Abstract

A performance appraisal, employee appraisal, performance review, or (career) development discussion is a method by which the job performance of an employee is evaluated (generally in terms of quality, quantity, cost, and time) typically by the corresponding manager or supervisor. P e r f o r m a n c e Appraisal is an integral part of performance management and has b e c o m e the important component of the H R M . P e r f o r m a n c e management includes activities to ensure that goals are consistently b e i n g m e t i n a n e f f e c t i v e a n d e f f i c i e n t m a n n e r . P e r f o r m a n c e management can focus on performance of the organization, banks, department, processes to build a product or service, employees; etc Performance management reminds us that being busy is not the same as producing results. It reminds us that training, strong commitment and lots of hard works alone are not results. The major contribution of p e r f o r m a n c e m a n a g e m e n t i s i t s f o c u s o n a c h i e v i n g r e s u l t s - - u s e f u l products and services for customers inside and outside the bank and o r g a n i z a t i o n . P e r f o r m a n c e m a n a g e m e n t r e d i r e c t s o u r e f f o r t s a w a y from busyness toward effectiveness. R e c e n t l y, o r g a n i z a t i o n s h a v e b e e n f a c e d w i t h c h a l l e n g e s l i k e n e v e r before. Increasing competition from businesses across the world has m e a n t t h a t a l l b u s i n e s s e s m u s t b e m u c h m o r e c a r e f u l a b o u t t h e choice of strategies to remain competitive. Everyone (and everything)in the organization must be doing what they're supposed to be doing to ensure strategies are implemented effectively This situation has put more focus on effectiveness, that systems and processes in the organization be applied in the right way to the right t h i n g s : t o a c h i e v e r e s u l t s A l l o f t h e r e s u l t s a c r o s s t h e o r g a n i z a t i o n . Must continue to be aligned to achieve the overall results desired by the organization for it to survive and thrive. Only then it be said that the organization and its various parts are really performing.

Acknowledgement

First of all, we would like to thank my friends for assisting and helping us in the completion of our task I would like to thank our course teacher for helping us how to do this task, because his encouragement, guidance and support from the initial to the final level enabled us to develop an assignment on that topic. We would like to thank our librarian for letting me borrow some books, that is not less important And it would not be successful without God who guides me in our everyday life and activates, we thank Him for the good health he has given to us , and for the success of my assignment.. For all the people who helped us a lot, thank you very much. This is really an important topic considering the current world because for an organization to be successful they should always identify the strengths and weakness regarding the employee performance and make sure they are taking measures to develop the overall productivity. Lastly, we offer my regards and blessings to all of those who supported us in any respect during the completion of this assignment

Introduction

http://www.scribd.com/doc/43924014/Performance-Appraisal-in-Banking-Sector-by-Ekta-Bhatia A performance appraisal, employee appraisal, performance review, or (career) development discussion is a method by which the job performance of an employee is evaluated (generally in terms of quality, quantity, cost, and time) typically by the corresponding manager or supervisor. A performance appraisal is a review and discussion of an employee's performance of assigned duties and responsibilities. The appraisal is based on results obtained by the employee in his/her job, not on the employee's personality characteristics. The appraisal measures skills and accomplishments with reasonable accuracy and uniformity. It provides a way to help identify areas for performance enhancement and to help promote professional growth. It should not, however, be considered the supervisor's only communication tool. Open lines of communication throughout the year help to make effective working relationships. Each employee is entitled to a thoughtful and careful appraisal. The success of the process depends on the supervisor's willingness to complete a constructive and objective appraisal and on the employee's willingness to respond to constructive suggestions and to work with the supervisor to reach future goals.

Literature review

The study, Performance Appraisal in Banking Sector, highlights the importance of Performance Appraisal in special reference of banking industry. As we know the banking sector is one of the fastest growing sectors of our country, the study highlights the perspective of HR in banking sector. In this study we strive to find out the need of Performance Appraisal for banks, and try to understand how the Performance Appraisal is done in banking sector. In this study we take the case of one of the leading bank, Mercantile bank, as our sample and try to find out t h e i r techniques used for Performance Appraisal. This study refers to the need of Performance Appraisal for banking industry, importance and emerging trends in the field of Performance Appraisal. Further we highlighted the role of HR, its need and importance a n d Performance Appraisal as its one of th e major tools. It signifies the role of HR in organizational perspective and highlight the rationale of a c t i v e H R p o l i c e s i n a n o r g a n i z a t i o n , t h i s r e p o r t t a k e s t h e H R a s managerial function rather than the staff activities. In this report we try to make the role and concept of HRM understood for our readers. The study is manly conducted on the basis of secondary data rather than the primary data. We managed to collect the secondary data from mercantile bank and got the information about the HR policy and process of t h e b a n k . I n o u r s t u d y w e h i g h l i g h t e d t h e process of Mercantile bank P e r f o r m a n c e Appraisal m e c h a n i s m a n d t h e m a n n e r i n w h i c h Performance Appraisal takes place in M e r c a n t i l e bank In special cases like the practical example of M e r c a n t i l e bank ,the stud y highlights: a) techniques ,b) approach) forms) managerial approaches) employees feedback) process and other real aspect of the Performance Appraisal that provides the realistic view of the Performance Appraisal process that is carried out by the bank in actual work environment.

T h e s t u d y i s c o n d u c t e d i s a s i m p l e m a n n e r a n d m o s t o f t h e d a t a i s collected through various sources. This study refers the Performance Appraisal technique as an effective managerial tool to enhance the e f f i c i e n c y and e f f e c t i v e n e s s t o a c h i e v e t h e o r g a n i z a t i o n a l a n d individual goals. This study provides the theoretical knowledge about the Performance Appraisals on the issue like a) Need, b) Importance, c) Features, d) Techniques, e) Approaches, f) Model, g) Trends and Other issues related to the banking industry. This study refers to the role of Performance Appraisal in a wide and in a systematic manner that takes place in a sequential way and covers almost all the aspect of the appraisal from employees to organization under the universal approach called Performance Management.

Objective of the study

Generally, the aims of a performance appraisal are to: Give employees feedback on performance. Identify employee training needs. Document criteria used to allocate organizational rewards. Form a basis for personnel decisions: salary increases, promotions, disciplinary actions, bonuses, etc. Provide the opportunity for organizational diagnosis and development. Facilitate communication between employee and employer. Validate selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements. To improve performance through counseling, coaching and development. Periodic reviews help supervisors gain a better understanding of each employee's abilities. The goal of the review process is to recognize achievement, to evaluate job progress, and then to design training for the further development of skills and strengths. A careful review will stimulate employees interest and improve job performance. The review provides the employee, the supervisor, the Vice President, and Human Resources a critical, formal feedback mechanism on an annual basis.

Methodology of the study

The study seems to be the observation and a description of where we try to find out the hidden aspect or bring out the c o n c e p t f o r f u r t h e r explanation, but some scientific method and techniques classified i t a s t h e r e s e a r c h , t h a t s w h y t h e f o l l o w i n g research methods, techniques and components are used to facilitate Research Design- Descriptive research design Descriptive research design is a scientific method that is used in this s t u d y w h i c h h e l p s i n o b s e r v i n g a n d d e s c r i b i n g t h e b e h a v i o r o f s ubject without influencing it in any way to obtain a general overview of the subject. This design allows observation without affecting normal behavior. It is a l s o u s e f u l b e c a u s e i t is not possible to test. Type of data secondary data

Secondary data was used for this study as the research design is descriptive in nature so we tried to collect the data available through o t h e r sources on the subject. Sometimes, primary data is also collected through observation method to facilitate the research work

The following sources are used for collecting the data for this study Books internet Journals News papers Personal sources

Findings of the study

Company profile

Head Office 61, Dilkusha Commercial Area, Dhaka-1000, Bangladesh Known As MBL SWIFT Code MBLBBDDH Stock Code MERCANBANK Category Commercial Type Private Origin Local Description Mercantile Bank Limited was established by a few dynamic people from industrial and commercial sectors of the country. The bank started its journey as a commercial bank on 02 June, 1999. It expressed its vision to be development of corporate citizens. At the same time it fixed its mission to bring up the bank as a healthy organization with equitable growth through diversified use of resources. During last 12 years MBL has provided caring services to its clients and offered innovative and global standard products for them.

Introduction to Banking Sector

Banking can be defined in various ways as the definition of the bank varies from country to country and keeps on changing on the basis of the activities carried out by the banks. In present dynamic business scenario, banking can be defined as the activities carried out with the bank on individual or corporate level. We can understand the concept of the banking by looking into the activities of the bank. A bank is a well regularized and licensed financial institute to assist the individual and corporate customer in their financial needs. Normally b a n k s p r o v i d e t h e f o l l o w i n g s e r v i c e s t o i t s r e t a i l ( i n d i v i d u a l ) a n d corporate clients: Transactional services, S e r v i c e s r e l a t e d t o m o n e t a r y t r a n s a c t i o n t h r o u g h c u r r e n t a n d saving account. Investment services. Fixed deposit. Letter of credit. Treasury services. Bill of exchange. Foreign exchange. Assisting in trade through Letter of credit. Letter of guarantee. Performance bond. Project financing. Personal loan. Credit card ,

Human Resources Manag e ment App roa ch

Human resource management's objective is to maximize the return o n i n v e s t m e n t f r o m t h e o r g a n i z a t i o n ' s h u m a n c a p i t a l a n d m i n i m i z e financial risk. It is the responsibility of human resource managers in corporate context to conduct these activities in an effective, legal, Fairland consistent manner The Human Resources (HR) function provides significant support and a d v i c e t o l i n e m a n a g e m e n t . T h e at t r a ct i on, p r ese rv at i on an d development of high caliber p e o p l e a r e a s o u r c e o f c o m p e t i t i v e advantage for our business, and are the responsibility of HR.H.R can be well understood as a model of personnel management that focuses on the individual rather than taking a collective approach. Responsibility for human resource management is often devolved tow l i n e m a n a g e m e n t . I t i s c h a r a c t e r i z e d b y a n e m p h a s i s o n s t r a t e g i c integration, employee commitment, workforce flexibility, and quality of goods and services.

Current trends in HR

Human resource management is a process of bringing people and organizations together so that the goals of each other are met. The role of HR manager is shifting from that of a protector and screener to t h e r o l e o f a p l a n n e r a n d c h a n g e agent. Personnel directors are the new corporate heroes. The name of the g a m e t o d a y i n b u s i n e s s i s p e r s o n n e l . N o w a d a ys i t i s n o t p o s s i b l e t o s h o w a g o o d f i n a n c i a l o r operating report unless your personnel relations are in order. Over the years, highly skilled and knowledge based jobs are increasing while low skilled jobs are decreasing. This calls for future skill mapping through proper HRM initiatives. I n d i a n organizations are also witnessing a change in systems, management cultures and philosophy due to the global alignment of Indian organizations. There is a need for multi skill development. Role of HRM is becoming all the more important.

THE PROCESS OF PERFORMANCE APPRAISAL

Establishing performance standards communicating standards and expectations

Measuring the actual performance

Comparing with standards providing feedback Decision making and taking corrective actions

Performance Appraisal System: The Process

Performance Appraisal involves an evaluation of actual against desired performance. It also helps in reviewing various factors which influence performance. Managers should plan p e r f o r m a n c e development strategies in a structured manner for each employee. In doing so, they should keep the goals of the organization in mind and aim at optimal utilization of all available resources, including financial. P e r f o r m a n c e A p p r a i s a l i s a m u l t i s t a g e p r o c e s s i n w h i c h communication plays an important role. Craig, Beatty and Baird (1986) suggested an eight-stage Performance Appraisal process:

Establishing Standards and Measures

The first step is to identify and establish measures which would differentiate between successful and unsuccessful performances. These m e a s u r e s s h o u l d b e u n d e r t h e c o n t r o l o f t h e e m p l o y e e s b e i n g appraised. The methods for assessing performance should be decided next. Basically, management wants to: know the behavior and personal characteristics of each employee; And assess their performance and achievement in the job. There are various methods available for assessing results, behavior and personal characteristics of an employee. These methods can be used according to the particular circumstances and requirements.

Communicating Job Expectations

The second step in the appraisal process is communicating t o employees the measures and standards which will be used in t h e appraisal process. Such communication should clarify expectations and create a feeling of involvement.

Planning
In this stage, the manager plans for the realization of performance e x p e c t a t i o n s , a r r a n g i n g f o r t h e r e s o u r c e s t o b e a v a i l a b l e w h i c h a r e required for attaining the goals set. This is an enabling r

Monitoring Performance
Performance Appraisal is a continuous process, involving ongoing feedback. Even though performance is appraised annually, it has to be m a n a g e d ' e a c h day, all year long.' Monitoring is a key part of the P e r f o r m a n c e Appraisal process. It should involve providing a s s i s t a n c e a s n e c e s s a r y a n d r e m o v i n g o b s t a c l e s r a t h e r t h a n interfering. The best way to effectively monitor is to walk around, thus c r e a t i n g c o n t i n u o u s c o n t a c t s , p r o v i d i n g f i r s t - h a n d i n f o r m a t i o n , a n d identifying problems, which can then be solved promptly.

Appraising
T h i s s t a g e i n v o l v e s d o c u m e n t i n g p e r f o r m a n c e t h r o u g h o b s e r v i n g , recalling, evaluating, written communication, judgment and analysis of data. This is like putting together an appraisal record.

Feedback
After the formal appraisal stage, a feedback session is desirable. This s e s s i o n s h o u l d i n v o l v e v e r b a l c o m m u n i c a t i o n , l i s t e n i n g , p r o b l e m solving, negotiating, compromising, conflict resolution and reaching consensus.

Decision Making
On the basis of appraisal and feedback results, various decisions can be made about giving rewards (e.g., promotion, incentives, etc.) and p u n i s h m e n t s ( e . g . , d e m o t i o n ) . T h e o u t c o m e o f a n a p p r a i s a l s ys t e m should also be used for career development.

Development of performance
The last stage of Performance Appraisal is 'development o f performance,' or professional development, by providing opportunities for upgrading skills and professional interactions.

The E S S E NT I AL S o f a n effective perfo rma nce system a re a s follows:

Documentation
Means continuous noting and documenting the performance. It also helps the evaluators to give a proof and the basis of their ratings.

Standards / Goals
The standards set should be clear, easy to understand, achievable, motivating, time bound and measurable.

Practical and simple format

The appraisal format should be s i m p l e , c l e a r , f a i r a n d o b j e c t i v e . L o n g a n d c o m p l i c a t e d f o r m a t s a r e time consuming, difficult to understand, and do not elicit much useful information.

WHAT SHOULD A PERFORMANCE SYSTEM BE?

Correlated with the organization's philosophies and mission Cover assessment of performance as well as potential f o r development Look after the needs of both the individual and the organization Help create a clean environment Rewards linked to achievements G e n e r a t e i n f o r m a t i o n f o r p e r s o n n e l d e v e l o p m e n t a n d c a r e e r planning suggesting appropriate person-task matching

HOW CAN THE PERFORMANCE APPRAISAL SYSTEM HELP?

Promote better understanding of an employee's role and clarity about his or her functions Give a better understanding of personal a n d weaknesses in relation to expected roles and functions Identify development needs of an employee Establish common ground between the employee and the supervisor Increase communication Provide an employee with the opportunity for self-reflection and individual goal setting Help an employee internalize the culture, norms and values of t h e organization. This helps develop an identity with and commitment to the organization and prepares an employee for higher-level positions in the hierarchy Assist in a variety of personnel decisions

strengths

APPROACHES IN PERFORMANCE APPRAISAL

Give a better understanding of personal a n d weaknesses in relation to expected roles and functions Identify development needs of an employee

strengths

Establish common ground between the employee and the supervisor Increase communication Provide an employee with the opportunity for self-reflection and individual goal setting Help an employee internalize the culture, norms and values of t h e organization. This helps develop an identity with and commitment to the organization and prepares an employee for higher-level positions in the hierarchy Assist in a variety of personnel decisions

APPROACHES IN PERFORMANCE APPRAISAL

Intuitive Self-appraisal Group Trait Achievement of results

TECHNIQUES OF PERFORMANCE APPRAISAL

Easy appraisal method Graphic rating scale Field review method Forced choice rating method Critical incident appraisal method Management by objectives Work standard approach Ranking methods Methods Alteration ranking Paired comparison Person-to-person rating Checklist Behaviorally anchored rating scales Assessment center

Need s a nd Imp ortance fo r Performance Appraisal in Banking

The butt of many a corporate joke, these hard working professionals are often relegated to small back offices where their activities, viewed as little more than administrative functions, are carried out without much recognition. But in an increasingly aggressive corporate world, where every competitive edge c ounts, leading organizations would dow e l t o r e c o g n i z e t h e h u m a n p o t e n t i a l t h a t c a n b e u n l e a s h e d b y adopting effective human resource management strategies that realiset h e p o t e n t i a l o f e m p l o y e e s a n d e a r n t h e i r r e s p e c t a n d l o y a l t y . Dealing with the mundane personal matters of corporate l i f e h a s traditionally been seen as the sole purpose of the HR department. From hiring workers and providing transportation and meals services, to processing housing, medical and insurance benefits, the functions of H R p r o f e s s i o n a l s h a v e b e e n r e c o g n i z e d a s e s s e n t i a l , b u t h a v e n o t always inspired respect for those involved in executing them. Essentially, people remain the strongest and most competitive assets of a business. T h i s s h o u l d , a n d i s , c h a n g i n g . I n a r e g i o n w h e r e b u s i n e s s g r o w t h i s rapid, and organizations are competing to secure talent from the same pool, investing in and revering effective HR departments to find, train. And help retain this talent is increasingly important. Testament to the f a c t m a n y banks in the region are now recognizing the value o f developing their human resources, Abu Dhabi recently hosted the Middle East Human Resource Summit - the annual conference and exhibition for industry professionals. But can everyone be persuaded to take real action in developing their HR departments Banking industry is facing a cut throat completion in present banking scenario where the motivation of the employee can be a competitive advantage to retain its customer.

P e r f o r m a n c e A p p r a i s a l I n B a n k i n g Sector Performance Appraisal is a vehicle to 1. Validate and training); and refine organizational actions (e.g. selection,

2 . P r o v i d e feedback to employees with an eye on improving future performance. Validating and refining organizational action or banks action Employee selection, training and just about any c u l t u r a l o r management practicesuch as the introduction of a n e w p r u n i n g method or an incentive pay program may be evaluated in p a r t b y obtaining worker performance data. The evaluation may provide ideas for refining established practices or i n s t i t u t i n g n e w o n e s . F o r i n s t a n c e , a p p r a i s a l d a t a m a y s h o w t h a t a farm supervisor has had a number of interpersonal conflicts with other managers and employees. Some options include (1) (2) (3) Paying more attention to interpersonal skills w h e n selecting new supervisors Encouraging present supervisors to attend communication al conflict management Classes at the local community college, or Providing the supervisor one-on-one counseling. .Data from Performance Appraisals can also help farmers

Plan for long-term staffing and worker development, Give pay raises or other rewards, Set up an employee counseling session, or Institute discipline or discharge procedures

Objectives of Performance appraisal

T o r e v i e w t h e performance of the employees o v e r a g i v e n period of time. To help the management in exercising organizational control. Helps to strengthen the relationship and communication between superior subordinates and management employees. To diagnose the strengths and weaknesses of the individuals soaps to identify the training and development needs of the future. To provide feedback to the employees regarding their past performance. Provide information to assist in the other personal decisions in the organization. Provide clarity of the expectations and responsibilities of functions to be performed by the employees. the

To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development. To reduce the grievances of the employees

Followings should kept in the mind for effective Performance Appraisal in a bank Select what performance data to collect Determine who conducts the appraisal Decide on a rating philosophy Overcome rating deficiencies Create a rating instrument Deliver useful information to employees

Reasons for Performance Appraisal in Mercantile bank

Increase motivation to perform effectively Increase staff self-esteem Gain new insight into staff and supervisors Better clarify and define job functions and responsibilities Develop valuable communication among appraisal participants Encourage increased self-understanding among staff as well as insight into the kind of development activities that are of value Distribute rewards on a fair and credible basis Clarify organizational goals so they can be more readily accepted I m p r o v e i n s t i t u t i o n a l / d e p a r t m e n t a l m a n p o w e r p l a n n i n g , t e s t validation, and development of training programs

Modern Trends in Banks for P.A

A growing number of front running banks like ICICI, and others have a d o p t e d a P e r f o r m a n c e A p p r a i s a l m o d e l i n w h i c h b e s t - t o - w o r s t ranking methods are used to identify poor performers. The identified poor performers are then given a time period during which they have to show an improvement in their performance. In cases where the employee fails to improve his performance he is asked to leave the organization gracefully and a severance package is o f f e r e d t o h i m . I f t h e e m p l o ye e r e f u s e s t o l e a v e t h e n h i s s e r v i c e i s terminated and no compensation is offered. This system is called rank and yank strategy. Advocates of this system feel that it continually motivates employees to better their performance since nobody would like to be included in the poor performance band. But the flip side of this strategy is that employees become too competitive and team spirit is not nurtured. Effective banks are not build merely on investment and returns but m o r e on the quality of the workforce, its commitment to the organizational goals and investments made to attract train and retain s u p e r i o r human capital. An integrated Performance Management s ys t e m i s essential to get the best out of its people. Employee performance is linked to the banks performance. This helps i n achieving the organizational goal and creates a performance culture in the bank . Invention, creativity, diversity of perspectives is fostered. Employees act as one bank one brand

Forms Used By the Bank for P.A

1. General Performance Appraisal Form I
Six-page form includes evaluation sections for three categories: a ) objectives from last review period; b) current job duties (which are customizable), and c) organization core values (e.g., maturity, vision).

2. General Performance Appraisal Form II

Four-page form has three sections: a) overall performance, b) communication skills, and c) people/self development skills.

3. General Performance Appraisal Form III

Two-page "short form" has numerical rankings for two sections: a ) general work attributes and b) managerial attributes. Includes w eighted average calculation

4. Project Evaluation Review Form

Four-page form geared towards specific projects, and an individuals role on a given project.

5. Employee Self-Assessment Form

Two-page open-ended form for an employee to fill -out before his oth e r o w n review. Sections include: a ) S u c c e s s i n m e e t i n g g o a l s f r o m last review, b) Accomplishments and c) Areas for improvement.

Approaches and Techniques in Performance Appraisal Used By the Bank

Performance Appraisal is a multistage process involving several activities, which can be administered using a variety of approaches. S o m e o f these approaches are being used by the banks f o r Performance Appraisal

Intuitive Approach
: I n t h i s a p p r o a c h , a s u p e r v i s o r o r m a n a g e r j u d g e s t h e e m p l o ye e b a s e d o n t h e i r p e r c e p t i o n o f t h e e m p l o ye e s behavior.

S e l f - Ap p r a i s a l A p p r o a c h
Employees evaluate their o w n performance using a common format.

Group Approach
T h e e m p l o y e e i s e v a l u a t e d b y a g r o u p o f persons.

Trait Approach
This is the conventional approach. The manager o r s u p e r v i s o r e v a l u a t e s t h e e m p l o y e e o n t h e b a s i s o f o b s e r v a b l e dimensions of personality, such as integrity, honesty, dependability, punctuality etc .

Appraisal Based On Achieved Results

In this type of approach, a p p r a i s a l i s b a s e d o n c o n c r e t e , m e a s u r a b l e , w o r k a c h i e v e m e n t s judged against fixed targets or goals set mutually by the subject and the assessor

Behavioral Method
T h i s m e t h o d f o c u s e s o n o b s e r v e d b e h a v i o r and observable critical incidents

Suggestion and recommendation

Though it is the basic rule of the report writing that suggestion and recommendation should not be given until its asked for but to keeping i n t h e m i n d t h e a c a d e m i c n a t u r e o f t h e r e p o r t w e w o u l d l i k e t o recommend the followings Management and employees should see Performance A p p r a i s a l a s a p o s i t i v e t o o l s t o d e t e r m i n e t h e organizational efficiency and effectiveness Banks should use a well communicative method o f Performance Appraisal to avoid any resistance from the employees T h e o u t c o m e o f t h e P e r f o r m a n c e A p p r a i s a l s h o u l d b e shared with the concerned employees and corrective action should be taken in the light of the outcome Performance Appraisal should be treated as an integral p a r t o f t h e organizational development not just the formality. If the external agency is hired for P e r f o r m a n c e Appraisal , it will be appreciated to remove the possibility of biasness Performance Appraisal should be done on both basis qualitative and quantitative There should be a cost and benefit study of Performance Appraisal process

Conclusion
To summarize our discussion we can say that the Performance Appraisal is an integral part of performance management and has become the important component of the HRM. P e r f o r m a n c e management includes activities to ensure that goals are consistently b e i n g m e t i n a n e f f e c t i v e a n d e f f i c i e n t m a n n e r . P e r f o r m a n c e management can focus on performance of the organization, banks, department, processes to build a product or service, employees; etcPerformance management reminds us that being busy is not the same as producing results. It reminds us that training, strong commitment and lots of hard works alone are not results. The major contribution of p e r f o r m a n c e m a n a g e m e n t i s i t s f o c u s o n a c h i e v i n g r e s u l t s - - u s e f u l products and services for customers inside and outside the bank and o r g a n i z a t i o n . P e r f o r m a n c e m a n a g e m e n t r e d i r e c t s o u r e f f o r t s a w a y from busyness toward effectiveness. R e c e n t l y , o r g a n i z a t i o n s h a v e b e e n f a c e d w i t h c h a l l e n g e s l i k e n e v e r before. Increasing competition from businesses across the world has m e a n t t h a t a l l b u s i n e s s e s m u s t b e m u c h m o r e c a r e f u l a b o u t t h e choice of strategies to remain competitive. Everyone (and everything)in the organization must be doing what they're supposed to be doing to ensure strategies are implemented effectively

This situation has put more focus on effectiveness, that systems and processes in the organization be applied in the right way to the right t h i n g s : t o a c h i e v e results. All of the results across the organization

Must continue to be aligned to achieve the overall results desired by the organization for it to survive and thrive. Only then it be said that the organization and its various parts are really performing.

We can say that Performance management should be:

Strategic
- It is about broader issues and longer -term goals

Integrated
- It should link various aspects of the b u s i n e s s , p e o p l e m a n a g e m e n t , a n d individuals and teams

A well designed Performance Appraisal system helps a n organization, bank know and understand what is expected of them H a v e t h e s k i l l s a n d a b i l i t y t o d e l i v e r o n t h e s e expectations a r e s u p p o r t e d b y t h e o r g a n i z a t i o n t o d e v e l o p t h e capacity to meet these expectations are given feedback on their performance h a v e t h e o p p o r t u n i t y t o d i s c u s s a n d c o n t r i b u t e t o individual and team aims and objectives. O n g o i n g b a n k i n g s c e n a r i o h a s c h a n g e d t h e s c o p e o f t h e performance management system as the competition is extensive and to retain the employees has become the challenging task for the m a n a g e m e n t . With the help of Performance Appraisal the bank can r e c o g n i z e i t s true personnel inventory and formulate the s t r a t e g y f o r m a n power planning and career d e v e l o p m e n t . Performance A p p r a i s a l d i r e c t l y a f f e c t s t h e o t h e r s u b s ys t e m o f HRM such as manpower planning, selection, career development, potential development, recruitment, compensation etc.To wind up our discussion we can say that Performance Appraisal is an integrated and widen approach to guide the employees in the r i g h t d i r e c t i o n t o a c h i e v e o r g a n i z a t i o n a l a s w e l l a s i n d i v i d u a l objectives m a i n l y i n b a n k i n g s e c t o r b e c a u s e o f t h e d o m i n a n c y o f personal skill and service level to interact with the customers