PMS is the most important aspect of HRM. For designing and implementing PMS, you need to clarify the following things first:
1. You should know the organization priorities, objectives, or Annual Business Plan.
2. Escalate objectives for each department based on Organizational Objectives and Annual Budget.
3. Review the progress towards the objectives on a Quarterly/Monthly basis.
4. At the end of the financial year, you will know the achievement ratio of each department.
For performance appraisal, you may follow the following process:
1. You need to divide all employees into at least three categories:
a) Directing and Managing (Department Head and above)
b) Middle Management (Team Leaders or those who implement the orders)
c) Associates (Who only obey orders as directed)
2. After deciding the above three levels, you need to develop appraisal forms considering the following points:
a) Operational Objectives
b) Competency Levels
c) Individual Training Needs
d) Career/Succession Planning
You need to define a timeframe for appraising the performance and, based on that, you should plan a Reward and Recognition policy, including increments, promotions, and training plans for development.
"What are the values of performance appraisals in HRM? Is there anything like a successful performance management system? If so, what steps does one take to develop one?"