CHAPTER ONE
INTRODUCTION
1.1    Background to the study
 Organizations are run and steered by people. It is through people that goals are set and objectives are accomplished. The performance of an organization is thus dependent upon the sum total of performance of its members. The success of an organization will therefore depend on its ability to measure accurately the performance of its members and use it objectively to optimize them as a vital resource (Biswajeet, 2009).
In the present highly competitive environment, organizations have to ensure peak performance of their employees continuously in order to compete and survive at the market place effectively (Prasad, 2005). Performance of an individual can be defined as the record of outcomes produced as specified job functions or activities during a specified time period (Bernardin, 2007). It can also be seen as a set of outcomes achieved during a certain period of time and does not refer to the traits, personal characteristics, or competencies of the performer.
Performance management on the other hand can be defined as a systematic process for improving organizational performance by developing the performance of individuals and teams (Armstrong, 2012). According to Briscoe and Claus (2008) performance management is the system through which organizations set work goals, determine performance standards, assign and evaluate work, provide performance feedback, determine training and development needs and distribute rewards. Performance management is a process involving performance planning, performance managing, performance appraisal, performance rewarding and performance development (Deb, 2009). Performance appraisal can be defined as the formal assessment and rating of individuals by their managers (Armstrong, 2012).
Performance appraisal as an element of performance management is often carried out to reveal individual employee’s contribution to the overall organizational objectives. To drive this notion home Biswajeet (2009) asserted that people do not learn unless they are given feedback on the results of their actions. For corrective actions to take place feedback must be provided regularly and it should register both successes and failures.
1.2     Statement of the study
The process of managing the performance of employees in an organization is often vague, the areas of performance for which an individual is responsible are often unclear and evaluations are often not based on actual performance but on the perceptions and judgment of an employee’s immediate boss.  Therefore, an ill-conceived and ill-considered performance management system could create tensions in the organization.