1.1 INTRODUCTION

Appraisal of performance is widely used in society. Usually parents will assess children and top management will assess employees. The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management.
However formal evaluation of employees is believed to have been adopted for the first time during the First World War at instance of Walter dill Scott, the US army adopted the ‘man to man’ rating system for evaluating military personnel. During 1920 to 1930 hourly paid workers in industrial units were evaluated on the basis of rating sources. This early appraisal system was called merit rating. In early fifties performance appraisal techniques began to be used for technical, professional, & managerial personnel.
A performance appraisal is a part of guiding and managing career development. It is the process of obtaining, analyzing, and recording information about the relative worth of an employee to the organization. Performance appraisal is an analysis of an employee's recent successes and failures, personal strengths and weaknesses, and suitability for promotion or further training. It is also the judgment of an employee's performance in a job based on considerations other than productivity alone. Performance appraisal is the process of determining how well the employees do their jobs in relation to establish the standard and communication of that assessment to employees. It can also be called as: Performance evaluation, Performance review, and employee rating, merit rating, staff assessment, etc. It used in many organization to evaluate employee current performance and measures have to be taken to improve future performance.