Performance appraisals in most organizations end up as a routine mundane activity done once a year, mainly to arrive at the increment for employees, by assessing their performance. But actually, organizations and employees can benefit a lot from performance appraisals, if they do proper performance planning.

1. Importance of performance planning activity in performance
management cycle
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Performance appraisals in most organizations end up as a routine
mundane activity done once a year, mainly to arrive at the increment for
employees, by assessing their performance. But actually, organizations
and employees can benefit a lot from performance appraisals, if they do
proper performance planning.
What is performance planning?
Performance planning means setting the goals or objectives of the
organization and then deriving the goals of groups (functions) and
individuals within the organization. The aim is to channel everyone's
efforts towards achieving organization's objectives.

2. Performance planning would have to be done at the beginning of each
year, and at the end of the planning activity, all employees will have
their performance objectives or goals clearly laid out to them, and they
will also know how their goals help in achieving the overall organization
goals. At the time of performance appraisal (or more frequently), the
performance of an employee on these goals can be measured.
How to set effective Goals?
For goals to be effective, they have to be clear, meaningful, achievable
yet challenging and measurable.
Goal is an accomplishment and not a routine activity that an employee
performs during the course of his work. So, it is recommended that it is
should not be derived from the job description of an employee.
Mentioned below are some examples that will help to understand the
difference between accomplishments and activities:
 Answering customer calls is an activity, accurate guidance is an
accomplishment
 Writing software programs is an activity, a software program that
works is an accomplishment
 Managing customer projects is an activity, satisfied customers is an
accomplishment
Also it is important that goals are measurable against standards.
For instance if we take the accomplishment “Software program that
works”, specific measures can be “Number of errors reported”,

3. “Deviation from estimated time”, “The code quality based on review of
code” etc.
The standards of measure can be Good, Average and Needs Improvement.
For a person to get Good standard, he would have to fulfill the following
criteria:
Number of major errors reported after a program is completed is less
than 2
Deviation from estimated time is not more than 1 day, and so on...
Similarly criteria for Average and Needs Improvement standards can be
arrived at.
Benefits of Performance Planning
1) If performance expectations (goals) are clearly set and communicated
to employees, everyone will work towards a target or goal. People who
have a clear target have much higher motivation to perform to their full
potential and derive job satisfaction than those who are performing just
their routine activities.
2) Employees will also have a sense of purpose that their work
contributes towards achieving organization objectives.
3) At the end of the year, during the performance appraisal, (and also
through frequent reviews in-between the year), the employees
performance can be measured against the target. This would help

4. employees to improve the performance and thereby help in
organizational goal achievement.
So by proper performance planning, organizations can ensure that not
only organizational goals are met, but they can use these goals for
measuring the employee performance in an objective manner.
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