Nokia Has Incorporated Performance Appraisals In Its Compensation Plans For Its Employees

Business, Financing.

Testing the effectiveness of performance appraisals - performance appraisal is one of the popular concepts among the multinational and local companies. The basic purpose of using performance appraisal techniques within an organization is to align the employee' s efforts with the overall objective of the firm. The concept has been defined by DeVries et al. , (1981) as the process which allows firms to measure and consequently evaluate an employee' s achievements and behavior over a certain period of time.

There has been a widespread discussion within the academic circles as to how to define performance( Papers4you. com, 2006) . - it has been established that there are certain factors that affect employees' performance more than others. Drawing upon Briscoe& Schuler( 2004) performance can be viewed as a combination of several variables, ability, such as motivation, working conditions and expectations. These factors, according to Dowling et al( 1999) include the compensation package. Support from higher management. The nature of task.

The working environment and the overall corporate culture. - it has been suggested that it improves the communication between the higher to lower level management. There are many advantages mentioned in the literature regarding the use of performance appraisals within an organization( Papers4you. com, 2006) . Identify areas of improvement. Help in promotion, retention and termination decisions. Show employees training needs.

And means of managerial control( Fletcher, 1992) . - for instance, it is evident that there is a direct correlation between the performance of employees and their rewards as businesses do seek creation of wealth as their primary goal. In order to take full advantage of the performance appraisals, the goal in designing such systems should be congruent to the overall aim and vision of the company. Therefore one of the increasingly adopted uses of performance appraisals is to motivate employees to perform better by linking it with reward packages. Nokia has incorporated performance appraisals in its compensation plans for its employees. The concept and its uses can be further explained with the help of the example of Nokia.

The company has adopted the philosophy of pay - for - performance and therefore measuring and gauging different performance indicators of each employee is essential to the company. - therefore the performance appraisal system called' investing in people' has been designed as 360 degree feedback and electronic briefing sessions( pollitt, 2004) , which are perfectly aligned with the structure and overall aim of the company. Nokia is an innovative firm with a global matrix structure and a typical line management configuration at the country level. It can be concluded from the discussion that valuable organizational objectives are served with the help of performance appraisals and organizations should use the technique by aligning the performance parameters with their overall mission and vision. Dowling et al( 1999) , "International Human Resource Management - Managing People in a Multinational Context" 3rd Ed. , International Thomson Publishing. References: Briscoe, D. & Schuler, R. (2004) , "International Human Resource Management" 2nd Ed. , Routledge.

DeVries, D. - m. , shullman, s. L. , Morrison, A. L. , Gerlach, M. Fletcher, C. (1992) , "Performance management: its nature and research base" , in Developing a Performance - oriented Culture( Eds) , Association for Management Education and Development. L. (1981) , "Performance Appraisal On The Line, Center for Creative Leadership" , Greensboro, NC. Pollitt, D. (2004) , "Nokia Connects HR Policy with Company Success" , Human Resource Management International Digest, Vol. 12 No. 6, p30 - 32.

Papers For You( 2006) "P/ HR/ 24Performance appraisal and 360 degree assessment" , Available from http: //www. coursework4you. co. uk/ sprthrm1htm. [22/ 06/ 2006] Papers For You( 2006) P/ HR/ 20Performance appraisal and employee feedback" , Available from Papers4you. com[ 21/ 06/ 2006]