Performance appraisal is considered as a management tool which is often used for motivating and effective utilization of human resources. This tool is used for determining compensation, incentives, promotion, tenure, transfers, layoffs and development of potential employees in an organization. The basic objective of this study is to analyze the need for replacement of traditional Performance Appraisal System (PAS) in public sector enterprises by using a case study approach selecting a public sector company, the Rajasthan State Mines and Minerals Limited. The study highlights that employees perceive the PAS measures to be objective, accurate and unbiased, and the PAS system to be transparent, performance-based and linked to employee growth opportunities. Also, significant differences have been found in the perception of workers and managers on the given constructs of modified PAS.

Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee (Chouhan et al., 2013; and Verma and Chouhan, 2014). It is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development (Jacobs et al., 1980). Performance appraisal is a structured system of measuring and evaluating employee’s job-related behaviors and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee, organization, and society are benefitted (Flippo, 1984). Jacobs et al. (1980) explained performance appraisal as a systematic attempt to distinguish the more efficient workers from the less efficient ones and to discriminate among the strengths and weaknesses an individual has across many job elements. These measurements are normally done by the direct supervisor of the workers and can serve different organizational purposes (Baron and Armstrong, 1998). Performance Appraisal System (PAS) is used as a measure for increasing the effectiveness of organizations by improving the performance of the employees and developing the capabilities of teams and individual contributors (Baron and Armstrong, 1998). It also includes all formal procedures used to evaluate personalities, their contribution and potential of group members in a working organization. It can also be seen as a continuous process to secure the information necessary for making correct and objective decisions on employees (Yoder, 1967).

Management Research Journal, Performance Appraisal System (PAS), Arrangement/Disarrangement, Importance of Attributes, Perception of Workers, Analyzing, PAS, Public Sector Organization, Rajasthan State Mines, Minerals Limited.