The Effect of Performance Appraisal System on Compensation Management Practices – A Study on NEXT VENTURES

Abstract

An employee's work performance is evaluated on a regular basis through performance ratings. Performance appraisals are often used by organizations to provide employees feedback on their work and to justify decisions like compensation increments, promotions, and in certain situations, terminations. Even though performance reviews may be conducted at any time, the majority of employers prefer to do it on a quarterly, semi-annual, or yearly basis. Performance evaluations can serve a variety of purposes for businesses, including determining which employees are the most deserving of pay raises and promotions, determining which employees have the most potential for growth within the company, analyzing employee strengths and weaknesses, and providing employees with useful objections to support in their professional development. NEXT VENTURES, this software and IT firm also places a significant emphasis on the functions performed by the department of human resources. The HRD is primarily responsible for supervising, managing, and asserting power over the organization's employees and other members of the workforce. The tasks of the department include selection and recruitment, training and performance evaluation, talent acquisition, compensation and benefits, ensuring the health and safety of employees, and planning that may assist the company in achieving its objectives. The main purpose of preparing the report is to study on their performance appraisal systems and to identify what challenges they are facing to implement effective performance appraisal system that impact on their compensation management practices. For analyzing the topic of the study, both qualitative and quantitative data have been used. Significant factors including recommendations and essential understandings have been provided also this report. These aspects were determined based on the results of the analysis. And at the end of the report is brought to a close with the presentation of the conclusion.