ABSTRACT
The first and crucial question in designing an appraisal scheme is deciding what its primary aims are choosing to go down a motivational/ developmental route or a reward route continues to be a fundamental dilemma. The performance-related pay (PRP) path is a risky route to take. There is evidence that some forms of PRP can work, but under what circumstances isn't clear. Moreover, there is a lack of evidence of cost-effectiveness. Generally speaking, this definition is acceptable and welcomes both to appraisees and most appraisers and it represents what is generally the highest priority for the organisation, a strategy for improving performance. This does not mean that the needs of those involved the organisation's senior management, HR, the appraiser and the person appraised always coincide. But understanding the different perspectives is essential to establishing an effective appraisal system one which sets realistic and achievable goals that offer something of value to all parties.
