Employee's performance is one of the main factors influencing the decision
             to promote or demote his ranking in the firm. Performance is what
             determines whether the person qualifies for a raise or not and should he be
             rewarded for his hard work or reproached for lack of effort. In any case,
             performance is the key. This has given rise to many different methods and
             strategies of progress evaluation, better known as performance appraisal.
             Performance appraisal can be defined as "a structured formal interaction
             between a subordinate and supervisor, that usually takes the form of a
             periodic interview (annual or semi-annual), in which the work performance
             of the subordinate is examined and discussed, with a view to identifying
             weaknesses and strengths as well as opportunities for improvement and
             skills development" (Introduction: Performance Appraisal). With correct
             performance appraisal techniques, we can determine how much effort does a
             particular employee put in and then he/she can be rewarded accordingly. The
             new strategies in this connection have given rise to the concept of paying
             for performance, which means that employees' rewards must be tied to his
             performance. Greater the hard work better should be the rewards.
             However, close analysis of the history of performance appraisal reveals
             that pay scale is not the only factor that determines and affects an
             employee's performance. Motivation, self-esteem, confidence in oneself and
             other personality attributes as well as external factors also play a vital
             role in determining the performance of an employee and the payment or
             rewards that he or she might deserve. On the same account, "in the 1950s in
             the United States, the potential usefulness of appraisal as tool for
             motivation and development was gradually recognized. The general model of
             performance appraisal, as it is known today, began from that time"
             (Introduction: Performance Appraisa...