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1. Introduction:-:-

Every organization performs its task with the help of resources as men, machine, materials and money. Except manpower other resources are non-living but manpower is a live and generating resource. Manpower utilizes other resources and gives output. If manpower is not available then other resources are useless and cannot produce anything. Out of all the factors of production manpower has the highest priority and is the most significant factor of production and plays a pivotal role in areas of productivity and quality. In case, lack of attention to the other factors those are non-living may result in reduction of profitability to some extent. But ignoring the human resource can prove to be disastrous. Performance appraisal is the process of obtaining, analysing and recording information about the relative worth of an employee to the organization. Performance appraisal is an analysis of an employee's recent successes and failures, personal strengths and weaknesses, and suitability for promotion or further training. It is also the judgment of an employees performance in a job based on considerations other than productivity alone. Performance' appraisal is a formal structured system of measuring and evaluating an employees job related behaviours 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 all benefit. Performance Appraisal has been considered as the most significant an indispensable tool for an organization, for an organization, for the information it provides is highly useful in making decisions regarding various personnel aspects such as promotion and merit increases. Performance measures also link information gathering and decision making processes which provide a basis for judging the effectiveness of personnel sub-divisions such as recruiting, selection, training and compensation. In India there are large manufacturing firms where there is a co-existence of two different systems in a same organization e.g. MBO and 360degree Performance appraisal system, Open ended system, Semi-open, closed system. To achieve organizational objective Training need analysis is essential which would be identified only by performance appraisal. Generally employees need to train to move the organization forward. To move organization further the owner and management should have some idea, some strategy for solving organizations current problems. Organization experiences some deficiencies so to bridge a gap between these capabilities. It needs to achieve its objective and what it currently has. Based on performance appraisal one should try to conduct Training need analysis to find out a gap in its people capability. It can be short fall in knowledge, attitude and skills of our employees. So to bridge this gap by providing training programme to employees, ask every single individual to be perfect and get a maximum productivity which will directly indirectly motivate employee so that he will give good and better product which will be benefited and profitable for organization. Performance appraisal is a most valuable human resource tool. It is a vital component for the development of company as well as for individual employee. The system of performance appraisal motivates the sincere employees and t punishes the dishonest employees and increase productivity. So it is the most important duty of every organization and the HR department to design and implement effective performance appraisal system in the organization. The challenges faced by the present days organization is absolutely depending on the effectiveness of its performance appraisal system The performance elements are the indicators which can vary from the organization to organization it can be productivity, effectiveness and objectivity. While the standards include certain objectives for which to employees must have to achieve. Performance standards and elements should be such that which must be calculated, attainable, fair and challenging. Federal Regulations, (2001) describes the basic three different types of elements which can be used for the effective performance management system that are critical elements, non-critical elements and performance elements. Critical elements or activities are those for which an individual is assigned for, non-critical are those which have no direct impact on the employees performance measurement but it pay an important role while performers perform in some group or team activity. Additional performance measurement can be based only on the group performance rather than the individual account ability effectively they must have to perform. Present study also propagates the step to study the effect of this valuable appraisal system on the performance of employee working in different manufacturing organizations in solan district in Himachal Pradesh.

2- Methodology:

- The primary data was collected from the respondents by using a questionnaire consisting 23 items. A sample of 120 respondents was selected from the employees working in different banks in Himachal Pradesh. Convenient sampling technique was adopted to collect the data.

INSTRUMENTS USED FOR DATA COLLECTION:

The following instruments have been utilized for data collection:

Independent variable (Performance appraisal) : -

-A 9 - item scale has been developed by studying the different research contributions of Smith and rupp,2003; Pritchard and kuvaas,2006; Abu-doleh, weir and ridley,2007.This 9-itemsperformance appraisal scale contains i)inspirational goals, (ii) higher expectations, (iii)self determination, (iv)showing confidence (v)strengthens commitment of the employees (vi) autonomy,(vii)performance improvement The questionnaire has been rated on five point scale (1.strongly agree (S.A), 2 .Agree (A), 3. Undecided (UD), 4. Disagree (D), 5.Strongly Dis- agree (S.D).

Organizational performance (Dependent variable):

To measure dependent variables organizational performance, a standardized five point scale, developed by Delaney and huseild(1996) has been used

Employee capability (Dependent variable)

a,five point scale and it provides information about organizational effectiveness with respect to leadership, capability, employee engagement, workforce performance, adaptable workforce, adherence to change, talent management, and human capital efficiency. The reliability coefficient was determined by cronbach alpha which is .8996 for N of items is 23, when total sample in 120. This coefficient value indicates higher reliability of nstrument used.

STATISTICAL TOOLS USED FOR DATA ANALYSIS

The responses collected through questionnaire have been analyzed with Mean, Median, regressionand t- statistics. All the calculations have been made through SPSS 16.

Data analysis and interpretation: -

The sample represented varied range of respondents the diversity of the total population. The demographic variables like sex, age marital status and experience of the employees were included for data collection. Table 1. Represent the frequency of distribution of the respondents on each of the demographic variables.

4. conclusion -

This study has identified a strong positive correlation between performance appraisal and employee capability and organizational performance. It is also clear that employee capability and organizational performance are predicted by performance appraisal, hence it is clear that performance appraisal plays a major role in the development of the workforce of the organization and retaining them in the organization and also performance appraisal aids in the improved organizational performance by motivating the employees and by solving al work related issues of the employees. It is understood that many companies have integrated appraisal system in their organizations and have made it a part of their policies. Employees appraisal helps and guides employees to understand where they stand and what the exception of the organization is and an appraisal motivates them to fill the gap between the standard set and the actual performance. Effective performance management system is a key tool of communication & motivation within the organization. The frame work for Performance Appraisal system has its core elements as improving individual performance in accordance with organizations performance keeping in mind employees personnel goal. As employees are valuable assets for every organization by taking an overview on performance Appraisal system and its profitability to corporate in certain cases the employees may be motivated and on other hand employees are demotivated. But the end result is that unless and until we all are not working as a team organization cannot achieve its productivity, quality and profitability .So the performance Appraisal system should be taken in a positive way. Organisational capabilities will be build by identifying Key result areas of every individual .Based on the same training need will also be identified. The best performer gives the quality work, where effective performance appraisal has a positive effect on corporate performance & profitability. In a country where human resource is abundant, it is a pity that they remain underutilized. In wording of Oliver Sheldon No industry can be rendered efficient so long as the basic fact remains unrecognized that is human. The people at work comprise a large number of individuals of different sex, age, socio religious group and different educational or literacy standards. These individuals in the work place exhibit not only similar behaviour patterns and characteristics to a certain degree but also they show much dissimilarity. Technology alone, however, cannot bring about desired change in economic performance of the country unless human potential is fully utilized for production. The management must therefore be aware not only organization but also employees and their needs. The human resource is critical and difficult to manage. It is because human behaviour is highly unpredictable. It differs not only from individual to individual but often on the part of same individual at different points of time. In spite of biological and cultural similarities, human beings not only differ in their appearance but also in their capabilities based on their background, training and experience. Human resource or a person at work is the most important component of the undertaking. Management cannot afford to ignore human resource at any cost. Management is the process of efficiently getting activities completed with and through other people. The management process includes planning. Organizing, leading and controlling activities those take place to accomplish objectives. Every organization has been established with certain objectives to achieve. These objectives can be achieved by utilizing the resources like men, machines, materials and money. All these resources are important but out of these the manpower is the most important. It plays an important role in performing tasks for accomplishing the goals. The question arises that how these resources are utilizes by manpower. Further, the business environment is changing drastically. The environmental factors are uncontrollable. These are beyond control of management of the firms. One has to adjust with the external factors to do the business in the market. Every environmental factor like social, cultural, legal, political, economic, technology and competition gets changed very fast. For effective working the knowledge of these factors is must otherwise the plan will misfire. In present situation it is difficult to predict about anything. It is uncertain to say that what will happen tomorrow. Again the need for highly skilled and dedicated manpower is felt who can give the best output. their roles are performed. HRM practices influence employee skills through the acquisition and development of a firm's human capital. Recruiting procedures that provide a large pool of qualified applicants, paired with a reliable and valid se-lection regimen, will have a substantial influence over the quality and type of skills new employees possess. Providing formal and informal training experiences, such as basic skills training, on-the-job experience, coaching, mentoring, and management development, can further influence employees' development. The effectiveness of even highly skilled employees will be limited if they are not motivated to perform, however, and HRM practices can affect employee motivation by encouraging them to work both harder and smarter. Examples of firm efforts to direct and motivate employee behaviour include the use performance appraisals that assess individual or work group performance, linking these appraisals tightly with incentive compensation systems, the use of internal promotion systems that focus on employee merit, and other forms of incentives intended to align the interests. Employee must have knowledge about their job what they must have to perform in order to fulfil its job target. In organization the developed performance elements tell what the employees really have to perform and the performance standards tells the employees that how effectively they must have to perform.

this article has three parts (introduction, methodology and conclusion) please summarize in your own word introduction in three line , methodology in three line and conclusion in three line.