The appraisal should measure performance in accomplishing goals, plans and performance, in regards to corporate performance management. No one wants a person in a managerial role who appears to do everything right as a manager but who cannot turn in a good record of profit making, marketing, controllership or whatever the area of responsibility may be. Nor should anyone be satisfied to have a performer in a managerial position who cannot operate effectively as a manager.

In assessing performance, systems of appraising against verifiable preselected goals have extraordinary value. Given consistent, integrated and understood planning designed to reach specific objectives, probably the best criteria of managerial performance relate to the ability to set goals intelligently and to plan programs that will accomplish those goals and to succeed in achieving them. Those who have operated under some variation of this system often claim that these criteria are inadequate and that elements of luck or other factors beyond the managers control are taken into account when arriving at any appraisal. But, in too many cases, managers who achieve results owing to sheer luck are promoted, and others, who do not achieve expected results because of factors beyond their control, are blamed for failures. Thus, appraisal against verifiable objectives is, by itself, insufficient.

The system of measuring performance against pre-established objectives should be supplemented by an appraisal of a manager as a manager. Managers at any level also undertake nonmanagerial duties, and these cannot be overlooked. The primary purpose for which managers are hired and against which they should be measured, however, is their performance as managers- that is, they should be appraised on the basis of how well they understand and undertake the managerial functions of planning, organizing, staffing, leading and controlling.