Effective Performance appraisal techniques improve the employee performance
In current context all
organizations demand maximum commitment, dedication and effort from employees
to improve the operational efficiencies Meanwhile employee’s expectation from
employer in terms of monetary benefit and non-monetary benefits also has
increase to great extent (Koshy and Suguna, 2014). Employee performances have
direct impact with job satisfaction and employee commitment to perform the job
role. Improving the performance of workforce will make employees loyal to the
organization and engaged with business to achieve common objectives (Nguyen,
2015). Effective and transparent performance appraisal system will enhance the
performance level of employees (Sang, 2005). As per Rahman (2006) comprehensive
performance appraisal system will lead to improve the commitment level of employee.
Performance appraisal system plays a vital role in improving the quality and
the productivity of organization (Lee and Lee, 2007).
Performance appraisal is
a process which evaluate efficiency and productivity level of employee’s task
and communicate the performance gap to be improve (de Andres et
al., 2010). ALDamoe, Yazam and Ahmid (2012) states that performance appraisal
is a process of evaluating subordinates job performance, set priorities and
assign responsibilities. Performance appraisal system, rates all or set of employee’s
behavior and competencies relevant to a specific period (Coens and Jenkins
,2000). Management can make decisions on promotions, increments, firing and
other structural changes based on the results of performance appraisal (Khan,
2007). Performance appraisals review the past performance of employees, reward
the employees based on the performance level and set goals for future
performance requirements and career developments required (Aggarwal and Thakur,
2013).
To get best outcome from
performance appraisal, all individuals should be clear on the duties and
responsibilities assigned Atiomo (2000). Effective performance
appraisal system should address the needs of both organization and the
employees. Organization should communicate the expected performance level from
employees as well as organization should identify the desires of employees from
the organization (Chiang & Birtch, 2010). Organizations should set the
clear guidelines, controls and procedures that employees are clear on the
duties they have to perform.
Performance
appraisal techniques can be classified in to two, traditional methods and
modern methods (Aggarwal and Thakur, 2013). Ranking method, graphic rating scales,
critical incident method and narrative essay are considered as most used
traditional performance appraisal techniques. Modern performance appraisal
techniques are Management by objectives, behaviorally anchored rating scale,
human resource accounting, assessment centers, 360 degree and 720 degree (Koshy
and Suguna, 2014, Aggarwal and Thakur, 2013).
I am working in a
leading logistics company in Sri Lanka where company has deployed a performance
appraisal system to evaluate individual performance level of employees. At the
beginning of each financial year HR department commence the performance
appraisal by requesting each department to set the goals and KPI’s for
individuals. Initially overall organizational goals are set with the
involvement of higher management and cascade down to divisional level. All
department heads need to review their subordinates job roles and set individual
goals in line with the organizational goals set by higher management. Once the
goals are finalized, it will communicate to individual level and formal
discussion will be carried out between management and subordinates to clarify
what company expect from employees and what individual needs to perform the
expected outcome. Weightage will be given on each goal based on the priority
and importance level to the divisional outcome. Performance level of
individuals review twice a year at the mid of the year and at the end. Employees are rated under four categories,
exceptional, highly effective, effective, need improvement based on their
performances and soft skills. Increments, promotions, bonused, firing will be
decided based on outcome of performance appraisal rating and training and
development needs of employees also identified during performance appraisal
cycle. As a company offering services to highly competitive market, performance
appraisal process is very vital to gain competitive advantage through better
performances from workforce.
Aggarwal, A. and Thakur,
G.S.M., 2013. Techniques of performance appraisal-a review. International
Journal of Engineering and Advanced Technology (IJEAT), 2(3),
pp.617-621.
ALDamoe, F.M.A., Yazam,
M. and Ahmid, K.B., 2012. The mediating effect of HRM outcomes (employee
retention) on the relationship between HRM practices and organizational
performance. International Journal of Human Resource Studies, 2(1),
p.75.
Atiomo A.C. (2000),
Human Resource Management; Malthouse Management Science Books, Lagos.
Chiang,
F. F. T., & Birtch, T. a. (2010). Appraising Performance across Borders: An
Empirical Examination of the Purposes and Practices of Performance Appraisal in
a Multi-Country Context. Journal of Management Studies, 1–24.
Coens,
T. and Jenkins, M. (2000). Abolishing Performance Appraisals: Why They
Backfire and What to Do Instead. San Francisco, CA: Berrett-Koehler.
De
Andres, R., Garcia-Lapresta, J. L., & Gonzalez-Pachon, J. (2010).
Performance appraisal based on distance function methods. European Journal
of Operational Research, 207(3), 1599–1607
Khan,
A. M. (2010). Effects of human resource management practices on organizational
performance: An empirical study of oil and gas industry in Pakistan. European
Journal of Economics, Finance and Administrative Sciences, 24, 157-174.
Koshy, E.R. and Suguna,
P., 2014. Performance appraisal in the contemporary world. International
journal of Advance Research in Computer science and Management studies, 2(9).
Lee,
F., & Lee, F. (2007). The relationships between HRM practices, leadership
style, competitive strategy and business performance in Taiwanese steel industry.
Proceedings of the 13th Asia Pacific Management Conference, Melbourne,
Australia, 953-971.
Nguyen, H.T., 2015. The
effects of performance appraisal on employee retention. A comparison of Finnish
and Vietnamese enterprises.
Rahman,
S. A. (2006). Attitudes of Malaysian teaches towards a performance appraisal
system. Journal of Applied Social Psychology, 36(12), 3031-3042.
Sang,
C. (2005). Relationship between HRM practices and the perception of
organizational performance, roles of management style, social capital,and
culture: comparison between manufacturing firms in Cambodia and Taiwan.
National Cheng Kung University, Tainan, Taiwan.
The performance appraisal plays a significant role in recognizing and rewarding employees in many Organizations. And the outcome of that performance appraisals helps to determine the level of the individual employees. It helps to measure employees' decision-making ability and how it affects the overall organization performance. (Venclová, 2013).
ReplyDeleteExactly Harsha. In todays world employees are the most valuable asset in an organization. Their competencies, commitment level and motivation will improve the performance of individual as well as the team level. Therefore performance appraisal system is important to measure the performance level and identify any gaps (Deb, 2009).
DeletePerformance is a multicomponent concept and on the fundamental level one can differentiate the process aspect of performance, that is, behavioral engagements from an expected outcome, the expected job performance comprising of planning, organizing, and administering the day-to-day work(Pradhan & Jena,2017).
ReplyDeleteAgreed Sandun, performance of its workforce is important that gives competitive edge for company. Therefore HR should ensure to establish an effective performance appraisal system that direct employee performance towards organizational goals (Allio, 2006).
DeleteAdding to you Chanaka, Appraisals often take the form of an appraisal interview, usually annual, supported by standardized forms/paperwork. The key objective of appraisal is to provide employees with feedback on their performance provided by the line manager (Prowse & Prowse, 2009).
ReplyDeleteI agree with you Chamara performance appraisal system should act as feedback control measure that inline with overall strategy development and execution (Caruth and Humphreys, 2008).
DeleteYes Chanaka, With the importance of performance appraisal you have mentioned above, it is important for employers to ensure that the selected performance appraisal system fits the organization and is fair for everyone without any bias and is aligned with the employee's own perception (Idowu, 2017).
ReplyDeleteAgree Arjun performance appraisal should fit with organization culture. Organizations should focus three dimensions of what should be measured, who should be measured and how frequent the performance should be measured when implementing the performance appraisal system (Bayo-Moriones et al., 2020).
DeleteAgree with you. Adding to that, . It can, in fact, play a major role in providing for an integrated and coherent range of human resource management processes that are mutually supportive and contribute as a whole to improving organizational effectiveness (Armstrong,M.2009).
ReplyDeleteTrue, its not a single activity but involves range of activities which improves the individual as well as organizational performance and effectiveness (DeNisi, 2000).
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ReplyDeleteI agree with you Chanaka. Further, Narcisse and Harcourt (2008, p. 1152) state that employee’s “performance appraisal encroaches upon ‘one of the most emotionally charged activities in business life’–the assessment of a man’s contribution and ability.”
ReplyDeleteYes Indeevari, further the common issue of a performance management system become failure that managers do not give proper feedback on the result of evaluation due to fear of affecting the relationship while employees tend to think that their managers are unskilled to discuss the performance with them (Pulakos, 2004).
DeleteAgreed With you Chanaka, Within this context, various studies suggest that organizations can hardly control the behavior of their employees (Attorney, 2007). he organizations can however control how employees perform their jobs. In addition, performance management research shows that a significant number of employees tend to have the desire to perform their jobs well as part of their individual goals as well as a demonstration of loyalty towards the organization (Wright & Cheung, 2007).
ReplyDeleteYes obvious human behavior is a key variable for developing an effective performance management system and the success of a PMS will depend on the level of understanding on human behaviors (Simons, 2000).
DeleteAgree Chanaka, "performance appraisal" is concerned with a process of identifying, measuring, influencing, evaluating and developing job performance of employees by giving regular feedbacks in relation with set of norms and standards to achieve company goal (Opatha, 2013).
ReplyDeleteExactly Sujeendran, the effective performance management system will have significant impact on financial performance as well as productivity of an organization (Hewitt Associates, 1994). Feedback on the result of performance appraisal is vital to motivate the best performers and fill the gap of lower performers.
DeleteAgree with you Chanaka on the need for performance appraisal, but as the generational dynamics are increasing in the industry with increasing number of millennials and Gen Zs, instead of formal annual reviews, companies should adopt instant feedback model as millennials prefer instant feedback on what they’re doing well and what they are doing wrong, along with tips for improvement (Myers et al., 2010).
ReplyDeleteIndeed Chanaka, a comprehensive employee performance evaluation process often consists of different evaluation methods to help judge an employee’s performance. Using multiple techniques can help you get a broader perspective of the areas where your staff needs to improve and the steps you can take to support the growth of the employees (Shepherd, 2016).
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