The performance appraisal season is at its zeal; yearly, biannual and quarterly performance appraisals are being conducted at multiple industries. For those who want to make this appraisal the best one, here are the things that you must consider to run it effectively and for those who have joined the companies or any other business entities and are not aware about the concept of performance appraisal or performance evaluation, it is a complete guide.
A simple definition of performance appraisal as per Businessdictionary.com is a process by which a manager examines and evaluates an employee’s work behavior by comparing it with the set standards, documents the results so that feedback can be provided to employees regarding their strong and weak attributes. To determine what kind of training is needed, to whom to promote, demote, retain, rotate or fire, give increments as per company best practices are some of the activities that are aided by performance evaluation.
Employees’ performances are based on their ability to do the job, willingness to accomplish the task and maintaining appropriate behavior while conducting the assigned job tasks, duties and responsibilities. The performance is also based on the opportunity and the degree of control over external factors in accomplishment of assigned job.
Set Standards and Communicate it with your Employees
A key aspect of performance management is communication of set standards in the form of job description and Tasks, Duties and Responsibilities (TDRs). As each and every personnel have different job duties and responsibilities, it must be communicated to them at the time of their hiring or as soon as possible if the role changes. If employees are given special tasks, those should also be explained to them accurately.
It is supervisors’ duty to explain the duties specifically to subordinates so that their performance can be measured perfectly. Poor communication of TDRs would definitely lead to poor performances.
Alliance with Company Policies
Performance Measurement System should be in alliance with company’s philosophy, vision, mission, objectives and values. It must also be aligned with the department’s objectives, so that clear guidance will be provided to the employees that would direct them towards the right path. Therefore, while you are planning or developing the process of performance appraisal, you must keep in mind company’s values and best practices. This should also be a part of job description, job specification, compensation, rewards and recognitions.
Create the Environment
Most of the employees who are appearing for the first time would hesitate from appearing on performance appraisal interviews. It is Human Resource Department’s duty to communicate the whole procedure prior to the appraisal to employees or make a structure to communicate the details beforehand. Different organizations have different performance appraisals. The supervisors and human resource department must inform their employees about the process so that they are prepared earlier.
Tracking and Support Progress
Performance appraisal helps in tracking and supporting employees’ progress in their field of work. The individual goals are set in the light of job description. The correct defining of career path will definitely help in achieving their goals on time and improving the work performance records.
Regular Feedback
Timely performance appraisals help supervisors and human resource personnel to provide regular feedbacks about the achievement of goals and performance throughout the period. Annual performance appraisals have their consequences as the company will be on the danger of losing a good and important employee. Therefore, companies must have quarterly or biannual appraisals so that they can have a complete review of overall performance throughout the year.
Rewards and Recognitions
The main purpose of the appraisal is to make the final review possible without any hindrance and to reward the best performers in the shape of promotion and increment. It helps in comparing the results of employees working in the same positions and to differentiate good performers from poor performers. The bad performers, if demonstrate poor performance throughout their career, have higher chances of demotions or getting fired. It helps the companies to find weaker aspect of their employees so that they can provide them trainings accordingly.
Issue of Biasness and Errors
It is human resource department’s duty to create the entire process smooth and free from errors and biasness factors. If any employee is having jealousy or enmity, he/she can practice or take revenge at the time of final performance review. Having a professional HR manager is crucial in every aspect, read How to Hire First Recruitment Manager for your Startup, it should be free from biasness in any form, the halo or horns effect, in human resource terminology.
The chances of errors can be reduced by giving proper trainings to the raters. Stereo typing errors refer to the propensity to generalize the impact on all the employees based on class or category like age, gender, ethnic background, social class and others. Sometimes supervisors or performance raters evaluate employees based on comparison and contrast. Contrast effect error is the biased perception of an employee that has distorted by the receiver’s comparative perception about others in the particular situation.
There are two more effects that impact the evaluation on biasness. One is the primacy effect, which is encountered due to the relationship that has taken place at the initial stages. If it is good than employee will get the good scores and if it’s bad than the results will be poor. On the counterpart, there is recency effect that encounters with the recent behaviors of individuals of other people in particular circumstances.
Sources of Information
Performance appraisals can be done by supervisors, peers, customers, subordinates and employee himself/herself. The number of sources for the review is high when the organization comprises of thousands of employees. For small and medium size companies, we can get the information from the above mentioned sources.
Types of Performance Appraisals
There are multiple types of performance evaluations available; however, human resource managers and talent management teams are working closely with industry professionals and performance management teams to get the best form of appraisals. However, the most important reviews are discussed below:
- Self-Assessments
In self-assessment evaluation, individuals assess their own strengths, weaknesses and behaviors on specific job in the formal context of performance appraisal. In which, employee assesses their own projects, however its negative point is that employee don’t get any chance to discuss with their supervisors and can be biased. Supervisors can point out easily that in what area particular employee needs training and can give feedback for improvement but here these benefits are not possible.
- Peer Assessments
In peer assessments, members of a group assess and evaluate the performance of their members. However, as a number of people are indulged in this activity, this would create an ad-hoc; even the level of biasness is also high. It has positive aspects as well; a complete review of an employee can be possible from precise aspects.
- 360 Degree
The 360 degree is the most crucial evaluation of employees as it will take evaluations from supervisors, peers, subordinates and self-assessments. This reduces the chances of biasness but it is the most difficult and time consuming technique. In large size companies, it is a problematic task and would create a number of major problems that might make this evaluation ineffective.
- Ongoing Assessment
In ongoing assessments, employees’ performance is evaluated on continuous basis. This has eliminated the factors of biasness and errors of ratings but this should be managed effectively and efficiently, any minor mistake can create a major loss in the shape of losing high potential employee or decreasing the motivation level of particular employee/s.
Recommendations
For effective performance review, the group leaders along with supervisors have to come up and do the appraisals with integrity. If they allocate the lower scores to high potential employees, than they might have the chance to lose vital talent. Yearly appraisals are crucial as it will lead employees to get promotion and increments or they can be demoted, rotate and even can be fired.
It is company’s duty to make their performance management system very effective and reliable so that everyone can get the fair chance to win or lose. It is very hard to retain employees and need huge funds to hire talented people for your exclusive talent pool.
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