The end of every financial year or production cycle brings the ritual of staff performance reviews. Employee performance appraisals is the system by which the job performance of employees are documented and reviewed. It is essential for the effective management and evaluation of employees. It is designed to help develop the capacity of the employees, improve organizational performance and provide information to be fed into any long term business planning. It identifies the expertise and experiences of human assets the organization possesses to enable it to do proper delegation of responsibilities and tasks. The information gleaned from the appraisal processes also enables the organization to analyze and plan the training needs of the employees. Employee performance appraisals if designed properly help both employee and employers to identify their strengths and weakness that affect their delivery.
Methods of Employee Performance Appraisal
There are various methods of conducting employee performance appraisals. However, to get the best out of appraisals considerations must be given to systems that include bottom-up and top-down approaches. The various methods include, the unstructured system, the Ranking system, the 360 degree, and the Mixed Standard Methods.
The Unstructured method
The unstructured format is a common method where the appraisers or supervisors use an essay or short answer formats to grade employees to capture all aspects of employee performance. Unstructured appraisals are open ended and encompasses all aspects of the employees’ duties.
The Ranking Method
The ranking system is a more structured approach. Specific performance targets are laid out. A ranking system has explicit variables to guide employers. This might include for a financial institution revenue generated, number of accounts opened, amount of credits disbursed, loan quality, and deposit levels. The purpose here is to provide a quantitative score in areas that are already agreed upon as targets. The purpose is to show which employees are performing well relative to a set of variables that an employer finds the most important.
The 360 Degree Approach
The 360 Degree appraisal method is one in which the employee’ subordinates, peers, other co-workers, managers and even customers of the organizations all anonymously rate the employee. By this method the employee receives an analysis of how they are perceived in the organization. Its main aim is to assess the training and development needs of employees and to provide competence related information for succession planning. this system of appraisal is gaining more traction as it is believed to be fair and transparent and encourages an open culture that values continuous feedback.
The Mixed Standard Method
The “mixed standard” deals with complex variables. It uses some open ended techniques, but also applies quantitative ranking standards in a mix to appraise the employee.
The Objectives of Performance Appraisals
The prime objective of employee performance appraisal is to give the employee opportunity to achieve their full potentials in order for them to also meet the objectives of the firm. The system of appraisal is premised on the belief that it improves communication between employees and their employer. The main objectives of performance appraisals are to develop the potentials of employees, to foster commitment and positive employee engagement, to retain talented staff; to motivate staff and to engender transparency at the office.Performance appraisal gives the employee the chance to identify with the supervisors their training needs and other tools they may need to make them perform better. The one on one contact with supervisors enable them to identify any gaps in their performance and any steps taken to address the deficiency so identified. Employee performance appraisals are also to get the employees to be involved in the planning of their duties and work and the identification of the needed skills. This results in increased commitment from the employee when they realize that their views and opinions are sought in planning the targets to be achieved by the organizations in the ensuing months or year. Another objective of employee performance appraisal is to identify nurture and retain talented and skillful employees. It enables organizations to take employee centered decisions, career planning, development, promotions, training and development as well as succession planning and reward hardworking or meritorious employees or teams for sterling performance.
How does Appraisal Help Increase Productivity?
Productivity in an organization is the ability of leadership to induce employees to work toward the achievement of the organizations goals with confidence. One of the most important ways to increase productivity is to increase the efficiency of the individuals on the job. The appraisal system is the used to reward deserving employees to motivate them to work harder to increase productivity. When employees are properly motivated their productivity increases, the organization experiences a decrease in turnover, absenteeism and smoother working relationships are experienced. For organizations to achieve their targets employees need to be well motivated to maximize their effort. Motivational packages must be provided by management to push them to increase their output. There are three main conditions necessary to successfully motivate employees to attain the desired performance goals. These are:
Rewards for achievement should be clearly stated from the very beginning
Specific increase in levels of performance must be rewarded.
Rewards should be follow desired performance as closely as possible.
For these to be achieved there must be an open communication system in the organization to provide feedback to both the employers and employees. In so doing they are able to gauge their own performance and progress in achieving their targets even before the appraisal period to remedy any discrepancies. A good appraisal system that seeks to reward instead of punish leads to increased commitment from employees towards organizational goals and improves productivity.
When supervisors regard appraisals as a platform to penalize some staff it may lead to reduced commitment from the employees. The lack of commitment from employees in an organization could lead to the failure of the organization. However, when employees are motivated they become more committed to the growth of the business and thus increased productivity.
In the modern business fast lane to remain competitive no organization can survive in an atmosphere of lack of commitment from employees. Commitment ensues from being an open transparent organization. When the employees are aware of their obligations and goals and progress. Employee behaviors at the workplace is influenced positively or negatively by their relationship with their immediate supervisors.
Positive relationship in the workplace strengthens commitment and loyalty to the brand. The implication is that the behavior of management would influence the behavior of the employees. If the employees regard their management highly it would be apparent in their output and the reverse is also true. In the absence of positive influence from management employees would treat their jobs as just a way to earn some income. The lack of real commitment from employees can easily be identified if the organization keeps an open lines of communication between employees and management.
For appraisals to unearth the gems in employees to enhance productivity employers have a duty to ensure that standards and targets are set and agreed upon with the employees at the beginning of the production cycle or financial year. Secondly employees’ responsibilities, obligations and duties must be clearly spelt out. Third, standards and targets set must be measureable, realistic and challenging enough. And lastly periodic reviews must be done and outcomes communicated clearly to the employees. These reviews must identify any shortfalls and factors that have militated against the achievement of the performance goals and then remedial actions recommended and taken. Where the employees have done exceptionally well they must be recognized to boost their morale.
Management must ensure that appraisals are reliable and serve as basis for promotions and pay increments. This requires that they are carried out with clear unambiguous objectives already agreed on. If well designed and administered appraisal systems could make the employee happy and content.
A Word of Caution
Some managers and supervisors use the appraisal system to penalize staff they do not particularly like. Some supervisors are biased towards some of their staff based on factors such as sex, religion, ethnicity, appearance and other personal attributes or even plain hatred to influence their score. The appraisal period should rather be a time for genuine analysis of the employee’s performance. If the appraisal becomes a system of penalizing employees where supervisors write poor reports on the employee it would rather result in low productivity from the employee and eventually would affect the performance of the whole team or department. Again some supervisors fail to give continued feedback to employees to help in their work. They rather spring their supposed transgression on them during the appraisal period. This they do to deprive their staff of any increment in salary, promotions, reduction in annual bonuses or even have them sacked. Supervisors and managers must understand that the performance of employees are a direct reflection of the type of leaders they are.
According to Carter McNamara of Authenticity Consulting LLC “Nothing should be surprising to the employee during the appraisal meeting. Any performance issue should have been addressed as soon as those issues occurred.” The employee should be motivated by the outcomes of their appraisal rather than demoralizing them.
References
Antariksa, Yodhia. “Performance Appraisal Methods.” Exploring HR Management (explorehr.org/articles/Performance_Appraisal/Performance_Appraisal_Methods.html)
Cumunings, M. W (1980) the Theory and Practice of Personnel Management, London Heinemann Books.
McGregor, D (1957) “An Uneasy Look at Performance Appraisal” Harvard Business Review, May-June 1957,p.90
McNamara, C. “Basics of Conducting Employee Performance Appraisals.” The Free Management Library. (managementhelp.org/emp_perf/perf_rvw/basics.htm)
Author: Francis Enimil Ashun has over 16 years’ banking experience including Credit Administration and Branch Operations. His other interests are researching current trends in Human Resources Management.
Email: enimilashun@gmail.com, Cell: +233 201255200
