A Performance Appraisal System
Characteristics of an Appraisal System
For a performance appraisal to be implemented properly, it must be accepted by all concerned. It is necessary to clearly distinguish between an appraisal and evaluation. Appraisal aims at both subjective and objective assessment of the performance of an employee in the period under review, whereas evaluation only focuses on objective measurement. Therefore, performance appraisal focuses on ‘feedback, development and assessment’. The process of performance appraisal concentrates on the employee, his or her job and the organization’s environment. These aspects are inter-dependent and inter-related. Thus, an effective appraisal system should be qualitative, subjective, individualized and directed towards problem-solving. It should be founded on measurable and specific indicators and standards of performance. There are various considerations that must be put into account while designing a performance appraisal system (Craig et al, 1986; Daniels, n.d.).
Reliable, stable, and consistent: The appraisal should employ both subjective and objective ratings in order to generate consistent and reliable measurement. It is essential to ensure high reality in order to make correct decisions. The appraisal should be adequately scientific so that even if two evaluators evaluated an employee, they would come up with similar results (Craig et al, 1986; Daniels, n.d.).
Practical and simple format: The format of the appraisal should be simple and practical and focus on achieving its purpose. A long and complicated format is hard to understand, it consumes time and does not bring forth much useful information (Craig et al, 1986).
Open and participatory: A good appraisal should involve the participation of employees, often in the form of interviews by the supervisor, to obtain feedback and use it for future planning. While interviewing the employee, the supervisor should give room for discussion of past performance and establishment of future goals. Plans made in exclusion of any party are less effective compared to those made jointly by administrators and staff. Another fundamental aspect is that both management and employees must be involved in structuring, mutually deciding and accepting the job description and performance goals (Craig et al, 1986).
Timeliness: The appraisal should be timely. It usually happens annually. Despite the fact that both employees and supervisors dread the season of appraisal, they often desire to understand the ranking of their performance as compared to organizational expectations. A timely appraisal focuses on addressing deficiencies and problems before they develop into serious situations. Moreover, the performance of employees worthy of recommendation must be instantly established in order to reinforce the positive action and behavior (Craig et al, 1986).
Uniformity: A standardized appraisal structure is importance since all employees are evaluated on a uniform scale. A non-standardized appraisal structure is ineffective due to the fact that the criteria for failure or success become meaningless and arbitrary. Moreover, a uniform appraisal structure provides a basis for systematic comparison of different employees (Patten, 1982).
Feedback: The feedback should be timely or else it could lose its utility and may barely have any impact on performance. In addition, the feedback should be impersonal in order to produce the desired outcome. Employees often reject personal feedback and eventually become de-motivated. Another important quality of feedback is that it should be noticeable. The information used in the process of appraisal should be made known to the employee being appraised. An appraisal that is open establishes credibility (Craig et al, 1986).
Relevance and responsiveness: An appraisal system that is not specifically relevant to the job may lead to waste of time and resources. A successful appraisal program aims at identifying and evaluating only the critical behaviors which lead to the success of the job. Appraisals which do not consider those behaviors are usually inaccurate, invalid and lead to discrimination in relation to unrelated factors. In addition, the responsibility for the appraisal system should be given to a senior level in the company so that there can be involvement and commitment across the hierarchy of management (Patten, 1982).
Linking the appraisal system to the programs for compensation and benefit packages
A good appraisal system should consider the personal development, work satisfaction and participation of the employees. It serves the purpose of providing information on human resources and their development, providing compensation and benefit packages to employees and maintaining organizational control. A performance appraisal should also focus on the mutual goals of the organization and the employees. It is important because the organization’s interests have to be met for the employees to develop. Employees are the main resources f the organization and it is important to meet their needs. A performance appraisal aims at accomplishing a certain purpose. With regards to compensation and benefit packages, all employees often desire to be informed about the connection between their performance and pay. During the interview stage, questions on compensation usually come up, particularly those who have got used to extra rewards for their efforts. An effective performance management system should be connected to compensation, whether it is wage hike or certain percentage based on the employee’s level, actual performance, effort and productivity (Patten, 1982).
The right incentives and rewards for employees usually make a great difference in relation to retention of good workers. Employers usually have a fierce competition for good employees and try so hard to keep their best employees by making better offers. The productivity requirements of an organization are related to appraisal systems. An appraisal system is used to show unproductive units. It therefore aims at rewarding productive staff and units. The reward structure of the organization is one of the most important response systems. From a hypothetical perspective, upward salary adjustments is the method employed by the performance appraisal in rewarding productive staff members. Though salary adjustment may be fixed in some organizations, it is possible to adopt alternative reward systems in order to acknowledge productive employees. In order to come up with a good compensation and benefits program, the organization must first establish desired employee skills, behaviors and accomplishments which will contribute to the achievement of the goals of the organization. The rewarding systems work because through rewards and recognition of outstanding performance, the organization is able to have an edge in a competitive business environment (Daniels, n.d.).
A good compensation system should enhance positive reinforcement and not negative reinforcement. The positive reinforcement promotes integrity, personal development, responsible stewardship and respect. Most programs do not conform to critical behavioral principles. Consequently, they miss improving or sustaining the results and behaviors of employees. Some appraisals usually adopt subjective measures only rather than employing both objective and subjective measures. Under such an appraisal system, performance appraisal relies on the perceptions of the supervisor who may be influenced by factors such as conformance, employee “busyness” and employee “likeability”. This may be unfair since someone is only rewarded on the basis of “being cooperative” rather than true business results. As a result, employees may fail to respect the management (Daniels, n.d.).
Organizations which employ personal performance measure get better results compared to those which employ large group measures. Examples of plans which rely on large group results are gain sharing and profit sharing. Rewarding employees basing on large group results does not enhance personal development and responsive stewardship since personal efforts are not put into consideration. The organization should also consider performance plans with rule-driven plans rather than discretionary rewards. It is necessary to develop a reliable performance program. Employees are often reluctant to invest their effort and time in constantly changing programs. Lastly, pay for performance should replace bonuses. This is because bonuses are “after-the-fact” discretionary awards for outstanding performance. Employees ought to be informed about the organization’s expectation in relation to their job description, skills and accomplishments. If an employee is not informed in advance about such expectations, it is unfair and does not promote responsive stewardship (Daniels, n.d.).
References
Craig, S. E., Beatty, R. W., & Baird. L. S. (1986). Creating a Performance Management System. Training and Development Journal, 38-42, 74-79.
Daniels, A. (n.d.). Designing a Compensation Program That Motivates and Produces a Profit-Driven Workplace. Retrieved on July 30, 2013 from: http://aubreydaniels.com/pmezine/designing-compensation-system-motivates
Patten, T. H., Jr. (1982). A Manager’s Guide to Performance Appraisal. London: Free Press.
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