Performance Appraisals and Ways to Better The Process

Performance Appraisals Process

Annual review, performance review, evaluation, employee appraisal, etc., are all different names for Appraisals which is a cyclic phenomenon in every organization. This regular employees performance evaluation is necessary for two main reasons; to keep the human resource updated on their shortcomings while expressing an organization’s gratitude for the excellent work and ensuring that they are financially in sync with the constantly changing market demands.

Happy-productive worker hypothesis

The happiest workers are the most productive performers, and the most compelling performers are the most comfortable workers. So the question is how to produce content and compelling performers?

The structured and customized method of identifying both the work behaviour and the potential of an employee includes quantitative and qualitative aspects of their job performance. Appraisals boost employees’ confidence and self-esteem, and the process also improves their chances for better pay, promotions, and other perks.

The main objectives of Performance Appraisals are;

1. Promotions 2. Confirmations 3. Training and Development 4. Compensation reviews 5. Competency building 6. Improve communication 7. Evaluation of HR Programs 8. Feedback & Grievances

We have compiled a list of 5 widely accepted and easy to implement appraisal methods.

For absolute transparency – 360-degree feedback for performance appraisals

Ongoing communication between employees and the team leaders/ managers motivates them to stay interested throughout the process and learn from the results of their performance appraisals. The 360-degree approach does precisely that, as the employee’s rating depends not on one but multiple raters, such as supervisors, peers, subordinates, customers, etc. The feedback is often collected via online questionnaires that allow absolute transparency. Every employee in an organization appraises their managers, peers, customers, suppliers and takes part in regular self-evaluation that ensures practical performance analysis.

For objective-driven appraisal – management by objective (MBO)

The managers and employees work together to identify, plan, organize, and communicate goals for success. It helps determine productivity rates and usually emphasizes career-oriented and tangible goals, leaving behind an employee’s intangible aspects such as interpersonal skills or job commitment. The OKR guide helps in setting the desired objectives to be achieved. It gives responsibility to an employee in terms of the results that are expected from them. With every touchpoint meeting, the manager and employee discuss the progress made and use the outcome as a guide to measuring the employee’s contribution level.

For a more straight forward process – result-oriented approach

There are no layers to this approach, it follows a simple meeting of an employee and manager to discuss on a set goal which could also be used for determining promotion, salary increment, etc. This method is often linked to direct motivation as one knows what the prize is at the end of the race. Goal-setting can be applied to any matrix such as a sales number, amount of time spent on the field, the number of returned goods, etc.

To include every human trait in the process – behaviorally anchored rating scales (BARS)

BARS is used if the objective is to bring out both the qualitative and quantitative benefits of the performance appraisal process. Employer compares employee performance with specific behavioral examples anchored to numerical ratings. BARS has a higher rate of success in providing clear standards, improving feedback, and providing accurate performance analysis and consistent evaluation as it considers intangible aspects of an employee such as interpersonal skills. Performance management can be concluded using software that helps you maintain employee productivity and decrease the physical burden of such calculation.

For a more behavior-oriented approach – the critical method

This is one of the most manually demanding processes but equally valid for employees’ individual growth. The manager keeps a detailed log of the job behavior for each employee as to whether the traits displayed are sufficient or insufficient. In the evaluation meeting, this log is then translated into a checklist to evaluate the employee, suggest required training, praise the better deeds, etc. It simplifies the process of identifying an employee’s future career trajectory.

Current Status Of Performance Appraisals With Relevant Stats

    • About 58% of the employees state that appraisals and recognition for their performance contribute to increased engagement and productivity.
    • About 94% of the employees expect and prefer to be given feedback, recognition, and appreciation in real-time.
    • Only about 13% of the employees and managers state they feel the organization’s appraisal system is helpful. Only 6% of the chief executive officers say that the performance appraisal is proper.
    • 29% of the employees expressed that the performance appraisal process or review is rarely honest, while only 17% felt the process is fair.
  • About 58% of the employees still express their views as performance reviews are ineffective and a waste of time, while the employers state that it leads to a 15% reduction in the turnover rates.

Possible drawbacks that can hamper the appraisal process

The performance appraisals are expected to be fair, accurate and objective. However, no system involving human and emotional parameters can be pure. Read on, to learn about common errors that can potentially tilt the balancing scales during the process.

Halo effect

Halo effect is another term for favoritism. This is caused when evaluators tend to be influenced by the previous judgments of the performance or personality of an employee. For example, employee A has better interpersonal skills than employee B. It would be unethical if the judging parameter is a skill and employee A scores better than B despite being equally good with their talent.

Strictness or leniencies

Authoritative figures can be extremely strict or extremely lenient with their evaluation. This results in overconfidence upon undeserving evaluation or insecurities among better deserving employees.

Central tendencies

Unlike extreme measures of strictness or leniencies, here our authority is unwilling to demotivate their employees by giving low points and disagrees with giving an exceptional or good rating to a select one or two. Hence, the final result will be a group getting average ratings overall.

Recency of events

This occurs when a recent event overshadows the entire evaluation period which is usually 6 months to one year. It results in improper and unjust ratings as an employee’s complete work cannot be condensed down to one good or bad incident.

Despite these shortcomings, 69% of the employees say they’d work harder if their efforts are better recognised, making appraisals an innate process of everyday business.

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