Performance Appraisal - The main H R Function

Performance appraisals are essential for the effective management and evaluation of staff. Appraisals help develop individuals, improve organizational performance, and feed into business planning. Formal performance appraisals are generally conducted annually for all staff in the organization. Each staff member is appraised by their line manager. (Directors are appraised by the CEO, who is appraised by the chairman or company owners, depending on the size and structure of the organization). Annual performance appraisals enable management and monitoring of standards, agreeing expectations and objectives, and delegation of responsibilities and tasks. Staff performance appraisals also establish individual training needs and enable organizational training needs analysis and planning. Performance appraisals data feeds into organizational annual pay and grading reviews, and coincides with the business planning for the next trading year. Performance appraisals generally review each individual's performance against objectives and standards for the trading year, agreed at the previous appraisal meeting. Performance appraisals are also essential for career and succession planning. Performance appraisals are important for staff motivation, attitude and behaviour development, communicating organizational aims, and fostering positive relationships between management and staff. Performance appraisals provide a formal, recorded, regular review of an individual's performance, and a plan for future development. In short, performance and job appraisals are vital for managing the performance of people and organizations. Significantly also, while this appraisal outline is necessarily a formal structure this does not mean that the development discussed with the appraisee must be formal and constrained. In fact the opposite applies. Appraisals must address 'whole person' development - not just job skills or the skills required for the next promotion. Appraisals must not discriminate against anyone on the grounds of age, gender, sexual orientation, race, religion, disability, etc. When designing or planning and conducting appraisals, seek to help the 'whole-person' to grow in whatever direction they want, not just to identify obviously relevant work skills training. Increasingly, the best employers recognise that growing the 'whole person' promotes positive attitudes, advancement, motivation, and also develops lots of new skills that can be surprisingly relevant to working productively and effectively in any sort of organisation. Developing the whole-person is also an important aspect of modern corporate responsibility, and separately (if you needed a purely business-driven incentive for adopting these principles), whole-person development is a crucial advantage in the employment market, in which all employers compete to attract the best recruits, and to retain the best staff. Therefore in appraisals, be creative and imaginative in discussing, discovering and agreeing 'whole-person' development that people will respond to, beyond the

usual job skill-set, and incorporate this sort of development into the appraisal process.

Effective Performance Appraisals

Aside from formal traditional (annual, six-monthly, quarterly, or monthly) performance appraisals, there are many different methods of performance evaluation. The use of any of these methods depends on the purpose of the evaluation, the individual, the assessor, and the environment. The formal annual performance appraisal is generally the over-riding instrument which gathers together and reviews all other performance data for the previous year. Performance appraisals should be positive experiences. The appraisals process provides the platform for development and motivation, so organizations should foster a feeling that performance appraisals are positive opportunities, in order to get the best out of the people and the process. In certain organizations, performance appraisals are widely regarded as something rather less welcoming ('bollocking sessions' is not an unusual description), which provides a basis only on which to develop fear and resentment, so never, never, never use a staff performance appraisal to handle matters of discipline or admonishment, which should instead be handled via separately arranged meetings.

types of performance and aptitude assessments, including formal performance appraisals

Formal annual performance appraisals Probationary reviews Informal one-to-one review discussions Counselling meetings Observation on the job Skill- or job-related tests Assignment or task followed by review, including secondments (temporary job cover or transfer) Assessment centres, including observed group exercises, tests presentations, etc. Survey of opinion of others who have dealings with the individual Psychometric tests and other behavioural assessments Graphology (handwriting analysis)

None of these methods is mutually exclusive. All of these performance assessment methods can be used in conjunction with others in the list, depending on situation and organizational policy. Where any of these processes is used, the manager

must keep a written record, and must ensure agreed actions are followed up. The notes of all review situations can then be referred to at the formal appraisal. Holding regular informal one-to-one review meetings greatly reduces the pressure and time required for the annual formal appraisal meeting. Holding informal reviews every month is ideal all staff. There are several benefits of reviewing frequently and informally:

The manager is better informed and more up-to-date with his or her people's activities (and more in touch with what lies beyond, e.g., customers, suppliers, competitors, markets, etc) Difficult issues can be identified, discussed and resolved quickly, before they become more serious. Help can be given more readily - people rarely ask unless they see a good opportunity to do so - the regular informal review provides just this. Assignments, tasks and objectives can be agreed completed and reviewed quickly - leaving actions more than a few weeks reduces completion rates significantly for all but the most senior and experienced people. Objectives, direction, and purpose is more up-to-date - modern organizations demand more flexibility than a single annual review allows priorities often change through the year, so people need to be re-directed and re-focused. Training and development actions can be broken down into smaller more digestible chunks, increasing success rates and motivational effect as a result. The 'fear factor', often associated by many with formal appraisals, is greatly reduced because people become more comfortable with the review process. Relationships and mutual understanding develops more quickly with greater frequency of meetings between manager and staff member. Staff members can be better prepared for the formal appraisal, giving better results, and saving management time. Much of the review has already been covered throughout the year by the time comes for the formal appraisal. Frequent review meetings increase the reliability of notes and performance data, and reduces the chances of overlooking things at the formal appraisal.

Advantages and Benefits of P. A. System

Every business and organisation should have a performance management system. The system's complexity and scope may vary, but the underlying requirement remains. Every organisation is different. The system should be designed to meet the unique issues faced, although many systems will have common elements.

Employee development
A good performance management system has an employee development focus. The personal development requirements of employees and staff members are reviewed and plans are made for formal and informal learning and training participation.

Salary and compensation review

In many organisations, employee compensation (wages, salary, benefits, etc.) is linked to performance. If this is the case, the system has to integrate compensation review as part of the overall process.

Personal performance
Most systems set personal performance objectives and targets at the start of the review period. These can relate to job tasks, multi-skilling, responsibility levels, etc. - there are many variables. Achievement of these objectives can be linked to compensation review.

Business performance objectives for individuals and teams

Some systems include performance measurement related to the business objectives and strategy. Relevant corporate goals and measures are taken directly from corporate strategy documents and adapted for individuals or teams. These often relate to financial objectives, market share, sales, etc. Achievement of these objectives can be linked to compensation review for staff and bonus payments for teams or groups. Success with performance management systems relies on good design and implementation. Many factors need to be considered. They include morale and organisation culture, other HR (human resources) practices and policies, business competitiveness and market conditions and employee "readiness" for either a new or a revised performance system.

New design or redesign?

A good performance management system is designed from the "bottom up" - that is, the organisational context provides the basis for the framework development.

New systems are easier, i.e. if a performance management system has not previously operated. There is no negative "baggage". More often, a redesign is undertaken to overcome problems that occurred in the previous implementation.

Design or redesign responsibility

In many organisations, particularly subsidiaries of larger companies, the system is implemented as a corporate initiative. Local management and local human resource managers may be charged with the responsibility for local implementation. Modification to suit local conditions may or may not be an option. The better situation is design responsibility established at the local level based on a corporate framework.

System technology
Many systems are paper based. Others have created a computerised paperwork system. Others have a technology based system, particularly those using 360 degree feedback mechanisms.

Human resource policies/legal framework

Every performance management system needs to incorporate organisational values and statutory requirements, e.g. discrimination and equity guidelines, etc.

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Performance Appraisal
The meaning of the word appraisal is to fix a price or value for something. This is used in finance in terms such as project appraisal or financial appraisal where a value is attached to a project. Similarly performance appraisal is a process in which one values the employee contribution and worth to the organisation. The objectives of performance appraisal are: 1.To help better current performances 2. To help in development of the employee. 3.To determine training and development needs. 4. To give employee feedback and counsel them 5. To review performance for salary purposes. Employees across the entire organisation are appraised of their performance. This could be done annually, twice a year, periodically depending the need of the organisation The various kinds of performance appraisal systems are: 1.Personality based performance appraisal system: Here the appraiser is supposed to rate the personality traits of the person being appraised. This is not in much in organisations as it very subjective and judgmental. It could also be biased and prejudiced. 2.Competence based performance appraisal system: Here the job analysis is used and the employee is appraised for the skills he exhibits. For e.g. if his job entails dealing with the clients then he is judged foe his effectiveness in dealing with them. This enables both the organisation and the employee as to what deficiencies are to be overcome and can be useful in providing training to the employee to better his performance.

Result based performance appraisal system: This system concentrates on the final results achieved by the employee irrespective of his personality or deficiencies. This is totally related to the job and concentrates on the end results that are more important to the organisation. The performance appraisal system has to be transparent and the employee should be taken into full confidence. In many cases employees themselves are given a chance to conduct a self-appraisal. Performance appraisal is a case of joint problem solving by the organisation and the employee. However the organisation must also take care of future potential and not get bogged down by current performance. Normally the immediate supervisor does the appraisal. Some organisations also have a peer group performance appraisal where colleagues rate the performance. The HR person must also ensure that line managers are properly trained for carrying out the appraisal including interviewing techniques and on how to give feedback. The managers must also be trained to look at the cases objectively outside of their personal opinion of the candidate.