Utilizing Employee Performance Appraisal Systems optimally?

By: Maj. Gen. B.K. Bhatia
Date: May 24th, 2010
Posted in: Employee Appraisals, HR Best Practices | 24 Comments »

Introduction

An employee performance appraisal process runs a few times during the year. If designed appropriately, significantly more information can be captured and analyzed by organizations. This may require some modifications to the appraisal instrument such that it can be used for employee feedback, self development and studying the rating patterns of supervisors besides a host of other analytics.
What more can be done by organizations in utilizing this important process is a focus of this article.

What most organization currently do!

Employee performance appraisals are generally being used by most organizations to:

• Evaluate employees contribution to the organization based on the goals assigned to them.
• Determine employee ranking in terms of ‘Excellent performer’, ‘good performer’, ‘average performer’ and so on.
• Know the current ratings of an employee in competencies and skills related to their job positions & identify development plans.
• Capture information about training needs.
• Finalize incentives such as performance bonus and annual increments.
• Manage promotions and transfers.
• Identify succession plans.

What more can be done?

Utilize appraisal instrument as a survey tool

Since most organizations carry out employee appraisals on an annual basis, it is possible to gather employee perceptions on the organizational issues such as:

• Quality of leadership at various levels.
• Effectiveness of the training provided.
• Awareness about company policies.
• Awareness about business objectives and plans.
• Factors causing concern and dissatisfaction to employees.

With some modifications to the exiting appraisal instrument, each of the above issues can be modeled in a manner that help in statistical analysis. For example, to gather inputs about the issue: ‘Factors causing concern and dissatisfaction’, employees could be asked to pick & choose any two factors from the table below which, in their perception, are major causes for dissatisfaction:

Inadequate safety at workplace

Out dated plant & machinery

Performance goals not clearly defined

No guidance & counseling by the Manager

Compensation not linked with performance

Lack of cooperation between departments

Delayed resolution of grievances

Inadequate communications from the Management

In the manner discussed above, other organizational issues also can be analyzed through a ‘Set of Factors’.

Management will probably like to get this feed back directly. Technology can help in the following manner:

• Through work flow changes, this part of the appraisal instrument will not flow through the reporting channels and may not be visible to managers or reviewers.
• 100% participation in this survey by the employees can be ensured since employee can proceed further with the appraisal process only if this information is submitted.
• Each year a fresh organizational issue can be analyzed since changing an online form is fairly easy.
• If an organizational issue requires feedback only from a specific set of employees (say senior managers) that portion is made visible to only those set of employees. Multiple issues can be analyzed simultaneously by having different feedback forms for different groups of employees.
• Department level issues can be submitted to Heads of Departments for resolution at that level.
• Analysis of the same issues can be done year over the year to assess statistical improvements in the ‘factors’ on which remedial actions were initiated by the management.

Collect Self – Development inputs from employees

Employees who take interest in their own development are looking forward to career growth opportunities. The management can identify such employees as potential candidates for higher level responsibilities, especially if the employees are performing well. If employees can input following details during a performance appraisal, it can help the management to identify the employees for growth opportunities:

• Educational qualifications acquired during the year.
• Certification programs/ courses attended to improve professional knowledge.
• Articles contributed to professional journals/magazines.
• Positions of responsibility held in professional institutions / societies/ forums.
• Contributions as a Trainer.
• Participation in seminars / conferences.
• Voluntary participation in community development programs.
• Participation in various sports events/ cultural programs.

The ‘Self Appraisal’ portion of the instrument can be suitably modified to collect the above feedback.

On a risk mitigation front, it may be important to appreciate that an employee investing in self development may have a higher exit potential. An automated appraisal system which captures the above information can provide valuable insights to the talent management concept of the organization in terms of planning growth for high caliber people and designing suitable employee retention plans.

Study the Rating tendencies of all Appraisers

Appraisers while evaluating performance of their subordinates, can be lenient or harsh ratees. This rating tendency is possible to be assessed for each appraiser in an automated system, not only for the current year, but cumulatively over the years, based on the number of appraisals written every year. This would help as under:

• Removal of inter – ratee disparities through a normalization process that considers rating tendencies of all appraisers.
• Training & counseling of appraisers on how to become more objective in employee evaluations.

(read more on this issue in the White Paper on ‘Normalization of Appraisal Scores‘)

Both the above aspects are very important from the people management perspective, especially in large organizations.

‘EmpXtrack Performance Edition’ offers a solution to ‘What more can be done?’ as discussed in the article above.

EmpXtrack is an integrated web-based solution that meets all requirements connected with Employee Appraisals and Training Management. Both of these modules are also available as stand alone modules which can be interfaced with the existing HRMS of an organization.