Executive summary
The performance appraisal process is essential for organizations as it aids strategic Human Resource decisions by the management. It entails six chronological steps which ensure that the process achieves its objectives. The management establishes desirable standards that it expects employees at different levels to perform their different roles promptly. These standards are then communicated to employees to forge an understanding as to what the management expects of them. Employee actual performance is measured against these standards to determine any favorable or unfavorable deviations from the expected norms. A comparison between the actual and planned performance is then undertaken. The management discusses the outcomes of the appraisal process with the employee to come up with the best solution for improvements. Finally, the relevant action is taken by the organization leadership regarding the employee in the quest to enhance organization performance for effective attainment of its goals.
The Performance Appraisal Process
Introduction
According to Lyster & Arthur (2007), organizations set performance standards that employees should meet to attain the established goals and objectives. It is thus imperative that they know whether the employee is meeting these standards or not. There should be processes that can aid managers in undertaking useful measurements of employee performance through objective metrics that will be able to unearth and distinguish underlying human resource issues against operational issues. Developing an effective appraisal system has a positive impact concerning the organization culture, employee engagement levels as well as staff morale; elements which promote employer brand while supporting the retention of relevant talent within the organization. Firms can customize this process to suit their needs but there are basically six steps involved in the performance appraisal process namely: the establishment of performance standards, communication of performance expectations to employees, measurement of actual performance, comparison of actual performance against the set standards, discussion of the appraisal with the employee and the initiation of corrective action. Establishing effective performance appraisal systems is relevant for every organization as it enables the management to make sound decisions about their employees.
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Establishment of Performance Standards
This is the initial step of the appraisal process and entails the setting of standards of performance to be used to gauge employees. Ventolo and Williams (2013) explain that it is the responsibility of the management to decide on the outputs, skills as well as accomplishments that would be measured. Such metrics should derive from job analysis, job description, employee handbooks as well as operational manuals. They should be clear, objective and measurable to be understood by all and eliminate the element of biases. The use of vague terms will give different meanings to different people leading to biases. For those standards that cannot be measured, the organization should exhaustively describe them to enhance clarity. These standards are not arbitrary and are relevant for all job levels as they are the vehicles through which the organization can attain its mission and vision. They should be flexible enough to accommodate necessary adjustments in response to dynamic business needs. They may include various metrics depending on the organization. They encompass everything from attendance to the attainment of sale targets. Organizations should instill a culture of consistency in the application of these standards to employees. Differential applications will undermine team morale and result in adverse legal issues in the firing process.
Communication of Performance Expectations to Employees
It is not enough for the management to establish performance standards and assume that employees understand them. There should be a specific process by the business leadership to clearly communicate them to clarify the company's expectations. For more effectiveness, there should be regular meetings held between the management and the employees to review these standards so that employees are well aware that to retain their current positions or qualify for a promotion or salary increment, they must meet specific minimum standards. The provision of regular feedback to employees ensures that they perform their duties according to organizational goals and objectives. An organization may opt for a formal or an informal way through which it can provide feedback. The important thing is that this process should also be consistently implemented o all employees to allow for uniformity so that they can be able to keep track on various activities and properly perform them. It should be instant and not occasional, to help employees take the right action in improving or upholding their performance on a timely basis depending on whether the feedback is negative or positive ( Ventolo & Williams, 2013).
Measurement of Actual Performance
Lyster & Arthur (2007) concurs that this is the most challenging part of the process and involves the evaluation of the actual performance of the employee within a specified period. It should support the employee in delivering excellent performance rather than hindering it. If an organization has set clear performance standards, it becomes easier to evaluate how employees are faring in their different roles. Some standards can be measured more regularly than others depending on their effects on business achievement. While others may be measured on a daily basis, others can be reviewed on monthly, weekly or yearly bases. The management needs to determine how often different standards get evaluated to prevent adverse outcomes and enhance team morale. The employee performance is measured based on the various reports which may be written, oral, statistical or observational. The management should take great care to ensure that the methods used for this process are ideal for measuring performance. As such, appraisal judgments should be objective and not based on personal perceptions. Facts need to be evaluated against the standards with objectivity. To ensure that all parameters are adequately taken into account, this process should be carried out continuously throughout the year to monitor performance on a regular basis.
Comparison of actual performance against the set standards
Lyster & Arthur (2007) adds that most organizations establish their performance standards according to their experience as well as industrial ideals. Despite the fact that business and their employees are unique; a comparison of an employee against all others with the same roles provides a basic idea as to whether performance issues are related to an employee and not operational obstacles within the organization. In this step, the actual performance is compared with the standard performance to determine any existing deviations. The resultant outcome could be favorable, indicating that the employee surpassed the set standard or it could be undesirable such that the employee performance is below the expected standards. Depending on the results, the management would take appropriate action for improvements. Such actions may include recalling, evaluation as well as the analysis of records related to employee performance. This is an important process that also aids the management to put in place appropriate measures that can help to enhance employee performance, and avail it the opportunity to discover those areas that require improvement to attain organizational goals.
Discussion of the Appraisal with the Employee
This step entails employee feedback. It is essential that performance appraisal is reviewed with employees for greater effectiveness. It should be a one-on-one communication between the organizational leadership and the employee whereby there is a review of standard expectations and offering of the feedback on what the employee has done well and what areas require improvement. The primary purpose is to communicate and listen. It entails the discussion of the performance results, existing problems as well as any available solutions for the goal of solving problems and reaching consensus. The feedback should be in written form and be objective, professional and positive. The management should use performance review meetings to provide this feedback to employees and also get feedback from them regarding their performance, goals and their take on the organization. It should be tactical in giving negative feedback to employees regarding their performance by exercising objectivity, combining both negative and positive comments, refraining from using harsh words, explaining the importance of providing feedback and ensuring that it gives feedback with great confidentiality especially for sensitive employees (Holpp & Woods, 2011).
Initiation of Corrective Action
According to Ventolo and Williams (2013), performance appraisal helps the management to undertake essential decisions regarding the employee in an objective manner. This final step is concerned with such decisions as promotions, employee rewarding, transfers, demotions, suspensions and employee dismissals. The HR manager should ensure that decisions made about an employee are related to the outcome of the performance appraisal process to avoid grievances that may negatively affect the overall performance of the organization. This process also involves the development of an action plan for future performance appraisals. In areas that employee success is more prevalent, the management should build bigger goals. For those areas where employee performance seems to lag behind, the management should provide specific action plans. Employees should be actively engaged in this process to offer their expectations as a motivational factor for effective implementation.
Conclusion
The performance appraisal process helps the management to make informed judgments about the employee and thus make effective decisions to enhance the attainment of organizational goals. It involves six steps through which the management sets standards of performance and eventually takes corrective action depending on the actual performance of the employee. Due to the uniqueness of businesses and their employees, different organizations employ various parameters in establishing their performance standards to be used in the appraisal process.
References
Holpp, L., & Woods, J. (2011). Win-Win Performance Appraisals: What to Do Before, During
and After the Review (6 th ed.). New York: McGraw-Hill Publishing.
Lyster, S., & Arthur, A. (2007). 199 pre-written employee performance appraisals: The complete
guide to successful employee evaluations and documentation: with companion CD-ROM (6 th ed.). Ocala, Fla: Atlantic Pub. Group.
Ventolo, W., Jr. & Williams, M. (2013). Fundamentals of Real Estate Appraisal (11th Ed.). Dearborn Real Estate Education.
