Performance Appraisal - Only Money or More?

It is that time of the year when either your performance has been evaluated, or it is about to be announced. With temperature soaring and an apprehensive set of employees all across, the doctors are receiving more patients for the regular checkups. With Performance Management System in place, an organization focusses on a systematic evaluation of performance of employees with respect to the targets and the organizational needs. The benefits for the organization are several: assessment of current performance, performance gaps, training needs, promotion programmes, restructuring compensation packages, talent management.

However, my experience and observation of a couple of years says its ‘money’ that significantly motivates an employee. The stark reality of the current scenario is that employees are less concerned about the employee development steps taken as a part of appraisal. Their worries and concerns revolve around the particular percentage of raise they expect and anticipate. I wonder whether its Performance Appraisal serving as a motivation tool for the organisation or is it only money factor driving the masses.

The value of the process involving goal setting, performance assessment,employee development is not communicated clearly to the employees. An obstacle for HR is in collecting data for the evaluation of performance since this process is not accepted by the employees. The acceptance of the process depends if its benefits have been well percolated down to the grass roots level.A rigid and long methodology for evaluating performance also leads to a disinterest at the employees’ end. The purpose of the system then gets defeated and poses a challenge before the HR to project Performance Appraisal as a development process, and not just as means to earn more money.

Here are some of the ways to make Performance Appraisal an effective tool, a tool of development instead of a source of money.

(1) Clarity in communication: Employees across the organization need to be informed on the process and its benefits. Projecting the process as a tool for development can change the way employees view it, thereby increasing its effectiveness. More often than not, the appraisal forms are filled in randomness, at the eleventh hour.A transparent mode of communication letting the employees know the way they are rated and how the grades are calculated always leaves them satisfied. It marginalizes the suspicious attitude that employees could have otherwise perceived it. Channelising the employee coomunication vehicles can be a step forward.

(2) Increased participation: Better informed employees will participate more in the process of Performance Appraisal.Increased participation will result in more commitment of employees towards performance. This will drive the appraisal process. This will also eradicate that section of employees which is usually non-performing and sulking.

(3) Engagement at senior level: The more the leaders in an organization are involved and engaged in the appraisal process, the more they will feel responsible towards driving the process. Each leader can motivate his team, keep them working towards performance throughout the year, hence resulting in a better quality performance assessment.

(4) Regular feedback: A Performance appraisal system if includes regular assessments, discussions and feedback will lead to a transparent and open culture in the organization. Surprise element in terms of grades once a year is usually not received well at the end of the employee. A quarterly assessment, giving the employees a fair idea on how to move further is always a great idea. This helps in keeping them on track throughout the year.

(5) Tool for improvement: Through feedback given by superiors,training needs for each individual can be identified. Identification of areas of improvement can help an organisation design its training calendar, specifying behavioural and skills needs.

The effectiveness of the Performance Appraisal depends on how well the HR is championing it. An organizational commitment to the process is also equally important. Performance management is not an annual event; it is a yearly process of two way communication, recognition of performance, and identification of areas of improvement.