Performance Appraisal

Performance Appraisal:?The changes needed: 13-07-95

All organizations have some form of?performance appraisal system.?Although there are some differences in appraisal systems followed by different organizations, there is one similarity, almost everywhere it is used for assessing compensation increments and promotions.?In most organizations it is observed that although the name of the system is performance appraisal but its rarely used for appraising the persons on his/her performance.?The sole purpose of this system gets reduced to deciding increments.

Purpose of #Performance Appraisal:

1. Performance Planning and Development:?One of the most significant purpose of any appraisal system is to plan for employees performance in the organization and working outa strategy to improve?performance.?In most of the appraisal systems the weakest area is planning part.?Most of the appraisal systems have a kind of reporting of what an employee did during the year, what was well done, what?was not so well done etc.?The portion of What he/she would like to do, what are the supporting and hindering forces (in what he/she would like to do), what are the learnings from the past, how he/she will ensure to improve the performance,?etc. are not the areas focused in great?detail. As a result the?analysis of self performance becomes very weak.?Hence defeating the very purpose of appraisal.

2. Feedback:?Another significant purpose of any appraisal system is to share #feedback about employees performance of a fixed period of time.?This dimension of appraisal?system again is found to be quite weak in most organizations.?Invariably the feedback is limited to whether person was able to achieve the set targets or not and in some cases (depending on the person doing the appraisal) suggestions are given on how to improve on this dimension.?But very rarely person is assessed on interpersonal interactions, contributions to culture building, on qualities such as taking initiatives, development of teams etc.?As a result responsibility to build the institution always remains with the top Management and is not shared with all the employees of the organization.

What can be done:

1. Analysis of?performance:?Appraisal systems should focus on helping employees analyse their performance and draw lessons for future.?It should focus on what performance was planned, what was achieved in reality, what helped in achieving, what hindered, how such problems will be tackled in future, what are the lessons learned etc.

2. Link it with performance?planning of the Organization: Each organization has some mechanism of planning about the future, at-least for coming year.?One possibility is that the organizational plans may be distributed in divisional, departmental and individual plans respectively.?This will not only provide?focus to individuals plans but would also help organization to recognize the contributions of people with greater clarity.?It will also give people a sense of mattering in the organisation because they could see how their performance will effect the overall performance of the organization.?Certainly it will involve greater amount of planning, but is it not one of the corner stones of management.

3. Develop a list of Qualities needed at various levels:?One of the reasons why organizations have various levels of employees is that they should be performing different roles which require different set of qualities.?For example the top management requires more of transformational qualities i.e.?visioning, role modelling, culture building, mentoring, boundary management etc. While the middle management requires more of transactional qualities i.e.?planning, coordinating, developing systems, monitoring, coaching,?etc. While the junior mangers?require qualities i.e. initiative, development of teams,?etc.?An organization with such a list can asses its employees on these dimensions also.?This will help employees get a much more complete picture of their role. With these parameters performance does not remain only number chasing affair instead becomes much more complete.

4. De-link it with reward system:?One of the main cause of appraisal systems becoming a self-defeating exercise is that mostly it is linked with reward system.?Hence what gets done is the reward distribution and what gets left-out is?the performance planning and development.?For a practising manager the next question comes `how to reward people'.?Some of the ways could be:

a. Link total performance of the company with general reward: One of the ways of rewarding people could be that according to the performance of the company (growth in its profits), people can be rewarded. It will be an acknowledgement of contributions made by employees.

b. Link performance of the unit with rewards:?Similarly another way could be rewarding people on the basis of the performance of the department or the unit.?Feedback on the performance of the department may be collected from the users and based on this feedback reward system can be worked-out.?This will enhance employees?accountability, quality of service and identification with department or unit.

c. Link customers feedback about people with rewards: Another way of rewarding could be that for each employee the feedback may be collected from their customers and onthe basis of this feedback rewards may be distributed. This will ensure customer orientation in the organization.

d. Link rewards with focus areas of the company/unit: Another way of rewarding people could be to asses their contribution to thrust areas selected by the company or the department, i.e. quality.?Employees may be assessed on their contribution made or initiatives taken to support the thrust areas of the organization.?This will motivate people to look beyond their job and identify and make contributions to the larger organization.

e. Give a fixed increments for inflation:?There is no need to reward people for doing the job (job that they are appointed for) well, because the expectation is that every one should be doing the job well.?When an organization rewards people for doing the job well, it builds the expectation that if people don't do their job well they can survive in the organization, only thing they will not get is the extra-increments.?The system of?Extra increments in any case should be scrapped because more then motivating employees for good performance it de-moralizes those who do not receive it.?Because due to lack of clear-cut basis of differentiation in performance, a high degree of subjectivity creeps into the system. Instead of extra-increments all employees may be given increments to take care of inflation, and hike in living cost.

f. Give power to your head of department to distribute some money: Some funds may be made available to the head of department to distribute among his/her employees using his discretion.?This can be looked upon as one-way of rewarding performance in the department.?It will give power to department head to directly reward people, instead of the current practice where his role is only recommendatory, will take care off the power less ness that most of the department head experience when it comes to rewarding people.

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