What a Performance Management System Should Do

Link Salary and Status Realistically to the Performance Appraisals

Most personnel departments have a very narrow outlook to appraisals. The general view is to receive the appraisal forms at a date (which usually is the deadline), issue instructions regarding increments and promotions, receive the data regarding the same and they issue letters to the concerned employee informing of their salary increase. The appraisal process gets polluted as the appraiser and appraise have at the back of their minds promotion and salary increase, rather than performance plans and participative reviews. This dilutes the objectives of appraisal to great extent. In fact, if organizations create, a culture of continuous feedback on the performance they would be making the appraisal system more relevant. Several organizations have already started delinking performance appraisal from salary increase.

Making Objectives of Performance Appraisals Clear to All Employees

If performance appraisal should not directly be linked to salary increase the question then arises, what should the objectives of performance appraisals be that could be realistically achieved?

• To do joint goal setting, and link the goals to the organizational objectives
• To provide role clarity by defining Key Result areas for Accounting.
• To establish a level of performance in the current job and seek ways of improving it.
• To identify potential for development and to support the total process of planning.
• To increase communication between the appraiser and the appraise.
• To identify factors that facilitate performance and other factors that hinder performance.
• To help the employees identify and recognize their own strengths and weaknesses. To make them assess their own competencies and how the same can be multiplied and improved.
• To generate data about the employee for various decisions like transfers, rewards, job-rotation, etc.

Focus on Developmental Appraisals

Managers should develop part ownership in the employee’s future. Any good appraisal system should focus on developmental appraisal. Developmental appraisal mean that an organization needs to develop not just isolated performance appraisal tool/system, but the total frame work for the individuals development, improvement in job and level of competence and preparing employees for future jobs. Thus, appraisal of people, which is a part of the total HRD system, lies to be linked to long-term development activity and carrier planning.

Organizations have to show vision for the future. Vision, strategies and objectives will give rise to individual objectives and performance standards. The immediate rewards and recognition do not lead to enduring performance and upgrading of competence and therefore are not real motivators. The appraisal as a tool not only gives the individual and the organization the idea of where the individual stands in terms of his skills, competencies and abilities, but also monitors the process of growth and development, together with the inputs that are required to develop a high level of competence by individuals.

Let Employees Appraise Their Own Performance

Subordinates need feedback more often on their performance. The best way to do it is to let them appraise their own performance.

Self-appraisal would;

• Motivate the employee to take more responsibility for his/her own performance.
• Focus on the job behavior only.
• Reduce ambiguity in performance and focus on change in job behavior.

Create a Climate for Open Appraisals in Organizations

In most organizations, the concept of open appraisal is misunderstood. Open appraisal does nut mean that the appraisal ratings are shown by the subordinate, and his/her signature is then obtained. What it does mean that both the appraiser and the appraise share their views on performance with each other, identify the areas of improvement and work towards it. One of the objectives of open communication between the appraiser and the appraise is to bring them together to solve organizational problems and performance related problems. The quality of ratings is likely to improve if there is shared understanding between the appraiser and the appraise.

Muscle Builds the Organization

In today’s competitive world, raising performance goals is essential. This entails analyzing the company’s current situation, projecting the future, establishing higher expectations, and selling the top management on the upgrading process and developing an action plan. Muscle builds the organization by;

• Enhancing your own performance
• Accelerating the professional growth of the best performers
• Not tolerating managerial performers. One cannot muscle build the organization, unless marginal performers are replaced.
• Developing multiple skills and competencies by worshiping success and potential.