Performance appraisal, as a concept has been a subject of neglect in many Indian organizations. In such organizations where performance appraisal has been instituted, it has been observed that the concept is ignored and/or given scant attention to, by even the principal participants to the process i.e. the boss and his subordinate probably because of flawed design/implementation of the process. My effort through this article shall be to provide a panoramic view of performance appraisal – the objectives underlying it, an idea of its evolution and the benefits, which it may offer to an organization (if properly understood and implemented).
The objectives of Performance Management System(PMS), as expressed by T.V. Rao (Ex-Professor-IIM-Ahmedabad) the guru in this area, include:
- Performance Planning:which means enabling the employees to obtain clarity with respect to their goals and develop a discipline of systemic planning and review of their own performance.
- Performance Development: which means enabling the managers to develop a better insight into their strengths/weaknesses (job related) and for identifying the training and developmental needs of the appraisee/employee.
- Performance Monitoring and Control:Performance appraisal is a tool for evaluation of the employee’s performance and for linking employee’s performance with rewards, increments and promotions.
- Culture Building:Performance appraisal can be an effective tool for instilling a positive,problem solving, and healthy culture in the organization for attainment of goal through collaboration and teamwork. Performance appraisal also facilitates the building of a competitive culture by focusing the energy of people inside the organization on the task of winning at the marketplace.
THE EVOLUTION OF PERFORMANCE APPRAISAL:
In earlier times, an evaluation of an employee’s performance happened through the instrument of – an “ACR” –i.e. an Annual Confidential Report regarding the employee, which his/he rboss would submit to higher authorities. However the manifold biases of the boss, which infiltrated into this kind of an assessment, drove progressive practitioners to evolve the mechanism of Self-Appraisal, where the appraisee/employee provided in writing, his own record of all job responsibilities entrusted to him/her and how well he/she carried them out.
Self-Appraisal has the advantage that it gives the boss a better understanding of the job activities and responsibilities of the appraisee/employee. It also provides the management and the boss a complete picture of the employee for objective assessment of his/her performance.
The Self-Appraisal process evolved further,yielding to appraisal of the appraisee/employee by his/her boss through the mechanism of a PRD (i.e. Performance Review Discussion). This system was a clear improvement over the previous ones as it provided the forum for both the boss and his subordinate to openly review and discuss the latter’s performance with respect to the performance goals, which was defined clearly earlier, through a goal setting process, thereby enhancing the transparency and credibility of the whole process. In most organizations today, this is the most commonly followed method of appraisal.
However, organizations with well evolved systems in place, have adopted “Peer Appraisal” as an additional means of employee assessment. Under this system one of the assessors of the employee’s performance and potential would be the appraisee/employee’s peer with who he/she is in regular interaction for fulfillment of his/her job expectations.
Organizations with further evolved systems have supplemented peer and boss appraisal mechanisms by soliciting customer feedback about the appraisee/employee’s performance on parameters related to cost, quality delivery, attitude, behavior etc . In some organizations, the subordinate (i.e. reverse appraisal) also assesses “the boss”. However, such organizations are few in number and very difficult to find in India, since a high level of systemic maturity in organizational culture is a prerequisite for accommodating these innovative appraisal methods.
It should be management’s commitment to continuously upgrade the performance appraisal system and other allied systems in such a way that one day we may be able to implement 360-degree appraisal in the organization (The 360-degree appraisal method is one where the employee is appraised by himself/herself, his/her boss, his/her subordinates, his/her peers and also the end customers – both internal and external).
Friends, a well implemented appraisal system is essential for the good health of the organization. Such an appraisal system can differentiate between the performers and non-performers distinctly and objectively, resulting in fair reward decisions being taken for performers and appropriate counseling and development plans being evolved for non-performers.
A fair and objective performance appraisal system can inspire good performers to perform even better. This way top line additions happen substantially and at a quicker pace. Better performance also guarantees higher organizational productivity leading to higher revenue generation and growth. Growth has its obvious positive implication in terms of enhanced profitability of the company, employee satisfaction through better shared prosperity and greater customer satisfaction. All these positive ramifications of a well implemented performance appraisal process indicate to us the prosperity hidden within an appraisal process- it is now up to each one of us to grab the GOLD hidden in the system for which it is essential that we would mould ourselves to its requirements.
Friends, global and national benchmarking reveal that all such organizations which have taken their performance appraisal process/system seriously and have integrated the performance appraisal system with other business processes (e.g. Wipro, Xerox corporation, Hindustan Lever Limited, Hewlett Packard, P&G etc.) have also outshone on results on critical parameters such as:
- Revenue Generation
- Profitability
- Customer Satisfaction
- Employee Satisfaction
Friends,I sign off here with the suggestion that you will put your best effort and co-operation for the fruitful implementation of PMS at your organization.
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