Employee performance appraisal is an essential process for any organization. It helps companies keep track of their employees’ performances and a scope of improvement that is directly linked to the organization’s growth. A proper appraisal process and performance review also encourages employees to perform better, keep them motivated and strengthen their commitment towards the company. But studies have shown that most employees are not completely satisfied with the traditional annual performance appraisal methods. To keep your employees satisfied, motivated, and committed to the organizations, the management should adopt the modern employee performance appraisal methods.
What is performance appraisal?
Performance appraisal or assessment can be defined as a quarterly or annual process that involves evaluating an employee’s performance and productivity against clear and quantifiable objectives of the organization. While the purpose of the appraisal is to evaluate an employee’s skills, value addition, motivation, and strengths and shortcomings, this process helps determine promotions, raises, and areas where an employee needs to improve.
Companies tend to take two kinds of approaches (traditional and modern) when it comes to employee performance appraisals. The traditional method involves ranking, grading, paired comparison, critical incidents, etc. The modern performance appraisal method, on the other hand, includes 360-degree feedback, psychological appraisals, management by objectives (MBO), and behaviorally anchored rating scale (BARS). While both methods come with their own set of pros and cons, recent studies have shown that modern methods have rendered better results for organizations. Even the employees feel more satisfied with the modern performance appraisal process, taking an objective and comprehensive approach.
Why is performance appraisal important for your organization?
A properly structured and implemented employee appraisal process can help both the organizations and employees enhance their output. While the organizations can find out whether their employees are being productive or a liability, the employees will know the areas they need to improve and the areas they are already doing well. This process can create a better work relationship between HR departments and the employees as both can express their concerns and issues.
But the benefits of a well-structured employee appraisal process are not limited to this. They also include:
- Employee satisfaction and motivation
- Finding out the training and development needs of the employees
- Analyzing appraisal data for future recruitments
- Enhancing communication between employees and the HR managers
- Manage the changing roles of employees
Best Modern Performance Appraisal Methods companies must implement
Management by objective (MBO)
This process improves an organization’s performance by articulating clearly defined business objectives through a collaborative effort between the management and the employees. In this approach, both managers and employees come together to identify and plan the goals that must reach within a stipulated period. The two then meet at regular intervals to assess the progress in achieving those goals and objectives, plan the way ahead, and the scope of improvement.
360 Degrees Feedback
As the name suggests, this method takes feedback from all the key players an employee works with, coordinates, and communicates daily. These could be their managers, colleagues, clients, supervisors, subordinates, and even customers. The employees are also required to fill in a self-evaluation form to access themselves. This method is ranked and regarded quite highly by companies as they get complete feedback from different quarters.
Behaviorally Anchored Rating Scale (BARS)
This measuring system rates, ranks, and assesses employees and trainers based on their performance and specific behavioural patterns. This is seen as one of the most efficient performance appraisal methods as it looks at both quantitative and qualitative forms of assessments. It works by comparing each employee’s performance based on specific behavioural patterns linked to numeric ratings.
This is a futuristic approach where companies assess how an employee might perform in the upcoming years rather than their past performances. In this method, a professional psychologist conducts private conversations, psychological tests, and in-depth interviews. The psychologist then analyzes cognitive abilities, interpersonal skills, leadership qualities, intellectual traits, personality traits, and emotional quotient. This method allows companies to future-ready their employees and plan for a long-term strategy.
Assessment centre method
This method concentrates on assessing an employee’s job capabilities as well as their social interaction skills. While written tests are conducted to determine their ability to perform their job, various situation-based exercises and role-play are given to them to successfully analyze their ability to carry out various roles and responsibilities.
The employee performance appraisal process is critical to the success of any organization. While the right one can help you improve performance and provide opportunities for long-term growth to your employees, a wrong choice can demotivate them and hamper their contribution to the company. That is why it is important to choose the one that fits the goals and structure of your business. And the best way to simplify this process is to utilize HR solutions by Carbonate HR, Best HR software in Singapore. An experienced and reputed service provider, Carbonate delivers complete HR solutions for the growth of your organization.