Employee Performance Management is a set of processes and activities which helps organizations to develop their employees and improve their productivity and efficiency. However, the performance appraisal, in fact, is the actual periodical review of the performance of an employee. The appraisal system reviews and assesses employee’s actual performance, skills, work quantity & quality, achievements and contribution to the organization within a specific period of time. The performance appraisal system measures the performance of an employee on the basis of predefined scales or objectives and their contribution to the organizational objectives and goals. The appraisal system plays a very critical role in aligning all of the organizational resources to the organizational objectives. The periodical appraisal review determines
- Employee skill level
- Work quality in contrast with the quantity
- Strengths and weaknesses
- Growth or lack
This provides a very clear insight into an employee’s capabilities and an organization can easily decide the contribution the employee makes towards the organization. Periodical appraisal promotes quality of work and exposes maximum potential from a resource.
There are different methods and techniques of performance appraisals. Here are the most commonly used appraisal methods:
Appraisal Method 1: Management by Objectives
Get the employee involved in the goal-setting process with the line manager.
This is the most advanced method of Performance Appraisal. My organization has adopted this method in 2021 to align the goals of the organization. The Performance Management System developed by RSI Concepts has provided this method and encourages organizations to utilize it more than other methods.
Studies have shown when an employee gets involved in the goal-setting process, they are more likely to achieve those goals. The manager and employee both plan the objectives for a certain period of time and then those objectives are monitored and measured to assess employee performance. The management by objectives is a full-on process rather than a one-time evaluation. It could be set for a particular time interval such as a month, quarter, yearly or bi-yearly. Once the goals are set, a strategy has been formed and the plan has been executed. The manager and the subordinates both sit after a certain time interval to discuss the progress and to estimate the future expectations. This also provides them a chance to improve the ongoing progress by tweaking their existing strategy and plan.
The management by objectives involves both the subordinate and the line manager so it provides a greater self-awareness, which encourages the employees to perform better. It is considered to be the most cost-effective employee appraisal method. The subjective bias can also be eliminated and the method is very effective in measuring the performance of the senior management, mid-level managers, frontline managers, supervisors and employees.
Appraisal Method 2: 360 Degree Feedback
Get feedback not only from the line manager but all the peers involved in the process.
The 360 Degree Feedback is another latest method in Performance Appraisal and adopted by many organizations or by some departments within the organization. It provides a detailed assessment of the employee. Usually, the feedback can be collected from many individuals, including senior colleagues, subordinates, supervisors, customers and managers known as peers. The catch here is all of these personals who are giving their feedback must have been working with or around the employee but in the business process – who is being assessed. The 360 Degree Feedback is mostly to assess the overall contribution of the employee towards their job role, tasks, objectives, expectations and organizational goals and objectives.
The 360 Degree feedback process could take up to two weeks to get complete, it starts with selecting the participants also referred to as raters. The selection of participants or raters is important and it could be up to 25 persons, it entirely depends on the employee’s work and responsibilities. The Performance Management System developed by RSI Concepts has the configuration level settings to change the number of peers or raters. Once the raters are being shortlisted then a questionnaire should be prepared by keeping in mind to generate enough data to help to build comprehensive reports. Some businesses and organizations also use online mediums to conduct surveys for 360 Degree Feedback. Once getting all of the expected feedback, a report has been produced. After that report, the line managers can hold a session to discuss the report and performance to find out methods and ways to improve performance further as and how assessed and required.
Appraisal Method 3: Behaviorally Anchored Rating Scale
Get line manager response in a YES and NO fashion. Quick and Precise!
The behaviorally anchored rating scale is designed to include behaviour related ratings in the appraisal process. Usually, particular behaviours are denoted with a numeric value and then the value is being used for the rating process. The behaviorally anchored rating scale or BARS is widely used to incorporate quantitative and qualitative ratings in the appraisal process. It is very important that all the behaviours that need to be assessed are carefully listed and then graded to ensure highly accurate appraisal results. Usually, a number of outcomes are listed then the possibilities of incident and behaviour has been analyzed which can produce those outcomes. Then we can create scales, grades or indicators on the basis of this analysis. This is how behaviorally anchored rating scales are defined and measured. The BARS results are very accurate and reliable, the data can be used for the appraisal process as well as for estimating employee efficiency and productivity for the future under particular circumstances.
In the Employee Performance System developed by RSI Concepts, the Behaviorally Anchored Rating Scales are influenced by the standards provided by the Government of UAE, Dubai and Sharjah. A set of Behavioral Competencies are defined and divided into the main categories and while each category further has 3 to 4 subcategories where each employee can be assessed on a scale of 1 to 5 where 5 is the best. The ratings are then incorporated into Performance Appraisal periodically.
The behaviorally anchored rating scale is very easy to understand and accurate to help organizations and businesses to understand the behaviour of their employees which could help the management to take accurate decisions to ensure maximum utilization of the skills, experience and capabilities of a particular employee. The BARS completely eliminate the irrelevant variables from the equation and only provide measurable, accurate results based upon clearly observable behaviours. This is what makes them very important and useful for performance management systems and the employee appraisal process. However, if you want to incorporate BARS into your appraisal rating program then you should have to do intensive research to ensure you will get accurate and actionable data. The behaviorally anchored rating scales are expensive, require more resources and efforts, but provide excellent data.
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Appraisal Method 4: Straight Ranking Appraisals
Get employees ranking compared with each other.
Straight Ranking Appraisals are very straightforward and simple. In this method, the line manager assigns a rating or number to all the employees working on a particular task under the same conditions. Most of the time the reviewer defines the ranking or scale on the basis of the top performers or on the basis of their personal experience or by the knowhow of the job. There are a few more variations that were being introduced later and are also followed by many organizations and businesses. The straight ranking is among the oldest and simplest appraisal methods still being used. Usually, all the employees are compared with one another and a ranking system is being established based on the ratings of most productive to least productive or most efficient to least efficient and so on.
Furthermore, the straight ranking appraisal has been transformed into more appraisal methods such as paired comparison appraisal, in that method the employees are divided into groups and then their performance is compared to each other. Another popular method is the standard rating scale method in this method the personality traits of an employee has been rated against a scale ranging from poor to excellent or as such.
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Appraisal Method 5: Human Resource Accounting Appraisal
Get the money earned vs money yielded.
The human resource accounting appraisal measures the performance of the employees on the basis of the monetary benefits they have yielded for the organization against the expenses they had cost to the organization. The cost is measured accurately by calculating the cost of retaining a customer, their salary, benefits, hiring cost, any other cost and then the monetary value of the benefits or work is calculated as per the predefined criteria and measurements to measure the monetary benefits an employee brought in for the business over a predefined span of time. The human resource cost accounting appraisal method includes the overall departmental cost, production unit cost, office cost, employee cost, interpersonal relationship cost, and many more. Basically, it is a purely cost and benefits based analysis, so sometimes, some employee’s trait or expertise could be missed out or not included in the appraisal process. But this can overcome by using other appraisal techniques in parallel.
The biggest advantage of using this appraisal method is that it provides a very accurate picture of what an employee is costing a business and in return what they are bringing back to the organization or business. It also clearly identifies and project the financial impact of the employee performance over the organization. It is an excellent method to understand the monetary and non-monetary benefits an employee is providing to the business.
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Appraisal Method 6: Assessment Center Appraisal Method
Get employees to see how others observe them.
The assessment centre appraisal method is most widely used by business to evaluate and assess the technical expertise, skills and performance of an employee for either recruiting purposes or for promotion, transfer, etc or for identifying the training needs for the employee. Assessment centres are specifically designed to assess and review certain tasks and certain job roles. Usually, the assessment centres are outsourced but even if a business has an in-house assessment centre they will have to prepare it with required planning to ensure an accurate outcome. All the employees are being given the tasks they will have to perform for a particular job, then a team of assessors will monitor the actual performance of the employee and on the basis of that performance, it is easier for the business and organizations to make hiring decisions, or decision about an existing employee such as their promotion, salary increment, job role and position, and training needs.
Assessment centres are one of the most widely used appraisal methods with excellent help for the HR department and remarkably accurate assessment results. The assessment centres can be very helpful in performance appraisal reviews and employee assessment. The assessment centres are designed for testing the physical skills and expertise of an employee. For the employees who have failed the assessment, the business and organizations are continuously offering development program to regain their motivation and to encourage them to improve their skills, that kind of setup is called development centres, there is a combination of both the development centres and the assessment centers can be used to ensure the improved human resource in future. Although this method is time-consuming and cost-intensive but provides greater results for industries such as Manufacturing, Educational institutes and Service based departments.
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Conclusion
The Performance Management System is used to achieve the goals and objectives of the organization to maximize efficiency and profits. Performance Appraisal is one of the factors which is designed to improve the work environment and employees and their capabilities and work efficiency within Performance Management. The different methods of performance appraisals are designed to help different requirements and challenges organizations face during periodical appraisals. The appraisals methods covered in this blog are prominently used in Sharjah, Dubai and UAE. These methods are widely used because they can provide highly accurate data which can help organizations and businesses to understand the true potential of an employee to contribute to the organizational goals and objectives. When an employee is placed on a job role where they can perform well, it improves their morale and it increases the employee retention rate. When an employee is working efficiently the operational cost get reduced. Not only that the appraisal systems are also used to identify the training needs for the employees as well.
RSI Concepts has a leading Employee Performance Management System in Dubai and UAE with effective and widely used appraisal methods. Please get in touch with our business consultants through our Contact Us page or leave a comment below and we will get back to you at the earliest to learn more about your requirements. Our Performance Management consultants can help you propose a solution according to the industry requirements to streamline the challenges.
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