Performance Management System Archives - Page 3 of 4 - RSI Concepts - Top IT Solution Provider Company in Dubai, UAE

October 28, 2022

How to Leverage Automation to Improve Employee Performance Appraisal Process?

The UAE is among the world’s most developed nations. The government is always encouraging ministries, departments, public offices, and even private sector to adopt to modern technologies. The government also facilitates the technology industry and IT sector with very supportive policies. The economy of the country has proven to be very strong even during the global outbreak, and now that phase is over already, the economy is booming. Here in Dubai and all around the UAE the rate of new startups per month is higher than any other neighboring nation. This is raising the competition and making the markets more diverse, dynamic and customer-friendly. As the simplest way to beat the competition is to delight your customers and make them loyal. The customer’ dominance is evident by the rapid adaptation to customer-centric strategies and business models. The tough competition, high customer demands, and ever changing market trends demand businesses to be more proactive with their strategies and policies. This led businesses to start implementing modern technologies and digital solutions to add value and efficiency to internal business processes. The performance management is one of those core processes that need an upgrade.

A well-crafted performance management strategy help businesses maximize their productivity and efficiency and enable them to grow gradually over the time. However, in this modern age of IT and digital the traditional performance management processes have become ineffective, and now a days the modern performance management is heavily relying on performance data. The annual appraisal practice have lost its effectiveness since a long time ago, however, there are still some businesses who rely on that method but most are now implementing modern and continuous performance monitoring methods. It is important to continuously monitor the performance of the employees and keep a track of their progress throughout the entire year. Whether you follow a traditional method or implement a modern digital performance management system, the performance management was never easy. Employees and managers always dread it due to time-consuming processes, unreliable evaluations and appraisals and high cost.

However, all these problems can be solved by implementing the modern technologies. In this blog we will discuss how businesses can leverage modern technologies to drive automation which can significantly improve the employee performance appraisal process.

What is Employee Performance Appraisal Process?

By definition an employee performance appraisal process is a systematic and periodic approach to measure the performance of the employee against their job roles, pre-set goals, the value they add to the company goals and strategic objectives, their worth for the business, their strengths and weaknesses and the future potential. The businesses use performance appraisal processes to acquire valuable information which they can use to make decisions such as employee promotion, bonuses, transfer, and termination, etc. The employee development programs and training programs are also set on the bases of that data. Furthermore the employee appraisal process also help improving communication between the employees and the managers. This is necessary to provide employees with a better understanding of the company goals and objectives and let employee understand how their individual goals and objectives will help business achieving its high-level goals and objectives. The employee performance appraisal data is also helpful in identifying future leaders and help businesses and organizations to gradually improve their talent pool and workforce which is a key to long term success and sustainable growth.

How Automation can improve the Employee Performance Appraisal Process?

There are two major problems that traditional employee performance appraisal process have, first is the bias or favoritism and the second is once or twice a year evaluation. However, in the present day the psyche of a common employee have completely changed, the deep integration of technology, fast-paced lifestyle and evolving markets demand businesses to act swiftly and be more vigilant. The yearly appraisals have become very ineffective. It is not just the employees, the managers, the HR and even the higher management is also unhappy with this yearly or biyearly chore. It is because the time, efforts and cost it takes and in return add very less value to employees’ or organization’s performance. Another major aspect of the modern performance management is that it not just focus on the past performance, but it help identifying the strength and weaknesses of the employees, various internal processes and other factors that are impacting the performance. The modern digital employee performance appraisal process depends on a software application, which automates several performance appraisal tasks, and it also improve the data collection capabilities and the data quality.

Businesses also want to align their employees and all resources with the company goals and strategic objectives. Which is not possible with the traditional employee performance appraisal processes. So the modern employee performance appraisal process is focused on the past performance, current performance and learn the ways to improve the performance in future. A digital employee performance appraisal system/software can help automating several processes of the performance management. Here is how businesses can leverage the automation to improve employee performance appraisal process:

Quicker and More Frequent Feedbacks

The employees don’t like waiting for one year to know how they are performing, in fact they need instant feedback. The yearly performance reviews take a lot of time, employees don’t have much trust on them and the reviews are also not capable of evaluating the entire year’s performance. In fact most of the time the annual reviews are based on just the most recent performances, and they might include some significant incidents where the employee either performed well or poorly. That is why the employee wants more frequent feedbacks from their managers as they know this feedback will help them stay on the course, and will keep them from deviating or losing the focus from the primary objectives. The digital employee performance appraisal system provides an automated and structured communication framework, which includes more frequent interactions with the managers. It help facilitating the one on one discussions/interviews, and more frequent performance reviews. Hence the employee can get more guidance from the managers and tend to perform well.

Streamline Employee Performance Appraisal Processes

The digital employee performance appraisal system is capable of automating several internal performance appraisal processes and performance management tasks. For example, the managers can easily utilize dynamic and customized feedback forms and questionnaires for each job role. The system can understand the workflow and it can automatically take the participants and managers from one stage to the next. Furthermore the system also have in-built features to control the access to the system and various processes and it is also capable of passing the employees or the feedback process to the next level without any human interventions. Thus it saves a lot of manual work. The digital review forms are also a great help, they keep the managers from doing hours and hours of manual work. The digital employee performance appraisal system also help processing the data and offer a variety of in-built analytical tools. It can share the data with all relevant managers, senior management, and even with the employees if needed. All this can be done automatically which save a lot time and effort.

Real-time Monitoring and Visibility to Performance

Processing manual reviews and generating reports is a time consuming task. The managers will have to wait a lot to get the report. This is because the traditional employee performance appraisal system was designed to generate such reports once a year or maximum twice. However, the modern employee performance appraisal system can completely automates the process. As the employee reviews and questionnaires can be digitalized, the system can collect the feedback automatically and instantly generate report in the system. The managers and senior management can easily access those reports from their administrative dashboards. Furthermore the automation enables the digital employee performance appraisal system to provide up-to-date performance data in real-time which can be very handy in decision making and strategy building processes and provide senior management greater visibility and monitoring capabilities. These features also help businesses to quickly adopt to continuous performance management which is tend to be a great and most effective employee performance management and employee performance appraisal strategy.

Save Time, Efforts and Cost on Employee Performance Appraisal Process

The traditional employee performance appraisal process includes a lots of administrative tasks that kept HR and Managers very busy during the evaluation process. AS different job roles have different forms, each employee might have to fill-in more than one form, the businesses tend to evaluate employees, managers, and also collect feedback from teammates and peers, the creation and distribution of all these forms could be very time consuming. Then the HR or the managers will also have to follow up with the employees to get them the form done within the time. Even then it is very less common for the HR to complete the employee performance appraisal process within the due time. It usually gets late and that is due to these time consuming administrative tasks. However, with the help of a digital employee performance appraisal system all these tasks can be fully or partially automated, which means the system will do the work and it can significantly reduce the time and efforts required to complete the process. Furthermore the system doesn’t only save time and efforts but a lot of cost too. The employee performance appraisal system is mostly a web-based application which is very cost efficient.

Align Employees with Company Goals and Objectives

Employees need to be more engaged in their work, they should be happy and satisfied and the communication should be excellent. This will help achieving businesses better performance. A digital employee performance appraisal system not only automates the appraisal and performance management processes but it also provide a structured framework which eliminates a lots of traditional problems and obstacles that can hinder the performance. When the employees are constantly provided with valuable feedback, guidance and mentorship from the managers, they inspired to perform better. The digital employee performance appraisal system also provide businesses with highly accurate performance data that help them understand the strengths and weaknesses of the employees and help them plan better employee development and training programs which itself is a great tool to maximize the employee performance. Furthermore the transparency and proper acknowledgement of all of their efforts help employees to get more emotionally connected with the business and its goals, which also inspire better performance and employee produce more outcome with less inputs.

Well-organized Historical Performance Data

It is difficult to remember the previous performances, milestones or achievements. Especially with manual data management and traditional performance management strategy it is extremely hard to pull out historical data and perform comparative analysis. However, with the digital employee performance appraisal system all the historical data and previous achievements are well-organized and stored in a data repository. It just requires a few clicks in the administrative dashboard to pull up the previous historical performance data. Especially in case of disputes, the historical data help managers and employees to resolve disagreements very quickly and save time. This also help managers pass a fair judgment and increase the transparency of the reviews. Employees are feel more confident and trust when they know the evaluation is fair and on bases of their actual performance. This also eliminates the chances of typical bias and favoritism that is common in traditional employee appraisal methods. The managers can also get the historical data to compare the weekly, monthly, quarterly or yearly performance of the employees, teams, departments and even the entire business.

Compatible with Multiple Employee Performance Appraisal Methods

The employee performance appraisal is not a simple method, in fact it have a lot of sub-methods or multiple different approaches to evaluate the performance on the bases of different reference points. A digital employee performance appraisal system can support almost all modern and traditional performance appraisal methods including:

360^ODegree Reviews and Feedback
720^ODegree Reviews and Feedback
Checklist Method
Critical Incident Method
General Performance Appraisals
Field Reviews
Forced Choice Method
Management By Objectives (MBO)
Behaviorally Anchored Rating Scale (BARS)
Assessment Center Method
HR Accounting Method
Customer/Client Feedback & Reviews
Performance Tests and Observations
Performance Rating Scale
Project based Performance Evaluation Method

Businesses can utilize any or all of the above mentioned employee performance appraisal methods using a digital employee performance appraisal system. The modern day digital performance management systems also provide in-built templates and tools to quickly create performance monitoring mechanisms such as KPIs, OKRs, and other measuring matrices. The HR or the managers can also build customized performance appraisal methods using the in-built tools and features of a digital employee performance appraisal system/software.

See More: 6 Performance Management Problems and How to Solve Them?

Conclusion

For any business or organization monitoring and measuring the performance of their employees and assessing the value they are adding to achieve the company goals and objectives is crucial. It helps them understand the strengths and weaknesses of the employees, let them plan better training and personal development programs for them and help them achieve better productivity and performance which translates to higher profitability and steady growth. However, in this modern fast-paced world, the annual employee performance appraisals are not enough to meet those needs. The ever changing trend, skyrocketing customer demands, and evolving markets demand more proactive strategy from the businesses. The modern digital employee performance appraisal system/software is equipped with tools and features that help automating the appraisal processes and facilitate communication which enable businesses to get higher visibility and align the employees and resources with the high-level business goals and objectives. When the managers clearly communicate the company goals and objectives and provide understanding of how the individual goals, objectives, tasks and performance will impact them, the employee tend to perform better.

When the employees are more emotionally connected with the company goals, their voice is heard, they have trust on the appraisal process and the communication between the managers and the employees is convenient, frequent and clear, the business can easily achieve higher performance. RSI Concepts is a leading performance management system provider in Dubai, UAE we provide tailor-made employee performance appraisal system/software. If you want to learn more about the subject of if you want us to help you deploying a digital employee performance appraisal system, please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

Check out this: Advantages of Hybrid Mobile Applications

October 27, 2022

6 Performance Management Problems and How to Solve Them?

The performance management success can be closely related to the business’s success as higher performance results in higher productivity and higher customer satisfaction. No matter how modern or advanced IT infrastructure you have, or how efficiency your production facility is, if your workforce is not performing at their best then you can never achieve your goals. That is why the performance management have become so important in present day workplace. Having a great talent and high performing workforce doesn’t only mean good hiring methods and HR practices, but a business will have to nurture its workforce, it must have to increase their engagement and satisfaction to achieve the higher performance. That is why the performance management is becoming very difficult day by day. The products and services you deliver to your customers will determine your success and failure. And that heavily depends on the employee performance. That is why the performance management is crucial for business success.

What is Performance Management?

In the modern business landscape the performance management is a method, approach, process, technology and tools a business used to monitor, track, enhance and improve the employee productivity, efficiency and value they are adding to the high-level organization’s goals and objectives. The traditional performance management methods and approaches are not effective anymore. The modern performance management rely on a software tool referred to as enterprise performance management system/software. Here are some of the most common goals of a modern performance management system:

Increase employee efficiency, engagement and enhance their individual skills
Maximize the operational efficiency and productivity of the entire organization
Maximize the profits by reducing the input and generating more revenue
Improve employee experience, increase their satisfaction and reduce employee turnover
Provide a better reliable framework to track and monitor the performance

The enterprise performance management software have completely transformed the traditional performance management. Businesses in Dubai and all around the UAE are also adopting to the modern technological solutions and tools to make their performance management more impactful. However, I still feel that the performance management software is at the place where the internet was in the late 90s. The internet technology have completely revolutionized everything today but at that time it faced skepticisms and a lot of uncertainty was around.The performance management software is also at the same stage. Sooner it will become an absolute necessary for all modern businesses and enterprises.

In this blog we will discuss 6 most common performance management problems and their solution with the help of a modern performance management software.

Performance Management Problems: 1. Unclear Goals and Objectives

The lack of clarity in goals and objectives is the most common and most impactful problem with performance management. Vaguely defined goals and objectives lead to confusion among the employees. Employees can’t understand what exactly is expected from them to achieve, and how their goals and objectives will contribute to the high-level organizational goals and objectives. In fact in such situation most of the time the managers also failed to develop a right mechanism to measure the performance. Ambiguity and confusion can kill the performance, it not only lead to a failure in achieving your performance goals but it will eventually cause a lot more problems. When the goals and objectives are not clear the managers and employees fail to develop right business processes to achieve those goals. The lack of clarity and uncertainty led to frustration and stress, which itself is very bad for productivity. This also have long term consequences such as increased employee turnover.

How to clarify the Goals and Objectives?

The businesses should clearly define their vision and mission. In the modern fast paced world, it is absolutely fine having dynamic vision and goals. Usually the vision and mission statements also keep changing with the time, hence the goals and objectives too. But it is very important that a business should have a clear and understandable vision and long term goals. The short term goals and objectives should be aligned with the long term goals and objectives and this relation should be logical and understandable. For that the business need to define clear and specific goals and objectives. In today’s fast paced markets, the business should clearly define the role of each individual employee, team, department and business functions so every employee know what is expected from them and how they should do it. Hence the managers should guide the teams and employees on how to move forward by setting up internal benchmarks and milestones.

The managers should involve employees in goal setting and strategy making processes, this will motivate them and give them a sense of connection with their goals and objectives. Employee engagement is one of the best advantage of using a performance management software. The performance management software facilitates flow of information and help managers and employees in understanding the high-level organizational goals and objectives. When the employee have clear and understandable vision, organizational goals and objectives, they have a vantage point to set their individual goals and objectives aligned to high-level goals and objectives. This usually tend to yield excellent performance. When the employees knows what the scale of measuring the success is and what success will look like, they get motivated and work harder to achieve their goals and objectives. That is why the clarity in company vision, high-level organizational goals and objectives is important to set valuable individual goals and objectives and to derive the internal processes and mechanisms to achieve those goals and objectives.

Performance Management Problems: 2. Poor Communication

The communication is the lifeblood of any business. Without effective communication a business can never achieve its goals. In fact poor communication led to several problems and have long term repercussions. The poor communication can deteriorate the performance as the employees can’t fully understand what the business is expecting from them to do. The communication is an essential component of each performance management process. Whether it is the goal setting and strategy making process, if everything is not communicated effectively the employees will remain confused about several things, which led them to work without a clear purpose or motive. When employee don’t have a clear objective or motive and they are not communicated how valuable their contribution is they tend to work aimlessly and perform poorly. There are several reasons of poor communication, such as:

Unclear and ambiguous language of written communication, such as emails or any other format
Poor communication practices failed to deliver right information to the right person at the right time which results in incorrect actions or no action taken at all
Unproductive discussions and meetings, due to personal relationship and behavior of managers and employees, which usually distract them from the topic and the result in very little progress
Managers failed to communicate the goals, objectives and plans, and employee failed to express their problems which cause delayed/incorrect action or no action at all

The poor communication also lead to deteriorate the relationship between the managers and the employees which could have serious consequences in the long term. That is why the poor communication is a huge problem within the modern business environments.

How to Improve Communication?

A modern performance management software provides a complete communication framework to maximize the communication, information flow and employee engagements. A multi-channel communication framework enable flow of information via multiple channels and it also help facilitating personal conversation and one on one meetings. Whether you are a small company or a large enterprise, whether your employee works at a single location or at multiple locations, whether you are following traditional work practices or hybrid work environment, an effective communication is a key to success. Here are some of the benefits of a multi-channel communication framework offered by the performance management software/system:

Ensure employee receive the right information at right time, prevent delays
Offer features to make sure the message has been delivered, read and understood
Facilitate one to one meetings and create more opportunities for frequent dialogues
Provide multiple remote communication channels to enable employee reach even if they are off-campus or working at remote sites
Facilitate personalized communications which build relationship between managers and employees and help them align with company goals and objectives
Automate information sharing processes, and set priorities and alerts for urgent communications

The performance management software also keep record of all previous interactions and can also capture the communication details from supported channels which help managers and employees to access the information on later stages if needed. The effective communication is a key to success.

Performance Management Problems: 3. Lack of Trust

The employee performance and their trust on the managers and at the business is mandatory for the performance. If employee don’t trust their managers or the enterprise they will eventually end up performing poor, it will also increase employee turnover rate. There are several factor that could hurt the trust of the employees, the most important is the lack of transparency. Usually without a performance management software the performance management processes are done manually. The human factor alone can harm the quality of the data. Furthermore when the managers do the employee evaluation they might only focus on certain things, without considering their other performances, this cause distrust and reduce the transparency of the system. The poor communication and lack of understanding of the evaluation matrices also ruin the employee trust on the managers and the enterprise also. Unfair reward and recognition, biased in feedback and managers’ personal liking and disliking also impact the process very badly and it can completely kill the trust. When the employee don’t trust on the managers and the enterprise or corporates, they tend to perform poorly and have no motivation with low morale.

How to Enhance Employee Trust?

The performance management system/software offers a variety of features that can help managers to set up several processes to enhance the employee trust. On top of everything the employee performance management software help improving communication between employees and the managers and it also help employee to participate and contribute in decision making processes which gives them confidence and help building the trust. The employee performance management software also help businesses bring transparency and fair accountability practices to their performance management processes. When the employee start feeling that the system is completely fair and there is no room for personal bias or favoritism they feel more comfortable with the performance management process and this help managers gaining more trust of the employees. Here are a few key features of the performance management software which help building employee trust:

The performance management software add transparency and data driven processes which add value to employees’ daily work flow and enhance their trust
The managers can have better communication with the employees which ensures they can easily understand the employee’s point of view and their problems
The performance management software also offer a dedicated employee feedback collection module which let them express themselves freely and openly and increase their confidence on the system
The employee performance management software streamline reward and recognitions processes and bring transparency and accuracy to the processes which help gaining employee trust
Managers can use employee performance management software data to develop employee development and training program which can meet their needs and help them build the trust
The performance management software offers real-time feedback monitoring which enables managers to proactively guide employees and make them more successful in achieving their goals

The employee performance management software help managers develop a culture and environment of understanding the importance of trust and employee satisfaction which can significantly raise the productivity and performance.

Performance Management Problems: 4. Micromanagement

The micromanagement is one of the most common problem businesses face. The micromanagers might think they are doing right thing by excessively controlling the employees and their daily tasks, however, in reality the micromanagement is very counter-productive. When a manager or supervisor manages your each and every move in a day, you will definitely feel powerless, incompetent and demotivated towards your daily tasks. As the micromanagement unknowingly gives employee an impression that they are incompetent and a supervisor or manager has to control their each and every move in order to get the work done. Eventually the employee start thinking they are incompetent or they are doing something wrong, this develop a sense of reliance and dependency. The employee become more dependent on the managers and they can’t work autonomously as they require constant monitoring and instructions from the supervisor or manager.

The micromanagement also kills innovation and creativity, it also hinder the ability of employee to work in a team as they neither have their own opinion or nor they can take their teammates opinion, as everything is managed by the manager. When employees are not given any control or their opinion is not valued, they feel distant form their goals and objectives. This can have a great toll on the performance, on top of that the micromanagers also don’t trust on the abilities and competencies of their sub-ordinates which is why they are always unhappy and unsatisfied with the employee’s work and keep forcing them to do better while not giving them any room to grow or evolve. As the manager or supervisor is deeply involved in each and everything which makes employee think that the manager might not trust them, and eventually they will also loose trust on the managers. The micromanagement can account for up to 70% of employee turnover in some industries. That is why micromanagement is very bad for the performance and poses a great threat to the overall organization’s performance.

How to Avoid Micromanagement?

Well it is obvious the businesses can’t simply replace all micromanagers, however, the performance management software provides a digital framework which can be very effective to reduce the impact of the micromanagement on the employees and on their performance. One of the biggest problem of micromanagers is their need to constantlymonitor the progress on the projects or tasks which cause them to interrupt employees many times in a day which keep them distracted from their work and make it difficult to focus on things they are doing. The performance management software can offer a performance dashboard where the micromanagers can monitor the employee performance in real-time. This let them focus on the employees who are lacking and they don’t bother the employee who are on schedule or progressing in the right direction. Another great feature of the performance management software is that it provide a structured framework for the discussion and meeting schedules which prevent micromanagers to interfering with the employees while they are working. This also restrict the micromanagers to meet or have discussion with the employees as per already planned schedules. Hence the negative impact of the micromanagers can be reduced by 60% to 90%.

Performance Management Problems: 5. Poor Strategy and Lack of Focus

The primary goal of performance management is to support and guide the employees to succeed them in achieving their goals and objectives which add value to the high-level organizational goals and objectives. The biggest problem with performance management strategy is that the businesses often think it will going to solve their all problems, however that is not true. A performance management system can’t just solve every problem in a business environment, at best it can bring autonomy and higher productivity to various processes and empower employees to be able produce quality work with limited supervision. The performance management keeps them motivated and encourage them to give their best. Another big mistake that most businesses made while implementing a new performance management strategy is putting too much burden on the managers. As the managers are majorly responsible for implementing the performance management practices so they will have to work a lot. This requires proper training programs which makes the managers able to understand and implement the performance management system effectively.

How to Improve Performance Management Strategy?

The first and most important thing that a performance management strategy should have is limited goals and objectives, too many goals and objectives keep your employees distracted and often confuse them. But when the employees are properly communicated about the importance of each goal, they tend to perform well. It is important to clearly identify the critical key goals which add most of the value to high-level organizational goals and objectives. The performance management software is very helpful in setting up and communicating goals and objectives to the employees. It help bridging the gap between high-level goals and the individual goals and help businesses align all resources with the most valuable goals and objectives. Setting up goals and objectives is crucial for the success, sometimes focus on wrong things could significantly harm the performance. For example, a branch manager have the goal to keep their employees 100% utilized, this led them to form an environment and a work pace (slower) at which all the employees remain 100% utilized all the time, because they feared that if the employee started working on the fast pace, then they might ran out of the work, which will eventually affect manager’s KPIs.

The goal setting is crucial for the success of the performance management process that is why it is important that the goals and objectives remains flexible and the managers have room to incorporate employee’s feedback. This will give employees more control and will enable a better communication between the employees and the managers. The performance management software can also help making all goals visible to everyone that is important as when an objective is complete or a goal is achieved, everyone know it is done. Furthermore the biggest advantage of the performance management software is that it utilizes the digital components to automate the performance data collection methods. Which provide real-time overview to the employees, managers and higher management. These features help managers understand employees’ problems and help them identify the areas of improvements. The performance management software also brings transparency and fairness to the employee evaluation and appraisal processes. When the employees know they will be praised for their good performance they tend to perform well. And when the employees knows that they will be held accountable for their poor performance and they tend to seek ways to improve their skills, and performance.

The performance management software doesn’t have a switch which you will turn on and the performance will magically goes up. In fact the performance management software helps implementing a long term performance management strategy which gradually improves everything. It help businesses understand the obstacles, limitations, strengths and weaknesses of their employees and internal business processes. The performance data plays a crucial role in building strategies, making plans and taking decisions. Businesses can utilize the performance management data to improve their training and personal development programs. The reward and recognition is also crucial to achieve higher performance. The performance management software help increasing employee engagement and satisfaction which can significantly reduce the employee turnover. Furthermore the performance data portrays a very clear picture of what talent the business have and what they might be needing, hence help HR hire the best talent which can add most value to the organizational goals and objectives and help the business in achieving maximum productivity and performance.

Performance Management Problems: 6. Performance Data Quality

Another big problem with performance management is the quality of the performance data. Traditionally everything was manual, hence the data collection was manual too. In the modern performance management practices the data collection is still manual, the reviews, feedbacks, performance measurements and even KPIs are calculated manually. The manual data entry is a big problem, the human errors at data entry time, human bias, and several other factors deteriorate the quality of the data. The performance management data is utilized in decision making process. The managers make their plans and strategies son the bases of the performance management data, the employee development programs, training and coaching programs all are designed on the bases of data gathered during the performance management. That is why this data is very crucial for the success of the performance management. However, manual data collection and manual data analysis can cause several problems. When a business implement a modern performance management strategy the biggest problem they face is the manual performance data collection.

Verified Data Fetching from other Systems

The performance management software is capable of integrating with other enterprise solutions and systems which let it automatically fetch verified data from other systems. Usually this integration is done via APIs, which enable both systems to share data with each other, the performance management software can fetch highly accurate and verified data which significantly improves the performance data quality. For example, the performance management software can fetch highly accurate stats from the customer data base and it can link it to the KPIs of the individual salesman as well as the overall performance of the sales department or even a particular branch. All the internal systems and databases can be on either centralized information center or keeping data separately. The performance management software have ability to fetch data from both scenarios without any hurdle or problem. The automatic data fetching techniques enables the performance management software to produce the best results. The high-quality performance data help the management make more effective decision based on the data they collected. Hence overall performance can be significantly improved with a digital performance management system.

See More: How Queue Management System Helps Maximizing the Efficiency?

Conclusion

The performance management is crucial for a business’s success. It help engaging employees, ensures maximum employee satisfaction, it reduces the input and maximize the outcome, ensuring maximum profitability and growth. Here in Dubai and all around the UAE the businesses are rapidly adopting to modern performance management practices and methods, however, sometimes it could be very overwhelming for the management and the employees too. That is why many businesses made many mistakes, in this blog we have discussed 6 most common and most crucial problems that businesses usually face when implementing a performance management strategy. A modern performance management software/system help businesses create effective strategies and implement them to achieve higher results. The performance management software automates various processes, collects data automatically and manually and let the management analyze the data instantly with in-built AI based analytical and data processing tools. This not only simplify the performance management process but also took out the extra workload that a performance management process traditionally puts on the managers.

That is why in present day the performance management software is the best solution to solve all performance management problems. In this blog we have discussed most common problems that businesses face while transitioning from the traditional annual and manual performance management to more effective modern performance management methods or continuous performance management methods. RSI Concepts is a leading performance management software/solution providers in Dubai, UAE. If you want to learn more about the subject of if you want us to implement a performance management solution for your business, please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

Check out this: Advantages of Hybrid Mobile Applications

October 11, 2022

Performance Management through OKR System

The technology have integrated far deeper in our daily lives than we can perceive. The businesses are no exception at all. The modern businesses face modern problems which requires modern solutions. For any business having everything in order is critical. When all employees and resources are aligned with the high-level organizational goals and objectives, only then the highest performance can be achieved. Usually businesses have enough resources, but they are either not properly using them or simply there is too much waste in the system. It could be both non-human and human resource which is underutilized or utilized incorrectly. The biggest challenge for the HR department is to ensure all the required skillsets and talent is made available all the time to all departments within the organization. However, that is not just achallenge, in fact that is the prime goal of the HR. In order to achieve this goal, the HR will have to face many challenges and obstacles. Furthermore the HR is also responsible to keep improving the workforce by implementing strategies and plans for training, motivation, and performance management.

The HR is also responsible for hiring new staff to fill in the gaps that may arise down the road. This all can be done only if the HR will have clear visibility of the performance of the existing resource and understand the gaps between the workforce or skillset that are needed to meet the requirements.Businesses and enterprises in Dubai and all around the UAE are using a variety of performance management system to maximize the productivity and performance which ultimately translates into higher profitability and revenue. The biggest advantage of using an agile performance management system or CPM (continuous performance management) is that it provides a very effective framework for goal management. It improves visibility, accountability and help aligning teams and individuals with high-level organization goals.

The OKRs also help businesses achieve autonomy and let teams work autonomously by making them able to understand how their work is contributing to the high-level organizational goals and objectives. Most of the times businesses confuse OKRs with the Performance Management, however, the OKRs are a framework for the goal management and the performance management majorly tend to evaluate employee performance.This doesn’t mean the performance management and the OKRs are rivals or can’t work together, in fact if a business wants to enjoy the maximum of both, they should align and integrate OKRs within their performance management process.

What is the Difference between the Performance Management and OKRs?

The OKRs are Objectives and Key Results. The OKRs are set by teams and managers for the teams and it always have a clear goal and objectives which can be measured clearly by the outcome. For example. We will improve customer service by increasing customer satisfaction. The improvement in customer service is an objective and how much improvement is done, that can be measured by the customer satisfaction survey, or by NPS score or even by reduction in customer churn rate or even by all those factors altogether. To achieve the OKRs several different employees will have to work together. In our example, in order to improve customer service, many teams must have to work together to produce the desired outcome. However, the performance management is entirely a different process with a different scope. It involves, high-level planning, continuous monitoring, reviewing or evaluation and then rewards & acknowledgements for the individual employees instead of teams. Although performance management also measures the teams’ performance but the main focus is at the individual performance.

The OKRs are not the employee evaluation, in fact it is the measure of the employees’ and teams’ contribution to the high-level goals and objectives. The performance management on the other hand is the evaluation of the performance of each employees for a given period of time. Hence the OKRs and the performance reviews should be kept separate and independent. Neither should dictate the other. The performance management system focuses on the outputs and attainments while the OKRs focus on the outcomes. Most of the outcomes for a business are not an individual effort, but a collective and collaborative effort by multiple employees and teams. That is why the OKRs focus on the outcomes instead of individual outputs. The OKRs inspire innovation and are designed to encourage teams to set more bold and stretched goals. Which encourage the entire teams to perform better and motivates them. The performance management doesn’t require collaboration as it is focused on individual goals, however, the OKRs encourage collaborations and demand collective efforts to maximize the outcome that is aligned with the high-level organizational goals and objectives.

How Businesses can Improve Performance Management through OKR System?

Now that we have established a clear understanding of the performance management system and OKR system, we will discuss how both can be used in parallel to maximize the results. The OKRs are also used to aid performance management process but unlike the traditional performance management system the OKRs focus more on broader goals and results. The OKRs have two parts, the objectives and the key results. Usually there are 3 to 5 primary objectives with additional 3 to 5 supportive or relevant objectives. These goals and objectives tend to be measured with quantifiable outcomes which are usually monitored through KPIs (key performance indicators). The biggest advantage of the OKRs is that all the goals are communicated well with the teams they have their say in it, and all goals are aligned with the high-level organizational goals and objectives. The goals set under OKR framework are always achievable but challenging which is a key to maximize the outcome. The OKRs cycle is also more frequent, usually it is 2 to 4 months, unlike the performance management cycle which is usually 12 months. This also provide better visibility and much deeper understanding of the progress and the factors that are impacting the productivity.

Basically the OKRs are used to support faster growth and help businesses in more dynamic and fast changing markets. There are several multinational businesses and enterprises who have performed exceptionally with OKR system, such as:

Google
Intel Corporation
Meta (Facebook)

And many more. All those companies are well-known for their hyper-growth and global expansion. The OKR system helped them and thousands of others to effectively maximize the productivity of their teams and individual employees.

Here are some key benefits of using OKR System to boost the performance:

OKR System Align all Resources with your Vision and High-level Organizational Goals

Every organization have a long term vision, in order to achieve that visions businesses set high-level organization goals and objectives. On the bases of these high-level organizational goals and objectives, the management develop plans and strategies which help them achieve those goals and objectives. Usually these goals and objectives scaled down to lower hierarchies such as different business functions, departments, teams and even individual employees. The prime goal is to achieve the high-level organizational goals and objectives that led the business to achieve its vision down the road. The OKRs are usually set in the same fashion. Start with high-level organizational OKRs, which later divided into departments, teams and even individuals. With a traditional performance management system a time comes when achieving the goals of the individuals, teams or even departments could become very difficult while performing daily tasks or work as per the respective job role or function. However, with OKR System business can assign different goals to the teams and departments and different goals for the individual employees which ultimately aligns with the high-level organizational goals and objectives. This can significantly boost the performance and produce better outcomes.

OKR System Produce Better Outcome and Results

The OKRs can be written in many ways, however the most common method is to define objectives and key results that are the milestones and these milestones outline progress instead of activity. The employees or teams should met those milestones in order to achieve the high-level organizational goals and objectives. The OKRs are great at communicating the goals and required efforts with clear timelines which can help achieving the high-level organizational goals and objectives.

The founder of the OKR framework and former CEO of Intel Corporation, Mr. Andrew Stephen Groveonce said about the OKRs:

“Stressing output is the key to increasing productivity.”

Google is another great example of stressing on the output and stretching the goals to achieve hyper-growth using OKR System. Mr. Larry Page, the co-founder of the Google once said:

“OKRs have helped lead us to 10X growth, many times over.”

When it comes to productivity, the output is what a team or individual does and the outcome is the effect of that output on the overall progress of the business towards their high-level organizational goals and vision. The OKR system can enable super-fast growth and transformation in any business. It support agile performance management and enable businesses to resolve problems and address issues midway. Which significantly reduce the time that is usually required by a traditional performance management system. Hence businesses can rapidly grow and expand while also maximizing their efficiency and performance.

OKR System Increase Employee Engagements

Studies have shown that only 1/3^rd of the employees are truly engaged in their organizations, and improvements in employee engagement could lead to up to 10% to 30% better performance. That is why the employee engagement is very important, it also reduce employee turnover and help businesses retain valuable talent. The OKR system allow employees to actively participate in the planning process of setting up goals and objectives for both the individual employees and the teams. When employees know they are accountable and they also participate in goal setting process, they become more attached and connected to those goals and objectives. When communication is improved and the employees knows their voice will be heard, they feel more connected to the organization, this gives them a sense of purpose and make them more responsible. When the employee know what they are working for and how their efforts will add value, they become more efficient. The OKR System provides a very effective framework which enables managers to easily link the employee performance or their output with the outcomes or high-level organizational goals and objectives. Studies and surveys have revealed that 90% of the employees felt more connected to the organization after implementing OKR System.

OKR System Enables Quick Adjustments and Course Correction

Most of the times managers and employees both feel that they could have done something if they had time. This feeling is common after the traditional performance management cycle. If the performance is evaluated once in a year then only after that you will be able to understand what have gone wrong and where. Mostly smaller things, or easily avoidable problems cause huge damage to the overall performance of the organizations. The OKR system is much more agile and it can make managers more proactive, rather reactive. This is what make it superior from traditional performance management systems. The OKR cycle is usually shorter, the goals and objectives are shot-term but completely aligned with the high-level organizational goals and objectives. Shot-term goals means more frequent performance reviews, the factor that all goals are quantifiable also brings transparency to the system and prevent several other traditional performance management problems. More frequent performance reviews enables managers to quickly take actions and provide guidance to the employees and teams to prevent them from deviating from the original goals. This ensures the high-level goals and objectives remains achievable and all the problems and unexpected situations are addressed with adequate actions and plans.

OKR Systems are Transparent in Nature

Transparency, biased reviews, favoritism and lack of context are some of the most common reasons of failure of a conventional performance management system. The OKR System is far much transparent, as the goals and objectives are set by the employees and teams so they are more accountable and they feel more responsible in achieving their goals. Furthermore the OKRs of everyone are visible to everyone. This means that every team member knows everyone’s tasks and objectives. This helps specifically when it comes to collaborative tasks, the conventional performance management system lacks this ability. When an objective is not achieved the managers and the employees are in a better position to understand the effects and impact of under-performing team members. Another great advantage of the OKR system is that the employees and teams who will be performing the tasks are setting the goals and objectives. The employees who are performing the tasks are more aware of the problems and obstacles they might be facing, that is why the OKR system always yield better outcome. Unlike traditional performance management system there are only a fewer goals and objectives in the OKRs which keep employees and teams focused on the high-priority tasks which led to high performance and better results.

Creating OKRs: Best Practices

The purpose of OKR System is to provide better understanding of high-level organizational goals and to ensure the employees and teams will perform well to achieve those goals. Creating such goals and objectives that not only align with the high-level organizational goals but also individual and team development is a very tricky task. In fact inspiring someone is very difficult in itselfit and requires a lot of skills. Most of the time when businesses and organizations adopt OKR Systems the first problem they face is the lack of understanding of the OKRs. The employee could easily get overwhelmed when they have to create goals and objectives that are not only achievable and challenging at the same time but also perfectly aligned with the high-level organizational goals. Here are a few tips to create highly effective OKRs which can truly add value to the high-level organizational goals and objectives:

Simplicity: Keeping it simple is always good, employees and teams should focus on the objectives they can achieve in the given timeframe and with the current resources they have.
Prioritize Objectives: Employees usually caught up thinking they will have to contribute to every department’s objectives. This could drastically reduce the efficiency and performance. The employees and teams should only focus on what is most needed from them.
Make them Specific: It is important that you brainstorm different possibilities to achieve the objectives, develop a specific plan of action to achieve those objectives. Also write how the performance will be measured.
Create Cascaded Objectives: Cascading objectives from organizational point of view to department, then teams and then individual objectives will eliminate all ambiguities and help employees and teams to see how their objectives will contribute to the higher objectives.
Break Goals into Smaller Goals: Create highly specific smaller goals within your key results. This will clarify what exactly the employees and teams will have to do to achieve their objectives and it also keep them more focused and aligned with their and higher goals.
Make it Measurable: The worst scenario is when the employees or managers are not sure if the goal is achieved or not. That is why each key result needs a unit to measure the performance. It doesn’t matter what unit you use but the result should be quantifiable.
Set Stretched Goals: Stretched and ambitious goals are a good motivation. But make sure the goals are achievable and challenging at the same time. Too easy goals and unrealistic goals will demotivate the employees and teams.
Recognize Achievements: It is important to keep encouraging employees and teams during the time period of the key results. Even if the key results are not achieved yet, if a milestone or a smaller goal is achieved, the teams and employees should be admired and encouraged.

Never Link OKRs to Compensations

When it comes to OKRs it is a well-known fact that the 100% results are never achieved. It is majorly due to the nature of the goals that are set within the OKR System. As the goals are always stretched and made challenging so only 70% to 80% of the objectives can be achieved. That is why it is never beneficial to link the OKRs with compensations and bonuses. Linking OKRs with the compensations led the employees to only do the needful work to make their metrics and KPIs eligible for the bonuses. This could also led to malpractices in the teams and employees just to meet the minimum required KPIs for the bonuses and it could completely kill the innovation from the system. That is why the OKR System is never linked to bonuses, pay increments and compensations like that.

See More: Top 5 Performance Management Trends in 2022 – 2023

Conclusion

The OKRs and agile or continuous performance management (CPMS) are the modernized form of performance management. However, it is important to understand that the OKRs and the performance management are two separate frameworks. The performance management and OKRs can be integrated to leverage the additional benefits of the OKR system that a typical performance management system lacks. That is why the OKRs can be utilized as the gap between the typical performance management system and the modern needs of performance management. The OKRs are also not suitable as a mechanisms to design personal development programs. The OKRs are best at bringing the transparency in the performance management process which help businesses motivate their teams and workforce to perform exceptionally well. The OKRs also gives a sense of ownership, responsibility and help connecting employees with the high-level organizational goals and objectives which is a key to success.

Whether you are using a performance management system and implemented OKRs in it or whether you haven’t used them, a dedicated OKR system software could be a great help to boost your organization’s performance. At RSI Concepts we are helping our customers to bridge the gap between the strategy and execution. Our performance management system comes with in-built dedicated OKR System and it can also be acquired as a standalone software. If you want to learn more about the subject or if you want us to help you improving your existing performance management methods and processes. Please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

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October 10, 2022

Top 5 Performance Management Trends in 2022 – 2023

The Dubai and in fact the entire UAE is evolving and advancing on a rapid pace. The market trends and customer demandsare also changing on a very fast pace, this requires businesses and enterprises to be more proactive and ready to adopt to those changes. The agility and operational capabilities are majorly driven by the employee performance. The skillful workforce and highly talented employees are a great asset for any business or organization. The employee performance drives profitability, stability and growth. However, the employee performance heavily depends on the performance management practices which increase employee satisfaction and employee engagement. Here in Dubai and all around the UAE businesses and enterprises are following traditional performance management methods, which are gradually losing their effectiveness. Employee performance evaluation and reviews once or twice a year are not enough. Businesses need a more proactive approach to manage and improve employee performance. Thanks to the evolution in technology and software development platforms, now a days, a continuous performance management is possible and is proven to be very effective comparing to the traditional methods.

The traditional performance management methods are not capable of eliminating the waste from the system, however, the modern performance management system (PMS) is capable of monitoring the performance in real-time and it enables managers to immediately detect any deviation and let them course correct to ensure the progress is done in right direction, towards the high-level organizational goals and objectives. Furthermore the traditional performance management processes and methods are very time-consuming and cost a lot of efforts and expense. However, the modern performance management system (PMS) makes performance management process seamless. Thanks to the digitalization, the data collections and KPIs can be fully automated. Which not only save time but also resources. The performance management system provides a full-fledged framework for the performance management processes. Businesses and enterprises can effectively set goals and objectives with a top-down approach to make them more realistic and achievable for the individual employees. The continuous monitoring prevent any employee from deviating the course and keep all resources aligned with the high-level organizational goals and objectives.

The ever rising competition and the customer demands skyrocketing in the current markets. In order to progress and grow in such environment every business needs to maximize the performance of its human resource to achieve maximum productivity. The high efficiency and productivity drives profits and facilitate growth over the time. Here are some key benefits of a modern digital performance management system:

Accurate and automated (fully or partially automated) performance measurement
Improved employee training and personal development programs
Better communication and presentation of the benefits of organizational and individual goals and objectives
Increased employee engagement, motivation, morale and employee satisfaction
Transparent evaluation and fair performance acknowledgement processes
Encourage trust and improve relationship between employees and the managers
Reduced employee turnover and increased success rate of all the employees
Align all resources with the high-level organizational goals and strategic objectives to drive the outcomes that benefit the most
Improved planning, monitoring, reviewing and reward processes

The performance management system (PMS) not only ensures maximum productivity but also help to understand the employees’ strengths and weaknesses and allow the businesses to bridge the gaps with effective training programs, coaching, and mentoring. The performance management system (PMS) ensures high transparency in evaluation and reward processes which increase employee trust and minimize disputes and conflicts. The digital performance management system (PMS) also increase communication and allow managers to effectively and clearly communicate organizational goals with the employees and let employees also provide feedback which improve bidirectional communication and raise trust.

In this blog we will cover the top performance management trends that gain popularity in the late 2021 and continuously growing in 2022 and we are also hoping to see those trends continue for 2023 and even beyond.

Performance Management Trends: 1. Data-Driven Performance Management

The performance management is a process of evaluating the employee and then providing them adequate feedback in hope to improve their performance and efficiency for the next performance cycle. However, smart businesses and field experts want to transform the performance information in an analytical data which help them evaluate employee in a more personalized fashion. This enables managers to improve their training programs, employee growth and development processes and help them improve individual employee performance in a more effective and impactful way. The data driven performance management is a process aided by digital tools which heavily relies on collecting and analyzing factual data to enable managers to take more effective and informed decision and help them build more effective employee performance management strategies. The data driven performance management process can significantly increase the transparency by reducing bias and discrepancies in the traditional performance management processes.

That is why the data driven performance management is gaining a lot of popularity since past few years, and this trend will continue for the rest of 2022 and the 2023. In fact the data driven performance management has become a new benchmark, and businesses will continue to use it until it is being replaced with another more effective method, which seems very unlikely at least for coming 4 to 5 years. A digital performance management system (PMS) is very capable tool to collect analytical performance data and it also allow managers to use this data through a very intuitive dashboard which makes performance management process simpler and more convenient.As the technology have deeply integrated in our daily and professional lives, our daily live whether personal or professional have become nearly impossible without the technology. The same is the case with the performance management, present day’s challenges demand a more data driven approach. The performance management system help businesses collect and analyze in-depth performance data and also prepare them to effectively deal with challenges, unexpected problems, and difficult situations.

Performance Management Trends: 2. Employee Satisfaction is Important

The employee satisfaction is important and even essential for performance management. Employee satisfaction depends on several factors and their experience at the organization. This also involves their work and their interaction with their managers and others. The main reason why employee satisfaction is so important is employee retention. The employee retention is a key to long term stable growth and success. Organizations with high employee turnover always face difficulties in achieving their goals. The hiring process is expensive, new employees take time to integrate within the organizational environment, and they also need training and more focus from the management to reach to the pace of their predecessor. These all factors can seriously impact the performance of the organization. Studies have shown that the employee development programs plays a crucial role in employee retention. When employees knows their voice will be heard, they feel more connected and involved in the organization and form a bond with their employer which results increase employee loyalty.

When the employee feel comfortable within their work space and they have trust on their superiors they tend to perform well. There are a lot of factors that impact on the employee performance. The employee always listen to their managers if they have faith in them. A manager should be a good mentor and he/she should motivate the employees to perform well. This can only be achieved if the employees have faith in them and they trust them. The traditional performance management methods lack this due to inherited bias and poor transparency. However, digital performance management system (PMS) is very transparent, it can provide highly accurate data for evaluation and appraisal. The managers can use that data to develop employee development programs. The performance management system (PMS) also help improving the communication between the employees and the managers which help bridging the gap between them and enable them to communicate more frequently and more freely. Which builds trust.

When the employees knows clearly what the organizational goal is and how their performance will contribute to that goal, they tend to perform better. A good training and employee development program help increasing employee retention as they know they will grow individually as well while staying at this job. The performance management system capture performance data from multiple angles, which also help building trust on the system. The employees receive more guidance and they are always rewarded and their accomplishments are always acknowledged. These features of the performance management system (PMS) help businesses increase employee retention and reduce the employee turnover. Furthermore the employee satisfaction is also crucial for productivity and performance. When the employees are happy and satisfied with what they are doing and their expectations with the employer are met, they tend to stay on their job. The long-term employees are a great asset of the business and they can significantly boost the performance as well.

Performance Management Trends: 3. Continuous Feedback and Monitoring

The modern enterprises and businesses focus a lot on employee performance and encourage their managers, HR and leaders to support the employees in achieving their goals and objectives. A continuous performance management strategy ensures a smoother development and growth of the organization. In today’s fast moving markets, businesses can no longer rely entirely on once or twice a year appraisal and evaluations. Those kind of traditional performance management methods only evaluate past performance. However, a business needs to enhance current and more importantly future performance. Which is only possible with a continuous performance management process which includes continuous feedback and real-time monitoring. The continuous feedback and real-time monitoring enable the managers to keep a close eye on the employee progress and enable them to sense a slight deviation without any delay. That knowledge and data provide them with enough time to discuss the matters with the employees, provide them guidance, support and resolution of the problems they might be facing.

The biggest advantage of continuous feedback and monitoring is that the managers are always up to date with the ongoing progress and with the instant guidance, they can save time and reduce waste. The guidance and support from the managers are crucial for the employees it motivates them to perform better. The manager should clearly understand the problems and obstacles the employees are facing which can prevent them from meeting their targets and achieving their goals and OKRs (objective and key results). This way they can address issues and be more ready to deal with unexpected scenarios. Regular and more frequent feedback from the managers not only motivates the employees but it also bridge the communication gap between the managers and the employees which is very common in the organizations. Better communication lead to trust and better relationships, which in itself is very crucial for the better performance.

Performance Management Trends: 4. Hybrid Work Environment

The hybrid work environment is a new business model which allow its employees to work from home/remotely or work with flexible work hours, and it improves work-life balance of the employees. Majorly the hybrid work model gained popularity during the 2020’s Corona Pandemic and the resultant lockdown. However, it seems that businesses and employees have adjusted themselves very quickly for the new demand. Now a days the employees experience and employee satisfaction have become ever more important. The work-life balance and flexible work hours are the key factor to drive employee happiness and satisfaction. The hybrid work models are a very new concepts and are not yet fully integrated with the performance management framework. However, it is not as that difficult to keep track of the employee performance. There are certain employees who are performing certain duties some of the duties are not even compatible with the hybrid work models. Apart from all such job roles, the businesses can adopt to a hybrid work models. With the aid of the technology, creating a highly productive hybrid work environment is easier. The hybrid work environment offers higher productivity and ensures better performance by improving employee satisfaction and employee happiness.

Performance Management Trends: 5. Impact of Gen Z’s Expectations and Behavior

What is Gen Z? Well, to simply put, the Gen Z is the most recent generation of employees entering the global workforce. Everyone who born from 1976 to early 2000 are considered from the ear of Gen Z. The corporate sector worldwide have witnessed various eras of demographics. Usually all these eras are referred to as a generation such as Millennial, Gen X, Baby boomer, etc. These are urban slangs that usually refers to almost 15 to 20 years of the time span. It is a fact that the employees are always replaced with the newer and fresher batches. Each younger generation is different form their predecessors. Currently in the Dubai and anywhere in UAE or in fact all around the world the Gen Z is replacing or filling the positions rapidly and according to a study published in Bloomberg the global workforce would have been filled with almost 40% of the Gen Z workers by the end of 2021. You would be thinking why an enterprise or business should care about any of that? The fact is each generation is not just a demographic but it comes with a completely different ideology, values, cultural norms, needs and priorities which have significantly huge impact on the organizational environment and its performance.

Each younger or newer era is vastly different from their predecessor however, the Gen Z is much more different from any of its predecessor. The Gen Z people are born in a very fast-paced, technologically advanced and an internet-centric environment. This have changed their habits, preferences, needs and even behavior too. This is only the start of the era, the oldest of the Gen Z would be around 24 years old by 2022. Sooner they will replace almost majority of the workforce globally. That is not all, the Gen Z also brings a lot of benefits to the table. It is extremely important to understand and consider them within the organizational strategy and planning processes. The performance management system is one of the core strategy that can unlock the true potential of the Gen Z. There has been several studies but the most common difference witnessed all around the world among the Millennials and the Gen Z is that the Millennial generation wants more job security, while the Gen Z wants to have a more diverse job experience, where they can perform multiple roles in a single job and they can gain diverse experience.

There are a lot of other aspects that make Gen Z different from its predecessor such as the Gen Z prefer more collaborative workplace with tons of digital solutions and tools at their hand. In fact the Gen Z is truly embracing the technology and the automation at the workplace. The Gen Z is also much more effective at multitasking and prefer to work at jobs that allow them to multitask. The digital integration, social media, and much more adoptability towards technology the Gen Z can significantly impact the modern businesses and market trends. The Gen Z prefers more frequent communication and feedback from their managers. They prefer one on one discussion rather written or telephonic conversations. The behavior of the Gen Z is also very different from any of the previous era. For example, the salary was is one of the most important aspect of job for any employee, however, for Gen Z the salary has become the least important aspect of their job. The also value personalization and personal development more. These are some of the main difference between Gen Z and any other previous eras. Business will have to consider these difference when it comes to performance management. Only then they will be able to fully unlock the true potential of the Gen Z.

Conclusion

For any business or organization its employees are its greatest asset. If the employees perform well the business grows and become more profitable. However, the performance management is not an easy feat. That is why the manual or traditional performance management and review processes are dying away. Now a days a technologically advanced digital performance management system (PMS) is considered to be an essential component of a modern data driven performance management strategy. A performance management system is very capable of collecting performance data from within and even outside of the organizational network. It can be integrated with various other tools and system to get direct feds and it also allow manually inputting the data within the system. These features make it a perfect companion for the performance management process. In this blog we have listed 5 most popular performance management trends in 2022 and the market signals are very positive that we will be witnessing the same trends grow more in 2023 and coming years.

RSI Concepts is a leading performance management system provider in Dubai, UAE. If you want to learn more about eh subject or if you want us to help you building your next-gen, highly effective and cost-efficient performance management system, please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

Check out this : The Risk of Poor Performance Management and How to identify it?

September 24, 2022

The Risk of Poor Performance Management and How to identify it?

Here in Dubai and all around the UAE the performance management has become a major concern for the businesses and organizations. Businesses whether small or large have started adopting to modern performance management systems and processes. The continuous performance management help managers effectively boost the productivity and outcome of their teams and departments, which is great. But sometimes the managers are failed to obtain the desired results and sometimes the performance management system can even have negative impact on the overall productivity of the business. It is easier to identify the negative impact of poor performance management, however, it is harder to realize if the performance management system improves the outcome but still the organization is less than the maximum performance level they can achieve with an effective performance management system in place. In this blog we will discuss what the major consequences of poor performance management are and how managers can identify them?

Poor performance management can cause a lot of problems for the managers and for employees too. It impact the productivity and also have significant impact on your customer facing channels. In short the poor performance management impact almost each and every aspect of the business including cost, expense and sales. Here are a few key aspects which you should notice if you want to understand your current performance management system and strategy:

Poor Performance Management Risks: Lack of Employee Engagement

One of the biggest problem with any performance management system is the lack of clarity. When the employees are not clear what is the primary goal or high-level organizational goal then they lack motivation to achieve it. Another reason is the lack of communication. When managers failed to communicate the individual goals, daily tasks and responsibilities to employees they get confused and don’t know what to do or how to do. This results in lack of employee engagement and eventually employee loose interest which can have devastating impact on their performance and productivity. When the managers failed to explain employees that how their daily tasks and individual goals will contribute in achieving the organization’s mission, they have no reason to grow or put extra effort. Furthermore if the employees feel the performance management system and evaluation methods are unfair or less-transparent they tend to loose motivation for the hard work.

The employee need emotional connection with the goal, which is impossible without a proper communication framework, when employees are engaged in goal setting processes, in evaluation and reviews and everything else, they feel emotionally connected with the goal and strive harder to achieve it. Furthermore the employees feel important and they feel their work is important too. The performance management system not only let them understand the importance of their own goals, but it also help them understand the weight of their efforts in the high-level organizational goals and vision. An effective performance management system always have award and training programs, which keep employee motivated and emphasize on the impact of achieving their goals on their personal development and individual growth. Professional and talented individuals need feedback, the managers should be able to provide them guidance and highlight them their strengths and weaknesses.

The performance management system should include the training and personal development program to upgrade the personal and professional skills of the employees. If they don’t find options and opportunities to grow and improve, they will lose interest. In such circumstances employees usually left, which also have negative impact on the performance and productivity. The poor performance management grow your employees disengaged and make them unattached from the high-level organizational goal and vision.

Poor Performance Management Risks: Inability to Deal with Common Performance Problems

Whenever managers set a goal for the individual employee or teams or multidimensional project teams there are some very common problems that they have to deal with. Such as:

Identification and arrangement of the required resources that the employees might be needing to achieve the goal.
Evaluation of the employees on the bases of required skill set and identification of required training to make them able to achieve the required goals or to produce the expected results.
In-depth analysis of required job roles. This is required to understand if each component of the employee job role matches with the required task, or what is their level of compatibility with the required task/goal.
Reassigning of the poor performers or incompatible employees. If the employee is not compatible or if he/she is performing poorly then they should be reassigned to another role, and should be replaced with a more suitable employee with compatible skillset and knowledge.
The last resort is to layoff the poor performing employees. The poor performing employees also demotivate others and put extra strain on peers who have to carry them.

All the above mentioned decisions are common occurrences in any business. However, it is extremely important that all these decisions are made on the bases of in-depth and highly accurate performance data. Without an adequate performance management system the managers can find these decision very difficult and often tend to be wrong. These are very crucial decision and as such activities help boosting performance if not done correctly can have devastating effects on performance and productivity.

Poor Performance Management Risks: Ineffective Reward Program

The poor performance management processes lead to poor communication, less employee engagements and unclear objectives. When the manager fails to communicate what is to be expected from the employees, what is the scale of measuring the success, and how the employee should improve themselves, the employee tend to take no interest in reward program as well. In such circumstances mostly the employees are not sure what the reward criteria is and how their work will be measured for rewards and recognition. This make them confused and doubtful about the reward program. They often not trust on reward program and instead of motivating them the rewards make them insecure and anxious. It also lead to negative perceptions of the managers and the entire performance management program. Such things discourage employees and create a sense of hopelessness in them. Which impact their performance very badly in longer run. That is why it is crucial that a perfectly clear and completely transparent reward program should be implemented by the performance management system to inspire and motivate employees for better performance.

Poor Performance Management Risks: Biased Reviews and Rating

Whenever it comes to performance reviews and rating, the most common complaint every employee have is the biased reviews. Most of the time the biased is unintentional but with the poorly managed performance management the right review framework is not in place which results in inaccurate rating and reviews. This lead to distrust among the employees and also the managers. The distrust on the rating system further cause hopelessness and stress among the employee and grow them disengaged. The performance management system enables businesses to conveniently conduct 360 degree reviews and evaluation. On top of that a good performance management system continuously monitor the performance of the employees. Traditionally the reviews are only conducted once or twice in a year which also result in inaccurate results. Most of the time in yearly or biyearly reviews the reviewer only focus on the most recent performance and incidents, which also impact the overall accuracy of evaluation process.

Furthermore the personal relation, morale values and other human emotion can also impact the judgment of the reviewer. However, a good performance management system includes continuous review process which increase employee engagement, reduce biased and improve transparency.

Poor Performance Management Risks: Low Job Satisfaction and High Turnover

Poor performance management, unfair/biased reviews and low or no recognition lead to employee dissatisfaction. When employees are not satisfied with their job they don’t take much interest in their work, resultantly their performance declined. They don’t feel motivated toward their work, their morale and self-esteem deteriorate and they do not see growth or personal development in their current job role. Eventually they will leave and find another job which increase employee turnover and also raise the hiring cost. The HR department should keep working to fill in the gaps by hiring new talent, which obviously is a costly process and the new employees also take some time to get integrated in the organizational environment. This all could have further toll on the performance. That is why it is crucial to have a good performance management system in place. The performance management system increase employee engagement, communication between employees and managers, it connects employees with the company vision and high-level organizational goals which help boosting their performance.

The performance management system help bridging the gap between the management and the employees, it make employees more confident and expressive, it also help managers identify the problems and obstacles that employee might be facing. The performance management system help building a very productive environment which makes employee happy by solving their problems, fairly rewarding them for their achievements and allowing managers to arrange very effective training and personal development program. All these efforts encourage employees to perform well and also increase their job satisfaction. Employee satisfaction drive employee loyalty and reduce their turnover.

Poor Performance Management Risks: Unhappy Customers and Negative Impact on Brand Image

The repercussions of poor performance management are not limited to the internal environment, in fact the poor performance have more impact on the external stakeholders such as customers, business partners, suppliers, investors, etc. When the employee failed to perform and when they are unable to achieve their targets, the customers also get effected. It is not only the customer service or support department that have direct impact on the customers, in fact when a business or organization fails to perform well, each and every business function got effected. The customer don’t get satisfactory service and they don’t get high-quality products. The entire customer journey got impacted by bad performance. Businesses will have to offer excellent service and high quality products in order to obtain a competitive advantage if they failed to do so, the customers start leaving. Which have very negative impact on the brand image and brand reputation. When customers get bad experience and a bad interaction they start talking about it too, sometimes on social media and sometimes with their peers, which promote negative popularity and badly impact brand image.

How to identify Poor Performance Management?

One of the biggest and most common reason of poor performance management is following traditional and very basic performance management processes. Traditionally the performance of an employee is measured at the end of each year. And the managers tend to focus more on the recent events rather than evaluating the entire year progress. This is a big flaw, which eventually failed the annual appraisal process. Now a days, the markets are very vibrant and dynamic, the businesses have to adopt a proactive approach instead of reactive approach. That is why continuous performance monitoring has become an absolute necessity. Businesses in Dubai and all around the UAE adopt a variety of different performance management strategies however, there are some mistakes that are very common:

	1. Unstructured Process: An unstructured performance management process is one of the biggest cause of the failure of performance management strategy in present day. A well-structured performance management process monitors performance continuously which help employees to understand their goals and progress more effectively and help them to move forward in right direction to achieve their goals.
	2. Ineffective Goals: One of the most accurate indicator of poor performance management system is its inability to create impactful goals and objectives. When the individual goals are selected wrongly, the employees loose interest in them. The performance management system help businesses to set up SMART goals and objectives and monitor the performance on the bases of SMART KPIs which help managers to take timely decision, fine tune goals, arrange training, solve problems and achieve higher performance.
	3. Lack of Communication: With traditional performance management systems the managers are failed to communicate the goals to the employees. When the employees doesn’t fully understand what their goals are and how their performance will contribute to the high-level organizational goals and objectives, then tend to perform worst. A clear communication and understanding of what is expected from the employees and how it should be done is a key to achieve a goal.
	4. Ineffective Employee Reviews: The ineffective performance reviews can have devastating effects on the performance and productivity. Usually traditional employee reviews are biased and lack transparency, and studies have shown that due to lack of trust, the employees and managers both loose trust from the performance management process.
	5. Inability to Course Correct: The course correction is something that plays a crucial role in optimizing and improving the employee performance. The traditional performance management lacks ability to course correct. The modern performance management system have continuous monitoring capabilities which can be leveraged by the managers to correct the course during the performance cycle and make sure every employee puts efforts in right direction.
	6. Lack of Understanding of Employee Pain Points: The traditional performance management processes lack another important aspect of the modern performance management which is the understanding of the employee pain points. The modern performance management system with real-time monitoring can alert managers as soon as a deviation occurs, which let them a chance to discuss and analyze the problem directly with employees to understand the limitations, obstacles or issues they are facing. This help mangers to rectify such problems with a proactive approach to sustain the progress and performance.
	7. Lack of Trust in Reward Program: The reward programs are essential to keep employees motivated and passionate about their work. The traditional performance management system lacks transparency and lacks ability to rectify bias which eventually result in mistrust on the reward programs. As employees feel the rewards were given on unfair evaluation, so they don’t trust the performance management system and doesn’t get motivated. In fact it could have reverse impact on the employees and the other employees got demotivated when they believe the rewards were not given on fair evaluation.
	8. Less Effective Personal Development Programs: The traditional performance management systems doesn’t provide enough data or understanding to clearly understand the strengths and weaknesses of the employees. When employees feel their job is unable to contribute to their personal growth, they eventually leave and cause higher turnover which also raise cost of hiring and cause other problems which have negative impact on the performance and productivity.

If any of the above problem is present in your performance management system then you must have to revisit your performance management strategy. It is better to adopt a digital solution that can help your performance management process.

Conclusion

The Dubai and in fact the entire UAE is a very competitive market. The businesses will have to attain maximum performance in order to compete with the others. The customers always seek competitive cost, however, they are also not willing to compromise on the experience and service quality. This lead to higher competition which demand businesses to maximize their performance in order to sustain growth and progress. This is when the businesses started building and implementing performance management strategies. For that some follow traditional methods, some follow modern methods and utilize a digital performance management system. Understanding your true potential is not as that easy, sometimes when businesses implement a performance management system they witness reasonable increase in the performance, but is it the maximum limit? That is very hard to answer. In this blog we have mentioned some key aspect of the modern performance management systems along with some comparison with the traditional performance management methods.

We have also listed the key indicator which can help businesses to identify poor performance management. If you want to learn more about the subject or if you want us to help you setup a highly efficient performance management system, please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

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September 23, 2022

Employee Performance Management Process with PMS

No matter what your business goals are, effective performance management process is absolutely necessary for any business to sustain and grow. The primary objective of performance management is to maximize the employee performance which drive productivity and profitability. In the modern business landscape, where the competition is tougher, the customers’ demands are skyrocketing, and hiring skillful staff is becoming more difficult, the performance management have become crucial for the business. Here in Dubai and all around the UAE, businesses tend to follow traditional performance management methods. A PMS or performance management system/software provides a modern and highly advanced framework to track, monitor and improve performance of the business. Another great advantage of the performance management is that it make businesses agile, responsive and help them deal with the rapid changes in the market and customer trends. The performance management system help businesses effectively build top-level objectives and goals and implement strategies to scale them down up to individual goals and daily tasks of the employees. This align each and every individual employee with the high-level organizational goals and objectives and ensures progress in the right direction.

What is PMS?

PMS or performance management system is usually referred to a software application which help organizations to implement various performance management processes and strategies. The manual performance management requires a lot of resources and it is time consuming, however, when done with the help of a PMS it become simpler, easier, and more impactful. Usually the manual performance management processes have annual appraisal or sometimes biannual evaluation, however, the performance management system (PMS) enable businesses to monitor and manage performance in real-time, it collects data in real-time rather once or twice a year, which make it more impactful. The PMS is also referred to as performance management software, basically it is a software exclusively designed for the performance management processes. The biggest advantage of using a PMS is that it can automatically collect performance data, monitor KPIs, and it also help streamlining the reviews and other appraisal processes. The digitalization and automation reduce the effort and make process more convenient and impactful. The managers get more visibility with the real-time performance data which enable them to take actions in time to maximize the outcome for the performance cycle.

The managers can view all the performance data such as Balanced Score Cards, KPIs, Reviews & Ratings, BARS data, and other performance matrices at a single dashboard. There are penalty of in-built analytical tools which allow managers to perform several analysis with just a few clicks. The intuitive UIs and simplicity of the system makes it a perfect tool for performance management needs. Furthermore it capture the data in real-time and it is also capable of performing several automated analysis, which allow management to set triggers for alerts and notifications. Every user dashboard gets real-time updates, so the managers can get the very recent performance data which help them understand the current performance, progress and it also help them easily identify the obstacles and areas of improvement. Hence the managers can take decisions in real-time and do course corrections instantly. This also help them rectify the problems and boost the performance of the employees for the performance cycle.

That is the reason the modern performance management is incomplete with a highly efficient technological solution. The PMS or performance management system or performance management software is exclusively designed for the businesses to maximize its impact and to increase the convenience. The PMS supports almost all modern performance management processes and methods. Here are some of the most important and commonly used performance management processes in Dubai and all around the UAE.

The Pain Points of Traditional Performance Management Process without PMS

The markets have changed drastically in past decade, the businesses have to adopt to new practices and modern processes in order to keep up with the pace. The modern business environment is continuously evolving, the customer behavior and the employee behavior is also changing. This left traditional decades old performance management processes ineffective and prone to errors and mistakes. Businesses, large enterprises, government sector and private sector in Dubai and all across UAE have realized that the modern problems require modern solutions. The PMS or Performance Management System/Software help such businesses and organizations to leverage the technology to improve their performance management processes. Here are a few notable pain points of a traditional performance management methods that can be avoided with the modern performance management processes through a PMS:

Course Correction: The traditional performance management processes such as annual or biannual evaluation doesn’t give enough time to the employees to do course correction. The PMS on the other hand ensure real-time monitoring and performance evaluation, the managers can instantly understand if an employee is deviating.
Rating Mechanisms:The traditional performance management processes have poor rating mechanisms, which led both employees and the managers to not trust the rating process. The PMS makes monitoring simple, effective and highly accurate with modern KPIs and performance tracking mechanisms.
Transparency: The traditional performance appraisal processes lack transparency, due to no check and balance on the employee’s actual performance and heavily rely on the reviewer’s point of view. The PMS resolve this problem effectively and provides a framework to monitor the performance and it also provides universal rules and criteria to measure the performance.
Goals and Objectives:The traditional performance management processes lack ability to set achievable but challenging goals for the employees. The PMS allow businesses to setup effective goals and objectives on the bases of the employee capabilities, strengths and also ensures the employee’sgoalsand objectives align with the high-level organizational goals and objectives.
Employee Engagement:The traditional performance management processes lack adequate employee engagement which make them less productive and in some cases counter-productive. The PMS encourages more frequent discussion, reviews, feedbacks and evaluation which encourages both employees and managers to improve communication and engagements.

The modern performance management with PMS (Performance Management System/Software) help businesses avoid all of the above. The ability to digitalize the performance management process and automated data collection allow businesses to effectively execute their performance management strategies to achieve their high-level organizational goals and objectives.

PMS Helps Setting up Goals and Objectives

Setting up goals and objectives is one of the most important and crucial aspect of performance management process. PMS help business set up realistic goals and strategic objectives and scale them down to individual employee. This help businesses align all the resources with the high-level organizational goals and objectives. The goals and objectives are basically the criteria to measure the performance of employees, teams, departments, managers, and the overall business. Here are the three most common types of goals:

Purpose Oriented Goals: These goals define what performance target or success will mean for each individual employee, hence key performance indicators are set accordingly. The purpose oriented goals are monitored continuously. For example keeping customer happiness and satisfaction equal or above 80%.
Project Based Goals:These goals are set for a precise outcome of a particular project along with the timeline. These goals are set for the individual employees as well as for the project teams/departments. For example, the IT team should be able to launch new mobile applications within 3 months.
Employee Personal Development: The employee personal development or professional growth oriented goals define the performance level an employee needs to outgrow itself. Majorly these goals require employees to learn new skills & abilities and acquire new knowledge.

The goal is a long term achievement, however the objective is a short term measureable action/outcome required to achieve a goal. It is important that these goals & objectives are clearly communicated to the employees so they can set target for their performance and try to outperform themselves in the next phase. That is how the performance can be improved and optimized gradually over the time.

PMS Helps Implementing SMART Framework

SMART Framework is a modernized method to set up goals and objectives. The SMART goals tend to produce maximum results. The SMART is acronym, it stands for:

SMART – Specific: The goals should be clear, understandable and must point to a particular outcome.
SMART – Measurable: The goal should be able to produce the measurable data that can be tracked in order to measure the performance and progress.
SMART – Achievable:The goals should be achievable, mostly businesses aim too high, which results in demotivating the employees when they know they can’t achieve them.
SMART – Realistic/Relevant: The goals should be realistic and relevant to the employees and teams, so they can achieve them.
SMART – Time-bound:Each goal should be time-bound with a clear start and end date, so the employees know when they will be evaluated and in what time they will have to achieve them.

When employees get SMART goals they can focus on a certain thing and improve their professional and intellectual skills. Most of the time when the goals are not set properly the employees doesn’t feel growing, they are performing their tasks aimlessly, and when they look back they think they have achieved nothing. This results in employee turnover which is another factor that impact the performance of a team, department or sometime the entire organization. When employees start achieving their goals which also add value to their experience, skills and capabilities, they got motivated and try to perform better.

PMS Streamlines Performance Review Process

The employees always have concerns about the performance reviews, there are several surveys and studies which suggested that the manual performance reviews are not a good criteria to measure the performance of an employee. The manual reviews could be biased and the reviewer usually only consider the most recent performance or incidents to measure the performance of the entire year. Which is never accurate. The transparency and accuracy are some of the major causes that large enterprises have started ditching the traditional performance management and review processes since 2010. Here in UAE businesses have just started adopting PMS (Performance Management System/Software) that is why it is relatively easier for the market to embrace the change. Earlier it was just the large enterprises, organizations, government entities and multinational who had an effective performance management system in place, however, now a days, medium and small sized enterprises and private sector too is rapidly adopting performance management processes to maximize the performance and to gain a better competitive advantage.

Although the traditional performance review processes are failing, but that doesn’t mean the performance reviews are ineffective. In fact the performance reviews can help maximizing the performance by providing valuable feedback to the managers and the employees which help them boost performance and employee engagements. If done correctly with a proper performance management system the performance reviews can help businesses bridging the communication gap between the managers and the employees, it brings more transparency and produce highly accurate performance data. The main objective behind implementing a digital PMS (Performance Management System) is to improve the employee performance review process to promote constructive criticism and acknowledge the achievements of the employees. When employees are rewarded or acknowledged about their good performance and the areas of improvement are highlighted to them, they tend to get motivated to perform better. This way the employees start focusing more on their weaknesses and tend to put efforts to upgrade their skills, knowledge and even behavior.

Highly Effective 360 Degree Feedback and Reviews with PMS

The 360 degree feedback is one of the most important aspect of performance management. It is a modern method help boosting the performance by increasing employee engagement, motivation and by identifying the problems and obstacles which can impact the performance. The 360 degree feedback is a multi-dimensional feedback mainly collected from the managers, peers, customers, sub-ordinates, stakeholders and any other concerned person or manager. This provide a 360 degree view of an employee’s performance from multiple sources which reduce the inaccuracy and maximize the transparency. There are five major components of this performance management process:

Managerial Feedback: The feedback and reviews from managers are the traditional method of performance management process. This review included feedback from the supervisor or manager, and it can also include feedback from line-managers or higher management.
Peer to Peer Reviews: The coworkers can provide a very unique and precise prospective to the employee performance. More importantly the peer to peer reviews are a great process to evaluate the ability of an employee to perform in a team.
Customer Reviews:The customer’s reviews help businesses understand the performance and behavior of customer facing employees. The customer reviews could be taken from internal and external customers, stakeholders and any other relevant person who interacts with the employee.
Subordinate Feedback:The upward feedback and reviews are not common in traditional performance management processes however, they are critically important. It help evaluating and improving the performance of the supervisors, managers and senior staff.
Self-Appraisals: The self-appraisals are when employees review their own performance. The PMS provide a structured feedback mechanism that let employees look back at their performance and rate it. Usually the self-appraisals are biased, but they allow employees to see their strengths and weaknesses.

The 360 Degree Feedbacks and Reviews are a great process to increase employee engagement and awareness. The employees can easily learn what is expected from them and how did they performed and what impact their performance have on the stakeholders. Furthermore the 360 Degree Feedback and Reviews serves as a bedrock for the training, counselling, and employee development processes. The PMS itself encourages employee engagement but the 360 Degree Feedback and Reviews are the best method to boost employee engagement. Employee engagement motivates them to perform better.

Implement Management by Objectives (MBO) Process with PMS

TheManagement by Objectives or MBO is one of the modern performance management process. The PMS enable managers and employees to make plans, set objectives, performance matrices and everything for the upcoming appraisal period. After setting up clear goals and objectives that align with the high-level organizational goals, the manager and the employees have multiple discussions or feedbacks to understand the ongoing progress. After that the manager and employees can readjust their performance goals and objectives to make sure they remain aligned with the high-level organizational goals and objectives, this is also called course correction. Furthermore the Management by Objectives (MBO) process allow the managers to constantly improve the performance and resolve any issues or problems that employees are facing to rectify them in time. This kind of performance management have higher success rate. The Management by Objectives (MBO) also increase employee engagement and raise their level of trust on the managers as well as on the employer.

The management by objectives or MBO is one of the best way to align the individual goals with the high-level organizational goals. The goals are set under the SMART framework so the success is rewarded and the failure is dealt as per the company policy, usually by more training and counseling or transfer, etc. The Management by Objectives (MBO) can be easily implemented all across the entire organization with the help of a PMS. This ensures the higher levels of success. When employees also got involved in the decision making process such as goal setting, evaluation, etc. they feel more emotionally connected to those goals and objectives. This raise their morale and motivates them to perform better. On top of that the frequent assessment also ensures the employees remain on track throughout the entire performance appraisal period which also amplify the success rate. The MBO is also a great process to maximize the communication and provider maximum understanding of the goals and objectives to the employees and it also tells them what is to be expected from them and how they should do it in order to achieve the goals. That is why MBO has higher success rate.

PMS Improves Behaviorally Anchored Rating Scales (BARS) Process

The BARS of behaviorally anchored rating scale is a very common performance management process. The management set behavior examples, and anchor them to a numeric or measureable value/rating scale. This allow businesses and organizations to effectively measure both quantitative and qualitative aspects of the performance. However, most of the performance management processes only focus on the quantitative aspects of the performance. The BARS or behaviorally anchored rating scale is linked with multiple BARS statements that are according to a specific behavior which employee exhibit during a certain situation. These BARS statements act as a measuring tape to measure the performance of the employees. Several market studies suggest that the behaviorally anchored rating is extremely important for the overall performance management. Usually the employee behavior can have 40% share in the overall performance and the rest 60% is their technical competencies and professional skills. Each employee is evaluated against the standard associated to their job role.

The behaviorally anchored rating scale statements are refined several times to set standards for expected behavior against every job role. The BARS is a very effective process to clearly explain and communicate the requirements from each employee. When employees clearly knows what is expected from them, they tend to perform better to achieve their individual goals. The behaviorally anchored rating scale is not like other rating mechanisms, in fact it starts from 5 up till 9, where 5 represents the worst performance, 7 moderate and 9 best performance. Another great advantage of the behaviorally anchored rating scale (BARS) is that it have different statements and rating mechanisms for different job roles, rather a universal rating or evaluation process. This can significantly increase the accuracy and effectiveness of the performance management process. The employees know exactly where they will have to improve their performance and what is expected from them in the next performance cycle. The only drawback of the BARS is that it require a lot of time and effort from the managers and executive administration.

PMS Allow Creating Precise KPIs to Improve the Monitoring Mechanisms

The PMS or performance management system/software is a digital tool, it has capability to integrate with any other third-party software, tool or database. Which enable businesses to effectively create KPIs or key performance indicators for each and individual employees, teams, managers, departments, and even for the entire organization. The KPIs allow the businesses to monitor the performance against strategic and high-level organizational goals and objectives. The KPIs enable businesses to implement a more effective data driven performance management process. The KPI also link the organizational goals and objectives with the individual action. The PMS or performance management system/software allow businesses to set up KPIs in a cascade format where the move from level to level until reached at the individual level. This approach is top-down and often also called pyramid KPIs structure. The SMART Framework works on KPIs too, each KPI should be specific, measurable, attainable, relevant and time-bound. The PMS allow businesses to effectively create KPIs either by customization or using the in-built templates.

The KPIs can significantly boost performance by providing real-time monitoring capabilities. Furthermore the KPIs also help managers to explain employees about their goals and how their performance should be evaluated, this help them perform better.

Conclusion

The traditional performance management processes have proven to become ineffective in the modern business environments. Now a days’ businesses in Dubai and all around the UAE require a highly advanced technological solution for their performance management processes. The performance management system/software or PMS is a software tool that enable businesses to perform performance management tasks in a more intuitive and effective way. Rectify all pain points of the traditional performance management methods and allow businesses to include innovative and customized features to their performance management system. Moreover the PMS allow businesses to implement the modern performance management processes and methods to maximize the outcome of the performance management cycle. The PMS provide dedicated user dashboards for the employees, supervisors, line managers, senior managers, high-level management and stakeholders who can monitor and track performance of the individual employee, team, project, department or the entire enterprise at their dashboards.

The PMS ensures the management get a comprehensive view of the entire organization and each and every single resource. This provide them a better control over the progress and also enable managers to do course correction, make adjustments to ensure the high-level organizational goal is achieved at the end of the performance cycle. In this blog we have listed only a few advantages of the PMS or performance management system/software to provide our audience an overview of how the PMS can meet the performance management needs of the modern businesses. If you want to learn more or if you want us to help you building a modernized, intuitive and cost-efficient performance management system please contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

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August 17, 2022

How to Set Goals for your Employees in Performance Management System?

For any business the performance management is absolutely crucial. Especially in Dubai and in fact all around the UAE the markets are very competitive and the industry standards are comparatively higher comparing to any other country in GCC or MENA regions. Obviously each industry sector have different challenges however, performance management is equally important for all business and organizations. Whether you are a large enterprise or a small business achieving maximum productivity and quality of the work will help you levitate in the market. Every business is centered on its customers, the customers need high quality products and excellent services. Which can only be achieved if your employees and internal business functions are performing well. That is not all the effective performance management also help reducing the expenses and improve outcome. It also help improving resource management and planning which tend to produce high quality work and better performance. Performance management systems help businesses improve their workforce over the time and gain competitive advantage in the market.

For any performance management method the most important point is setting up goals and objectives. Setting up performance oriented goals not only ensures high performance and produce better outcome but also benefit your employees. The goals and objectives have a huge impact on employee performance, unclear and unrealistic goals not only decline performance but demotivate your employees and lower their morale. The performance management system is a digital tool based on a powerful software application which provide better employee engagement, enhance communication and help businesses effectively implement performance management strategies. Modern day performance management heavily rely on data flow and structured information. That is why the performance management system is used instead of traditional and manual methodologies. In this blog we will cover how a business whether large or small can effectively create result oriented goals to boost employee morale and achieve higher performance, productivity and profitability.

Align Employee Goals with High-level Business Goals

Each business have high-level goals and objectives that they want to achieve. The employee goals should be aligned with the high-level organizational goals. When the employees knows what the organization is wanting to achieve and what is expected from them in order to achieve those goals they tend to perform well. When the high-level goals and individual goals are communicated clearly to the employees and they know how their goals will contribute to the high-level organizational goals they understand the importance of individual goals and they get a sense of importance and value. This way the employee work with passion and focus more on their goals and objectives. Basically the employee engagement is very important to motivate them for better performance. When the business goals are communicated effectively and consistently the employee understand them and feel more connected with the business, this gives them motivation and raise their morale. The performance management system provides a complete framework to set up goals and also help managers communicating those goals to the individual employees.

Another major obstacle in improving performance is the accountability. Employees are usually not comfortable with high accountability. But when the high-level organizational goals and objectives are communicated to them and the importance of their work and performance is clear to them they can tolerate more accountability as they know how their performance can impact the overall performance of the entire organization. Usually the business goals and objectives are derived from its vision and mission. Then these goals and objectives are used as a reference point to build strategies and these strategic objectives and goals are scaled down for the teams, departments and various business functions. Then these goals and objectives are further fragmented into individual goals and objectives. This top-down approach is more effective and help communicating the high-level organizational goals and objectives to individual employee. When individual goals and objectives are perfectly aligned with high-level goals the business can achieve the desired performance objectives.

The performance management system help managers improving employee engagement and provide a variety of features that support communication between employees and managers/supervisors. Furthermore the performance management system is capable of continuously monitoring the employee performance and progress towards pre-set goals throughout the entire appraisal period. This allow managers to immediately detect any deviation from the original employee goals and let them take steps in time to correct course and align employees with the high-level organizational goals. The Performance management system offers several other features and monitoring tools which can alert managers about any discrepancies and obstacles the employee might be facing which is deviating them form the original goal. This help managers identify and rectify the problem in time and prevent any long-term negative impact on the overall performance for the entire appraisal period.

Set SMART Goals for the Employee Using Performance Management System

Setting up goals is one part of the problem, the other part is to build plan of action to achieve those goals. For that businesses tend to utilize SMART framework. The SMART framework is a method to build goals that can be tracked and achieved easily. One of the main reason of failure of an employee is poorly crafted goals. If the employee create goals for themselves they might not be able to create realistic goals, they either tend to create goals with very high outcome or either as per their own convenience. In both cases ultimately these goals will fail the employee as their performance is associated to their contribution in the high-level organizational goals and objectives. That is why the businesses tend to implement SMART goals strategy, which help them create realistic goals, made them more achievable, and enable them to build result-oriented action plans. Here is what SMART stands for:

S: Specific
M: Measurable
A: Achievable
R: Relevant/Results
T: Time-bound

SMART Framework: Specific

It is crucial to create very specific goals that can clearly explain what is to be achieved, why it has to be achieved and how it can be achieved. When managers ask their employees they tend to get confused or gave very vague answers, which doesn’t usually specify outcome either. That is why it is crucial for the managers to set a very specific goal and outline the plan of action to achieve it. Furthermore in order to increase employee engagements and to encourage them it is also important to explain them why you would want them to achieve that goal and how it will contribute to the high-level organizational goals. It is prime responsibility of a manager to explain the employees how they can achieve their goals. In fact the managers should not only make step by step plan, but also coach them to let them be more confident and motivated in achieving their individual goals.

SMART Framework: Measurable

Each goal should be measureable or a criteria should be established to quantify the outcome. These criterions indicates the progress towards the desired goals. The measureable aspect of the SMART framework is very important as it provide a mechanism for accountability and also indicates the progress accurately towards the goal, which help keeping employees on track and keep the motivated. If employee get engaged during the goal creation process it can boost their morale and increase their motivation. The manager can also learn about their ambitions and what they want to achieve in terms of growth and progress. Furthermore the managers can discuss the goals in details and let them understand what indicators and what mechanism will be used to track their performance and what indicator will indicate their success.

SMART Framework: Achievable

A specific and measureable goals should also be achievable so that the employee can realistically improve their progress to achieve it. This can be done by closely analyzing the capabilities and competencies of the employee. Managers can also check their previous performance and they should also discuss it with the employees as well. Most of the time managers and employees both don’t consider the possible obstacles or limitation that can prevent them from achieving the goal. It is crucial to understand the limitation and obstacles that an employee is facing or could face while working to achieve their goals. This will make goals more realistic and achievable. When employees are given achievable goals they tend to perform well, as they understand they can achieve it and in case if they have to work harder, they don’t hesitate. If the goals are over-complicated or doesn’t look achievable, most of the employees lose hope immediately and doesn’t even try to achieve them.

SMART Framework: Relevant

The SMART Framework encourages managers to create relevant goals that are not only relevant to the high-level organizational goals but also relevant to the employees as well. This way the employees can understand the importance of the goal and they can also understand the benefits for them in achieving that goal. This also makes it easier to explain them how the goal will contribute to the high-level business goals and objectives. Furthermore it is important to see how relevant the goals is to the business’s broader visions and if it is relevant to the current priorities. Mostly businesses keep improving step by step, for example, a business is more focused on marketing at a time and on the other time it might focus on reducing the customer churn rate or improving the customer support department, etc. Although all such goals are achieved in parallel however, at a certain time certain things are more important than others.

SMART Framework: Time-Bound

Each and every goal should be time bound, whether it is high-level organizational goal or individual employee’s goal a clear sense of time should be there for example, if a business wants to increase their sales by 10% in a particular region, then the time should also be defined such as 10% in sales in Ras Al Khaimar by the end of 2022 or 2023. Similarly the sense of urgency and time limitation motivate employees more to work harder to achieve the goal. A manager should clearly specify the deadline for the goal and explain employee why it is important to achieve the goal during that time period. The performance management system is used to boost performance and productivity, time-bound goals gives a sense of urgency and also clarify the importance of the goal which encourage employees to work harder in order to achieve the goal in time.

That is how the SMART Framework works and it can significantly improve the performance management process. A modern performance management system provide intuitive features and customized features to allow businesses implement SMART goal setting framework. The performance management system can also provide the previous data and other analytical data which can help managers predict the possible outcome, hence they can further optimize the goals and make them more realistic, achievable and impactful.

Include Employees in Goal Setting Process & Set Consistent Goals

The managers always want to set goals that can improve productivity and efficiency. As the primary focus is to achieve those goals with a better performance it is better to engage employees in the process as well. Usually managers have certain ideas and plans in mind for each employee and they set goals accordingly to maximize their progress and performance. However, discussing them with the employees first can provide a greater insight. Managers can directly ask the employees to identify the goals or suggest the goals relevant to their position and skillset. Moreover when the employees and the managers are on the same page the goals are more likely to be achieved successfully. Imposing goals on the employees and asking them to suggest goals for themselves which aligned with the high-level organizational goals are two different things. When goals are imposed the major problem is it is extremely difficult to convince employees that the goals is worthwhile and it will add value to their personal experience.

Furthermore another most important aspect of employee goals is consistency. It is always best to assign similar goals consistently. This will gradually increase the employee performance and skills and it will also give them a sense of direction and help them set their career path for future. Such goals help managers to achieve better results and also encourage employees to improve their certain skills. This also prevent competition and rivalry among employees and maintain a healthy and productive work environment. If a certain goal is assigned to an employee next time the same employee should be assigned that goal. The managers should never encourage competition and rivalry as it cause frustration, resentment and lower down the morale of the employees and prevent them from working at their full potential like they can do with consistent goals and tasks.

Reward, Recognition and Accountability

It is an important part of performance management to recognize and admire the employees who achieve their goals or exceed them. The performance management system provides a dedicated dashboard to create, implement and improve reward, recognition and appraisal processes. The reward and recognition program show employees how much respect is given to them and how valuable their work is for the business. Such things help improving their morale as well as it helps motivating others. It is important for the managers to prepare a plan for reward and recognition based on the actual achievements of the employees. As when employees knows no matter what they accomplish their efforts would not be acknowledged, they lose motivation and their morale declines which result in poor performance. The reward and recognition processes should also be transparent, hence no employee feel discriminated.

As much as the reward and recognition is important the accountability is also equally important. If the employees know no one will ask them about their poor performance or no one cares to correct them or confront them, they tend to get lazy and start losing aim and ambition. This could result in gradual decline in employee performance over the time. The performance management system provides a framework to lift up the entire culture of the organization and make it more productive. For that the managers frequently review the employee progress towards the goal and keep assisting them whenever needed. However, there would be some employee who will fail despite a lot of efforts are done by the managers. In such case the manager should take a very positive approach and encourage the employee to express themselves openly to understand what prevented them from achieving their goals. This way the manager can held the employee accountable for their poor performance while also encouraging them to perform better for the next performance cycle.

Conclusion

Since past few years business in Dubai and all around the UAE have started upgrading their performance management practices. During past 4 – 5 years the performance management systems have become significantly popular. The main reason is that, businesses realized the traditional and semi-digital methodologies are losing their impact day by day so much so that the traditional practices are no longer impactful as they were around a decade ago. That is why the performance management systems got rapid adaptation. Basically the performance management system is a modern technological solution for the performance management needs. It is a software that has capability to automatically collect data, streamline various performance management processes and allow businesses to leverage automation and advanced features to improve the process. Setting up goals is the first and most crucial part of any performance management cycle.

That is why we decided to wrote this article to provide our audience a basic understanding of the goal setting process and how they can improve their strategies to ensure they will achieve those goals at the end of performance cycle. If you consider the above mentioned suggestions and methods you can significantly improve your performance management strategy and its impact on the actual performance of the entire business. RSI Concepts is a leading software development company in Dubai, UAE specialized in customized and tailor-made performance management system solution provider. If you want to learn more about the subject or if you need our help to build an exclusive performance management system for your business or organization, please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

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August 16, 2022

Performance Appraisal System for the HR Department

The HR Department at any business or organization is one of the most important business function. The HR is responsible for the capabilities and performance of the workforce for the business. If the business have all the required skillset with high performing teams, individuals and business functions, nothing can stop it from dominating the market. Here in Dubai and all around the UAE the markets are very competitive comparing to other gulf countries in GCC and MENA regions. Tougher competition requires maximum performance and productivity. The HR department designs performance appraisal processes to boost the employee performance and capabilities of the workforce. Individual employee performance adds value to the team performance which reflects in the overall performance of the business or organization. That is why the HR department is considered to be the most important business function and the performance appraisal is the key driver for the high efficiency, quality of work, productivity, profitability and growth of the business.

In any market or any scenario leveraging employee’s full potential can provide a great competitive advantage. Whether it is lowering the cost, raising the product/service quality, optimizing the operations and management or anything else, the employee performance is crucial. Businesses have their long term goals and vision. Every business strive hard to achieve those goals and objectives. However, most of the time we noticed that the problem lies within the practices and methodology rather with the resources a business is investing or willing to invest to achieve their high-level organizational goals and objectives. The performance appraisal is the major process a business relies on to optimize and increase its performance. On the bases of performance reviews and appraisals a business perform several HR related tasks, the same are used for building employee development and training programs which are crucial for performance management. In this blog we will discuss how a performance appraisal system can solve a lot of problems and how a business can achieve their performance objectives with it.

What is a Performance Appraisal System?

The performance appraisal is a process of reviewing employee performance usually at the end of a year and on the bases of these reviews the HR department or reviewer determines the value and worth of an employee and its contribution to the high-level organizational goals and strategic objectives. This entire process is a very time consuming and often done almost manually which requires HR department to invest a lot of time and resources in the process. The performance appraisal system is a software and a digital solution which help businesses streamline their performance appraisal process and automates various steps to save time and resources. The performance appraisal system is capable of enabling businesses to execute both traditional and non-traditional appraisal processes with higher accuracy and more efficiency. The performance appraisal system also offer a variety of modern solutions and improve data flow and communication which is a great advantage.

Furthermore the performance appraisal system offers digital tools and allow HR department to evaluate the employee performance against a set of pre-determined objectives, their strengths and weaknesses, their worth and value for the business, the financial aspects of retaining an employee, and facilitates various other HR processes, especially decision making. The performance appraisal system is also capable of integrating with various other third-party tools and systems and help businesses to leverage the data more efficiently. The performance appraisal system also support modern needs and allow businesses to customize their own appraisal strategies and processes. One of the biggest advantage of the performance appraisal system is that it allow businesses to conduct more frequent reviews such as twice a year, at each quarter, monthly or even at the end of a particular project or phase. Which allow management to continuously monitor performance and take timely decisions to set course and make corrections to ensure at the end they will achieve their high-level goals and objectives.

Types of Performance Appraisal in Human Resource Management

Majorly the performance appraisal process involves top-down reviews in human resource management. Where a senior employee evaluate and review their subordinates. There are conflicting information about the origins of the performance appraisal process, however the most common belief is that the performance appraisal processes was first created and implemented during the word war I, however the corporate sector have adopted it in somewhere between 1950s. Here are a few types of performance appraisals:

Top-Down: This is the traditional employee performance evaluation technique. In this method the supervisor or line manager reviews the performance of the employees and usually the employees doesn’t have any say in the review.
Self-Assessment:In this method the individual employees rate their abilities, skills, behavior, competencies and performance by themselves. Obviously this could be biased but it has great impact on the employees and encourage them to perform better.
Peer-to-Peer:In this appraisal processes, the co-workers, team members and other relevant employees who work alongside with the individual employee review their technical, personal and behavioral competencies.
360 Degree Feedback: This is a very broader feedback and review process it includes review and feedback from peers, managers, supervisors, cross-function and cross-team feedback, customer and supplier feedback and review from any other stakeholder.
Negotiated Review:This is a more detailed employee performance review, it considers the employees tasks and what they were doing before the review, and it also allow employees to give their opinion/explanation along with the review. Great to resolve disputes.

Key Advantages of Performance Appraisal System for the HR Department

The performance appraisal system allow the HR department to closely monitor and optimize the performance of the entire business across all its functions. Here in Dubai and all around the UAE various performance management methods are adopted by the businesses. The performance management system is a very powerful digital tools which doesn’t restrict you to follow only certain methods or practices, in fact it allow businesses to keep evolving and improving their appraisal methods and practices over the time. Here are the key advantages of the performance appraisal system:

1. Collect Valuable Feedback

The feedback is the core of the performance appraisal. A good performance appraisal system provide multiple channels to collect feedback from multiple resources and combine it in a single dashboard to provide a quicker and broader view of the employee performance with high accuracy and reliability of the data. The performance appraisal system allow businesses to improve the transparency of the process and collects data from multiple streams which further improve the accuracy and quality of the feedback data. The performance appraisal system not only collect feedback data but it digitalize it and allow HR to perform several analysis with in-built tools and let them generate actionable reports. Which not only improve the quality but also enable them making more informed decisions with positive impact on the overall performance of the business.

2. Set SMART Goals and Objectives

SMART goals and objectives are crucial for performance management, most of the time the HR Department failed to achieve their performance goal because their goals and objectives are not properly set. The SMART goals and objectives means Specific, Measureable, Achievable, Realist/Results, and Time-bound. The SMART goals and objectives are a very popular technique and performance appraisal system allow businesses to effectively execute it. Furthermore the performance appraisal system allow more in-depth monitoring, historical data and comparison features which help businesses to improve their goals and objectives too. When employee are given SMART goals, they tend to perform well. It gives them a sense of focus, encourages them to outperform themselves and others and help boosting their morale.

3. Improve Promotion Process

For any business or organization it is extremely important to bring the right people at the tops and keep everyone at the right place. For that the businesses follow promotion processes which is mainly based on the employee performance appraisal. The performance appraisal system makes this process more efficient, accurate, and transparent and help HR department to accurately and more closely understand the strength and weaknesses of an employee. Only employees who deserve promotion should get it, it will keep the morale of the others high and will encourage them to follow their footsteps. If wrong person got promoted they will eventually failed, and the other employees especially who deserved promotion will feel a sense of left-behind, their morale will decline and they will also lost over the time. Despite having required talent the HR department might have to hire new people which put extra strain on the business.

4. Improve Reward and Compensation Process

Another great advantage of employee performance appraisal system is that it help the HR Department to improve the reward and compensation process and methods. The performance appraisal system provides in-depth performance data and also monitor several KPIs (key performance indicators), hence the reward and compensations are not only awarded on the bases of the supervisor’s reviews, but a lot many other factors are also taken into account. Which improve the reward and compensation process and ensures the employee who work harder throughout will get the most benefits. Rather than on the bases of just one mistake or just one last performance they rewards and compensation or salary raise is not given. Which encourage employees to perform well throughout the appraisal period and help HR Department to improve the overall performance.

5. Improve the Effectiveness of Employee/Individual Development and Training Program

For any business who wants to grow it is crucial to up-skilling their employees and keep their workforce up-to-date. The performance appraisal system help HR Department to closely monitor employee performance from various different prospective to understand their strength, weaknesses and potential. The performance appraisal system makes it easier to collect all the feedback and performance data from various different competencies, such as technical skills, behaviorally anchored reviews, ability to deal with unexpected situations, decision making abilities, and much more. Hence the training and development program is not only limited to the reviews, but it is designed considering a lot of factors which help HR department to build a more beneficial training and personal development program. According to several studies the training and development programs are a key driver for employee retention and are equally important as rewards, compensations, promotions and non-monetary acknowledgments.

6. Help Retaining Best Talent during Downsize or Right-Size

The performance appraisal system collects feedback and data from various sources, it can also help HR Department to accurately estimate the financial impact on an employee for example, how expensive the employee is and what financial value he/she is adding to the business. Furthermore the performance appraisal system provides HR Department with the most accurate data about employees and their capabilities which help them to understand the worth of each individual employee and their impact on performance of their team, department or the overall performance of the entire organization. There could be many reasons for downsizing, such as financial difficulties, new competition in the market, overall market conditions, etc. Which force businesses to lay-off some of their workforce to optimize the expenses. Right-sizing is a relatively new turn, it also means laying off employees but not due to external factors. In fact it accounts internal factors, such as an employee become non-productive over the time, their behavior got changed and is impacting others, or their skill might not be needed.

Mostly due to new technologies and automation business might not need certain skills. Whatever the scenario is if a business will have to lay off some of its employees, the performance appraisal system ensures that the business retains the best talent and only lay off the poorly performing or low-performing employees with least impact on the overall operational capabilities and performance of the business.

7. Improve the Impacts of Coaching and Mentoring

The managers at each business are expected to coach their sub-ordinates and teammembers. If a manager is saying the right thing, the employees will keep inspiring from them and it will become easier for the manager to become a good mentor for the employees. However, this is not as simple as it may sound. It is very difficult to understand the actual difficulties and problems an employee is facing and where they need support to make improvements. However, with the help of performance appraisal system since everything is digital and a huge amount of data is available for the managers with interactive reports and intuitive performance dashboards. This enables them to understand the obstacles an employee is facing but is unable to express. The performance appraisal system also help them understand the strength and weaknesses of the employees in terms of technical, behavioral and knowledge competencies. Which let them communicate better with the employees and help them encourage to perform well.

8. Increase Employee Engagements

Employee engagement is one of the most serious concern of the HR department, as it is very crucial for employee retention and to boost their performance and productivity. Communication is a key to employee engagements. A performance appraisal systems facilitates and encourages communication between the individual employees and their supervisors or managers. Furthermore the ability to collect 360 degree feedback also allow individual employee to review the performance of their supervisors and managers and also let them provide feedback about them. Which not only help improving the performance of the supervisors and managers but also tell employees that they are important and their opinion matters too. The digitalization help improving in-person and digital communication which also let the managers and HR Department understand the problems, issues and strengths/weaknesses of the employees and let them address the issues.

The performance appraisal system also help communicating the individual and high-level organizational goals and objectives to the individual employees and tell them about their value and contribution in the high-level goals. Which increase employee engagements and also help HR Department to reduce employee turnover.

9. Improve Employee Retention

For any business retaining the employees is a key factor in maintaining a great workforce. When businesses hire an employee, they invest on them, the employee themselves gain experience over the time, they get integrated within the organization and understand its internal processes and culture. However, the new recruits will take time to learn and understand the internal processes, culture of the business and many things, hence they take a lot of time to reach to the performance level of their predecessor. This entire process costs a lot of resources and have significant financial impact too. That is why employee retention is very important. The key factors that plays role in employee retention are reward and compensations, individual development programs, and the communication. If the employee knows they are valued by the business and their say will be listened they feel more connected to the business and become more loyal. The employee loyalty doesn’t only increase employee retention but it also drive performance.

10. Help HR Department Dealing with Legal Situations

Here in Dubai and all around the UAE the federal and local governments have very strict laws and regulations against discrimination and employee rights at workplace. The federal and local governments have great policies in place to protect employee rights and have several government departments to ensure the workplace environment is supportive for the employees. Discrimination or favoring an individual employee due to personal bias or any other reason could lead to a lawsuit. Hence having a proper performance management system in place could provide you an advantage and let you provide all the data to prove no misconduct have happened. Such claims could have devastating impact on the business’s reputation and could also have a significant financial impact too. Which is why a proper performance appraisal system will help you dealing with such situations. In fact the performance appraisal system ensures greater transparency which help preventing any such situation.

What are Key Objectives of a Performance Appraisal System for HRM?

The employee performance appraisal system is a tool for human resource management which helps to implement performance management strategies and to achieve higher performance across the entire business. Basically the primary objective of the performance appraisal is to align all available resources with the high-level organizational goals and objectives to maximize the contribution of each individual employees in the business goals and objectives. The rapid adaptation of new technologies and digitalization in the business practices have completely changed the dynamics of traditional performance appraisal methods. Now a days’ businesses are practicing more modern performance appraisal methods which are mainly aided by a digital solution or software since the manual processes tend to be ineffective and prone to errors and issues which can cause a variety of very serious problems for the HR Department. Here are the five key objectives of using a performance appraisal system:

	1. Set and Communicate Goals Effectively Setting up goals is the very first step towards performance appraisal process. The SMART goals and objectives are the modern form of goals, however, setting up perfect goals and objectives that align individual resource with the top-level goals and objective is not enough, being able to communicate those goals and objectives to the individual employee is a key to success. Communicating what each employee will have to do and what is expected from them will encourage them and provide them more clarity which results in great improvement in overall performance and efficiency.
	2. Continuous Feedback Collection Feedback at the end of each year will only help you identifying the issues and problems and on top of that mostly the traditional year-end appraisals are largely influenced by the latest performance rather than the overall performance throughout the year. Performance appraisal system offer continuous feedback and allow managers to correct course during the appraisal period and evaluate several time to ensure everything is on track. This makes easier to achieve the high-level and individual goals by the year-end.
	3. Identify Strengths and Weaknesses Today’s world is rapidly changing, businesses have to keep their workforce up-to-date and relevant all the time. Technologies are coming and going at a rapid pace which is also impacting the business practices hence the employees and their job roles as well. Even small looking problems can have huge impact over the time. It is crucial to identify the strengths and weaknesses of the employees and guide them appropriately and take measures to improve the workforce. The performance appraisal system made it very simple and easy as the entire data is digital and extracting actionable reports requires just a few clicks.
	4. Talent Development and Employee Retention The talent development depends on employee retention. Employee retention can be increased by increasing employee engagement and offering transparent reward and compensation programs. Furthermore the talent development is done by conducting good training programs, coaching and mentoring. The performance appraisal system help building a complete framework to achieve all that and improve the outcome of all relevant efforts. It is much more expensive hiring a new employee comparing to retaining an employee and developing them gradually over the time.
	5. Reward and Recognize Performance Recognizing the performance of an employee means rewarding them for their good performance. The performance appraisal system not only monitor employee performance but it regularly collect data which help managers and supervisors to understand various obstacles an employee is facing. It remove bias and make reward and recognition processes more transparent. When an employee’s good work is acknowledged by either monitory or non-monetary compensations it encourages them as well as others to perform better.

Conclusion

The HR Department at any business is one of the key component which is responsible for ensuring a smooth operation and sustainable growth. The make sure that the business have required skillset and a high performing workforce to achieve maximum productivity and profitability. The performance appraisal is one of the core process of the HR Department. Traditionally the performance appraisal was done at the end of the year, and mostly it is a manual process. It takes a lot of time, requires a lot of resources and due to manual process the problems and issues are very common. However, the performance appraisal system is a digital solution and software which has ability to automate and simplify the performance appraisal process. It increase transparency and accuracy of the appraisal and help boosting the performance of each individual resource, departments and entire organization. RSI Concepts is a leading performance appraisal system designing and development company in Dubai, UAE. If you want to learn more about the subject or want us to help you building a high quality performance appraisal system exclusively for your needs, please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

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July 20, 2022

Modern Methods of Performance Appraisal

The Dubai and in fact the entire UAE is a very competitive and vibrant market which demands businesses to perform well to defeat competition and sustain a long term growth. The performance appraisal and performance management is a standard practice for large businesses in the country. However, now a day’s even local businesses and SMEs are also implementing performance management frameworks to boost their productivity, profitability and to sustain growth. The employee performance appraisal system provides a structured mechanism to deal with obstacles, resolve problems, improve employee engagement, boost their morale, monitor progress, and above all align all the resources to achieve the high-level business goals and objectives. Whether you are a local or small business, a medium size enterprise or a large-scale business the biggest challenge is to select a suitable performance appraisal method. This blog will help you understand the modern methods of performance appraisal.

What is Performance Appraisal?

Basically the employee performance appraisal is a process of evaluating employee performance against clear and quantifiable goals and objectives that are aligned with high-level organizational goals and objectives.Traditionally the appraisal are done on annual bases. However, more and more businesses are adopting continuous monitoring and more frequent appraisals. Actually the problem with traditional employee performance appraisal method is that it is done annually, and in some cases twice a year. Whatever the case is, the traditional appraisal methods doesn’t support the modern fast-paced and ever changing market and business needs. The traditional performance appraisal methods lacks adequate communication and they also don’t support the managers in process of making timely course corrections and taking steps to deal with problems or in taking preventive measures during the appraisal period. By the time when the manager become aware of a problem, it is already too late, the damage have already been done. Hence, more and more businesses are now leaving traditional employee performance appraisal methods and are more inclined towards modern appraisal practices.

8 Modern Methods of Performance Appraisal

In Dubai and all around the UAE the competition is very high and the customers are too demanding, which pushed businesses to take drastic measures in order to boost their performance and by improving employee management processes and performance appraisals. That is why selecting an appropriate employee performance appraisal method has become a challenging task for the businesses and the HR. In this blog we will cover top 8 most effective and modern employee performance appraisal methods to provide our audience a brief understanding of each method which will help them selecting the best performance management system as per their needs.

Modern Performance Appraisal Methods: 1. Management by Objectives (MBO)

The simplest definition of Management by Objectives (MBO) is that the high-level organizational goals are defined and determined first then according to those goals and objectives, employee and managers mutually identify/define, communicate, plan and manage employee goals and objectives for success. This enables each individual to see their progress and accomplishment in connection with high-level organizational goals and objectives. It gives employee a clear understanding of what is to be expected from them in order to achieve their individual goals and what is their contribution in the high-level business goals and objectives. This helps each individual employee understand the top priorities of the business and let them align with the high-level goals and objectives while carrying out their daily tasks. Aligning the employee and all resources with the high-level organizational goals while providing them with a clear understanding of the organizational and their individual goals can drastically boost performance and increase the quality and quantity of the outcome.

Modern Performance Appraisal Methods: 2. Psychological Appraisal

All traditional employee performance appraisal methods only evaluate the past performance of the employees, even the most modern methods only consider at most the ongoing performance however, the psychological appraisal method is a very unique evaluation process, it help businesses and managers understand and evaluate the future performance and potential of an employee. The psychological appraisal method focuses on the intellectual and personal traits of an employee which can either improve or deteriorate their performance in future. The psychological appraisal methods is designed to meet the modern needs of the workforce, as now a day’s employees are more vulnerable due to balancing their work and personal life, which could result in frustration and poor performance at both work and also it can impact their personal life. That is why the psychological appraisals are conducted by qualified psychologists who held several personal sessions, in-depth discussions and interviews and perform various psychological tests to understand the true potential of an employee and the result/feedback is used to project their future performance expectancies.

Modern Performance Appraisal Methods: 3. 360 Degree Feedback

The 360 Degree Feedback is simply feedback and performance data which is systematically gathered from the all relevant connections of the employee such managers, peers, team leads, cross function managers, and even customers or any other external source too. That is why it is called 360 Degree feedback. Naturally every employee likes the communication and continuous feedback, this help them understand their performance better and encourage them to make improvements. Since the 360 degree feedback collects feedback data from all internal and external raters who interacts with the employee, so it provides a variety of different aspects and prospective of employee performance. It increase transparency of the appraisal process and keep employee motivated. That is the reason the 360 degree feedback is one of the most widely used appraisal method. This method can effectively highlight the strengths and weaknesses of the employees and help them make improvements in right direction. Furthermore the 360 degree feedback is a great tool for the businesses and managers, it help them forming high-performance teams to achieve critical strategic goals and to work on important projects.

Modern Performance Appraisal Methods: 4. Critical Incident Method

The critical incident method is a very useful employee performance appraisal tool it evaluate and provide analysis of the employee performance when a critical incident happens, the employee’s manager provide the details of the incident or gather information about the incident and the employee is evaluated to understand if he/she performed very well, or very bad or the incident where he/she could have performed better. Basically the critical incident method is used to analyze the KSAO – knowledge, skills, abilities and other indicators/attributes required to perform their task. The critical incident method is widely used by the businesses to analyze if the employee meets the required KPIs (key performance indicators) associated with his/her job role. Businesses wants to understand if the employee is performing his/her job role as per requirements or if the management intervention is necessary who can enroll the employee for a training, held consoling sessions, compensate them for their achievements or terminate them for very poor performance. Essentially a business wants to know if it is getting what it is paying for or not.

Modern Performance Appraisal Methods: 5. Assessment Center Method

The assessment center appraisal method analyze employee’s abilities, competencies, skills and personal characteristics by asking them to participate in in-basket exercise, simulations, test groups, and role playing exercise where employees are put in various roles with various responsibilities and asked to do the tasks or to solve real-life problems. Basically the assessment center appraisal methods are used for in-depth analysis of employee’s emotional behavior, response, problem solving skills, ability to deal with pressure, adoptability, collaboration, judgment, etc. and several other traits. There could be several tests and simulations to reach to a conclusive result. Usually the assessment center method is applied when a business wants to hire a new candidate or if a candidate is up for promotion, etc. however, since past few years it has become a popular appraisal method. The assessment center appraisal method is done under a trainer who evaluate the employee and he/she also discuss their performance with the other raters.

Where it provide a great tool to boost the morale of the high-performers and motivate the average-performers the assessment center method could also have negative impact on the low-performing employees. Hence it should be done by professional trainers only.

Modern Performance Appraisal Methods: 6. 720 Degree Method

Basically the 720 degree method is a modern and more evolved form of the 360 degree method. The 720 degree appraisal method consists of two rounds of 360 degree appraisal over a pre-determined time period. The employee evaluation is done by two groups, internal stakeholders and external group who interacts with employee such as customers, suppliers, investors, etc. This is what made 720 degree appraisal method the most crucial for the employees and for the business as well. The main objective of the 720 degree appraisal method is to meet the expectations of the employer, employee and the customers too. In the first round the aim is to build an effective employee development program or individual development program. Then after a certain period of the time the employee’s performance is analyzed again to understand how their performance is improved and how potential they have for future. The results of the second round also help evaluating the effectiveness of the employee development program and help organizations make improvements for future.

When employees notice improvements after the development program they got motivated and business can gain their trust which help to improve performance in the long term and also reduce employee turnover.

Modern Performance Appraisal Methods: 7. Behaviorally Anchored Rating Scale (BARS)

The behaviorally anchored rating scale or also known as BARS is one of the best employee performance appraisal method. It help businesses to leverage the both quantitative and qualitative performance data during the appraisal process. The behaviorally anchored rating scale (BARS) enables the rater to measure the performance of an employee against pre-defined behavioral responses anchored to a quantifiable rating scale or numeric value. This method can accurately measure the quality of the work as well as the quantity. Poor quality with more quantity and good quality with less quantity are both not good, in fact an employee performance should be balanced between the quality and quantity. The behaviorally anchored rating scale (BARS) is a numeric scale from 5 to 9 where 5 means poor and 9 mean good performance. The manager who conduct BARS analysis must write down all the tasks that an employee is expected to perform, then they should define the appropriate behavior that goes along with those tasks. All these behaviors can be assigned a numeric value which can be used to determine the employee behavior hence the business can get a highly accurate data. Which helps improving employee performance and allow businesses to form high-performing teams.

Modern Performance Appraisal Methods: 8. HR Cost Accounting Method

The HR (human resource) accounting method consider employees as an asset and it measures the cost a business had incurred to recruit, hire, train and develop the employee. The HR cost accounting method also determines the financial impact of the employee performance and their economic value to the business. In simple words the HR cost accounting appraisal method determines the value of the cost of retaining an employee and the revenue it is generating for the business. It improve various human resource processes and help businesses understand the cost of the human assets. This is done to ensure the employees are delivering the value as per the expectations form their job role. It not only help determining the cost and returns of the human assets but it also help businesses in evaluating the output of the human resource, training programs, and other relevant facilities. The HR accounting appraisal method enables businesses to measure the employee performance against the monetary benefit or value generated by their service.

Why Performance Appraisal is Important?

Before we discuss different performance appraisal methods it is important to understand what are main objectives of deploying an employee performance appraisal method? Here are some key objectives a business can achieve by implementing an effective employee performance appraisal system:

Sustain Growth and Increase Profitability
Improve Performance and Operational Efficiency
Increase and Facilitate Communication between Managers and Employees
Define and Communicate High-level Business Goals and Individual Goals Clearly
Align all Resources and Individual Goals with the High-level Business Goals and Objectives
Increase Employee Engagement, Improve their Morale and Reduce Turnover
Collect Real-time Employee Performance Data
Design Effective Employee Development and Training Programs
Implement and Improve Employee Competency Building Process
Improve HR Processes and also Evaluate HR Programs
Improve Employee Feedback, Compensations, Rewards, Recognitions and Accountability
Achieve Short-term and Long-term High-level Business Goals and Objectives with Higher Success
Optimize Cost, Effectively Utilize Resources, Increase Output and Gain a Competitive Edge

An employee performance appraisal system enable businesses to make improvement in each and every function. It just not improve employee performance but it also improve the entire internal culture of the organization and help improving brand identity by providing good quality work and satisfactory services to the customer. Businesses can gradually achieve their performance goals and develop a very reliable and efficient workforce which can help them even in a very competitive market such as in Dubai, UAE.

Conclusion

The employee performance management is essential for businesses and organizations who are seeking a sustainable long term growth. When it comes to employee appraisal methods, all methods can be classified in two groups, the traditional employee performance appraisal methods and the modern employee performance appraisal methods. In this blog we have covered only the best and modern employee performance appraisal methods because the traditional appraisal methods are getting less effective over the time, their accuracy is not enough for the modern needs and the processes mostly involve manual steps too which reduce the accuracy and increase chances of errors, mistakes and even bias. These modern performance appraisal methods are designed to meet the modern needs and provide highly accurate evaluation. RSI Concepts is a leading performance management system provider in Dubai, UAE. If you want to learn more about the subject or if you want to enquire about our employee performance appraisal solution please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

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June 21, 2022

Beginners’ Guide to Appraisal System

The employee appraisals and performance evaluation is a challenging task. The businesses owner, stakeholders or high-level management always wants to improve employee performance, engagements and management. The modern world is heavily data driven. The digital technologies and IT is deeply integrated in our society and also in businesses. In Dubai or anywhere in UAE the markets are very competitive and customers are also very demanding. This means it is much harder for a business to stand out of the crowed. Businesses invest a huge amount in their assets, infrastructure, production facilities, customer care and workforce. But it doesn’t mean they can obtain a competitive advantage and attract more customers. That can only be achieved if whatever resources a business have, perform at the maximum levels. Businesses and organizations strive to maximize this performance by optimizing internal businesses processes, improving the HR, actively managing employee performance and making their organizational culture more productive.

The goal of every business is to offer high quality products and services to satisfy their customers. Businesses invest a lot of resources in establishing their facilities, infrastructure, workforce and IT. However, the one key aspect of growth is the employee and their performance. Because at the end of the day it would be these employees who will be utilizing those systems and facilities. Without proper optimization of the employee performance a business cannot achieve its goals and objectives. That is why businesses use enterprise performance management and employee appraisal systems. The performance appraisal system not only help monitoring the employee performance but it also help businesses in making policies and setting up strategies for future on the bases of performance data to gradually increase the employee performance and overall productivity of the business.

What is Appraisal System?

The appraisal system is a digital tool that helps businesses in measuring the employee performance against their goals for a pre-determined time period. These goals are previously set as per the employee job roles and the high-level organizational goals and objectives. The appraisal system also helps setting up future goals and objectives and it also helps in identifying the needs of improvements, training and employee development. The appraisal system provides businesses and organizations a very comprehensive framework to manage their employees’ performance which includes both their achievements and shortfalls. The appraisal system is a strategic framework which enables businesses to easily align their high-level organizational goals and objectives with individual level employee goals and objectives to make sure all resources worked in a same direction in achieving the high-level organizational goals and objectives.

Why a Business should use an Appraisal System?

The main function of an employee performance appraisal system is to build a good relationship between the business and the employees. It enhances two-way communication and provides a platform for the employees to easily communicate with their managers. The appraisal system provides a framework which not only built confidence and improve communication but it also increase clarity and help businesses and employees to set clear expectations from each other. In addition to that it motivates employee to perform better and help businesses and employees to effectively plan for future growth. It provides regular reviews and improved communication and relationship by enabling two-way feedback. Furthermore the feedback and surveys can be conducted to get top-down, bottom-up and peer-to-peer feedback. The businesses have to understand that the appraisal system is not a monitoring tool only. In fact it is a system which helps establishing and nurturing a strong relationship between employees and their management and keep them motivated and excited about their work to achieve the higher performance. That is why the appraisal system is absolutely necessary for the businesses to grow and improve profits.

Different Types of Appraisal System

The employee performance appraisal system is a very crucial tool for a sustainable growth. The appraisal system not only provides data for the HR purposes, but it also provides data which helps managers understand the strengths and weaknesses of their teams and individual employees. The appraisal process is usually an annual process but the performance or progress of the employees can be evaluated against a pre-determined time period. Here in Dubai or anywhere else in UAE the business owners and managers often don’t put much attention to the appraisal system. However, it can be very beneficial for any business to effectively optimize their performance by adopting some of the following appraisal systems:

1. 360 Degree Feedback

The 360 degree feedback is one of the most popular and very effective appraisal system. Every employee appraisal system have features to support 360 degree feedback. There are several components of 360 degree feedback which provide different point of views and is known for most accurate non-biased performance assessments. The feedback is mainly collected from the managers, supervisors, performance reports, peers, customers and any other relevant personal to the employee. These reviews can be designed to measure several competencies and overall performance as well as performance in a particular trait either professional, personal or behavioral competency. Here are some key components of the 360 degree feedback:

Self-Appraisal: Enables employees to evaluate themselves and give them a chance to understand their strengths and weaknesses. The appraisal system provides a mechanism to collected structured data which reduce the bias and increase the accuracy.

Top-down Appraisal: The top-down appraisal is a managerial feedback which allow managers and supervisors to evaluate their sub-ordinates and provide their feedback about their performance in various traits in both personal and professional capacity.

Bottom-up Appraisal:The good appraisal systems also include a bottom-up appraisal or subordinate appraising the manager features as well. The subordinates sometimes can have a very unique and prospective which can help improving the management. Such feedback can have a huge impact on the performance and employee satisfaction.

Peer-to-peer Appraisal: The co-worker could sometime be the best evaluators. They have a very comprehensive and detailed feedback especially on skills and behavioral competencies. The peer to peer reviews are a great tool to accurately evaluate behavioral competencies as well as professional competencies and skills.

Manager Reviews:The performance reviews and feedback by the managers is the most traditional appraisal system. These reviews include feedback from the supervisor, line manager, or senior manager for an individual employees. The performance of teams, departments and groups is also evaluated by managerial reviews.

Customer Reviews: Mostly the customer reviews are feedback from the customers regarding an employee who is interacting with them. The appraisal system enables businesses to manage internal (users of product/system/IT, etc.) and external customers (your customers) separately.

The 360 degree feedback is one of the most important key factor in performance management and appraisals. It provide individual employees a clear picture of their performance and how their performance is impacting other stakeholders. Furthermore it encourages employees to focus on self-development and let them make improvements in the right direction. The 360 degree feedback also enable management to arrange and improve counselling, employee development, training and coaching programs. The 360 degree feedback increase engagement across the entire organization increase employee loyalty. A large number of local businesses, large enterprises and multinational companies are using 360 degree feedback to evaluate their employees in Dubai, UAE.

2. Management by Objectives (MBO) Appraisals

The Management by Objectives (MBO) is one of the best appraisal type to boost employee engagements. It involves individual employees in the planning process, it gives them value and make them feel important. This way employees feel more connected to the business and they focus more on self-development and improvement which boost their performance. The Management by Objectives (MBO) appraisals involves employees in the decision making and goal setting process. Which gives them confidence and a sense of responsibility hence they perform well with passion and happiness. That is why the management by objectives is an excellent way to increase employee engagement. The managers and the subordinates make plans, set objectives and make strategy to achieve those objectives which are highly aligned with the high-level organizational goals and objectives.

The objectives are validated using the SMART criteria. The SMART stands for Specific, Measureable, Achievable, Realistic, and Time bound. All the objectives should be very specific and time bound so the employees know exactly what is to be expected from them and when it should be delivered. The progress towards objectives should be quantifiable so at the end of the appraisal period both the employees and the managers can measure the performance. Most importantly the objectives should be achievable. There are many factors which can make an objective unachievable or very difficult to achieve, such as limited resources, insufficient technical capabilities, insufficient time, etc. The objective should be realistic too, because non-realistic objectives negatively impact employee performance. For example, the business wants to reduce the delivery time by 50% which is not realistic with the current logistics strength. Such objectives will result in poor interest from employees and most of the time the employees don’t even make any attempt to achieve such objectives as the know no matter what they do they can’t achieve it.

On the contrary if the objective is to reduce the delivery time by 5% in the 3^rd quarter of the year or even by the end of the year. It will motivate the employees to perform well. As they would know this is achievable and realistic and with just a little more effort the objective can be achieved. That is why when the employees are involved in the process they can also provide their input and the management and employee both can agree to achieve a common goal by the end of the appraisal period. The managers and employees make plans, set milestones, and define timelines. Furthermore the employees and managers both monitor the progress and are free provide feedback, suggestion and even reevaluation can be done and the objectives can be revised accordingly to stay on course towards the high-level organizational goals and objectives. The frequent discussion about the outcome and the current progress allow managers and employees to take timely action and course correction to make sure at the end of the appraisal period the desired objectives can be achieved.

3. Behaviorally Anchored Rating Scale (BARS)

Behaviorally anchored rating scale or BARS is a non-traditional appraisal system. However, it is massively popular among all types and sizes of businesses. It help businesses understand the employees in terms of their behavior and help them quantify the impact of different behaviors on the outcome. The behaviorally anchored rating scale (BARS) is very effective in improving qualitative and quantitative performance and is very popular appraisal system. The most important thing here is that there is no rule book for this system, each BARS scale can be anchored with multiple behaviors or statement describing different behaviors that are very common among the employees. These statements are used as the measuring scale for the individual employees against their performance which is evaluated on the bases of pre-defined sets of standards that are also anchored with their individual job role. It is a relatively complicated systemand the managers and the appraisal experts should be very careful when creating different incidents and associating behavior to those incidents.

Furthermore the BARS is relatively difficult and time-consuming to create and implement. For each organization or business the BARS standards could be different which makes it very hard to take promotion and compensation decisions solely on BARS appraisal results. It also requires a lot of work and research to be done by the executives and senior managers. The behaviorally anchored rating scale appraisal system starts with identifying and creating most common incidents, which trigger a particular behavior of the employee. Then it requires a lot of efforts and testing to refine and fine tune those incidents and the associated behavior. Then the final standards and incidents can be formulate. However, the BARS is highly accurate in terms of performance analysis and it also provide a consistent evaluation which further help optimizing and improving the employee performance. The behaviorally anchored rating scare (BARS) appraisal system is used to improve the accuracy of the appraisal by focusing in most important and observable behaviors. It also help minimizing the bias and increase the fairness in the appraisal process which gain employee trust and also encourage them to perform well.

4. Human Resource Accounting or Cost Accounting Appraisals

The human resource accounting or cost accounting appraisal is a very simple appraisal system solely based on the monetary gains an employee yields for the business or organization against the cost to retain the employee. It is very straightforward system but it can overlook a lot of other performance indicators. That is why the human resource accounting or cost accounting appraisals are always used to improve the overall evaluation process rather being used as a sole appraisal system. The modern form of human resource accounting or cost accounting appraisal not just include the monetary gains VS cost of retention but it also includes several other benefits an employee is offering such as average service value, quality of the service, interpersonal relationships, and the skills of the employees and many more. The main reason to use human resource cost accounting appraisals is to accurately measure the cost and value an employee brings to the business and the financial implications of their poor performance.

The human resource accounting or cost accounting appraisals are very popular and effective among the small businesses and startups where the performance of a single employee could have huge impact on the overall business’s success. It is also a very effective appraisal system to identify the gaps between the current package of the employee and the market while also accurately measuring the monetary and non-monetary value an employee is bringing to the organization. Furthermore the businesses can utilize the human resource accounting or cost accounting appraisal for certain functions or group of employees where the progress and performance is easy to quantify in terms of revenue or financial gains. Actually it is very difficult for the HR to accurately measure the value an employee is bringing to the organization and the impact of their poor performance. However, for certain job roles such as sales, marketing, supply chain and a few other can be easy to assess with human resource cost accounting appraisal system.

5. Psychological Appraisals

The psychological appraisal system is a future-focused appraisal method used to identify the hidden potential of an employee. That is why the psychological appraisal system is very unique because it measures the employee’s future performance rather than their current or past performance. Although the psychological appraisal system is only used by big businesses, large organizations and multinational corporations, because it is expensive, time-consuming and slightly complicated. That is why the psychological appraisals are always done by a qualified psychologists. These psychologists conduct a variety of tests and could have several discussion sessions with the employees to understand their cognitive abilities, intellectual and personality traits, emotional quotient, interpersonal and leadership skills and a variety of other skills. The findings are then shared with the experts and senior managementidentify the potential of the employees and make plans for their future growth and leadership roles.

Appraisal Systems You should Avoid

We have mentioned only most popular and effective appraisal systems this far however, there are certain appraisal methods that a business should avoid. Mostly these appraisal systems were popular in the past, however, now they have been proven to be counter-productive and can have serious negative effects on the employee performance.

Stack Ranking Appraisals: This is most controversial but still commonly used performance appraisal system. When ranking employees against each other and forcing managers to stack them in performance tiers, it could have negative impact on the employees, especially the employees placed in poor performance group got demotivated.

Forced Choice Method: The forced choice appraisal system provide the reviewer with only a limited number of options, usually just binary – true or false. The reviewer is forced to make a choice, which completely discard the discussion about circumstantial evidences or exclusivity of the situation during the appraisal period.

Essay Appraisals: In this system the reviewers/managers are provided with open-ended questions or asked to write down a performance analysis in form of an essay. This system doesn’t provide quantifiable reporting data which make it extremely difficult for the HR to make comparisons or use it in their decision making process. Furthermore the writing abilities of the reviewer and the personal bias can also reduce the accuracy and in fact it can harm employees too.

Field Review Appraisals: This is a very old appraisal system and it requires someone from the outside of the employee’s department, usually from the corporate head office or the HR who observe employee for a certain time period to evaluate their performance in terms of professional and behavioral competencies. However, it is very obvious that employee’s behavior gets changed under the knowledge of observation and it is also very difficult for the reviewer to completely understand the context, and actual behavior of the employees.

Rating Scale Based Appraisals: A simple or graphical rating scale is used to review the performance on a scale of 1 to 5. The reviewer is asked to rate the employee against pre-defined traits such as capability, timeliness, leadership, and various abilities. The biggest drawback of this system is that it only measures performance at the time of the rating and doesn’t completely neglect previous performances and sometime even context too which cause dissatisfaction amongst the employees and demoralize them instead of improving their performance.

The employee appraisals and performance management is very tricky and reviewers and managers could easily get it wrong. Sometimes despite the reviewers excellent ability to implement the appraisal system correctly doesn’t also produce desired results and that is because the system itself is incapable. These are some employee appraisal systems that each business should avoid. However, the stack ranking is somewhat applicable for the modern consultancy firms, law firms and such business models.

Conclusion

Employees are a most valuable asset of any business. It is absolutely necessary for business to establish and nurture their relationship with their employees to ensure a long term success. Every business have a vision and that vision helps them lay down the goals and strategies to achieve their vision. The high-level organizational goals and objectives later scaled down to the individual goals and objectives. Each employee is hired for a particular job role. Their job role defined the expectations from them. Similarly their goals and objectives are also relevant to their job role, skills and capabilities. It is extremely important to keep your employees motivated and ambitious. The employee performance can make a huge difference, whether it is your customer care, your sales team, production department, HR or strategic planning department and higher management. Everyone has to be driven to perform well in the direction of long term organizational goals and objectives.

However this is not an easy task. That is why businesses use a performance appraisal system. The system help them track and monitor performance, provide business intelligence data and a better understanding of the employees’ strengths, weaknesses and obstacles that might be preventing them to perform better. This information is vital to improve the workforce and achieve higher efficiency, performance and productivity which drive profitability and help generating more revenue for the business. RSI Concepts is a leading customized employee performance appraisal system development company in Dubai, UAE. If you want to learn more about the subject or want our help to build you a high-quality appraisal system? Please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

Check out this: Building the Customer Experience of the Future

BLOG OF RSI CONCEPTS

Category: Performance Management System

What is Employee Performance Appraisal Process?

How Automation can improve the Employee Performance Appraisal Process?

Quicker and More Frequent Feedbacks

Streamline Employee Performance Appraisal Processes

Real-time Monitoring and Visibility to Performance

Save Time, Efforts and Cost on Employee Performance Appraisal Process

Align Employees with Company Goals and Objectives

Well-organized Historical Performance Data

Compatible with Multiple Employee Performance Appraisal Methods

Conclusion

What is Performance Management?

Performance Management Problems: 1. Unclear Goals and Objectives

How to clarify the Goals and Objectives?

Performance Management Problems: 2. Poor Communication

How to Improve Communication?

Performance Management Problems: 3. Lack of Trust

How to Enhance Employee Trust?

Performance Management Problems: 4. Micromanagement

How to Avoid Micromanagement?

Performance Management Problems: 5. Poor Strategy and Lack of Focus

How to Improve Performance Management Strategy?

Performance Management Problems: 6. Performance Data Quality

Verified Data Fetching from other Systems

Conclusion

What is the Difference between the Performance Management and OKRs?

How Businesses can Improve Performance Management through OKR System?

OKR System Align all Resources with your Vision and High-level Organizational Goals

OKR System Produce Better Outcome and Results

OKR System Increase Employee Engagements

OKR System Enables Quick Adjustments and Course Correction

OKR Systems are Transparent in Nature

Creating OKRs: Best Practices

Never Link OKRs to Compensations

Conclusion

Performance Management Trends: 1. Data-Driven Performance Management

Performance Management Trends: 2. Employee Satisfaction is Important

Performance Management Trends: 3. Continuous Feedback and Monitoring

Performance Management Trends: 4. Hybrid Work Environment

Performance Management Trends: 5. Impact of Gen Z’s Expectations and Behavior

Conclusion

Poor Performance Management Risks: Lack of Employee Engagement

Poor Performance Management Risks: Inability to Deal with Common Performance Problems

Poor Performance Management Risks: Ineffective Reward Program

Poor Performance Management Risks: Biased Reviews and Rating

Poor Performance Management Risks: Low Job Satisfaction and High Turnover

Poor Performance Management Risks: Unhappy Customers and Negative Impact on Brand Image

How to identify Poor Performance Management?

Conclusion

What is PMS?

The Pain Points of Traditional Performance Management Process without PMS

PMS Helps Setting up Goals and Objectives

PMS Helps Implementing SMART Framework

PMS Streamlines Performance Review Process

Highly Effective 360 Degree Feedback and Reviews with PMS

Implement Management by Objectives (MBO) Process with PMS

PMS Improves Behaviorally Anchored Rating Scales (BARS) Process

PMS Allow Creating Precise KPIs to Improve the Monitoring Mechanisms

Conclusion

Align Employee Goals with High-level Business Goals

Set SMART Goals for the Employee Using Performance Management System

SMART Framework: Specific

SMART Framework: Measurable

SMART Framework: Achievable

SMART Framework: Relevant

SMART Framework: Time-Bound

Include Employees in Goal Setting Process & Set Consistent Goals

Reward, Recognition and Accountability

Conclusion

What is a Performance Appraisal System?

Types of Performance Appraisal in Human Resource Management

Key Advantages of Performance Appraisal System for the HR Department

1. Collect Valuable Feedback

2. Set SMART Goals and Objectives

3. Improve Promotion Process

4. Improve Reward and Compensation Process

5. Improve the Effectiveness of Employee/Individual Development and Training Program

6. Help Retaining Best Talent during Downsize or Right-Size

7. Improve the Impacts of Coaching and Mentoring