The performance appraisal system is a great tool for the HR department. It help them to unlock the full potential of their workforce. The performance appraisal system is a necessity in a competitive marketplaces such as UAE. The UAE is one of the largest economy of the region with a high-paced growth and very friendly environment for businesses. That is why businesses and organizations are flourishing in the country. The local market and the international markets both are accessible form the UAE and this has attracted a lot of businesses and organizations to operate in the country. These circumstances also led to a very competitive market with high standards and very high customer demands. In order to ensure the sustainability and growth a business must have to operate at the maximum levels of efficiency and productivity. These factors led to a rapid adaptation of the digital performance appraisal systems all across the entire country. Businesses have started implementing various different types of performance appraisal systems however, most of the businesses preferred a customized performance appraisal system in 2022 and we are hoping to see a rise in this trend in coming years.
A modern performance appraisal system is a digital tool that enable businesses to evaluate their employees with high accuracy and enable them to identify factors that are impacting the performance of the employees. The biggest advantage of a digital performance appraisal system is that it is a data-driven performance framework which provide highly accurate and structured methods to evaluate the employee performance and help businesses align them with the high-level organizational goals and objectives. Traditionally the performance appraisals are a very time and resource consuming activity, hence only done once or twice a year. However, with the help of digital performance appraisal system several processes can be automated and the data is fully digital which enable businesses to conduct a performance appraisal with very less resources, time and efforts. The businesses who use a performance appraisal system usually have more performance evaluation cycles in a year, usually quarterly, but it can be further reduced to monthly or even project wise appraisals.
Why Organizations in UAE Needs a Performance Appraisal System in 2022
Since the economies all around the world are recovering from the 2020 pandemic, the marketplaces have evolved rapidly and become more customer oriented. Furthermore the customer demands and trends are also continuously changing. The competition and other market conditions are also rapidly changing and need businesses to be more vigilant, resilient and proactive. A business can only respond to such changes quickly enough if their employees and resources are working at their full potential. Most of the time businesses have all the ingredients of success, but still failed to achieve their goals because they are not performing as well as they could. The performance appraisal system provide a structured framework to manage and improve the employee performance and drive productivity by effectively evaluating the employees, solving their problems and inspiring them for better performance. The modern performance management systems have become more integrated, smart, and easy-to-operate and become more autonomous than ever before which makes the process more effective, accurate and agile.
Advantages of the Performance Appraisal System
The performance appraisal system have many advantages which makes it as perfect companion for modern businesses in 2022. As the system is digital so it can offer great visibility and customized view of performance data for different user groups. It provides a structured framework for communication and help organizing the conversation repository which also enables it to offer various comparative analysis and past performance data. Here are the key advantages of the performance appraisal system:
1. Align Employees with the Organizational Goals and Objectives
The performance measurement might seem a simple process however it is not as that easy to integrate a performance appraisal framework in organizations. For that businesses require a good performance management strategy which always begins with defining the goals and objectives for the employees, managers, teams, departments and for the entire organization. Each organization has a long term vision, all their annual or shorter goals are derived from that vision. Obviously the vision or mission is not something that can be fully communicated to the individual employees. However, the vision and mission statements can be communicated effectively to the employees along with their goals and objectives which are derived from the organizational goals and strategic objectives to achieve that vision. The top management define the organizational goals and objectives that are always aligned with the vision and mission. Then these goals and objectives scaled down to the departments, teams, and individual levels. These goals will provide a reference point to measure the performance.
The employee performance is measured based on their progress towards their goals and objective during a given time period or appraisal cycle. For example if the appraisal cycle was for 3 months, the goals of an employee was to produce 300 parts at a lathe machine and they have produced 250 parts during that time period then their progress can be measured as 83.3%. That was a very simple matric the performance measurement was simple and easy. However, most of the time the performance measurement is a bit more complex that is why the managers set quantifiable goals for the employees so their performance can be measured accurately. In some cases only one matric is not enough to measure the actual performance which makes things a bit more complex. For example, in case of a service center, a service agent was given a goal to serve 300 customers in 3 months, however, they served only 250, but their performance can’t be taken as 83.3% success. In fact it the customer experience that is equally important. Just by calculating the number of customers alone can’t determine how beneficial the employee was for the organization.
The digital performance appraisal system allow businesses and managers to set up goals along with the scale to measure the progress. Usually the goals and objectives are defined using SMART framework, it means scalable, measureable, attainable, realistic, and time-bound. Adopting SMART framework can eliminate almost all major mistakes that any HR or line manager can make setting up goals for the employees. The employee performance appraisal system allow both the employees and the managers to access the system through their dedicated dashboards to monitor their performance and progress in real time. Which is also very helpful in encouraging the employees to perform well. Furthermore the performance appraisal system also support managers to communicate the goals and objectives to the employees along with their impact on the high-level organizational goals and objectives. When the employees know what their efforts worth for in term of achieving the high-level organizational goals, they tend to perform well. Communicating the organizational goals and objectives is crucial for the employees to understand how they are and how they can contribute to the organizational goals and objectives.
2. Organize Communications and Reviews
The digital employee performance appraisal system provides a structured communication framework and make communication more effective, organized and convenient for both parties. The communication is the most crucial aspect of performance management. An organization can never achieve higher performance without an effective communication mechanism in place. The communication help the management to acquire the required feedback to understand the performance and progress. It help them understand what employees are doing, how they are doing and what is to expect from them in future. Furthermore it also help management understand the employee’s problems and help them identifying the factors that are harming the performance. The performance appraisal system streamline the communication, it provides a structured framework to establish effective relationship between the managers and the employees. All one to one sessions are logged, scheduled and recorded in the system along with the regular performance reviews and other feedbacks. This will help management take actions to improve the performance and increase the chances of success.
3. Increase Employee Engagements and Collaboration
The digital employee performance appraisal system allow managers to include employees in decision making processes which increase employee engagement. When the managers and the employees collaborate to set goals the employees are most likely to achieve them. It is the employee who can completely understand their circumstances, limitations and strengths. The managers obviously have a good understanding of work environment but it is the employee who have deeper knowledge about the ground realities. When the employees and the managers sit together the chances are they will set more realistic and achievable goals. This help increase the success rate and also increase employee morale. Moreover when the employee knows the goals are set with their consent they are most likely to get attached to it and feel more responsible for that. This encourage them to put extra efforts to achieve such goals and increase the success rate. The success itself is a great factor to increase employee courage, confidence and passion about their work. The increase employee engagement and collaborative environment always tend to produce better performance and higher productivity.
4. Bring Transparency to Reward and Recognitions Processes
The reward and recognition is one of the primary objective of any employee performance appraisal system. Traditionally the employee performance appraisal system was based on manual assessments, which are usually done by the managers. This method is outdated and no longer viable, employees in businesses and organizations are not happy with the traditional assessment processes. Usually the employee complain about the lack of transparency in the system. Studies have revealed that the managers only consider the most recent and most prominent events to assess the overall performance of the employee for the entire year. Most of the time the managers failed to recall the employee performance and behavior from the earlier months of the years, which in itself cause a lot of problems and reduce the accuracy from the system. However, the digital employee appraisal system can record and provide the employee performance data of the entire year. The managers can view the employee performance of the entire year along with the recorded reviews and feedbacks at their dashboard which help improving the accuracy and transparency of the system.
The employees are also provided with the data collected by the employee performance appraisal system hence the chances of misconduct or mistakes are very less. There is no room for favoritism or personal bias in the evaluation process which also build confidence of the employees on the system and produce highly accurate performance data. Furthermore the management can embrace the employees who have performed well and they can try to improve the performance of the employees who lagged behind. The appreciation, recognition and reward for good work plays a crucial role in employee satisfaction and raise their morale. It also increase their loyalty and motivate them to perform even better. The performance appraisal system doesn’t only rely on the reviews of the manager, but it collect quantifiable performance data and also allow other stakeholders to provide feedback. The peers, managers, senior management, cross-department managers, and even relevant customer can provide their feedback which significantly increase the transparency of the performance appraisal process and help gaining employee’s trust.
5. Offer a Better Career Path to the Employees
The employee performance appraisal system is a great tool to harvest future leaders. The modern performance management is leaning towards more contextual analysis rather only measuring the quantity of the work. The employee performance appraisal system help managers to implement contextual performance measurement techniques and enable them to include both the quality of the work and the quantity of the work in the evaluation process. Furthermore the performance appraisal system also help businesses effectively analyze the skills, technical competencies and the behavioral competencies which help them determine the exact value of an individual employee. The employee performance appraisal system can also be integrated with the accounts and help HR department with cost-accounting appraisal processes. It is extremely important for an organization to determine the exact value of individual employee and then propose them right career path to keep increasing their potential and talent. When the employees are provided with the right opportunities they grow, when they grow they become more beneficial for their organization. This require highly accurate performance data and in-depth analysis of the strengths and weaknesses of each individual employee which is only possible with a digital employee performance appraisal system.
6. Improve HR Efficiency
The performance appraisal either annual or interim is one of the most important function of the HR department. It requires a lot of resources, efforts, planning and time. The primary function of the HR department is to select the right talent for the business, retain employees, ensure employee satisfaction to maximize the outcome and keep filling the skill gap in the organization’s talent pool. These all tasks require a lot of in-depth understanding of the workforce and individual employee. The digital performance appraisal system not only help HR department achieve their organizational goals, but it also facilitates all these processes and make the appraisal more simpler and easier this it help boosting the efficiency of the HR department. It is the employee performance appraisal process that generates the right data to let HR understand what talent and skills they have and what is missing or what can be added to further boost the productivity of the business. Without accurate performance data the HR’s decisions could be risky and might failed to generate the desired outcome. That is why the employee performance appraisal system is absolutely essential for the HR in modern work environments in 2022.
7. Improve the Efficacy of the Training and Development Programs
The training and personal development or employee development programs are crucial for any business. They are expensive and it requires a lot time and efforts to develop an effective training and employee development program. The employee performance appraisal system not only provide the required information and performance data that help HR to design most effective training and personal development programs but it also help the HR to further analyze and evaluate their training and development programs. The HR departments can complete several appraisal and performance cycles to reach to a conclusive decision for these programs. This means that it also require a lot of resources and time. Once the HR department have designed an employee training and development program they can measure the efficacy by simply conducting another appraisal after those programs to measure the effects. The performance data will provide highly accurate results which will help determining the efficacy of these programs. The HR department can further tweak and upgrade those programs to generate the desired outcome. That is why the employee performance appraisal system is so crucial for organizations.
8. Reduce Employee Turnover
The employee turnover is one of the most impactful factor at enterprise and organizational performance. The HR department have invested a lot of efforts and resources to hire an employee, then the business will also have to bear the retention cost. Usually the HR can successfully target the right talent but the problems come when the HR will have to retain those highly-talented and ambitious employees. Most of the time the organization failed to retain those highly valuable and talented employees. There could be so many reasons why employee leave but most common is the lack of appreciation, acknowledgement, engagement and future score at the job. The employee performance appraisal system help the HR to solve employees’ problem and fulfill their needs which help reducing the employee turnover. When the employees are happy and satisfied with their current position they are most likely to stay. The employee satisfaction can be achieved by gaining their trust, appreciating them for their efforts and helping them out when they are not performing well. The employee performance appraisal system help streamline the communication, it improves the employee satisfaction and engagements, it improves communication and help HR to understand the needs and problems of the employees. Which help HR to take actions to retain employees and prevent unwanted disruptions in the performance.
Conclusion
The UAE is a rapidly growing economy and a very competitive marketplace, the businesses and organizations need performance appraisal system to maximize their productivity and profitability. In the year 2022 we have witnessed a huge increase in the adaptation of the modern performance management methods and digital employee performance appraisal systems. This is an indicator of how important it is for the modern work environment. No matter how expensive and advanced IT infrastructure an organization builds, or how modern and effective solutions they have acquired for their daily operations, if the employee are not performing well then everything else is just worthless. That is why the businesses emphasize a lot on performance appraisal systems. The traditional appraisal systems have already failed the business and organizations in UAE and in fact all around the world. The employees and the managers both are rapidly losing faith in the traditional appraisal methods and practices all around the world. This requires businesses to adopt a modern and highly advanced employee performance appraisal system.
The employee appraisal system is a digital tool it helps businesses set up most effective goals and also enable them to communicate these goals effectively to the employees. It help monitoring the employee performance in real-time hence make managers more ready and prepared for interruptions and unprecedented scenarios. It help improving the evaluation practices and provide highly accurate performance data which help the HR and the management to take informed and effective decisions. The modern performance appraisal system also help organizations to reduce the cost of the appraisal process and make it very simple so much so that the businesses who have implemented a digital performance appraisal system can conduct performance appraisal activities many times a year. It also help businesses to adopt modern appraisal practices such as in-depth contextual based performance reviews and support them to boost the skills and performance of the employees over the time. RSI Concepts is a leading employee performance appraisal system provider in Dubai, UAE. If you want to learn more about the subject of if you want our help to build a highly efficiency and cost-effective customized employee performance appraisal system for you. 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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