8/6/2019 29543d1213025941 Article Employees Pms System Performance Management System http://slidepdf.com/reader/full/29543d1213025941-article-employees-pms-system-performance-management-system 1/76 Page 1 of 76 AN ARTICLE ON EMPLOYEE’S PERFORMANCE APPRISAL SYSTEM P.B.S. KUMAR B.Sc,MA(PM),MA(Ind.Eco.),MBA(HR),BGL,DLL,PGDIR&PM
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29543d1213025941 Article Employees Pms System Performance Management System
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8/6/2019 29543d1213025941 Article Employees Pms System Performance Management System
Performance appraisal is an attempt to assess an employee’s performance.The assessment may be taken into account in determining wage or salaryincreases. Claims are made that some schemes are objective, but most ofthem are bases on ‘subjective opinion’. Some schemes involve the employee inmaking an assessment. Employees know they are being evaluated and theyare told the criteria that will be used in the course of the appraisal. Nothing iskept secret. The appraiser and the appraisee should carry out this task jointly ina cordial atmosphere stressing on the plus points and finding out ways andmeans of overcoming drawbacks, if any, of the appraisee.
PURPOSE OF APPRAISAL
Appraisal has three purposes:
To help improve performance by identifying strengths and weaknesses
and by getting things done which will develop the former and overcomethe latter.
To identify those with potential for greater responsibility, now or in the
future, and to provide guidance on what should be done to ensure thatthis potential is realized.
To assist in deciding on pay increases which fairly equate the level of
reward with the level of performance.
Performance appraisal is …….or should be, a continuous process, but it isnecessary from time to time to carry out a stock-taking exercise which reviewsperformance and progress over a period of time, so that a more comprehensivestory can be built up to from the basis for considered action. The starting pointis the performance review, which posses three questions.
1. What has actually been achieved during the period against what wasexpected to be achieved ?
2. What are the factors that influenced the level of achievement ? Thesecould relate to the personal efforts or abilities of the individuals
concerned, or to external factors beyond his direct control.3. What needs to be done to improve performance ?
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The performance review leads to the potential review, which should answer twoquestions.:
1. What potential has this individual to advance beyond his present level ofresponsibility ?
2. What needs to be done to ensure that he fulfils his potential by thecompany, his manager and himself ?
COMPONENTS OF PERFORMANCE APPRAISAL
There are a number of reasons for performance appraisal of employees such
as counseling, promotion, training, or a combination of them. Therefore, it isnecessary to understand clearly the objectives of the performance appraisal.While doing the performance appraisal. While doing the performance appraisal,the appraiser should address the question in respect of the five Ws. Viz. who,what, why, when, where, as also the how of performance appraisal.
ADVANTAGES OF EMPLOYEE PERFORMANCE
APPRAISAL
The principal advantages of employee performance appraisal are :
It provides a regularly scheduled uniform system of reviewing the
employee’s performance and an opportunity for exchanging viewsabout each other, i.e. the department and the employee.
It gives evidence of management’s interest in the individual employee.
It induces supervisors and department heads to think more seriously
and objectively about the performance of their employees.
It gives an opportunity to an employee to know his plus and minus
points and to improve his performance.
It provides and objective basis for many types of personnel decisions
including pay increase, training, promotion etc.,
Employee performance appraisal indicates whether the present job
makes full use of an employee’s abilities and if any change is desirable
in his duties, what kind of training is required to improve hisperformance.
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THE APPRAISAL PROCESSThe appraisal process should deal, as far as possible, with objectively observedfacts rather than subjective opinions. The aim is to get agreement between theboss and his subordinate on what the latter has achieved and what he needs todo to improve his performance. Such agreement is more likely to occur if thediscussion is based on comparing agreed results with agreed targets orstandards of performance. It is unreasonable to criticized; it is only acceptedand acted upon if it is felt to be fair – and it will only be considered fair if theindividual fully accepts that he has not achieved standards which hadpreviously been agreed by him as reasonable and attainable.
REQUISITES OF A GOOD APPRAISALSYSTEM
The following are the requirements of a good employee performance appraisalsystem:
The most important condition for the success of any rating system is thatthe supervisors fully understand the plan, have faith in its effectivenessand carry out their part conscientiously. The original rating is made bythe employee’s immediate supervisor. If this rating is made carelessly,no amount of care and intelligence elsewhere will be able to save theprogramme.
It is important that the employee performance appraisal system has toactive support of the top executive who make the final decisions onpromotion, training, increment, transfer, etc.
An appraisal from that has been thoughtfully and skillfully designed
should be used. A well designed from is of great help in securingaccuracy and uniformity in doing the appraisal. An important part of any employee’s performance appraisal plan is the
statement of standards of performance standards will enable both theemployee and the rather to have some basis for judgment as to howsatisfactory the employee’s performance has been. These standardsshould be stated in writing and in as specific terms as possible.
It must have the support of all the line managers who administer it,otherwise they will not take interest in its operation.
It must be easily understandable. If the system is too complex or tootime-consuming, it may be non-starter and ultimately be rejected by
those who are to use it. It must identify persons of proven competence and leadership.
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There should be very close collaboration between line managers and theHR manager, because the line managers are primarily concerned withsubordinate and his job, and the human resource manager focuses onthe man and his career.
As much notice as possible should be given to the employee regardingthe performance appraisal interview, so that the employee may bementally prepared.
Adequate time should be allowed for the performance appraisalinterview. This may vary according to circumstances and the personstaking part in it.
Complete privacy and freedom from telephone and other interruptionsshould be ensured.
Finally, it is a must to establish rapport before commencing theemployee performance appraisal interview.
APPRAISAL SHOULD HAVECONTINUOUS PROCESS
Generally, performance appraisals are made annually. However, once a year isnot enough. Too much will have happened between appraisals to them to beadequate reflections of work done. If people like to be told how they are doing,and what their prospects are, you should let them know constantly.
The best method of continuous appraisal is the encouraging of greatercooperation between management and individual employees. Once the staffbecomes used to a flow of reaction and response, they may feel emboldened tocomment constructively on your own behaviour and approach.
There is no need to set up elaborate procedures for continuous assessment.Just allocate extra time for studying the work of individuals, discussing it withthem, and sorting out problems, encouraging initiative and setting new goals.
GUIDELINES FOR EFFECTIVE APPRAISAL
What you get from an appraisal depends on what you put into it. As a rule thequestions you ask should be those that lead to the most detailed discussion,and that keep the convergence of the person and the job firmly insight. Ifproperly handled appraisals can provide a wide variety of information, help youset largest and reveal problem areas hitherto unsuspected.
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Performance Management ensures that managers and their subordinates areaware of what needs to be done to improve performance. Its provides feedbackso that people know where they stand, where they ought to be going to getthere. It can be linked to performance related pay where the rewards are clearlydependent on the results achieved.
DISADVANTAGE OF APPRAISAL
Appraisals are a waste of time and effort unless some form of counselingresults from them. An appraisal should not be thought of as
1. The employee telling the manager how he / she is doing followed by
2. The manager dispensing wisdom.
An appraisal must be worked through together by appraiser and appraised.Before you can really discuss and evaluate performance, you most decide onthe results that you as a manager expect to see and these goals must beagreed on. It is always advisable to have something definable and / ormeasurable to appraise.
Appraisals should end in mutual agreement. Finish by setting a date by whichcertain results should be evident.
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Why should you care about managing the performance of your employees?
Because communication between manager and employees is essential forincreasing productivity, improving morale and motivation, and allowingcoordination of each employee’s work with the goals of the unit and theorganization.Many managers dislike performance management. They try to avoid it or theytry to cut corners or they simply mess up. It’s often because they don’tunderstand performance management.So, they’re focusing on the wrong things. They focus on appraisal rather thanplanning. They focus on a one-way flow of words (manager to employee) ratherthan dialogue. They focus on required forms rather than communication. Theyfocus on blaming rather than solving problems. They focus on the past rather
than the present and the future.So they waste time and effort and just don’t get out of performancemanagement the benefits that it can provide – if done properly. In fact, theirtime and efforts often oly make the situation worse.Performance management is an ongoing communication process, undertakenin partnership between an employee and his or her immediate supervisor, thatinvolves establishing clear expectations and understanding about the following:
• The employee’s essential job functions
• How the employee’s job contributes to the goals of the organization
• What it means, in concrete terms, to do the job well
• How job performance will be measured.
• What barriers hinder performance and how they can be minimized or
eliminated.
• How the employee and the supervisor will work together to improve the
employee’s performance.
“ Performance management is, in some ways, very simple and , in other ways, very complex. It
consists of lots of parts and requires some skills. But if you approach it with the proper mindset,
you can make it work – and pay great benefits.”
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One of the challenges of making performance management and appraisal
work involves leaving behind older ideas of how work gets done, the roles ofmanager and employee, and the purposes associated with performancemanagement. For example, managers who believe their role is to tell staff whatto do rather than work with them to solve problems don’t fare well withperformance management. Managers who believe performance appraisal is thevenue for bashing employees over the head don’t do well. And managers whorefuse to take on the role of helping everyone succeed quite simply don’t get
success.
There are two things to understand-what performance management should beand what performance management should not be. These aren’t based ontheories, but on observations of what works and doesn’t work in real workplaces.
Performance management isn’t a way to threaten, cajole, or intimidateemployees into being more productive. It isn’t a method to blame or find fault inemployees. It’s not for attacking the personality and attitudes of employees.So, what is it? It’s a broad set of tools used for the purpose of optimizing the
success of each employee, each work unit, the manager, and the organization.If these goals are to be achieved, the manager must adopt a modern mindset.
Commit to the idea that your job is to build success in the preset and future andnot to manage by looking at the past (managing by looking in the rearviewmirror). This means you must be looking forward.
Understand that the benefits you can achieve through performancemanagement will come only when you complete all the steps, not justevaluating performance.
Accept the fact that, on your own, you can improve performance only a little bit.Employees, on their own, can improve performance only a little bit. However,when you and each employee realize you are on the same side and worktogether, then you can improve performance by huge amounts, not only foreach employee, but also for your work unit.
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Performance management requires an investment on your part. Yes, thatmeans you need to do the work. Most important, it means that if you invest thetime and effort, you will save time, effort, and costs.
Share responsibility :
The responsibility for productivity lies with you and the employee. Forresponsibility to be shared, there needs to be two-way communication betweenmanager and employee. You need information to move things along. Theemployee needs information.
Seek out employee wisdom :
Performance management is a good way to harness the knowledge, skills, andexperience of employees. They do the work every day. They are closest to theaction. Often they know better than you how to fix things.
“Employees need to play an active role in defining and redefining their jobs.”
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It’s not surprising that managers tend to skip the performance management
process. Most of us haven’t had a chance to participate in performancemanagement done properly. As a result, many don’t understand the benefits forthe employee, the manager, and the organization. Performance management
can be valuable-provided you understand what it can do for you.
Performance management takes an upfront investment to achieve certain verypractical aims. For example, performance management can be used to makesure each employee’s work contributes to the work unit’s goals. It can reducethe amount of “supervision” you need to provide by clarifying for employeeswhat they need to do and why they need to do it. Performance management,properly done, allows you to identify problems when they occur so you can fixthem early. The need to discipline is reduced as a result. The bottom line is thatperformance management can improve productivity- if you commit to the entireprocess. You’ll recoup your investment.
Besides being the tool for improving productivity, performance managementalso protects you in situations where you fire an employee or have to makeother difficult decisions about employees. Performance management involvesdocumenting problems and communicating those problems to employees. If anemployee files a complaint, your documentation will show that your decisionswere based on performance issues and that the employee knew about thoseissues and had a chance to address them. Solid performance managementdocumentation can even deter frivolous lawsuits and complaints.
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Here are three ways to focus on the benefits you want:
Keep the goal in sight :
Before any step into the performance management process, remind yourselfthat your goal is to improve performance and help everyone succeed. Focus onthat and you will start seeing benefits quickly.
Be patient about results :
You will see some benefits from the performance management process veryquickly after starting. Performance planning, by itself, should help reducewasted effort and the need to closely supervise your staff. The full benefitswon’t be obvious until you’ve been through the entire one-year cycle at leastonce or twice.
Do all the steps :
Performance appraisals alone don’t improve performance. When you do all the
steps of performance management, that’s when you get the payoff. Planperformance, communication during the year, diagnose problems, and reviewperformance.
“Since performance management helps employees understand what they should be doing and why, it gives them a degree of empowerment – the ability to make day-to- day decisions.”
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There’s a major misconception about performance management. Many
people confuse performance appraisal and performance management,believing they are one and the same. When employees and managers believethat performance management consists of one annual meeting where themanager evaluates performance for the purposes of punishing employees whodon’t make the grade, is it surprising that nobody looks forward to the process?
Performance evaluation is just a small part of performance management-andprobably the least important part. To improve performance and create a moreenjoyable workplace, you need to manage performance, not just evaluate it. Ifyou just evaluate, chances are you’ll end up with less productivity, not more.
So, do all the steps. Start out by planning performance. This critical stepinvolves making sure both you and the employees understand what he or shemust do in the next year to contribute to the overall goals of your work unit.Both of you should be clear about how the employee needs to do the job.
Make sure you communicate about performance all year round. That helps youidentify and solve problems early before they result in significant costs.
Managing involves making the right decisions. What do you need to makethose decisions? Data and information. Part of the overall performancemanagement process involves observing and collecting data so you and theemployee know how things are going.
Documenting is the process of recording significant discussions and eventsrelated to an employee’s performance. Proper documentation (done during allstages of the process) makes performance discussions easier, since you and
the employee don’t have to rely solely on memory. Documentation may involvecomplex forms or it may be as simple as jotting down some notes.
Diagnosis and problem-solving refer to how you and the employee identifybarriers to performance (past, present and future), so you can formulate plansto overcome those barriers.
Finally, there’s the performance appraisal meeting, which yields a summary / review of the year. If you successfully complete all of the other steps, thereview meeting is simply a fast formality, since everything would have beendiscussed during the year. That’s why the actual performance appraisal
meeting is the least important part of performance management.
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Employees need to understand these steps. Explain the point of each part.Explain what will happen. Explain how the process will benefit them.
Make it two-way :
Remember that performance management involves an exchange ofinformation. You get and give information to the employee. The employee getsand gives information to you. That’s how you improve performance.
Make it about you, too :
Performance management isn’t just about what the employee does. It’s aboutidentifying your role in improving performance. Talk about and decide how youcan help, what you can do.
“If you believe that performance appraisal is performance management, it’s just not going to work.”
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You have a pretty good idea about what your employees are doing and need
to be doing, right? Since that’s the case, you could simply tell your employeeswhat they need to do and then, at the end of the year, tell them how wellthey’ve done. A fair number of managers do just that. They feel they know bestabout the work that needs to be done.
But there’s a problem: this approach doesn’t work very well. Here’s why.
Managers have one perspective about the work. Employees have another
perspective. They complement each other and you need both. When you andyour employees combine your knowledge, you improve performance.
Involve employees as equal contributors in the performance managementprocess, particularly during performance planning, performance reviews, andproblem solving. Not only will this make the best use of available information,but it will tell employees that you value their knowledge and insight. That’sessential if employees are to become active and enthusiastic participants inperformance management. Involvement also builds a sense of ownership andresponsibility.
Treat employees, particularly experienced ones, as experts in their jobs untilthey demonstrate a lack of expertise. You do not have to agree with input fromyour employees and you’re certainly not bound to act on it, but you should notdismiss it out of hand.
Guard against the tendency to rely on just your perspective, particularly whenthe goal is to identify why performance has been below expectations or howperformance can be improved. Managers are often just too removed from thedetails of the job to have a good grasp of the source of work problems.
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Here are three components to create a collaborative situation:
Give employees the information they need :
Make sure employees have enough information about the goals and challengesyour work unit faces. That helps them connect their own goals and work tothose of the work unit. It allows them to be active, valuable, and informedpartners in performance management.
Use more questions than statements :
Encourage staff to share knowledge, information, and ideas by askingquestions, rather than telling. Once their contributions are on the table, presentyours. Questions about goals and objectives and questions that encourage self-evaluation are particularly valuable.
Listen, respond, and act :
Don’ t ask for participation and then ignore what the employee says. Listen first-and then make sure the employee knows you’re listening. Then respond withyour own understanding and perspective. When necessary, commit to action tohelp improve performance-and then follow through on your commitment.
“If managers look at performance management as something they do to employees, confrontation is inevitable. If they view it as a partnership, they reduce confrontation.”
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The entire performance management process ends up as wasted effort if theemployee’s goals and job responsibilities are not directly linked to the goals andmission of the work unit, department, and organization. The reasoning is
simple. Not only do employees have to do things well, but they also have to bedoing the right things. It’s your job to ensure that the employee’s workcontributes to the achievement of organizational goals.
How do you align employee goals with the goals of the organization? The mainmechanism for doing this is the performance planning process. Here’s how itshould work.
Ideally your company should be doing some strategic and tactical planning sothat the company has some clear targets. Those clear targets are distributedamong the individual work units, so that each work unit ends up with a clear set
of goals it must achieve. Those work-unit goals are used during theperformance planning phase to determine the goals and objectives of eachemployee. It’s best described as a cascading process.
The logic goes like this: if every employee achieves his or her goals, the workunit achieves the goals assigned to it, which in turn helps the organization hitoverall targets.
Apart from optimizing overall performance, this process has another benefit. Ithelps employees put their jobs in an overall context. When they know how their jobs fit into the big picture, they’re more likely to be more motivated and get
more satisfaction out of doing their jobs. Understanding the work-unit goals alsomakes it easier for employees to make decisions that take into account thosegoals.
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Start the performance planning process by reviewing where the organization isgoing. Then review what the work-unit MUST ACHIEVE. Then discuss what theemployee can do. Get significant employee input on how he or she cancontinue.
Tweak the timing :
Aligning goals this way means that organizational and work-unit planning needto happen before individual performance planning. Consider altering yourperformance management cycle so it aligns with the overall work-unit planningcycle. Don’t be discouraged if the organization doesn’t plan, since you canmake best guesses.
Reinforce during reviews :
At the end of the cycle (performance appraisal), don’t forget to highlightindividual accomplishments and how they’ve contributed to the larger goals.Reinforce the links. Employees who understand how they’re contributing tendto feel more ownership and pride.
“Regardless of what the rest of the company does, many managers find it useful to set aside one day a year to meet with staff and identify what the unit needs to accomplish in the coming year.”
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We know people work best when they a) have clear goals, b) believe they can
achieve those goals, and c) know what they will receive when they achievethose goals. There are other factors involved in motivating employees, butthese three simple aspects are very powerful.
Incentives are a bit different from rewards. An incentive is something that isspecified in advance. A reward is received after the fact. For an incentive tomotivate an employee, the employee must know about it in advance. Thespecification of incentives should be part of the performance planning process.
Don’t make the mistake of assuming that incentives need to be of huge value.Yes, large financial bonuses can improve performance, but so can smallbonuses or other kinds of benefits. Access to training, consideration forpromotion, small pay raises, or even a nice dinner can serve as low-costincentives. In fact, huge bonuses can have a negative effect if not implemented
properly, since they can pit employee versus employee in the pursuit ofsignificant financial gain. Huge bonuses are not as cost-effective as moderateones.
There are two critical times with respect to incentives-setting up incentives anddetermining of the criteria have been met.
Setting up incentives is part of performance planning; determining whethergoals have been achieved is part of performance appraisal. When planningincentives, negotiate with each employee. Whatever criteria you negotiate,make sure that the employee can reach them if he or she works hard andexceeds normal expectations about performance. If you use criteria theemployee cannot possibly reach, incentives are worthless. Salary pays for“normal performance”. Incentives reward superior performance.
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If you can, link incentives to both individual success and work-unit or companysuccess. The employee benefits from hitting his or her targets. The employeealso benefits if the work unit or company hits targets. Trying incentives to work-unit success can improve a sense that “we’re in this together.”
Individualize incentives :
Incentives works only when the employee wants the benefit offered. Beprepared to negotiate incentives on an individual basis. If employees canchoose their specific rewards, those choices are more powerful motivators.
Avoid vague criteria :
Using vague criteria linked to incentives is a recipe for disaster. Specify clear
goals that can be measured. Don’t link incentives to vague ratings scales. Makesure you and the employee understand the criteria in the same way.
“Think of your job as helping each employee hit that target, make that extra money,or get that promotion.”
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Forms don’t improve performance. People working together improve
performance.
That’s a point that’s often lost in the minds of both managers and humanresource staff who supply evaluation forms for use by managers. The truth isthat most appraisal forms are so bad they make employees resentful and arefar too general to achieve the goals and generate the benefits of performancemanagement.
During appraisals, filling out the form is the least important part of the process.What is important is that you and the employee have a meaningful dialogueabout past performance and what can be done to improve performance in thefuture (regardless of current levels).
What do you do if you are forced to use a form that is too general and vague
and doesn’t require recording information needed to improve performance?Complete the form if you are required to do so-but augment it in two ways.
First, don’t limit your discussion to the form and its items. In fact, don’t evenbring out the form until the end of the meeting. Talk about the job, pastperformance, barriers to performance, and ways to overcome those barriers.Ask how you can help improve performance.
Second, you can document (write down) the important aspects of thatdiscussion and append them to the form. Record any strategies or plans toimprove. Include what you can do to help. You want to succeed in improving
performance in spite of being forced to use a horrible tool.
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When given a form, people tend to fill it out and provide only what it asks for. Asa result, the form controls the review process, when you and the employeeshould be guiding the process. Use the form t summarize discussions and add
notes to the form as necessary.
Lobby for better tools :
Some appraisal forms are so bad that completing them will inevitably end upinsulting employees. This happens if the forms ask for evaluations aboutattitudes and personality, rather than behaviors and results, or force you to ratea certain percentage of staff as below average. See if you can convincedecision-makers to allow you to use a more flexible approach.
Focus on communication :
Performance management is about communication. Even if you have to usepoor forms, you can overcome the negative effects by being open and honestand working with employees to improve performance. Dialogue is the key.
“When you focus on performance management as a way of communicating and building relationships, the actual format of the reporting system becomes less important.”
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For years, managers focusing too much on the forms have destroyed
performance management. Now we have a new wrinkle-the use of technologyfor performance management. Various computer - based systems have beendeveloped to make the process faster. One system allows you to “phone in“your employee ratings using a touchtone phone!
Here’s the problem. Computers are great for recording large amounts ofinformation and automating certain kinds of repetitive tasks. They do nothowever, make the users of the technology wiser or smarter or improve their judgment and thinking abilities. And we know that these things are theessentials that make performance management work.
As with forms, people tend to do only what computer programs ask of them.Use a performance management computer program and people will do onlywhat it requires. And that’s not enough to improve performance.
Use the technology, but keep in mind the pay off comes from good face- to-face communication. Never allow any computer program to result in lessinteraction between you and your employees. Use technology for storingrelevant information and data and for summarizing discussions you havedirectly with employees.
Keep in mind that allows us to do things faster. That’s not always a good thing.
If we do the wrong things, but do them faster, we get to the wrong place morequickly. When systems are automated, the resulting automating system will beonly as good as the thinking that went into creating it.
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Don’t restrict yourself to filling in online forms or doing only what’s asked. Doesit make sense to be told what to do by a machine? No.
Watch for poor setup:
Performance management software usually needs to be customized to beuseful. That customization is often done by information technology or humanresource departments. Their needs are different from yours. The software canbe tweaked, so provide feedback to improve it.
Fight the novelty:
Don’t be seduced by the novelty of these systems. It may be “cool” to sit by
yourself and do performance appraisals on a computer. That doesn’t mean it’sgoing to get you where you want to go.
“Any method can have undesirable side effects, particularly if it’s used without proper thought and care. Be alert to potential problems with your appraisal system.”
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If you’re using a rating form in your performance appraisals, it’s best to be
aware of their limitations and do your best to reduce their negative aspects.
Typically, a rating system has some sort of verbal descriptor (e.g., “completestasks on time,” “exhibits leadership ability”). For each descriptor, the rater isasked to assign a number (usually one to five) that best describes theemployee’s performance on that item. Variations include replacing numberswith evaluative phrases (e.g., “poor,” “excellent”) or combining the two. Oftenthe exact same form is used to evaluate employees across a wide range of jobs. The items tend to be quite general.
That’s the first problem. Because the items are so general, a rating doesn’t givethe employee enough specific information to improve. How does it help an
employee to know that he or she is a “two”? It doesn’t. In fact, it’s likely to insultthe employee, since nobody believes he or she is a two on a five-point scale.
Ratings are not usually tied to specific behaviours, so the ratings areexceedingly subjective. The numbers may make things seem objective (we’resuckers for numbers), but they aren’t. When these numbers / ratings are usedto make personnel decisions, the subjectivity involved creates a huge conflictpoint.
Can you minimize these and other problems associated with ratings? Yes.
In a performance appraisal, never begin discussing a topic with the rating.Discuss the performance first. Once that’s done, then negotiate a rating. Forexample, for “being on time,” discuss instances where the employee has beenon time or not, using any data you have. Identify the causes of any late arrivals.Only once you and the employee have done that should you choose a rating.
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Employees understand the limitations of rating. They still need to hear that youunderstand the limitations. Explain that you realize ratings are a very vagueway of evaluating. Treat them as fallible-and let the employee know that’s yourstance.
Negotiate ratings :
Since ratings have very little objective meaning, negotiate the final rating foreach item; don’t just tell your rating. Don’t get picky. Whether an employee getsa “three” or a “four” is not very important. Arguing over small differences
creates bad feelings that affect future performance.
Don’t sum ratings :Adding up the ratings to obtain a total overall rating of performance ismeaningless. Don’t do it. It’s like adding up the numbers on football jerseys todetermine which team is better. For a number of reasons-some simple, somestatistical-adding up the items is unfair and inaccurate.
“Always clarify the meaning of each rating item before doing the rating. Discuss your idea of its meaning and ask the employee about how he or she understands it.”
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Ranking employees as a measure of their productivity is not common. Where
ranking is used, it’s almost always misused and it should be eliminated.
That’s a bit counterintuitive. You’d think it would be possible to look at 10
employees doing the same job and determine which is the best, then next best,and so on, all the way down to the worst. But you can’t do this meaningfully andyou can’t eliminate ranking perils.
Is ranking ever appropriate? Yes. Where employees are expected to create oneor two very specific results and they can be measured accurately, ratings canbe used. A real estate agent could be evaluated in terms of a very few criteria-number of sales, dollar value, number of new clients secured. If that’s all youcare about, ranking can work. But what about the agent who interferes withother agents through cutthroat practices? May be you expect the agent to domore than sell, to contribute in other ways to the success of the company.Ranking then becomes a problem.
Ranking creates a win-lose situation among employees. There can be only one“best performer”, only one “second best”, and one “worst performer”. So, for anemployee to be the best, he or she can either become more productive … orwork to bring down the performance of everyone else. You do not want tocreate that kind of unpleasant competition, unless there is simply no need foremployees to work together.
Finally, using ranking to make decisions about which employees keep their jobs
is bad business. If you hire the right people, everyone should be performingwell… even the worst in your rankings. If you were to replace the bottom 20%each year, the chances are the people you hired to replace them would beworse.
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There’s no way to eliminate the problems with ranking systems, but here arethree things to keep in mind:
Understand the faults :Ranking shows only relative contributions, at best. Rankings do not tell you theactual value of an employee. A low rank, when a person is performing well,may lower future performance.
Lobby for change :
If you’re required to use ranking, consider trying to get the requirementchanged. Ranking ties your hands and your ability to make managerialdecisions. It rarely succeeds. Companies that appeal to succeed usingemployee ranking are succeeding for reasons completely unrelated to rankings.
Augment:
If you must use rankings, augment them with elements that make performancemanagement work. Plan performance and set clear objectives. Communicate
all year long and problem-solve. Help everyone succeed.
“In the short run, ranking systems can encourage some people to work harder … But they can also encourage people to passively or actively interfere with the work of others.”
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There are few things worse than being involved in a performance review
meeting when one or both parties don’t know why they are there, don’tunderstand the point, and haven’t done any thinking or background work. Yourgoal is to limit the length of the actual appraisal meeting to about an hour, tops.If you go longer than that, fatigue sets in. Along with fatigue comes aggravation.So, you need to lay the groundwork beforehand.
There are two aspects to appraisal preparation. You prepare to play a lead roleduring the meeting in a way that encourages the employee to participateactively. The employee prepares so he or she can participate actively.
Preparation begins at the time you schedule the review meeting. Explain thepurpose of the appraisal discussion and what to expect and outline anydecisions that need to be made by the end of the meeting. You can discussspecific steps to help the employee prepare. You might ask him or he to reviewrelevant documents-job descriptions, performance planning documents, andstrategic planning and relevant documentation created throughout the year. Askthe employee to go through his or her objectives and make notes aboutwhether he or she has achieved them or not.
It is good to provide some reassurance at this time. “I promise there won’t beany surprises during the meeting” is a good phrase. What’s important is that theemployee begin to think about the things the two of you are going to discuss.Make sure you ask if the employee has any questions about the meeting.
Your preparation depends on a number of factors, including the forms you haveto complete, your style, and the particular details of your performance
management system. Review the employee’s job description, jobresponsibilities, performance plans, and relevant documentation. Be sure toreview the form you’re expected to use. Make sure you understand it and thinkabout how you’ll use it to stimulate discussion. It’s also a good idea to write aquick informal agenda outlining the critical steps you want to complete. You canshare this with the employee at the start of the review.
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A few minutes before the meeting, remind yourself that you’re three to create a
dialogue. Commit to asking questions. Plan to foster self-evaluation. Promiseyourself not to get into the blame game.
Touch base :
A day or so before the meeting, confirm the appointment with the employee.Answer any questions. Verify that both you and the employee will be ready.
Prepare in person :
Reduce anxiety about the performance review by preparing face to face. Don’tdo it by memo. That’s far too impersonal and very intimidating for theemployee. Schedule and explain in person.
“Arrange not to be interrupted. Have your phone calls held. This is the employee’s time. Make it quality time.”
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Some managers who consider themselves “hardnosed” believe it’s not
necessary to praise employees and acknowledge their successes. They believethat salary is enough and “coddling” employees is unnecessary. They are deadwrong.
All of us need to know that our work and our successes are noticed,recognized, and appreciated. Salaries don’t convey that sense to employees. Ifyour employees feel you do not recognize their contributions, they won’t go tothe wall for you.
Recognizing success can take many forms-perks, awards, and bonuses areexamples. The most practical forms of praise don’t have to cost a cent, though.Look for instances where an employee is doing a good job. Then, when youfind them, tell him or her.
Don’t limit recognition to any time, place, or situation. You can recognizecontributions over coffee, in team meetings, and in one-to-one-meetings. Youcan show your appreciation during all the phases of performance management:during performance planning, any time during the year, and, of course, duringthe performance review meetings.
There’s no limit on praise, but be sincere and specific and accurate when yourecognize performance. Sincerity is critical, since research suggests tomanipulate him or her into higher performance, performance tends to drop, notrise.
Congratulate employees on special accomplishments, dealing with toughsituations, and even regular run-of-the-mill success. But keep in mind that if youpraise everything, employees will devalue your praise. Make sure youdemonstrate an accurate understanding about the particular accomplishment.For example, if you congratulate an employee on always getting to work on
time, but the employee has actually been late five times during the past month,you look like a fool who doesn’t know what’s going on.
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Acknowledging success in a general way is a good thing. It’s even better if you
explain exactly what the employee did well and why it was valuable. Thataccomplishes two things. It tells the employee what to continue to do and itprovides a little motivational lift.
Catch employees doing good :
Get out of your office to see what’s going on and talk to staff. Look actively forsuccesses rather than for problems. When you find an employee doingsomething good, comment and recognize that accomplishment on the spot.
Recognize with small rewards :
When acknowledging accomplishments with some sort of tangible reward, userewards of token value. Small rewards (ex, certificate, plaque, small giftcertificate, congratulatory coffee mug) don’t result in bad feelings or destructivecompetition for rewards. Recognition rewards are best served in a context offun and goodwill.
“Celebrate success as they occur.”
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Some managers believe that the best way to “motivate” employees is to get in
their faces or “read the riot act.” That’s not true. Fear is not a good motivator.
The harder you lean, the more likely the employee will resent you and resistyou. Aggressive talk breeds aggression.
By using cooperative language, you’ll reduce conflict and send the messagethat you and the employee are “on the same side.”
Avoid comments and criticism that can be construed as personal attacks. Forexample, “You aren’t listening” and “You don’t know what you are talking about”are personal attacks. Replace these kinds of statements with more cooperativelanguage. For example, “Let’s slow down a bit so we make sure we understandwhat each of us is saying” or “I ‘m not understanding your thinking here. Could
you explain a bit more?”
Eliminate focusing on the past and using past-centered comments. Forexample, “For years, you’ve been late in getting your work done” is a past-centered comment that’s likely to create an argument. Why? Because it’s in thepast and can’t be changed. It’s OK to refer to past event in passing, but not tofocus on the past. For example, “I can recall a few instances where projectshave been delayed. Let’s talk about how we can prevent that in the future” ismuch more constructive and less likely to start fights.
Eliminate guilt-inducing phrases, comments that are meant to make anemployee feel guilty, such as “If you really cared about this team, you wouldwork harder” or I guess you don’t care much about this project.” If you usethese kinds of phrases, employees will fight you tooth and nail because theyare interferences on your part and far too vague.
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Here are three more tips on improving your communication:
Reduce unsolicited advice :
There are times to offer advice and times to to. You have a right to make
suggestions, but it’s best to ask first. For example, I have some suggestionsabout [topic]. Can we talk about them?”
Reduce commands :
You also have a right to order or command that an employee do what you want.However, overuse tends to foster resistance and rebellion. Usually you cansend the same message without being overbearing. “Get this on my desktoday” is a command, while “I need this today; does that work for you?” is not.
Don’t overstate :
If you use words like “always,” “never,” every time,” and “all the time,” you’reoverstating your point. People tend to fight overstatements. Overstatements arealmost always inaccurate and intended to “win.”
“Ask your staff, ‘Are there things that I do or say that make you feel uncomfortable talking to me?”
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We know beyond a shadow of a doubt that people need specific information
about their job performance to improve. When that information is missing,performance tends to drop over time, even for better performers.What kind of information do employees need?
• Specific information about what they are doing well and should continue
doing
• Specific information about what they should not do
• Specific information about what they should do-instead of what they
should not do
How specific does the information need to be? Here are examples of commentstoo vague to help an employee learn and improve: “You aren’t selling enough,”“You’re too argumentative during team meetings,” and “You need to workharder.”
Here are examples of comments that are specific: You might be able toimprove your sales if you qualify your customers by…, “ “I think you seem
argumentative in team meetings because you tend to interrupt others,” and “I’venoticed that you get into work late about once a week and that preventscustomers from contracting you in the morning.”
The vague comments may in fact be true, but by themselves they are simplytoo inaccurate to improve performance, while the more specific ones are clearabout what’s needed-try this qualifying technique, stop interrupting, and arriveon time.
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Here are three techniques to help you keep appraisal discussions concrete andspecific:
Rely on specific examples:
Use specific examples of behavior when talking about performance. Forexample, “In June I received three calls from customers unable to get in touchwith you because you hadn’t arrived by 9 o’clock” or “In the last team meeting,you interrupted Jane three times.”
Stick to observations and facts, not inferences’ :
Observations are things you see. Facts are about things you know, based ondata (e.g., sale figures, customer comments). Inferences are conclusions,usually about an employee’s attitude or personality. Avoid inferences and
statements like “You’re lazy,” “You need to work harder,” and “You’re not ateam player.”
Make and use informal notes :
You can’t always talk about a performance issue immediately. When you dosee things about an employee’s performance that you want to mention later,make some short notes so you can be specific during the discussion. Use themto jog your memory.
“Employees need regular, specific feedback on their job performances. They need to know where they are excelling and where they could improve. If they don’t know … , how can they get better?”
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Although It’s not among the main reasons for managing performance,
performance management is an important tool for disciplining an employee.Discipline is not quite the same as punishment. Punishment has an “I will hurtyou” quality, while discipline is the process of holding an employee accountable
for his or her actions by specifying consequences that will be applied undersome very specific circumstances. And, of course, discipline is applying thoseconsequences when needed.
There are times when employee actions are so extreme or unacceptable thatthey require immediate action (e.g., assault, theft, gross safety violations).However, most disciplinary action related to performance does not require thatimmediacy. Enter progressive discipline.
There are several components to progressive discipline. First, you identify
aspects of performance that must change. Second, you determine what willhappen if that change does not happen by a specific time- the consequences(e.g., probation, demotion, suspension). Third, you communicate (anddocument) the information to the employee. Fourth, you reevaluate at theidentified time. Fifth, you apply the consequence.
Usually the consequences themselves are progressive: you start with the mostgentle consequences and then, if those are not sufficient to help solve theproblem, you escalate. You may go through the cycle several times, dependingon the value of the employee, the severity of the problem, and other factors thatfit the situation.
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Here are three suggestions to help you make progressive discipline work:
Problem-solve first :
Discipline of any sort should be considered a last resort. You have aninvestment in each employee, an investment that you do not want to lose.
Before you move to discipline, work with the employee to identify why theproblem is occurring and try to help him or her overcome it. If that fails,discipline may be appropriate.
Weigh the consequences :
Disciplining an employee means crossing a bridge that you may never be ableto uncross. Disciplinary action can destroy any chance of a positive relationshipbetween you and the employee. Also, before you decide to proceed, considerthe costs of disciplinary action-the cost of replacement and the effect on other
staff.
Identify, communicate, provide opportunity, and help :
Give employees reasonable time to improve, except in very severe situations.Be clear about what they need to change and take an active role in helpingthem improve. First, be a “teacher/helper.” Then, if helping doesn’t work, be aboss.
“Any disciplinary action must be documented completely, in detail – the actual performance gap, how it was identified, how it was communicated to the employee,and steps taken to resolve the problem.
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Consider that you already have a significant investment in your employees. It
took time and money to hire them and get them up to speed. It makes sense toinvest further by helping them develop and to improve their skills and, therefore,their ability to contribute over the long term.
Skill development is appropriate when you believe performance can beimproved if the employee acquires or refreshes job-related skills. Skilldevelopment can also be used in cases where an employee might be suitablefor increased responsibility or a promotion. Some managers use developmentopportunities, such as going to conferences and seminars as rewards for goodperformance.
How does this fit with performance management? Performance managementprovides you with the tools for determining whether employee development isindicated and what kind of development best fits the situation.
For example, use performance planning to identify possible barriers to goalachievement and identify what an employee needs to learn to achieve thegoals. Performance appraisals can highlight gaps between where an employeeis and where he or she needs to go.
Employee development need not be costly. You can use seminars and trainingworkshops, but there are other alternatives. For example, you can pair up aless skilled employee with a willing, more skilled employee. You can coach the
employee yourself if you have the required knowledge and skills. You canarrange for job rotations so the employee learns new skills and becomes amore adaptable part of your organization. Don’t restrict yourself to just the moreformal learning opportunities, such as training seminars. Informal ways oflearning are often more effective and less costly.
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Below are three suggestions to help you optimize staff development:
Follow up :
Learning happens best when there is follow-up. If an employee goes to training,suggest reporting to other staff members what he or she has learned ormeeting with you. Talking about learning reinforces the learning.
Link learning to goals :
People learn best when they understand the purpose. Regardless of thelearning methods, make sure employees understand how they’ll use whatthey’ve learned. Tie development to specific goals or career enhancement.
Incorporate a development plan :
The best times to plan for skill development occur during performance planningand performance appraisal. During both phases, discuss skill developmentgoals and how to reach them. Document any agreements and commitments forthe employee and yourself.
“In a constantly changing workplace, the skills needed for employee success
change over time.”
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“Perf “Perf “Perf “Performance management is about people, communication, dialogue, and ormance management is about people, communication, dialogue, and ormance management is about people, communication, dialogue, and ormance management is about people, communication, dialogue, and working together, not about forms or forcing employees to produce.” working together, not about forms or forcing employees to produce.” working together, not about forms or forcing employees to produce.” working together, not about forms or forcing employees to produce.”
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Name of Appraise: ________________________Designation: _______
Department: _____________________________ Service Start Date: _________ Appraisal Period From: ___________ to ________Purpose of Review:
Confirmation
Annual Review Name and Designation of Appraiser: _________________________________________
Nature of Relationship: ________________________________________
XYZ Company seeks corporate value of higher significance, pursuing innovativequality in the areas of Customers, Employees, Society, Products, Technology,
Management and Fairness
When completing the form, you are required to support your rating with comments in thespaces provided for each category. For statements that do not apply to the person beingevaluated, please mark “Not Applicable” (NA). Comments should be specific (includingexamples) and explanatory. If your evaluation and recommendations cannot be adequatelycovered in the space provided, you should prepare an attachment to this appraisal form.
Performance for each category is graded into the following:
Outstanding 5 points Performance is exceptional and far exceeds
Total Scores X 100 %Number of Questions Answered X 5
Grading
90%- 100% Outstanding Performance is exceptional and far exceeds expectations.Consistently demonstrates excellent standards in all jobrequirements.
76%-89% Very GoodPerformance is consistent, and exceeds expectations in all situations.
60%-75% GoodPerformance is consistent. Clearly meets essential requirements of
job.
45%-59% FairPerformance is satisfactory. Meets requirements of the job.
31%-44% Needs ImprovementPerformance is inconsistent. Meets requirements of the joboccasionally. Supervision and training is required for most problemareas.
0%-30% UnsatisfactoryPerformance does not meet the minimum requirements of the job.
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(iii) What specific plans of action, including training, will be taken to help theappraisee in their current job or for possible advancement in the company?
Name of Appraisee:__________________ Designation: __________________
Department: ___________________ Service Start Date: ________________________ Appraisal Period From: ___________ to ___________ Purpose of Review:
Confirmation
Annual Review
Name and Designation of Appraiser: ______________________________________
Nature of Relationship: ______________________________________________________
XYZ Copmany seeks corporate value of higher significance, pursuing innovative quality in the
areas of Customers, Employees, Society, Products, Technology, Management and Fairness
The purpose of this evaluation is to communicate clearly to the individual evaluated how wellhe/she is meeting expectations for a person at his/her level. *You are required to support yourrating with comments in the spaces provided for each category. For statements that do notapply to the person being evaluated, please mark, “Not Applicable” (NA). Comments shouldbe specific (including examples) and explanatory. If your evaluation and recommendations
cannot be adequately covered in the space provided, you should prepare an attachment to thisappraisal form. This form should be reviewed by the next level of authority, before discussionwith the person being evaluated.
*Please refer to the goals set during the previous appraisal period, as you conduct yourassessment.
Performance for each category is graded into the following:
Outstanding 5 points Performance is exceptional and far exceeds expectations.Consistently demonstrates excellent standards.
Very Good 4 points Performance is consistent and exceeds expectations.
Good 3 points Performance is consistent. Clearly meets job requirements.
Fair 2 points Performance is satisfactory. Meets minimum requirementsof the job.
Needs Improvement 1 point Performance is inconsistent. Meets requirements of the job
occasionally.
Unsatisfactory 0 point Performance does not meet minimum requirements of the job.
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(iii) What specific plans of action, including training, will be taken to help theappraisee in their current job or for possible advancement in the company?
θ Termination θ Consider for merit incrementθ Extension of probation θ Transfer to other types of workθ Suitable for confirmation θ Ready for promotion
(w.e.f. _______________) θ Has potential for promotion, but notready now
θ Normal increment of S$________ θ Others: _________________________ θ No salary increment __________________
The performance appraisal is part of a larger system known as the performancemanagement system. This system is the approach to the management ofpeople using performance, planned goals and objectives, measurement,feedback and recognition to motivate people to realise their maximumpotential. Performance appraisal involves the setting of clear quantifiable goalsand objectives and assessing individual performance against these measures.
1.2 Aims
Performance appraisals are a way to give feedback to staff regarding theirperformance. The appraisal can be used to encourage good work as well aspoint out opportunities for improvement. Appraisals can also be used to setmeasurable targets and objectives to continually spur performanceimprovement.
Increasing Role Clarity
Performance appraisal is a tool for communicating the skills, knowledge andattitudes required for the different job roles. The appraisal criteria acts as aguide to the attitudes and behaviours that XYZ COMPANY would like theirstaff in their various capacities to have.
Training and Development
Performance appraisals measure an individual’s performance and can identify
opportunities for improvement or learning through training.
Compensation and Reward
As XYZ COMPANY bonuses and annual increments are linked toperformance, a system for measuring performance in an equitable way isnecessary. The performance appraisal encourages the use of objective,quantifiable criteria to measure performance which will be known to all staff.This system improves fair judgement and the perception of equity among staff.
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Performance appraisals will allow XYZ COMPANY to assess the skill set oftheir existing staff to ascertain the career path for each individual.
Enhance Corporate Values
XYZ COMPANY’s corporate value is the pursuit of innovative quality in theareas of Customers, Employees, Society, Products, Technology, Managementand Fairness. These values are translated to performance measures that areused in the appraisal. This enhances awareness of corporate values andpromotes behaviours that are in line with XYZ COMPANY’s values.
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Don’t make promises you do not have control over (e.g. salaryincrements, promotions, transfers etc)
Review goals Concentrate on a few areas- things that make a difference. Try toencourage continuation and growth in the areas of strength. Set up
“smart” goals that will build strength in areas needing attention
Administration • Complete the paperwork required for the results of the appraisal• Make sure the appraisee signs on the bottom line• Mark the calendar on when your next appraisal session with the
person will be
Follow-up Follow-up on agreements made during the appraisal
A F T E R T
H E A P P R A I S A L
Learning Review what you have learnt about the employee, your records andsystems, yourself, the appraisal process and your management style
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Whilst completing the appraisal form, the appraiser is advised to exercisecaution, as there may be several pitfalls which may skew the assessment:
Halo EffectA person outstanding in one area tends to receive outstanding or better thanaverage ratings in other areas as well, even when such a rating is undeserved
Negative EffectA low rating in one area yields lower than deserved ratings for otheraccomplishments
Central Tendency Assigning an average rating for all qualities
Confrontation AvoidanceDiscomfort with giving negative feedback
Initial PerformanceRating an employee based solely on initial impressions of performance
RecencyRating an employee based solely on most recent performance whichovershadows the entire year’s performance
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The appraisal form covers the following key areas:
• Assessment of performance• Employee’s growth and development - strengths and areas for
improvement • Training requirements• Achievements• Goals and targets (for managers and executives)• Review with staff (for managers and executives)• Recommendations
• Management review- Review by Countersigning Authority
5.2 Completing the Appraisal Form
5.2.1 Key Performance Indicators
Core Values Manager Executive Staff
Customer Focus
• Maintains high priority in achieving customer satisfaction (both internal and externalcustomers) by quickly and accurately identifying and responding to customers actual needs
Customers
• Is effective in dealing and negotiating with internal and external customers
Staff Training and Welfare
• Actively provides guidance and helps staff in their careerdevelopment
Employees
Interpersonal/ Facilitation of Teamwork
• Promotes and develops good working relationships with other staff
Communication Skill
• Speaks, listens and writes clearly and logically to share information and skills
Society Cost Consciousness
• Demonstrates concern for the society through practices that save company’s resources andreduce wastage
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In this section, describe how the appraisee demonstrates their strengths andareas for improvement by providing specific examples.
Specific action plans can also be developed together with the appraisee (forExecutives and Managers) to address these areas. In particular, trainingrequirements can be identified for the areas that can be enhanced or developedthrough training. Training requirements refer to the skill set required by theemployee to either successfully fulfil current job responsibilities or to preparethe employee for greater responsibility.
Achievement
This section allows any additional responsibilities outside of the appraisee’s jobscope (e.g. ISO 9002 Steering Committee) to be acknowledged.
Goals Achievement
Appraisals for Executives and Managers, contain a section for goal setting andgoal achievement assessment. Goals are specific and measurable objectivesthat the individual wishes to achieve by the end of the following appraisalperiod.
Recommendations
The appraiser provides recommendations for the career development for theemployee. These may include: confirmation, extension of probation,promotion, increments, termination, etc.
Review by Director
The Managing Director will provide comments prior to filing with the
Administration Department.
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