Performance Appraisal System

Introduction In business organizations, employees are among the most valuable organizational assets and highly determine the overall performance of any business. Many organizations despite having the abilities essential in enhancing performance have slacked due to poor input towards employees concerns.Advertising We will write a custom research paper sample on Performance Appraisal System specifically for you for only $16.05 $11/page Learn More In fact, according to Levesque (2007, p.30) employee satisfaction leads to customer satisfaction. In this line, I suggest that employee motivation is the most essential component in business. Effective HRM (human resource management) is vital for optimally exploiting creativity and accomplishing organizational as well as individual goals. Organizational leadership must ensure appropriate integration of different activities and synchronized functioning focusing on organizational goals. Employee motivation is vital for guaranteeing commitment of human capital to the given goals. The answer to motivation is centered on the integration of individual and organizational goals. Hence, managers have to concentrate on important HRM tasks like planning, development, evaluation and compensation. Evaluation entails performance appraisals, scheduling and recommending. This paper investigates the â€Å"good† characteristics of an appraisal system and how the system can be paired with compensation and benefit packages to increase employee motivation. ‘Good’ characteristics of an appraisal framework The success of an appraisal system depends on the involvement of all parties involved. The difference between appraisals and evaluations should be clearly understood by both parties. An evaluation is aimed at objective measurement but an appraisal involves both objective and subjective measurement of employee performance within the period set for review. Therefore, the aim of performance appr aisal is feedback, improvement and assessment (Goel, 2008). The process of implementing performance appraisals is centered on three elements: the job, the employee and the environment of the business. Since these elements are interrelated and interdependent, the appraisal system must be individualized, qualitative, subjective, and focused on solving problems in order to be effective. The system should also be founded on clearly defined and measurable values and indicators of employee performance. Because the system appraises performance rather than personality, personality aspects that are not pertinent to performance must be disregarded from the system. Some of the ‘good’ characteristics of an appraisal system include the following:Advertising Looking for research paper on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Documented job analysis: the performance goals and job description must be structured, mu tually accepted by and documented for both the employees and managers. Reliability and validity; performance appraisal systems should give reliable, consistent and valid information that an organization can use even in legal ramifications (Goel 2008). If two supervisors are equally qualified to appraise a worker through the same appraisal method, their results should then agree. An appraisal should also satisfy the requirement of validity. For instance, if a system is designed for potential of a worker for promotion, the information it gives must relate to potentialities of the worker to assume higher roles. Communicated to employees; most workers want to know about their job performance. An effective appraisal scheme offers the necessary feedback continuously. The appraisal interview must allow both the employee and the appraiser to understand the existing gaps and plan for a better future. So far, managers must explicitly explain their expectations on various jobs in advance of th e review period. With that understanding, the employees find it easier to learn about the goals and improve their future performance. Participatory and open; for any successful appraisal system, the employees should be involved and allowed to participate via an interview with the appraiser, for feedback. Interview discussion may involve past performance and establishment of future goals. Strategies to accomplish these goals and improve future performance should also be discussed jointly. Such involvement imparts a sense of belonging. Employee appeal; formal procedures must be developed to give room for employees who are dissatisfied with appraisal results. They should be offered options to pursue their complaints and have them handled objectively. Primarily, performance appraisals should be used to develop employees as treasured organizational resources. The system will apparently fail when the managers use it as a whip or fail to understand its restrictions.Advertising We will write a custom research paper sample on Performance Appraisal System specifically for you for only $16.05 $11/page Learn More Supervisor training; since the performance appraisal is vital and somehow difficult, it is necessary to offer training to the appraiser on rating, documenting and interviewing. Being familiar with rating errors can enhance the performance of the rater and hence inject the necessary confidence in the supervisor to consider ratings more objectively (Goel, 2008). Rewards; an effective appraisal system should include both positive and negative rewards in order to initiate impact. The employees use the rewards as yardstick and improve their performance accordingly. Integrating compensation and reward packages Designing and managing reward systems perhaps presents the managers with the most challenging HRM undertaking. Within this area of HRM, there are great inconsistencies between what the literature promises and the practical execution. At the same time, organizations encounter cycles of novelty with higher hopes as the reward networks are improved, only to experience disappointment when they fail to provide results. From a business perspective, rewards are aimed at motivating certain behaviors. Nonetheless, rewards such as compensation should be appreciated as well-timed and connected to successful performance. This means that reward considerations must reflect on the outcome of performance appraisal in order to instill motivation. In today’s competitive environment, business organizations are increasingly establishing compensation goals based on pay-for-performance principle (Goel, 2008). It is agreed that performance appraisal are not complete without the managers tying some rewards to the efforts and performance of the employees. This principle is important in motivating employees to perform with larger effort, resulting in low-wage cost. Pay-for-performance standard refers to different compensation for ms such as incentive pay, cash bonuses, merit pays and gain-sharing plans. All of these forms seek to separate outstanding performers from the pay-for-average performers. As Goel (2008) notes, productivity researches indicate that employees output increases when a firm establishes a pay-for-performance initiative. A number of researches and theories have been developed about how monetary initiatives satisfy and motivate workers (Perry, Engbers Jun, 2009; Arthur Aiman-Smith, 2001; Raghuram Rangaraj, 2008).Advertising Looking for research paper on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Nearly, all studies on the significance of pay likened to other rewards indicate that pay is significant and constantly ranks top in the list. Merit salary increase and piece-rate incentive systems have been associated with responsible stewardship (Perry, Engbers Jun, 2009). Group and organizational-wide incentives such as gain-sharing plans have been associated with cooperation and fairness in organizations (Arthur Aiman-Smith, 2001). Individual-pay-for performance initiatives have been associated with personal development (Raghuram Rangaraj, 2008). All these suggest that a performance appraisal that involves effective rewards systems is important in motivating employees. Conclusion Employee motivation is a major factor than determines individual performance as well as the overall performance of an organization. Therefore, it is the role of management to design performance appraisals that are accepted by all those involved in order to enhance their effectiveness. Such appraisals must then include the rewarding system which leads to the motivation. Although there are many reward systems, studies reveal that pay-for-performance initiatives are most appropriate to integrate with performance appraisals. References Arthur, J. B. Aiman-Smith, L. (2001). Gainsharing and organizational learning: an analysis of employee suggestion over time. Academy of Management Journal. 44(4), 737-754. Goel, D. (2008). Performance Appraisal and Compensation Management: A Modern Approach. New Delhi, India: PHI Learning Pvt. Ltd. Levesque, P. (2007). Motivation: powerful motivators that will turbo-charge your workforce. Irvine, CA: Entrepreneur Press. Perry, J. L., Engbers, T. A. Jun, S. Y. (2009). Back to the future? Performance-related pay, empirical research and the perils of persistence. Public Administration Review, 39-51. Raghuram, G. Rangaraj, N. (2008). Formulating the concept, principles and parameters for performance-related incentives (PRI) in government. Retrieved f rom https://www.india.gov.in/ This research paper on Performance Appraisal System was written and submitted by user Tate D. to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here. Performance Appraisal System