In many organizations, ‘Performance Appraisal’ is a yearly ritual that triggers dread and apprehension with employees. Employees who are going through the appraisals do not always look forward to them. In fact, research and practice demonstrate that employees enjoy performance appraisal just about as much as a trip to the dentist, but at least the dentist gives them something for the pain. With employees, always there is a misconception that performance appraisal is Salary revision. One has to understand that Performance appraisal mechanism is completely different from the Salary Revision Process. With proper transparent mechanism, Performance appraisal should happen whether Salary Revision happens or not. Organisations take calls on Salary Revision depending on their profitability, cash flow situation, market conditions, industry trends, competitor actions etc.
The research from WorkplaceTrends.com suggests that Employees are looking for a truly personalized career, development at all junctions in their workplace tenure. Employees don’t wish for an annual performance review; they seek frequent, helpful conversations (in an open, mentoring and coaching atmosphere) that aids their development throughout their days and weeks at work. It is important to have review & governance mechanism to track the progress of employees and their scoring.
In this article, I am going to write about how to set up a perfect Performance Appraisal system and sharing our process as well. We are using SAP Success Factors as a system to have a fair and transparent performance Appraisal.
I will also touch upon the other aspects of the performance appraisal.
Our Appraisal system consists of 4 different Sections, with each carrying different weight, to measure the progress of our Employees throughout the year.
KPIs and measurable targets should be set and measured frequently. Corrective coaching, discussions should happen to improve the effectiveness of the employees.
Objectivity and fairness are key factors in the Performance appraisal process. When managers rate Employees on a personal relationship, gender, race etc. it creates unhappiness among employees and leads to attrition.
SAP Success Factors come with a standard set of Goals for every industry and measuring process that can be leveraged to have a fair and transparent Appraisal Process.
Employee Life Cycle Assessment:
This section is set up to measure the progress of employees on the projects/jobs they have been assigned. It is to measure their Competence, Skills, and Commitment to their Job.
Often in Organizations, Managers are the only ones who do the Performance Appraisal, and it has to change. Feedback should be from many people to create fairness and it is good to get a 360 Degree view of employees. Managers, Peers, Subject Matter Experts, and Customers should all give feedback and the collective feedback should be taken for the Performance Appraisal.
The periodicity of this assessment is also very important. It is good to do the assessment every quarter or at every event point.
Corporate Alignment Assessment:
This helps to achieve how employees are aligning with the overall objectives of the organization. Their cooperation with the other departments is measured and taken for consideration during the appraisals. We measure how employees are supporting pre-sales, sales, and recruitment departments. For each support activity, points are allocated and the total points collected over the period of a year is taken for the Appraisal process.
Every organization has its own culture. Since many employees spend 40 or more hours/week at their workplace, their organization’s culture obviously affects both their work lives as well as their personal lives. Organizational culture refers to the beliefs, ideologies, principles, and values that the individuals of an organization share. This culture is a determining factor in the success of an organization.
We have the following 11 Cultural Tenets, and employees are measured against these cultural tenets.
- Aspire to be the best
- Do More with Less
- Decide Courageously & Stay Accountable
- Exhibit Thought Leadership
- Embrace Change
- Make your Journey Count
- One for All All for One
- Obsession with Customer Service
- Result Driven Execution
- Walk the Last Mile
It is important to access the employee’s performance on all walks of his work at the office and operate a fair and transparent mechanism to evaluate the performance and do the corrective measures.