Human Resource Practices and Organizational Performance - Example

Performance Appraisal Student’s Name: Institutional Affiliation: Performance appraisal Human resource management has been a key focus to many organizational management teams. Human capital constitutes one of the most essential and complicated organizational asset, and hence calls for effective management. Their performance is affected by various factors including tiredness and emotional factors. To enhance their productivity, there are several strategies applied, especially in the recent past. Performance appraisal is one of the key strategies significant in achievement of organizational goals and objectives. As competition increases in the market, organizations have developed strategic measures to be competitive to ensure their growth and maintaining current market command. Performance appraisal assists in the realignment of human resource to enhance achievement of these strategies. A process performance appraisal involves five main steps. The first step is the setting of goals and objectives of a certain task, department, or a project. These objectives should be measurable and challenging, but achievable to the employees concerned. The second step is the measure of actual performance. In this case, employees’ actual performance is established using a predetermined method. Thirdly, the actual performance is compared with the predetermined objectives (Lievens & Chapman, 2009). This step is immensely essential in establishing any deviation, and by what extent. Various analysis take place at this step to establish the actual deviation, and how to avoid the same in the future. The last step in performance appraisal is the feedback. The employees are provided with full information of their performance and the management analysis. This step is critical in that employees are informed about their mistakes, and how to improve their performance in future (Richard, 1996). Retail outlets are common all over the world; they serve almost every final consumer in a market. In this type of business operation, employees are immensely significant as a result of their contribution and direct contact to consumers. It is easy to set objectives and goals to these employees, and hence performance appraisal can effectively take place. Performance appraisal is essential to a retail organization in various ways. First, it gives a chance for feedback to employees on their performance. In a retail business operation, performance can be based on customer satisfaction and amount of sales recorded. Customers can give their comments and rating on how they are served, through the customer care department or suggestion boxes. In addition, the quantity and value of revenue generated by an employee can be determined on a cumulative manner, and reported back to the employee. Secondly, the retail organization can identify employees and areas where training can assist in improving their performance (Abang, May-Chiun & Maw, 2009). The identified areas of weaknesses will determine the training required, and its intensity. This reduces the chances of unnecessary training, which save the company’s time and resources. For example, when customers give negative feedback concerning a certain employee, section, or department, the management investigates the causes of the dissatisfaction. This assists in establishing who are in need of customer care training, as well as interpersonal skills. Thirdly, performance appraisal assists in determining who and what reward should be offered to employees. It is a process of measuring performance in an objective way unlike in personal appraisal, which can be biased. The standards and requirement are predetermined, and performance is measured based on individuals’ actual performance, which is not easy to reverse (Lievens & Chapman, 2009). As a result, employees rating take place free from undue influence; it is highly acceptable. Excellently performing employees are rewarded as a means to motivate them to perform better in the future. In addition, those who are not rewarded are challenged and informed where they missed the point, and hence improve their performance in the future to enjoy the rewards. The retail business organization can benefit in that the improved employee performance, assists in developing a competitive edge against their competitors. Another essential, application of performance appraisal to a retail outlet is that it can be applied in the determination of salary, promotion, bonuses, and disciplinary action against employees. The value an employee adds to an organization can be determined through performance appraisal process. In this case, the employer can proportionally determine the amount of salary to offer to each employee depending on their performance (Harvard Business School Press, 2009). The retail outlet is sales oriented business, and hence sales can be used as a benchmark for performance appraisal and salaries determination. Promotion is a rise from one post in an organization to a higher post with additional benefits. Determining who to promote is a challenging process, and requires objectivity to avoid discrimination in the process. Promotion in a retail outlet should be based on performance as established through performance appraisal process. In addition, employees who intentionally perform poorly can be disciplined to discourage the tendency. This can be achieved through performance appraisal, particularly, through investigation of causes of deviation from intended outcomes. Performance appraisal enhances communication in an organization. The process is all side oriented, and hence all stakeholders in the appraisal process should be involved. The employer sets the organizational goals and expected time. From these goals, the management team together with operation employees’ representatives, strategizes on how the goals should be achieved. In this case, communication takes place from all levels and department for the common goals (Christensen, Marx & Stevenson, 2006). The exchange of ideas brings about cohesiveness and well informed decision making. In measuring employees’ performance, communication must take place among the evaluators and employees being evaluated. In addition, involvement of customers enhances communication and better understanding of customers’ needs and expectations not met. There are various setbacks of performance appraisal in a retail outlet organization. First, it is a time consuming process. In this case, managers and supervisors take a lot of time from the time of setting goals, measuring, comparing with actual performance, and establishing deviations. As a result, they lack the time to attend other managerial functions, which may end up affecting their overall performance. There are so many other functions they should be involved in, particularly, in the case of a retail outlet which is usually a busy business operation. In the attempt to attend to all what is required of them, they may not carry out performance appraisal in an effective way (Murphy & Jeanette, 1995). The other issue impending effectiveness of a performance appraisal is the fact that, in some cases, personal appraisal dominates in some cases. Some supervisors and managers take advantage of personal appraisal to overturn excellent performers, particularly those who seem as if they can be promoted to their or a higher post than they are. In this case, a foreman with excellent performance may be a threat to a floor supervisor, who may use personal appraisal process to pin him down. Another negative attribute of performance appraisal concerns the treatment of poor performers. In some cases, poor performers are not really their own problem; poor placement and unfavorable working conditions, may contribute significantly towards their poor performance. Performance appraisal may undermine such facts, and hence the so called ‘poor performers’ are put under disciplinary action for issues beyond their control. It may, therefore, be a demoralizing process, which can create a counterproductive behavior to the affected employees (David, 1987). In addition, the rate of turnover of employees can be immensely high, which may increase human capital related expenses. Another set back of performance of appraisal is poor communication of feedback to employees. Manager and supervisors in a retail outlet do not give timely feedback to employees, and hence the outcomes of the appraisal may not be of any value to them. As a result, all the efforts, time, and resources consumed in, goes into waste. There are various means of improving performance appraisal effectiveness. This can be done through mitigation of factors impending performance appraisal. First, managers and supervisors should concentrate only of important issues concerning performance appraisal. This will save their time for attending other managerial functions. Secondly, personal appraisal should be run parallel to performance appraisal, but decisions on their outcome should be carried separately. This will reduce chances of personal appraisal from overlapping performance appraisal. Lastly, before taking disciplinary action against poor performers, managers should investigate into details, factors which may contribute to poor performance, rather than personalizing it (Murphy & Jeanette, 1995). This will enhance fairness and corrective disciplinary action, where possible. In conclusion, it is significant for an organization to come up with strategies in order to gain competitive advantages over its competitors. Setting up these strategies is a complex process requiring a combination of efforts, knowledge, skills, and experience. It have been evidenced that some organizations set up these strategies in vain; they do not achieve their objectives within the required time. Performance appraisal is one of the key processes which assist many organizations in achieving their strategies. Employees’ actual performance is measured against predetermine objectives and goals, to establish deviation and investigate their causes. This process enhances communication, assists in the determination of salaries, promotion, bonuses, as well as rewards to employees. Some setbacks of this essential process are poor feedback, unfair treatment of poor performers, and dilution of its objective by personal appraisal. References Abang, A. M., May-Chiun, L. & Maw, K. L. (2009). ‘Human Resource Practices and Organizational Performance. Incentives as Moderator.’ Journal of Academic Research in Economics, 1(2), 229-244. David, E., G. (1987). Human Resource Management and Industrial Relations. Journal of Management Studies, 24 (5), 503-521. Christensen, C. M., Marx, M. & Stevenson, H. H. (2006). The tools of cooperation and Change. Harvard Business Review, 84 (10), 72-80. Lievens, F., & Chapman, D. (2009). “Fundamentals of human resource management: Recruitment and Selection.” In. A. Wilkinson, T. Redman and S. Snell. 2009). The SAGE handbook of human resource management. Thousand Oaks, California: SAGE Publications Ltd. pp. 133- 154. Harvard Business School Press. (2009). Performance Appraisal: Expert Solutions to Everyday Challenges. Massachusetts: Harvard Business Press. Murphy, K. R., & Jeanette, C. (1995). Understanding performance appraisal: social, Organizational, and goal-based perspectives. London: Sage. Richard, C. G. (1996).The complete guide to performance appraisal. New York, NY: AMACOM Div American Mgmt Assn. Read More