Best Practices in Performance Management and Appraisal - Essay Example

Best Practices in Performance Management and Appraisal

Performance management is one of the important functions of human resource since it provides measurement of employees’ performance against organization’s set targets, goals, vision, and mission. Over the years, best practices have been developed by different HR experts with a view to improving the function of performance management and appraisal. Performance management and appraisal has two sub-functions, management of employees' performance and appraisal of employees (Hope, 2012). However, the two functions run concurrently. The essay discuses one of the best practices in performance management and appraisal while giving convincing reasons why the practice should be adopted by organizations in order to improve HR’s performance management and appraisal function.

According to human resource experts in the leading international organization, one of the most basic yet neglected best practice is uniformity in performance management and appraisal. Performance management function is a very powerful tool that is used by HR management to propel productivity to greater heights, shaping and aligning individuals to be a formidable team and in the process, enabling employees’ continuous improvement. Additionally, performance management and appraisal has an impact on employees' energy and attitude in the workplace. Positive outcome of the performance management and appraisal goals results in the success of the organization and energetic employees. The goals of performance management and appraisal have identified as bad practices. In this light, they have made suggestive solutions (best practices) which have been adopted and operationalized and has resulted in better management of performance and appraisal. One area that was identified to be a bad practice with regard to performance management and appraisal is the organization’s systems itself (Smither, 2009). It is a bad practice to have a rigid performance management and appraisal function where every employee is subjected to and is expected to have certain results. Some of the performance management and appraisal pitfalls identified in line to organization’s system include; appraisal forms, divergent goals and purposes, appraiser skills, and the course of implementing performance management. Some organizations have uniform appraisal form which is used to appraise all employees in the organization regardless of the position of the employee in an organization. Additionally, diversity of goals and purpose has been noted to result in a bad practice of performance management. Some organizations have goals and purpose misaligned to each other; thereby, resulting in performance management that is subjective (Sims, 2007). Uniform appraisal exposes employees to the junior level performance management, linking them directly to the strategies of the organization which is disadvantageous to the lower level employees since their performance is collective and not individual bound as is the case with line managers or middles level managers. Therefore, this makes it hard to appraise employees at the operational level with the same appraisal form that is used for top-level employees. The pitfalls identified have been noted to amount to a bad practice in performance management and appraisal function. However, they are correctable through a best practice which has been identified as a development of performance management and appraisal evaluation cycle under which employees and managers review competencies and goals on regular recurrent basis throughout the year.

This best practice applies to performance management of international companies such as IBM and Infosys among other international. These companies have found the application best practice as a solution to the ever recurrent problem of high employee demotivation and low performance resulting poor results. Uniformity of evaluation does not give employees level playing ground regarding noting their performance, improvements and corresponding reward (Lussier 2015). Consistency of assessment requires top management to be evaluated equally with the lower level employee. In actual sense, subjecting top management to the same performance management and appraisal process as the lower level employees shows greater unevenness. Top level management's function of leadership, planning, organizing, and strategizing. Their performance is more aligned to the realization of goals and mission, and they are long term in nature. On the other hand, lower level employees are aligned to achieving daily targets. Importantly, the measurement of their performance is short term in nature (Secord, 2004). Therefore, evaluating top level management equally with the lower level employees will present biased results while trying to establish performance, improvement, and corresponding rewards at each level. Therefore, it is a good practice to have differentiated performance management and appraisal process for different level employees. Top level management measurement should be purely weighed against achievement of company’s strategies and through the measurement of the overall performance of the company aggregated on the total performance of a concerned company. Measurement of performance and appraisal of departmental managers and supervisors should be directly tied to the department's goals and objectives for a specific duration with the scope becoming smaller as the management rank and functions reduce (Marchington, 2006). Lower level employees are the majority rank of employees in an organization; therefore, they should be subjected to a totally different performance management and appraisal process from the one the top management and lower level employees are subjected to. Performance management and appraisal for top level management should measure improvement and achievements of management against the strategies of the organizations, and it should be for a period of one year or depend or strategic cycle and review.

On a different note, performance management and appraisal of lower level employees should be routinely done, perhaps on daily, weekly, monthly, or per assignment basis. Performance management and appraisal of this level of employees should be purely based on what has been accomplished and how it has been accomplished. What has been accomplished measures achievement of a specific person on a specific task? In other words, it gives a performance of an individual in quantitative terms. On the other hand, how it has been achieved measures the way an employee accomplished a certain task or attained certain results. Regarding how it has been achieved, the focus is on the employees’ innovativeness, speed, ability to consult, teamwork, and attitude. Additionally, it measures the means through which an employee attained a certain result or a goal; good results/goals can be attained through company’s acceptable conventional means while others can be achieved through company’s unconventional/unorthodox means (Paladino, 2013). Measurement of employees speed and innovativeness seeks to identify talent in the employees. Therefore, lower level employees are the greatest beneficiaries of unified employee performance management and appraisal process. Research has established that lower level employees who are subjected to a uniform performance management and appraisal process tend to be demotivated and non-candid in handling their duties. This is because they feel intimidated to be subjected to the same weighing scale with their supervisors and the top management in general. But in an instance where there is the differentiated evaluation of performance and appraisal, lower level employees feel motivated and candid on their duties. According to Infosys’ HR management (Infosys is an Indian international outsourcing company with over 60, 000 employees from all over the world) non-unified evaluation system gave the company's HR an impetus in its performance over its international counterparts, and it is partly or largely attributable to the company's success. Besides, it continues to register more success in the management of performance management and appraisal (Lussier, 2015).

Differentiated performance management and appraisal process have been found to be advantageous in so many ways which include; giving employees morale and candidness in their assignments. Such emanates from the fact that they do not feel intimidated by their level of performance and that of their bosses since they are evaluated differently. Additionally, differentiated evaluation gives talent and compensation management team an easy time in as they seek to identify hardworking and talented employees per level and then manage them appropriately (Pope, 2004). It also enables management to rate the performance of each department individually and by doing so, they give room to the management to look into areas that need improvement and what need to be done to effect the desired changes. The only known disadvantage that exists as a barrier to adopting this best practice is that of resource requirements. The differentiated evaluation system will require companies to marshal more resources for the HR team because implementing the best practice will require an organization to set aside more resources to meet the intensity of the performance management and appraisal evaluation process. Companies that have employed the best practices have had almost to double the budget of HR team. The difference that exists between the practice and the non-differentiated performance management and appraisal is with the way evaluation is done. Differentiated evaluation requires human resource employees to be tasked with carrying out routine management of performance and maintain clear, true, and concise records of employees’ performance management (Lawler, 2009). However, the parameters of measurement in the two practices are almost similar in the sense that, it carries out the output of individual employees, as a team or an individual. What brings the difference between the two practices regarding the parameters is the intensity of evaluation. The immediate advantage that has resulted from this best practice is that it has enabled companies to identify talented and hardworking employees; thereby, retaining them in the company by compensating them appropriately. Performance management and appraisal is sometimes hard to carry out in multicultural organizations due to diversity in culture and employees’ expectation. This is because employees from different cultural backgrounds differ in expectation and how they are managed while carrying out their duties. Differentiated performance management and appraisal practice have enabled such multicultural organizations cope with problems by enabling organizations to understand individual employees and value them based on their expectation.

Different employees have different rewards that motivate them. In most cases, differentiated performance management and appraisal practice take account of what turns on employees based on initial records about employees. Some employees would like to have the monetary reward tied to their performance while others would rather have recognition or promotion as their reward. This from of individual recognition has greatly improved the level of motivation that employees have in their workplace and it is translated to positive results in their work (Houldsworth, 2006). Additionally, the practice helps identify and punish employees who are rowdy and unproductive in the workplace. The practice has been identified to have a direct bearing on both long term and short term human resource strategies and the company’s strategies as well. This is because positivity in the workplace resulting from motivation and individualistic evaluation gives employees a sense of belonging.

Most companies which have adopted the performance management and appraisal best practice above, such as IBM, have realized different results from what they used to attain when they were employing a unified performance management and appraisal procedure. Making performance management and appraisal regular and recurrent leads to improved employee performance. The fact that there is a certain period of the year when the employees are subjected to performance management and appraisal makes employees become aware; therefore, they become candid and secure knowing that they have room for improvement before every next recurrent performance measurement and appraisal period (Lussier, 2015). Through the process, employees become confident and motivated in their work unlike in the case of a bad practice where employees are subjected to impromptu performance management and appraisal analysis which leaves employees tensed and unsettled in the workplace; therefore, affecting their output.

Differentiated performance management and appraisal process is; therefore, the performance management technique that needs to be employed by all organizations through the world since it has been tested and proved by international companies such as IBM and Infosys. The practice holds a greater potential for turning around the fortunes of a company from losses to success. Besides, an organization is made up of employees (people) and it is only through their proper management that organizations will realize more profitability and success. Incorporation of the practice in performance management and appraisal will not only result in organization’s success in quantitative terms but it will lead to success in qualitative terms as well.