One of the most difficult internal process that HR has to face every year, once or twice, is employee appraisal. The appraisal process in an organization requires lots of
resources (both financial and manpower). On other hand, it also offers organizations an excellent opportunity to analyze the strengths and weaknesses of the organization. While a well-planned appraisal can provide lots of inputs on re-aligning your organization and boost your profitability, a poorly-planned appraisal can cause frustration among employees.
This article describes in brief a sample step-by-step process for planning, executing and getting results from a performance appraisal exercise. We will discuss the following points in the article further: -
1.Defining vision & objectives of performance appraisal
2.Creating a performance appraisal Plan
3.Creating awareness about appraisal
4.Organization-wise training of appraisal process
5.Selecting appropriate appraisal tools
6.Data collection & analysis
7.Normalization of appraisal scores
8.Utilization of appraisal scores
9.Assessment of training needs
10.Training & development plans 1. Defining Vision & Objectives
Before initiating the appraisal, every HR Manager should ask himself - Why appraisal? What I want to achieve out of it? Will appraisal add value to the organization? The answer to such questions will lay foundation of the vision and objectives of appraisal for the organization. The objectives of the appraisal process should align with business objectives. The vision and objective should be formally written and communicated to all relevant people in the organization. 2. Creating an Appraisal Plan
Once objectives have been defined, a detailed Appraisal Plan should be drafted. This may consist of the target dates of appraisal initiation for every department, time allocated for various activities, people allocated for various processes, etc. This draft should be reviewed by the senior management and finalized as a master blue-print for the appraisal.
. Creating Awareness about Appraisal
The biggest challenge that HR may face will be creating a sense of ownership and responsibility toward the appraisal. A few steps to meet such challenges are: -
·Employees - The amount of participation and ownership for appraisal process can drastically increase if employees know the benefits of the exercise. So clearly explain to each and every employee how performance appraisal can affect their career graph and impact the next compensations plan. This will motivate them to take steps to improve their goal achievement percentage, initiations, etc., to get higher scores in appraisal.
·Managers - The same exercise should be followed for HR Managers but in different perspective. Their basic questions like how appraisal process of their department impacts their team and themselves should be answered by the Senior HR Managers.
·Management - Top-level management should be consulted on the appraisal process. They can add value to the appraisal process by sharing their previous experiences within and outside the organization. They can also help in customization of the appraisal process that best suites their department.
4. Organization Wise Training of Appraisal Process
Training employees on appraisal process is another challenge that needs to be addressed by the HR department. Without adequate training on the appraisal process and appraisal software, employees cannot contribute what they could, by giving their own vision and thoughts about their own performance and how they can maximize the productivity.
1. Appraisal Form Terminology: Employees should be made aware of various terms of the appraisal form / appraisal software, they can understand what inputs are required. They should also be provided a reference manual where they can refer in case of confusion.
2. Sample Phrases & Comments: They should also be provided with various terms and phrases that they can use in their appraisal form to express themselves. Many employees cannot provide adequate feedback because they lack writing skills. By creating a repository of such terms can provide them ideas on how to fill various appraisal forms. HR Managers may even choose to share some good appraisal feedback especially from past appraisals (though hiding the private information).
·Managers: The similar exercise should be done for the managers. All managers may not have good appraisal writing skills. Appraisal trainings should be conducted for managers. They should especially be trained on handling the bad appraisal cases, where non-productive employees think that they did perform, but actually they did not. Bad appraisal can be a sensitive issue for any employee and can further demotivate the employee. Managers should also be provided training on analysis of the appraisal reports for their respective department
5. Selecting Appropriate Appraisal Tools
Every organization and each of its departments are unique, they have their challenges and skills. Because skills and competencies required to meet the operational challenges differ, a tool that says "one-size-fits-all" may actually do more harm then benefit. The appraisal tools and techniques like performance management software, elements of appraisal form, etc., should be customized according to the needs of the organization. The important things that may matter are: -
·Design of Appraisal Form Components - Appraisal form should be carefully designed to include all competencies, skills and KRAs required for the specific designation and role.
·E-Appraisal Software - E-appraisal software, which is a common trend now, should be chosen that suits your technical infrastructure and budget. Many organizations are offering Talent Management Software based on SaaS model that does not require you to owe costly IT infrastructure, but just access to Internet.
6. Normalization of Appraisal Scores
Normalization of appraisal scores is very important to remove any personal biases from the appraisal scores. Maj. Gen. B. K. Bhatia of Saigun Technologies says in his white paper - 'Normalization of Performance Appraisal Scores' - "Rating tendencies of Managers in an organization vary from a 'very lenient' ratee to a 'very harsh' ratee. The employees reporting to them experience the impact of these variations. This impact becomes crucial in an environment where employees are given performance based remuneration / incentives. Normalization of scores is intended to introduce greater objectivity in the Employees Performance Management (EPM) System of an organization."
. Data Collection & Analysis
The most important input of the appraisal process is the data, which is useful for analysis and taking improved business decisions. The data collected should be converted into reports and dashboards that are easily available to the decision makers. A good Talent & Performance Management Software come with comprehensive analytics and dashboard
8. Utilization of Appraisal Scores
Once appraisal scores have been obtained, it is time to utilize these scores for various practical purposes. Some of these are listed as below: -
·Compensations - The compensation plan may be linked to appraisal scores
·Team Rankings - The teams and individuals may be ranked on basis of appraisal scores
·Succession Planning - A succession pipeline can be created based on the appraisal scores. The team members may be placed in succession pipeline based on the appraisal scores achieved.
9. Assessment of Training Needs
Appraisal data can help you measure skills and competencies gap within the organization. Once you have found competency and skill gaps, you can easily assess what training should be imparted to fill these gaps.
10. Training & Development Plans
Based on the training need assessment various training and development plans should be created. Trainings should be aimed at bridging the gaps within the organization to make it more competitive in its business domain. Conclusion
A well-planned appraisal can help you do a SWOT (Strengths, Weaknesses, Opportunities & Threats) Analysis of your organization. This analysis will help you to root out the weaknesses within the organization and chalk out an appropriate action plan to be more competitive.