Employees Performance Appraisal, even in a small company, should be Goals/ KRAs based. I consider that competency based appraisal systems can not measure performance. These are more useful to evaluate development needs of employees.
Setting of Goals/ KRAs for all employees well before the start of the next Financial year is important. This can happen only if your Annual Business Plan (ABP) for the next year is ready by then. In addition to the ABP, you need the Job Descriptions (JDs) of all your employees. JDs define the job deliverables & the ABP gives an indication of the KRAs for that year for each Job Position. Two of these combined create SMART goals which are to be set through interaction between the employee & his/ her Manager (Appraiser). Some goals may have quarterly targets to be achieved. For Sales staff, the targets could even be monthly/ weekly.
The fact, however, remains that unless an employee knows clearly the goals (and the targets to be achieved for each goal), how can you expect him/ her to deliver performance. Thus assignment of Goals becomes a vital responsibility of all Appraisers in a company. If each appraiser takes this responsibility with pride, the entire organization becomes performance driven.
Having set the goals, there is a need to periodically track employee's achievement as per the targets assigned. If each employee has, on an average, 8 goals in an year which are to be tracked on a quarterly basis, you need a system. It is difficult to track performance manually. Afterall, our basic purpose is that the targets assigned are achieved every quarter by each employee. Even with a strength of 25 employees in the company, you have to track 200 goals every quarter. The employee has to enter his/ her achievement for each goal & submit to the Appraiser. If achievement is inadequate, the Appraiser has to examine the handicaps (in consultation with the employee) & give his/ her counselling for future improvements. A record of such counsellings every quarter on the Goal Sheet gives, at the end of the year, a comprehensive summary of achievements & shortfalls. This is an objective picture of round the year performance of an employee which enables the Manager (Appraiser) to do proper performance evaluation of each subordinate.
Automated Tools are available these days to help organizations create a performance culture right from the begining. HR has to understand these tools & educate the company management about their utility. 'EmpXtrack' is one such tool which is being widely used by small & medium sized organizations to manage performance of employees. It provides a free demo of both the Appraisal & Goal Setting mechanisms. Those interested may do Google search of 'EmpXtrack' and register for the Demos.
Those keen to learn more are welcome to contact me at [IMG]https://www.citehr.com/misc.php?do=email_dev&email=YmtiaGF0aWFAc2FpZ3VuLm NvbQ==[/IMG]
Best of luck
B K Bhatia