How Do I Start a Performance Appraisal System from Scratch in My Company? Seeking Guidance

Dear Friends,

I am working in a steel manufacturing company as Manager-HR. I am handling the entire gamut of HR activities. We don't have a performance appraisal system here. Can anyone tell me what steps to follow to initiate the performance appraisal system in my company? Kindly explain it from scratch as I don't even know the basics of it.

Please reply.

Sweta

Hi Sweta,

You need to first see what fits your company. Is it a manufacturing unit, sales-focused organization, HR firm, etc., and then you have to define key deliverables or targets and put weightages - qualitative and quantitative. There should be a ranking within teams, across functions, PAN India, preferably. You can use an IPF system or a BSC system, and supervisors should be briefed on how to appraise, and appraisees should be explained - self-appraisal and ranking systems. You need to design this on a 9-10 point basis:

1. It should be in line with the organization objective - Total goals
2. Talent retention
3. Recognition
4. Promotion
5. Breeding managerial and staff talent
6. Job rotation
7. Identifying training needs
8. Grooming successors
9. Cutting the tail
10. Reward (Performance Linked Incentive disbursements, etc.)
11. Competence development

It's a whole process, and you can find many threads on this.

Regards,
Aseem Singh

Hello Sweta,

I am attaching a file from which you will be able to get an idea about the entire Performance Management System. There are certain steps that you need to follow before you decide on a particular method:

1) First, you need to know the manpower strength of your company.
2) You need to have detailed KRAs or Key Result Areas of all the different job groups together with the job descriptions.
3) If possible, please carry out a detailed competency mapping system, that would help you in arriving at the KRAs and the parameters that you can use for performance evaluation.
4) Depending on your manpower strength, you would decide on which particular method of appraisal system to use.

Do let me know if you need any further assistance.

Thanks and regards,
Ayona

Hello, Sweta. How you initiate a new performance appraisal system will depend on the kind of system you choose. The first step, before implementation, is design. There are a number of important questions that need to be asked and answered during the design stage. Here are some of those questions:

- What is the purpose of the performance management system?
- How will you know that you have achieved your purpose?
- Will the system appraise goals and objectives, behaviors, or both?
- How will you appraise performance: manager appraisal, multi-rater feedback, objective measures, or manager staffing reviews, or a combination?
- How will you reward good performance/exceptional performance?
- How will you fund rewards?
- How will you handle disagreements between appraiser and employee?
- Will the appraisal cycle be based on the business cycle or employee anniversary date?

I suggest you sit down with the management team in a joint meeting to answer these questions. Doing this will also give each manager a stake in the outcome. You will get more commitment from each manager when it comes to implementation if you have involved them in the design process.

I also suggest you look at the performance appraisal system section of our website at www.businessperform.com/html/employee_performance_management.html.

Les Allan
Author: Managing Change in the Workplace
www.businessperform.com

Sweta, I am not aware of how big your company is in terms of the number of employees in Executive, Supervisory, and Workers cadres.

To introduce a Performance Appraisal System (PAS) for the first time, the target group in any organization should be the Executives. The reason for this is that their Key Result Areas (KRAs)/Goals can be well defined. Without clear goals, performance evaluation becomes a meaningless exercise, especially if the purpose of introducing PAS is to improve accountability.

Evaluation of competencies is another aspect of PAS, particularly if the organization's focus is on employee development. In this case, one needs to identify a set of competencies and special skills applicable to different job positions.

To learn more about the components of a good Appraisal system, you can search for 'Empxtrack' on Google and study the relevant details in depth.

B K Bhatia