Performance Appraisals: Do They Really Boost Employee Satisfaction or Cause Frustration?

Hello Friends,

Could you please give me examples where performance appraisal has actually helped employees by increasing their satisfaction levels and motivating them, or has left them thoroughly dissatisfied? I would be grateful if you could provide cases (fictional or otherwise).

Hi Neha,

Performance appraisal can be satisfactory for those who are rewarded in any terms but not for those who are not. I was once conversing with a very senior person who is an employee of a very reputed firm at a senior level. He wasn't appraised up to the level for which he worked as his boss wasn't on the best of terms with the top management, but he duly deserved it. He's now planning to leave the company, and this has left him dissatisfied.

Even after receiving an appraisal, there are people who are dissatisfied because in most companies, post-appraisal feedback is lacking. They are not told on what basis they are ranked and appraised, and where they need to improve.

Hope this helps you.

Regards,
Ritu

Hi Neha,
One of the factors of attrition is not getting satisfied monitory benefits in appraisal.
And in today's scenario in IT industry, almost all the technical people want minimum 30-40 % raise, which is not acceptable across the organization, so those who are deserving get it (pls. read it as very few employees) and rest all (pls. read it as the larger chunk) don't and thus dissatisfied try to leave, some get new job some don't so stick with the current org, with very low motivation to work. Not very sure how one can motivate these employees.
Regards
Swapna

Hi Neha,

The basic fundamental about PMS is if you run PMS for employee satisfaction, it will never be successful and will remain as an activity (as mentioned in your second para). If PMS is used as a business model (to roll out as policy deployment of business strategies) then it's a business process and not just an HR process. The success rate is very high in this case. Furthermore, we need to use this model for employee development and not just for appraising them to decide on increments.

It is very difficult to eliminate all subjectivity from PMS, even with Smart goals, but by introducing this as a business model, you can make it more objective than subjective.

Regards, AJay

The prime question here is whether HR really plays a role in performance appraisal, or if it is just a process of form-filling and decisions taken for those who are working with the management and satisfaction of management committee.

If the performance appraisal system is open, meaning there are declarations of company goals, communicating expectations to employees, conducting regular assessments, setting targets and evaluating achievements, and having discussions with employees about the appraisal (both pre-appraisal and post-appraisal), then if points for better appraisal and proper appraisals are made clear, dissatisfaction does not arise.

The natural way to address dissatisfaction is to give employees a chance to express their opinions about the appraisal. Sometimes this can seem risky, but in the long run, it benefits the organization. Especially when an individual is appraised and rewarded, yet still experiences dissatisfaction, this process helps both the individual and the organization.

Thanks & regards.

Neha,

With the above questions, I have attached a document for handling performance problems - a part of an extract from information shared on the web.

Thanks & regards,
Hiren Pandya

Hmm... Now I'm a bit confused about what you've said, Ajay. How is it possible to use PMS as a business model? Isn't it just an evaluation tool?

Hi Neha,
Yes PMS is a strong business model. Meaning we at HR should introduce this process as business process, the following flow chart will take out your confusion hopefully.
Business Strategy (Three Years)
Organisation Goals MD's Goal (current year)
Functional goals
Managers Goal
Team Goal
Supported by Training & Development
Six Monthly reviews
Yearly review
What Am saying here is yes it is a evaluation tool but not only employee evaluation but also business. Secondly, my suggestion to you is do not use this tool as only evaluation tool. it is tool for identification of training and development plan, it is tool which can be used for your career management in the organisation.
when I say business model, it is nothing but connecting people to business goal and this is nothing but taking all employees towards "one direction"
regards,
Ajay

Dear Neha,

There are two schools of thought to your query (or this is what I have seen at least):

A. People who expect career growth in terms of job enrichment from PA.

B. People who expect career growth in terms of monetary value from PA.

Now, when type A gets job enrichment from their PA, they are more than satisfied (e.g., assistant manager getting manager level). At the same time, if they only get a monetary increase (e.g., staying in the assistant manager band but with increased salary), they are dissatisfied with it.

Again, when type B gets only monetary growth, they feel satisfied, and vice versa.

Regards,
Parjit