New HR in IT: How Do You Assess Employee Performance for Appraisals?

Hi all,

Greetings!

I am new as an HR professional in an IT company. I am looking for a format to assess Employee Work Performance, which will assist me in determining whether an employee's request for appraisal or salary increment is valid. Additionally, I would like to provide them with reasons for receiving or not receiving an increment.

Kindly assist me by providing some sample formats.

Regards,
Saniya

It is a common mistake on the part of HR professionals or business leaders to view Performance Appraisal (PA) solely as a means for salary increase. PA holds far greater value for the organization.

It seems that there is a lack of proper policy in place for PA. When employees join the company, they should be informed during their induction about when their appraisal will take place. The key features of the policy could be as follows:

a) Appraisals may be conducted quarterly as a one-year appraisal cycle is too lengthy. However, salary increments could occur on either 1st April or 1st October.

b) For employees joining in between, the timing of their first PA can be determined by the policy.

c) The percentage of the salary hike should be tied to the PA score.

The crucial aspect is that PA should not only focus on individual performance but also extend to measuring business performance. To achieve this, a well-designed Performance Management System (PMS) policy is essential. There was a query in this forum regarding PMS to which I have responded. You can refer to the reply by clicking on the following link: https://www.citehr.com/511936-pms-company.html

While the title of the link pertains to IT companies, the response is relevant to all industries. Within the provided link, you will find several other useful links. I recommend going through them patiently to enhance your understanding of the subject.

For any further inquiries, feel free to contact me on my mobile number.

Thanks,

Dinesh Divekar

Quantifying Employee Performance for Appraisals

It is a great idea, and if you can find the perfect quantitative solution, it will create an ideal world. Every employee will have a performance score, and you can easily decide what score deserves what increment.

However, in real life, situations will not be so clean-cut.

Challenges in Quantifying Performance

The biggest problem will be how to quantify performance and how to benchmark performance across different departments and areas of work.

The solution will not be perfect, but a good solution can be worked out.

Steps to Implement a Performance Assessment Model

Identify every employee's goals for the quarter or year. Determine how you will measure success and partial success. Ensure the employee completely understands expectations and success criteria. The more objective, the better. Do this for all employees under you. In a big organization, you will build a model and let the reporting managers fill in the details.

Then, at appraisal time, all you have to do is make the reporting manager sit with the employee and mark scores.

Obviously, it won't be as simple as the explanation above, but you can build a very good solution here.

Performance Management Systems: Real-World Applications

The opening remarks of your post are, "It is a great idea, and if you can find the perfect quantitative solution, it will be an ideal world. Every employee will have a performance score, and you can easily decide what score deserves what increment."

Well, gentlemen, it is not an imaginary world; it is a real world indeed. I have designed performance measures that are as good as putting a performance meter to the employee. For a few departments, it is difficult to measure performance, such as Administration, Legal, Liaison, etc. For office secretaries or security personnel, it is also not possible to have 100% measures. But for others, it is very much possible.

I say this with conviction because I provide consulting services to establish Performance Management Systems (PMS). I have established PMS for various companies like ports, real estate developers, fuel projects, DG set service centers, telecom tower maintenance, etc.

Challenges in Designing Performance Measures

One of the most challenging tasks for me came when I had to design measures of performance for shift personnel working in a shipping port. Their shift duties are different from those who work in a hospital, factory, airport, etc. Their work starts when a vessel berths in and ends when the vessel berths out (in/out of a vessel in simple words). The timing of berthing in a shift is unpredictable. Therefore, establishing measures of performance for shift personnel was a great challenge. Before my consulting, they were only measuring the total turnaround time for the vessel's berthing in and berthing out. However, it was difficult to establish the efficiency or inefficiency of a particular shift. I solved that challenge too. While designing the measures of performance, I took into account the different types of cargo like sugar, coal, bauxite, aluminum, dolomite, and so on.

Importance of Comprehensive Performance Appraisal (PA)

Nevertheless, the purpose of PA is to measure the organization's performance, then the department's performance, and lastly, individual performance. Certain vital measures are never measured. Recently, I met the Marketing Head of a prominent steel manufacturing company. I casually asked about the marketing cost per ton, and he could not provide an answer. One of my clients never measured the value of the finished goods inventory against the total sales in a given period. Another client never measured the accuracy of the contractors' bills forwarded to their billing department by site engineers or project managers. When measured, it was found to be only 37%. Furthermore, let me reveal that 99% of factories in India never scientifically measure the Inventory Carrying cost of raw materials or finished goods.

This is where HR professionals make a mistake. They just skim the surface and call it PA. That is the trouble of HR professionals or even business leaders!

Thanks,

Dinesh Divekar

Hi,

Your reply is useful to me, but I want to clarify more. Usually, we offer performance appraisals (PA) based on employee performance every 3 months. However, if any employees are not eligible for an appraisal, how should we provide a performance report card to avoid further discussion?

Thanks,