Performance appraisal examples Archives - RSI Concepts - Top IT Solution Provider Company in Dubai, UAE

April 29, 2022

Why do businesses need both the performance management and performance appraisal?

For any business it is important that all its resources are performing at higher performance with maximum efficiency. Every business small or large must have limited resources, hence they have to utilize their resources in a way that they can achieve maximum productivity and profitability. The performance management is also necessary for the business as it enables them to align all human resources, assets and strategies with the organizational goal and vision. Every business function and every operational tasks is dependent on the employees, if the employees are performing well they will produce better result hence the efficiency of each and every business process is dependent on the employee’s performance. Business in Dubai and all around the UAE are rapidly adopting performance management systems and tools. There are several reasons why businesses acquire a performance management or performance appraisal systems.

For any business or organization it is crucial to monitor and rectify problems and challenges that employees are facing in order to boost their performance. This will help businesses to obtain employee trust and loyalty which in return also increase performance. Furthermore the performance and progress should be in a direction to achieve something. All businesses and organizations always set their future goals, vision and mission. The enterprise’s performance is optimized and increased to achieve those high-level goals. In this blog we will cover performance management and performance appraisal and their importance.

What is Performance Management System?

A performance management system is a tool that facilitates performance management process. The performance management process is basically a set of all the efforts and activities a business do in order to keep its employees on track and aligned with the organizational goals. The main objective of doing performance management is that the employees and all other resources remain aligned with the high-level organization goal. The performance management process encourages employees to perform well and perform in the right direction so the high-level organizational goals can be achieved. The performance management process and system also enable managers and supervisors to engage with the employees and encourage them to work better.

What is Performance Appraisal System?

The performance appraisal system or process is a very simple process it measures the performance of the employee. Where performance management system provides a roadmap to achieve the organizational goals the performance appraisal system is used to measure the progress of each individual employees. The performance appraisal system is only used to measure the performance of the employees as per their progress towards the set goals and objectives. The performance appraisal keep records of the performances of the individual employees which can be used by the HR department as well. Basically the performance appraisal system tells business about how productive an employee is. This way businesses can easily identify the highly performing employees and reward them and businesses can also easily identify the employees who have become liability.

Difference between Performance Management and Performance Appraisal

The performance management and the performance appraisal both are used for employee performance however there are basic difference between the two methodologies. Here is a list of some fundamental differences between performance management and performance appraisal systems:

Performance management help and encourage employees to improve their performance, while the performance appraisal only evaluate the performance
Performance management evaluate an employee on the bases of past, present and future, however, the performance appraisal just measures the performance in the immediate past
Performance management increase employee engagement and evaluate the relationship between employee and the employer, however, performance appraisal is individualistic
Performance management continuously monitor employees, evolve strategies and focusing on employee development, whereas, the performance appraisal focuses only on the results
Performance management includes one-on-one sessions and discussions, hence it is very dynamic. The performance appraisal have a top-down approach and is very linear
Performance management always encourage employee development and help facing challenges in present and future however the performance appraisal focuses only past performance
Performance management offer real-time reviews and continuous feedback however, performance appraisal only offers feedback once or twice in a performance period (usually 1 year)
Performance management is better future equipped and easy-to-scale however, the performance appraisal is usually focused on the past performance of the employees

It is clear now that the performance management system and performance appraisal systems are designed and used for completely different purposes although both are covering employee performance management.

Why a Business Should Use Both Performance Management and Performance Appraisal?

The performance management is a continuous process which keeps monitoring the employees and their progress in real-time. This provides the management an added advantage of allowing them to quickly set course or make adjustments if any employee deviates from their set path. This advantage is not available in the appraisal method. However, the performance appraisal process can accurately measure the actual contribution or value of the efforts of the employees towards the high-level organizational goal and objective. That is why it is important to use both systems in parallel. Businesses use performance appraisal system to generate performance data for HR. The performance appraisal will provide accurate employee performance to the HR on the bases of this performance the HR can plan bonuses, awards, promotions, demotions, transfers, training program and much more.

The performance management system on the other hand provides a comprehensive strategic and tactical data which not only measure the employee performance but also help businesses and organizations to set goals, build strategies to achieve those goals, make plans, and assign individual and team goals as per the requirements. The performance management system also helps businesses in communicating those goals and objectives with the employees and also guide them how they could and should perform in order to achieve their individual and high-level goals and objectives. The performance management system can also generate data which can help businesses in understanding their resources, technical skills, and capabilities of each individual employee. This will help businesses in future and it will enable them to make more realistic and practically sound decisions.

A good quality performance management system help businesses and organizations to achieve their long term strategic and financial goals. When the performance management system and the appraisal systems both are used combined the effectiveness and results will be improved significantly. Here are some benefits of using employee performance management system and appraisal system:

Improve Communication between Employee and Management
Convey Goals and Objectives more Effectively
Communicate the Performance Requirements/Needs and Expectation more Effectively
Enable Employees to Evaluate themselves and Provide Feedback about their Individual Goals and Plan of Action to achieve those Goals
Aligning Employees and Resources with the High-Level Organizational Goals and Objectives
Improve Communication all across the Organization and Improve Relationship between Employees and their Managers
Real-time and Continuous Feedback Makes it Easier for Employees to Communicate with the Management
Help Management to Monitor the Performance of the Entire Business or Organization
Enable Management to Swiftly Take Actions to Rectify Problems and Help Employee Facing their Challenges
Increase Employee Engagement, Gain Employee Trust, and Increase Employee Retention

These are some of the most obvious benefits of combining the performance management system and appraisal system.

The performance management and performance appraisal systems when used together can fix drawbacks and gaps of each other. For example:

The performance management system can increase the communication and fill the communication gap which usually occurs in performance appraisal management
The performance appraisal doesn’t clearly communicates the high-level organization whereas the performance management system clearly communicates individual and high-level organizational goals as well as it also include employees in planning and strategy building processes which increase employee engagement
The performance appraisal process worries employees, as the appraisal is done only once or twice the year, and that is the reason most of the employees doesn’t show trust on the appraisal process. However, the performance management process includes regular and continuous employee reviews. Which not only gain employee’s trust and reduce their anxiety but it also help improving the communication between the employee and the manager.
The performance appraisal methods emphasize on increasing the performance and doesn’t clearly communicate how the employee should improve their performance or what is expected from them in the future. On top of that most of the time the communication is very low. The performance management process clearly communicates the goals and objectives, both individual and high-level goals and objectives are defined. The employees are provided with the guidance on how to achieve their objectives and how to improve the performance.
The performance management is continuous and it can collect all the details about the employees and their performance. This data can be made available for the management at any time. However, in performance appraisal methods the evaluation is done once or twice in a year.
The performance appraisal method lacks the employee personal development strategy. However, the performance management focuses a lot on employee’s personal development program to ensure the business always have the required workforce. The personal development program can increase employee engagement and it also help increasing loyalty. However, if the employees feel there is no scope for their personal development then they will leave.
The performance appraisal methods doesn’t help much in increasing employee engagements, gaining employee trust and improving employee retention. However, the performance management methods boost employee engagement and help building a sense of belonging and connection with the business. This also make employees happy and satisfied and it also increase employee retention.

The performance management and performance appraisal both are tools to boost business’s performance. If the employees and other resources start working at their true potential the productivity and profitability increases. That is why both system are important and when used combined can have additional benefits as well.

Conclusion

For any business in Dubai or anywhere else in UAE achieving the high-level organizational goals is a key to success. Businesses use various methods and tools to improve the employee performance. The employee performance is crucial if a business wants to achieve their high-level goals and objectives. The employee performance can be improved by communicating them the goals clearly, assigning them the objectives & tasks, and monitoring them to understand if they are going in the right direction. The performance management and appraisal ensures that the goals and objectives are established and communicated clearly and there is a monitoring mechanism in place which can immediately highlight if an employee is deviating from their set path and allow the managers to take timely actions to reset course.

The performance management also help businesses in evaluating employees and understanding their true potential, skills and capabilities. This help HR in several functions and also provide intelligence data for employee personal development and reward schemes. In short the performance management and performance appraisals are absolutely necessary for a business and its long term growth. RSI Concepts is a leading name in developing and designing performance management systems and tools, if you need any help in your business’s performance management or if you want to learn more about the topic, please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

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April 28, 2021April 28, 2021

Appraisal Methods in Performance Management System

Employee Performance Management is a set of processes and activities which helps organizations to develop their employees and improve their productivity and efficiency. However, the performance appraisal, in fact, is the actual periodical review of the performance of an employee. The appraisal system reviews and assesses employee’s actual performance, skills, work quantity & quality, achievements and contribution to the organization within a specific period of time. The performance appraisal system measures the performance of an employee on the basis of predefined scales or objectives and their contribution to the organizational objectives and goals. The appraisal system plays a very critical role in aligning all of the organizational resources to the organizational objectives. The periodical appraisal review determines

Employee skill level
Work quality in contrast with the quantity
Strengths and weaknesses
Growth or lack

This provides a very clear insight into an employee’s capabilities and an organization can easily decide the contribution the employee makes towards the organization. Periodical appraisal promotes quality of work and exposes maximum potential from a resource.

There are different methods and techniques of performance appraisals. Here are the most commonly used appraisal methods:

Appraisal Method 1: Management by Objectives

Get the employee involved in the goal-setting process with the line manager.

This is the most advanced method of Performance Appraisal. My organization has adopted this method in 2021 to align the goals of the organization. The Performance Management System developed by RSI Concepts has provided this method and encourages organizations to utilize it more than other methods.

Studies have shown when an employee gets involved in the goal-setting process, they are more likely to achieve those goals. The manager and employee both plan the objectives for a certain period of time and then those objectives are monitored and measured to assess employee performance. The management by objectives is a full-on process rather than a one-time evaluation. It could be set for a particular time interval such as a month, quarter, yearly or bi-yearly. Once the goals are set, a strategy has been formed and the plan has been executed. The manager and the subordinates both sit after a certain time interval to discuss the progress and to estimate the future expectations. This also provides them a chance to improve the ongoing progress by tweaking their existing strategy and plan.

The management by objectives involves both the subordinate and the line manager so it provides a greater self-awareness, which encourages the employees to perform better. It is considered to be the most cost-effective employee appraisal method. The subjective bias can also be eliminated and the method is very effective in measuring the performance of the senior management, mid-level managers, frontline managers, supervisors and employees.

Appraisal Method 2: 360 Degree Feedback

Get feedback not only from the line manager but all the peers involved in the process.

The 360 Degree Feedback is another latest method in Performance Appraisal and adopted by many organizations or by some departments within the organization. It provides a detailed assessment of the employee. Usually, the feedback can be collected from many individuals, including senior colleagues, subordinates, supervisors, customers and managers known as peers. The catch here is all of these personals who are giving their feedback must have been working with or around the employee but in the business process – who is being assessed. The 360 Degree Feedback is mostly to assess the overall contribution of the employee towards their job role, tasks, objectives, expectations and organizational goals and objectives.

The 360 Degree feedback process could take up to two weeks to get complete, it starts with selecting the participants also referred to as raters. The selection of participants or raters is important and it could be up to 25 persons, it entirely depends on the employee’s work and responsibilities. The Performance Management System developed by RSI Concepts has the configuration level settings to change the number of peers or raters. Once the raters are being shortlisted then a questionnaire should be prepared by keeping in mind to generate enough data to help to build comprehensive reports. Some businesses and organizations also use online mediums to conduct surveys for 360 Degree Feedback. Once getting all of the expected feedback, a report has been produced. After that report, the line managers can hold a session to discuss the report and performance to find out methods and ways to improve performance further as and how assessed and required.

Appraisal Method 3: Behaviorally Anchored Rating Scale

Get line manager response in a YES and NO fashion. Quick and Precise!

The behaviorally anchored rating scale is designed to include behaviour related ratings in the appraisal process. Usually, particular behaviours are denoted with a numeric value and then the value is being used for the rating process. The behaviorally anchored rating scale or BARS is widely used to incorporate quantitative and qualitative ratings in the appraisal process. It is very important that all the behaviours that need to be assessed are carefully listed and then graded to ensure highly accurate appraisal results. Usually, a number of outcomes are listed then the possibilities of incident and behaviour has been analyzed which can produce those outcomes. Then we can create scales, grades or indicators on the basis of this analysis. This is how behaviorally anchored rating scales are defined and measured. The BARS results are very accurate and reliable, the data can be used for the appraisal process as well as for estimating employee efficiency and productivity for the future under particular circumstances.

In the Employee Performance System developed by RSI Concepts, the Behaviorally Anchored Rating Scales are influenced by the standards provided by the Government of UAE, Dubai and Sharjah. A set of Behavioral Competencies are defined and divided into the main categories and while each category further has 3 to 4 subcategories where each employee can be assessed on a scale of 1 to 5 where 5 is the best. The ratings are then incorporated into Performance Appraisal periodically.

The behaviorally anchored rating scale is very easy to understand and accurate to help organizations and businesses to understand the behaviour of their employees which could help the management to take accurate decisions to ensure maximum utilization of the skills, experience and capabilities of a particular employee. The BARS completely eliminate the irrelevant variables from the equation and only provide measurable, accurate results based upon clearly observable behaviours. This is what makes them very important and useful for performance management systems and the employee appraisal process. However, if you want to incorporate BARS into your appraisal rating program then you should have to do intensive research to ensure you will get accurate and actionable data. The behaviorally anchored rating scales are expensive, require more resources and efforts, but provide excellent data.

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Appraisal Method 4: Straight Ranking Appraisals

Get employees ranking compared with each other.

Straight Ranking Appraisals are very straightforward and simple. In this method, the line manager assigns a rating or number to all the employees working on a particular task under the same conditions. Most of the time the reviewer defines the ranking or scale on the basis of the top performers or on the basis of their personal experience or by the knowhow of the job. There are a few more variations that were being introduced later and are also followed by many organizations and businesses. The straight ranking is among the oldest and simplest appraisal methods still being used. Usually, all the employees are compared with one another and a ranking system is being established based on the ratings of most productive to least productive or most efficient to least efficient and so on.

Furthermore, the straight ranking appraisal has been transformed into more appraisal methods such as paired comparison appraisal, in that method the employees are divided into groups and then their performance is compared to each other. Another popular method is the standard rating scale method in this method the personality traits of an employee has been rated against a scale ranging from poor to excellent or as such.

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Appraisal Method 5: Human Resource Accounting Appraisal

Get the money earned vs money yielded.

The human resource accounting appraisal measures the performance of the employees on the basis of the monetary benefits they have yielded for the organization against the expenses they had cost to the organization. The cost is measured accurately by calculating the cost of retaining a customer, their salary, benefits, hiring cost, any other cost and then the monetary value of the benefits or work is calculated as per the predefined criteria and measurements to measure the monetary benefits an employee brought in for the business over a predefined span of time. The human resource cost accounting appraisal method includes the overall departmental cost, production unit cost, office cost, employee cost, interpersonal relationship cost, and many more. Basically, it is a purely cost and benefits based analysis, so sometimes, some employee’s trait or expertise could be missed out or not included in the appraisal process. But this can overcome by using other appraisal techniques in parallel.

The biggest advantage of using this appraisal method is that it provides a very accurate picture of what an employee is costing a business and in return what they are bringing back to the organization or business. It also clearly identifies and project the financial impact of the employee performance over the organization. It is an excellent method to understand the monetary and non-monetary benefits an employee is providing to the business.

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Appraisal Method 6: Assessment Center Appraisal Method

Get employees to see how others observe them.

The assessment centre appraisal method is most widely used by business to evaluate and assess the technical expertise, skills and performance of an employee for either recruiting purposes or for promotion, transfer, etc or for identifying the training needs for the employee. Assessment centres are specifically designed to assess and review certain tasks and certain job roles. Usually, the assessment centres are outsourced but even if a business has an in-house assessment centre they will have to prepare it with required planning to ensure an accurate outcome. All the employees are being given the tasks they will have to perform for a particular job, then a team of assessors will monitor the actual performance of the employee and on the basis of that performance, it is easier for the business and organizations to make hiring decisions, or decision about an existing employee such as their promotion, salary increment, job role and position, and training needs.

Assessment centres are one of the most widely used appraisal methods with excellent help for the HR department and remarkably accurate assessment results. The assessment centres can be very helpful in performance appraisal reviews and employee assessment. The assessment centres are designed for testing the physical skills and expertise of an employee. For the employees who have failed the assessment, the business and organizations are continuously offering development program to regain their motivation and to encourage them to improve their skills, that kind of setup is called development centres, there is a combination of both the development centres and the assessment centers can be used to ensure the improved human resource in future. Although this method is time-consuming and cost-intensive but provides greater results for industries such as Manufacturing, Educational institutes and Service based departments.

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Conclusion

The Performance Management System is used to achieve the goals and objectives of the organization to maximize efficiency and profits. Performance Appraisal is one of the factors which is designed to improve the work environment and employees and their capabilities and work efficiency within Performance Management. The different methods of performance appraisals are designed to help different requirements and challenges organizations face during periodical appraisals. The appraisals methods covered in this blog are prominently used in Sharjah, Dubai and UAE. These methods are widely used because they can provide highly accurate data which can help organizations and businesses to understand the true potential of an employee to contribute to the organizational goals and objectives. When an employee is placed on a job role where they can perform well, it improves their morale and it increases the employee retention rate. When an employee is working efficiently the operational cost get reduced. Not only that the appraisal systems are also used to identify the training needs for the employees as well.

RSI Concepts has a leading Employee Performance Management System in Dubai and UAE with effective and widely used appraisal methods. Please get in touch with our business consultants through our Contact Us page or leave a comment below and we will get back to you at the earliest to learn more about your requirements. Our Performance Management consultants can help you propose a solution according to the industry requirements to streamline the challenges.

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