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

December 10, 2022

Why Organizations need Performance Appraisal System in UAE in 2022

The performance appraisal system is a great tool for the HR department. It help them to unlock the full potential of their workforce. The performance appraisal system is a necessity in a competitive marketplaces such as UAE. The UAE is one of the largest economy of the region with a high-paced growth and very friendly environment for businesses. That is why businesses and organizations are flourishing in the country. The local market and the international markets both are accessible form the UAE and this has attracted a lot of businesses and organizations to operate in the country. These circumstances also led to a very competitive market with high standards and very high customer demands. In order to ensure the sustainability and growth a business must have to operate at the maximum levels of efficiency and productivity. These factors led to a rapid adaptation of the digital performance appraisal systems all across the entire country. Businesses have started implementing various different types of performance appraisal systems however, most of the businesses preferred a customized performance appraisal system in 2022 and we are hoping to see a rise in this trend in coming years.

A modern performance appraisal system is a digital tool that enable businesses to evaluate their employees with high accuracy and enable them to identify factors that are impacting the performance of the employees. The biggest advantage of a digital performance appraisal system is that it is a data-driven performance framework which provide highly accurate and structured methods to evaluate the employee performance and help businesses align them with the high-level organizational goals and objectives. Traditionally the performance appraisals are a very time and resource consuming activity, hence only done once or twice a year. However, with the help of digital performance appraisal system several processes can be automated and the data is fully digital which enable businesses to conduct a performance appraisal with very less resources, time and efforts. The businesses who use a performance appraisal system usually have more performance evaluation cycles in a year, usually quarterly, but it can be further reduced to monthly or even project wise appraisals.

Why Organizations in UAE Needs a Performance Appraisal System in 2022

Since the economies all around the world are recovering from the 2020 pandemic, the marketplaces have evolved rapidly and become more customer oriented. Furthermore the customer demands and trends are also continuously changing. The competition and other market conditions are also rapidly changing and need businesses to be more vigilant, resilient and proactive. A business can only respond to such changes quickly enough if their employees and resources are working at their full potential. Most of the time businesses have all the ingredients of success, but still failed to achieve their goals because they are not performing as well as they could. The performance appraisal system provide a structured framework to manage and improve the employee performance and drive productivity by effectively evaluating the employees, solving their problems and inspiring them for better performance. The modern performance management systems have become more integrated, smart, and easy-to-operate and become more autonomous than ever before which makes the process more effective, accurate and agile.

Advantages of the Performance Appraisal System

The performance appraisal system have many advantages which makes it as perfect companion for modern businesses in 2022. As the system is digital so it can offer great visibility and customized view of performance data for different user groups. It provides a structured framework for communication and help organizing the conversation repository which also enables it to offer various comparative analysis and past performance data. Here are the key advantages of the performance appraisal system:

1. Align Employees with the Organizational Goals and Objectives

The performance measurement might seem a simple process however it is not as that easy to integrate a performance appraisal framework in organizations. For that businesses require a good performance management strategy which always begins with defining the goals and objectives for the employees, managers, teams, departments and for the entire organization. Each organization has a long term vision, all their annual or shorter goals are derived from that vision. Obviously the vision or mission is not something that can be fully communicated to the individual employees. However, the vision and mission statements can be communicated effectively to the employees along with their goals and objectives which are derived from the organizational goals and strategic objectives to achieve that vision. The top management define the organizational goals and objectives that are always aligned with the vision and mission. Then these goals and objectives scaled down to the departments, teams, and individual levels. These goals will provide a reference point to measure the performance.

The employee performance is measured based on their progress towards their goals and objective during a given time period or appraisal cycle. For example if the appraisal cycle was for 3 months, the goals of an employee was to produce 300 parts at a lathe machine and they have produced 250 parts during that time period then their progress can be measured as 83.3%. That was a very simple matric the performance measurement was simple and easy. However, most of the time the performance measurement is a bit more complex that is why the managers set quantifiable goals for the employees so their performance can be measured accurately. In some cases only one matric is not enough to measure the actual performance which makes things a bit more complex. For example, in case of a service center, a service agent was given a goal to serve 300 customers in 3 months, however, they served only 250, but their performance can’t be taken as 83.3% success. In fact it the customer experience that is equally important. Just by calculating the number of customers alone can’t determine how beneficial the employee was for the organization.

The digital performance appraisal system allow businesses and managers to set up goals along with the scale to measure the progress. Usually the goals and objectives are defined using SMART framework, it means scalable, measureable, attainable, realistic, and time-bound. Adopting SMART framework can eliminate almost all major mistakes that any HR or line manager can make setting up goals for the employees. The employee performance appraisal system allow both the employees and the managers to access the system through their dedicated dashboards to monitor their performance and progress in real time. Which is also very helpful in encouraging the employees to perform well. Furthermore the performance appraisal system also support managers to communicate the goals and objectives to the employees along with their impact on the high-level organizational goals and objectives. When the employees know what their efforts worth for in term of achieving the high-level organizational goals, they tend to perform well. Communicating the organizational goals and objectives is crucial for the employees to understand how they are and how they can contribute to the organizational goals and objectives.

2. Organize Communications and Reviews

The digital employee performance appraisal system provides a structured communication framework and make communication more effective, organized and convenient for both parties. The communication is the most crucial aspect of performance management. An organization can never achieve higher performance without an effective communication mechanism in place. The communication help the management to acquire the required feedback to understand the performance and progress. It help them understand what employees are doing, how they are doing and what is to expect from them in future. Furthermore it also help management understand the employee’s problems and help them identifying the factors that are harming the performance. The performance appraisal system streamline the communication, it provides a structured framework to establish effective relationship between the managers and the employees. All one to one sessions are logged, scheduled and recorded in the system along with the regular performance reviews and other feedbacks. This will help management take actions to improve the performance and increase the chances of success.

3. Increase Employee Engagements and Collaboration

The digital employee performance appraisal system allow managers to include employees in decision making processes which increase employee engagement. When the managers and the employees collaborate to set goals the employees are most likely to achieve them. It is the employee who can completely understand their circumstances, limitations and strengths. The managers obviously have a good understanding of work environment but it is the employee who have deeper knowledge about the ground realities. When the employees and the managers sit together the chances are they will set more realistic and achievable goals. This help increase the success rate and also increase employee morale. Moreover when the employee knows the goals are set with their consent they are most likely to get attached to it and feel more responsible for that. This encourage them to put extra efforts to achieve such goals and increase the success rate. The success itself is a great factor to increase employee courage, confidence and passion about their work. The increase employee engagement and collaborative environment always tend to produce better performance and higher productivity.

4. Bring Transparency to Reward and Recognitions Processes

The reward and recognition is one of the primary objective of any employee performance appraisal system. Traditionally the employee performance appraisal system was based on manual assessments, which are usually done by the managers. This method is outdated and no longer viable, employees in businesses and organizations are not happy with the traditional assessment processes. Usually the employee complain about the lack of transparency in the system. Studies have revealed that the managers only consider the most recent and most prominent events to assess the overall performance of the employee for the entire year. Most of the time the managers failed to recall the employee performance and behavior from the earlier months of the years, which in itself cause a lot of problems and reduce the accuracy from the system. However, the digital employee appraisal system can record and provide the employee performance data of the entire year. The managers can view the employee performance of the entire year along with the recorded reviews and feedbacks at their dashboard which help improving the accuracy and transparency of the system.

The employees are also provided with the data collected by the employee performance appraisal system hence the chances of misconduct or mistakes are very less. There is no room for favoritism or personal bias in the evaluation process which also build confidence of the employees on the system and produce highly accurate performance data. Furthermore the management can embrace the employees who have performed well and they can try to improve the performance of the employees who lagged behind. The appreciation, recognition and reward for good work plays a crucial role in employee satisfaction and raise their morale. It also increase their loyalty and motivate them to perform even better. The performance appraisal system doesn’t only rely on the reviews of the manager, but it collect quantifiable performance data and also allow other stakeholders to provide feedback. The peers, managers, senior management, cross-department managers, and even relevant customer can provide their feedback which significantly increase the transparency of the performance appraisal process and help gaining employee’s trust.

5. Offer a Better Career Path to the Employees

The employee performance appraisal system is a great tool to harvest future leaders. The modern performance management is leaning towards more contextual analysis rather only measuring the quantity of the work. The employee performance appraisal system help managers to implement contextual performance measurement techniques and enable them to include both the quality of the work and the quantity of the work in the evaluation process. Furthermore the performance appraisal system also help businesses effectively analyze the skills, technical competencies and the behavioral competencies which help them determine the exact value of an individual employee. The employee performance appraisal system can also be integrated with the accounts and help HR department with cost-accounting appraisal processes. It is extremely important for an organization to determine the exact value of individual employee and then propose them right career path to keep increasing their potential and talent. When the employees are provided with the right opportunities they grow, when they grow they become more beneficial for their organization. This require highly accurate performance data and in-depth analysis of the strengths and weaknesses of each individual employee which is only possible with a digital employee performance appraisal system.

6. Improve HR Efficiency

The performance appraisal either annual or interim is one of the most important function of the HR department. It requires a lot of resources, efforts, planning and time. The primary function of the HR department is to select the right talent for the business, retain employees, ensure employee satisfaction to maximize the outcome and keep filling the skill gap in the organization’s talent pool. These all tasks require a lot of in-depth understanding of the workforce and individual employee. The digital performance appraisal system not only help HR department achieve their organizational goals, but it also facilitates all these processes and make the appraisal more simpler and easier this it help boosting the efficiency of the HR department. It is the employee performance appraisal process that generates the right data to let HR understand what talent and skills they have and what is missing or what can be added to further boost the productivity of the business. Without accurate performance data the HR’s decisions could be risky and might failed to generate the desired outcome. That is why the employee performance appraisal system is absolutely essential for the HR in modern work environments in 2022.

7. Improve the Efficacy of the Training and Development Programs

The training and personal development or employee development programs are crucial for any business. They are expensive and it requires a lot time and efforts to develop an effective training and employee development program. The employee performance appraisal system not only provide the required information and performance data that help HR to design most effective training and personal development programs but it also help the HR to further analyze and evaluate their training and development programs. The HR departments can complete several appraisal and performance cycles to reach to a conclusive decision for these programs. This means that it also require a lot of resources and time. Once the HR department have designed an employee training and development program they can measure the efficacy by simply conducting another appraisal after those programs to measure the effects. The performance data will provide highly accurate results which will help determining the efficacy of these programs. The HR department can further tweak and upgrade those programs to generate the desired outcome. That is why the employee performance appraisal system is so crucial for organizations.

8. Reduce Employee Turnover

The employee turnover is one of the most impactful factor at enterprise and organizational performance. The HR department have invested a lot of efforts and resources to hire an employee, then the business will also have to bear the retention cost. Usually the HR can successfully target the right talent but the problems come when the HR will have to retain those highly-talented and ambitious employees. Most of the time the organization failed to retain those highly valuable and talented employees. There could be so many reasons why employee leave but most common is the lack of appreciation, acknowledgement, engagement and future score at the job. The employee performance appraisal system help the HR to solve employees’ problem and fulfill their needs which help reducing the employee turnover. When the employees are happy and satisfied with their current position they are most likely to stay. The employee satisfaction can be achieved by gaining their trust, appreciating them for their efforts and helping them out when they are not performing well. The employee performance appraisal system help streamline the communication, it improves the employee satisfaction and engagements, it improves communication and help HR to understand the needs and problems of the employees. Which help HR to take actions to retain employees and prevent unwanted disruptions in the performance.

Conclusion

The UAE is a rapidly growing economy and a very competitive marketplace, the businesses and organizations need performance appraisal system to maximize their productivity and profitability. In the year 2022 we have witnessed a huge increase in the adaptation of the modern performance management methods and digital employee performance appraisal systems. This is an indicator of how important it is for the modern work environment. No matter how expensive and advanced IT infrastructure an organization builds, or how modern and effective solutions they have acquired for their daily operations, if the employee are not performing well then everything else is just worthless. That is why the businesses emphasize a lot on performance appraisal systems. The traditional appraisal systems have already failed the business and organizations in UAE and in fact all around the world. The employees and the managers both are rapidly losing faith in the traditional appraisal methods and practices all around the world. This requires businesses to adopt a modern and highly advanced employee performance appraisal system.

The employee appraisal system is a digital tool it helps businesses set up most effective goals and also enable them to communicate these goals effectively to the employees. It help monitoring the employee performance in real-time hence make managers more ready and prepared for interruptions and unprecedented scenarios. It help improving the evaluation practices and provide highly accurate performance data which help the HR and the management to take informed and effective decisions. The modern performance appraisal system also help organizations to reduce the cost of the appraisal process and make it very simple so much so that the businesses who have implemented a digital performance appraisal system can conduct performance appraisal activities many times a year. It also help businesses to adopt modern appraisal practices such as in-depth contextual based performance reviews and support them to boost the skills and performance of the employees over the time. RSI Concepts is a leading employee performance appraisal system provider in Dubai, UAE. If you want to learn more about the subject of if you want our help to build a highly efficiency and cost-effective customized employee performance appraisal system for you. 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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May 30, 2022December 9, 2022

How the HR should select a Performance Management System?

For any business the human resource is considered to be the backbone of the business. The HR is responsible for hiring skilled staff. The HR is also responsible for employee retention and employee happiness. Job satisfaction is a very positive factor and can boost one’s performance by many times. Here in Dubai and all around the UAE the market is very competitive, the customers are also very savvy and there are other challenges too which makes it extremely crucial to make your employees productive and efficient. For that businesses uses multiple methods and tactics, most of the businesses use a performance management system. The main reason to use a performance management system is to measure and evaluate the employee performance and their impact on the high-level organizational objectives and goals. Basically the performance management system is used to make sure all the employees and departments are working in the right direction to achieve the high-level organizational goals and objectives.

The continuous performance monitoring and evaluation also help encouraging employees to perform well. The performance management system is also used to improve employee’s capabilities. It helps HR in many ways and it enable businesses to implement employee development programs which help them improving their employees’ professional skills and capabilities. The performance management system is also a great tool to understand the strengths and weaknesses of the employees which help businesses in effective and efficient resource planning and management. All these benefits can help businesses and organizations in achieving their goals and objectives and maximize the productivity and profitability of the business.

When it comes to implementing a performance management system there are several options available in the market. Here in Dubai and all around the UAE the off-the-shelf and ready-made solutions are in abundance which also makes it difficult for the HR to decide which system they should acquire. Obviously each business have different needs and plans, so in this blog we will discuss how the HR should choose the right system for their needs.

What is a Performance Management System?

A performance management system is mainly a software which have in-built features that allow the businesses and organizations to execute the performance management tasks and strategy. There are two major parts of performance management. First part is called performance management system which is drawing a roadmap to achieve the goals. The second part is performance appraisal system which is basically measuring the performance and progress of each individual employee, teams, departments and management with the reference to the high-level organizational goals and objectives. Although most of the time the performance management system and the appraisal management system are interchanged and referred to as the performance management system only.

The performance management system software can be hosted on cloud, online hosting or in local/in-premises data centers. The system is interlinked with the central information center as well as all necessary systems and tools via API based integration which enables it to synchronize, update and push data to and from other systems.

Here are a few important things that the HR should consider while selecting a performance management system:

Performance Management System Software Technology and Platform

For any performance management system the software technology and the platform is crucial as it will not only support businesses with customization and scalability but it also have huge impact on the cost. The performance management system must be built on a widely available technology. Hence the changes or customization should be easy. These days many performance management systems are utilizing open-source programing platforms which is very cost-efficient and easy to customize. Furthermore the performance management system should be able to provide easy and cost-efficient scalability. The performance management system’s software consists of user interfaces (UIs) and a core server application.

The server application is where all the source code and algorithms are stored and executed. Hence the software platform should be able to support multiple server technologies such as online hosting, cloud hosting, local or in-premises hosting solutions. This will enable the business to choose appropriate solution as per their convenient and doesn’t put extra strain on the expense by forcing them to opt for a particular hosting technology.

Exclusive and Intuitive User Interfaces (UIs)

For performance management system or in fact for any system it is extremely crucial that the users are able to use it without any trouble. The intuitiveness and simplicity improves user experience which improves the overall efficiency and efficacy of the system. For the performance management system as it should be utilized by different all of the employees who all have different level of IT proficiency and computer knowledge, so the user interfaces should be designed to keep the users in mind. In a standard performance management system there are several different types of user interfaces which are all designed for different user groups, for example the user interface (UI) for the employee would be very different from the user interface for the CEO or the top level executives.

That is why it is extremely important that the user interface is easy to understand and intuitive. In some cases if training is required then the training should be provided to the staff. An employee or even a manager can only get the full benefits of the performance management system if they could use it easily.

Flexible Goals and Objectives Implementation

This is the most important part of any performance management system. The performance management system must have to be very flexible and user-friendly to enable the users to easily set goals and objectives in the system. At every managerial hierarchy till the individual employees the system administration (which is top level management) should be able to transmit the goals and objectives. In-built features should allow the board of directors and senior management to communicate the high-level organizational goals and objectives with the head of departments, directors, etc. and then they should be able to communicate those goals to their respective teams. For example the director operations should be able to set goals of the managers from the department and then they can do the same for the next level of employees and then the line managers, supervisors, etc. and at last the individual employees. This should be available for all business functions.

In this way the high-level organizational goals and objectives can be effectively communicated to everyone in the chain and businesses can get better results. Furthermore a good performance management system always encourage inputs and feedbacks from the individual employees and lower level management, which help them understand the goals much better and when employee have their say in planning and strategic affairs they feel more compassionate about their work and become more loyal with their employer. This can help improving their performance too.

Strong Monitoring Tools and Dynamic Strategy Implementation Approach

Most of the time the high-level organizational goals and objectives never changed, they remain same for the entire year. However, due to unplanned and unforeseen circumstances the individual goals and plan of action can be changed to remain on course for the high-level organizational goals. This requires continuous monitoring of the performance and the progress. A good performance management system should be very flexible towards implementing strategy and plans. It should provide continuous performance data to the managers and supervisors and let them change or amend the goals at any time. This course correction help them dealing with unforeseen events, interruptions and unplanned events.

Another upside is that it also provide continuous performance data to the employees as well and provide them with a chance to improve their performance to reach their goals and objectives. Furthermore it also estimate the impact of the individual performance on the overall performance of the team, department and the organization as well. Which also help encouraging the employees to perform well and it gives them a sense of importance which is good to improve employee loyalty and employee retention.

Continuous Employee Feedback

For any performance and appraisal management system the employee feedback is absolutely essential. It provides management a chance to evaluate the employees in a more accurate and better way and it also help reducing the communication barrier which is usually present among the junior employees and the management. The performance management system should have a dedicated in-built module for the employee feedback management. Where the managers should have ability to schedule one-on-one feedback sessions for any of their subordinate and also the manager who will be conducting the feedback session. The performance management system should also include online feedback features to conduct online surveys and feedbacks.

Furthermore the peer-to-peer, top-to-bottom and bottom-to-top feedback collection mechanisms should be available. These features can become very handy for the HR department and they also help understanding the problems and issues of the employees in greater depths.

Employee Appraisal Management & Reward Modules

The employee appraisal management is a very crucial part of the performance management. The employee appraisal is basically their performance during a particular time period. The employee appraisal management modules measure the employee performance on the bases of their progress towards the objectives, goals, and their contribution in the overall organizational goals and objectives. The appraisal management is the key component that is used to align all organizational resources with the high-level organizational goals and keep everyone on track to ensure the high-level goals and objectives will be achieved. The management by objectives is a modern appraisal method that involves employees in goal setting and strategy building process. Furthermore there are other methods too such as behaviorally anchored performance scales, 360 degree feedback, straight ranking appraisal, accounting appraisals, etc. and many more.

A good performance management system should not only support all these methods but it should also be able to allow the management to customize and configure their own methods and techniques. The appraisals play a crucial role in improving the overall productivity and profitability of the business. On the bases of the performance evaluation the performance management system should also help businesses to implement an effective reward program. The reward program help businesses in improving employee’s morals, encouraging them to perform even better in future. Furthermore the performance management system can provide accurate data on technical and behavioral competencies which help businesses to setup and plan training programs and it also help them in measuring the effects of the trainings and skill enhancement programs. This help HR to improve the overall operational and professional capabilities of the entire workforce.

KPIs, OKRs, KRAs, and other Matrices

The performance management system have in-built performance measuring matrices. These matrices are used to track, monitor and measure the performance of the entire business along with all its business units, departments, teams, and employees. The KPIs are Key Performance Indicators which are used to measure the performance of the individual employees, teams, departments, and even the entire business. The KPIs are used to communicate what is needed from an employee and quantify their work to assess the performance. While the KRAs or Key Result/Responsibility Areas are matrices that are used to measure the employee performance in terms of the expectations from their job role. Majorly the KRAs are used to clearly communicate the job role of the employees and give them a perspective of what the business is expecting from them and what should be their contribution.

The OKRs means Objectives and Key Results and it is a fairly new performance management method. The OKRs are reviewed more frequently (usually at the end of each quarter) and they are transparent both horizontally and vertically. The OKRs are different from KPIs as the KPIs provide the measure of the effectiveness of the existing processes, the OKRs mainly address the change and growth and it measures how far a business have progressed in in a certain time period in pursuit of their goals and objectives. These are some matrices that any good performance management system should have. These matrices and a lot many more such matrices improve the efficacy of the performance management system.

Performance Management System with Remote Access Enabled

A good performance management system must also have capabilities to provide access to the employees remotely if needed. These days in general our dependence on the smartphones and mobile devices is increasing. In fact most of the people use their mobile devices as their primary device to access the internet and do regular tasks. Furthermore businesses in Dubai and all around the UAE usually have many branches and most of the time employees are deployed off-campus or at project sites. This means that all of the employees wouldn’t have access to the computer or they won’t be able to come to the head-office to access their performance management system dashboard. Sometimes the higher management and stockholders also want to access the system from remote locations such as if they are at home, or at a business trip or if anything urgent came up while they are not at the office, etc.

That is why having the facility to provide remote access via mobile and smartphones could be a great advantage. Businesses can also integrate special purpose interactive kiosks with the system which can provide access to the performance management system from remote locations and make it possible for all employees to access their dashboard any time and from anywhere. Such features are very helpful in improving the effectiveness of the system and help businesses improve their performance in all sectors.

Performance Management System Cost – Customized VS Off-the-shelf Solution

Obviously the cost is one of the major factor. Whenever a business planned to acquire a new system or tool the cost is always an important anchor point. The ROI is calculated on the bases of the cost and the returns a business gets from the software or system. There are two types of performance management systems on the bases of their cost and usage agreements. Some companies are providing ready-made or off-the-shelf performance management systems which can be acquired on the rental bases or at different subscription plans. In both cases the scalability is expensive and the business must have to pay for the plan or package they have opted for. Usually these plans and packages are designed for general purpose hence most of the businesses end up paying for unwanted features and tools as well.

The data is stored in the service provider’s storage and business have no control over it. Another big disadvantage of off-the-shelf solutions is that they are hard to customize and sometimes businesses have to wait for a long time to see the new features in the updates. If any customization is done, it remains limited and it is also very expensive and in some cases it is not permitted at all.On the contrary the custom-build performance management systems provide full control and freedom. The business usually acquired a software development company like RSI Concepts or they hired a team of programmers and developers. In any case the business have full ownership rights over the software and it’s all resources. This make scalability a non-issue and business can include as many employees, departments, branches and everything whenever needed without paying hefty charges or upgrading fees.

Furthermore the full ownership frees the business from dependency on a single vendor and businesses can move to a new vendor or service provider without losing anything or going through the migration problems. This make customized performance management systems more superior and cost-efficient. In the long term the cost to benefits rates are excellent and the business have more control and freedom over their performance management system.

Conclusion

The performance management system is a very critical component of any business’s management. Businesses use a digital performance management system to plan and execute strategies as per their goals and vision. However, when it comes to selecting an appropriate performance management system the HR department had to be very careful. The performance management system could have a significant and long term impact on the business’s growth and productivity. In this blog we have listed some basic features which will help the HR department to choose the best solution for their performance management needs. A performance management system help businesses to set realistic goals and help them implementing strategies to achieve those goals. It significantly improves communication.

The performance management system also help employees’ in understanding their job roles, the expectations from them and the importance of their contribution in the overall high-level organizational goals and objectives. The feedback and planning tools help businesses including the employees in planning and strategy building phases which increase their trust and improve their relationship with the business.A performance management system is absolutely necessary for any business. Each business grows, some grow faster and some at a slower pace but eventually each business grows and their internal business processes become more complex and sophisticated. A performance management system ensures the business sustain that growth and with the growth it also improves it workforce, operational capabilities while ensuring higher productivity and performance.

RSI Concepts is a leading performance management system provider in Dubai, UAE. If you want to learn more about the subject or if you need our help to provide you a high-quality performance management system, 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 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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