Target setting and goal achievement:

Performance enhancement and appraisal techniques

Dr K Kuhathasan

CEO: Cenlead

Competency and productivity are essential for organizational success today. A key ingredient for such is human capital and investing in human capital will be critical for organizational survival.

Today we live in a globally competitive environment, marked by high velocity change. Successful business keep up getting ahead of that change, they get ahead growing and learning; and they grow and learn by investing in their workforce.

l Organizations that are at the forefront of effectiveness and competitiveness constantly seek to:

* Improve the productivity of people

* Identify their needs in terms of the gap between desired or required performance levels and current performance

* Select the appropriate strategies to enhance employee performance, and continuous improvement, and motivating their workforce to higher levels of quality

* Integrate human resources with new technologies

* Evaluate the outcomes of performance enhancement strategies.

Appraising performance

Performance appraisal is a formal measurement of the quantity and quality of an employee's work within a specific period of time. Usually, performance appraisal occurs once, or at most, twice a year. There are several methods of performance appraisal, which differ in what aspects of performance are measured and how the measurement is made.

Purpose of performance appraisal

To create and maintain a satisfactory level of performance.

To contribute to the employee's growth and development through training and management development programs.

To help superiors gain a proper understanding about their subordinates.

To guide job changes with the help of continuous ranking.

To facilitate fair and equitable compensation based on performance.

To facilitate testing and validation of selection tests, interview techniques through comparing their scores with performance appraisal rating.

To provide information for making decision regarding lay off, retrenchment etc.

Performance appraisals should be conducted:

On a regular basis that is established in writing

At a pre-determined time and place, free of interruptions

Using a document upon which performance can be summarized in writing

Separately from the compensation review

With a written follow-up outlining any action plans resulting from the performance session.

Preparation

When an employee is hired or assigned to your office, provide a written description of the behaviour and qualities required for the job.

Set specific goals with the employee and put your agreement in writing.

Ensure the goals are fair and reasonable so they allow you to evaluate how well the employee is doing.

Explain that the performance review process is designed to evaluate how well goals are met and the means by which the employee achieved them.

Obtain agreement with the employee about which behaviours and performance criteria will be achieved.

Set a date for the review. Ensure your schedule the first review within any probationary period required by your office.

Observe the employee during the review period and document incidents of behaviour that affect the employee's performance or illustrate behaviour patterns.

Schedule the actual appraisal far enough in advance to allow the employee to prepare.

Performance appraisal

The basic objective of performance appraisal is to close the gap between optimum work performance levels and actual work performance. Analyzing performance involves the following steps:

Establish desired performance levels

* Identifying Expectations

* Reviewing Performance Indicators

Determine Current Performance Levels

* Selecting Measurement Techniques

* Collecting Data

Identify Performance Gaps

* Analyzing the Data

* Calculating Performance Gap

Uses of performance appraisal

1. The use of performance appraisal is that it enables the management to make effective decisions and/or correct or modify their earlier decisions relating to the following issues of HRM.

* Organisational planning based on potentialities of its human resources.

* Human Resource planning based on weakness, strengths and potentialities of human resources.

* Organizational effectiveness through performance improvement.

* Fixation and re-fixation for salary, allowance, incentives and benefits.

* Original placement or placement adjustment decisions.

* Identifying training and development need and to evaluate the effectiveness of training and development programs.

* Career planning and development and movement of employees.

2. The other use of performance appraisal is that it helps to evaluate the existing plans, information system, job analysis, internal and external environment factor influencing employee performance, such as relations with surpervisors, working conditions, personal problems of the work like family, financial and health. This evaluation suggests and results in improvement in plans, information system, job analysis creating the conducive work environment and controlling the controllable environment variables.

3. It helps the employee to improve his performance and for his self-development.

4. Further it improves superior subordinate relations through close interaction and proper understanding.

Organizational uses of performance appraisal measures

Performance appraisal measures serve many different purposes within an organization. Basically, the uses of these measures fall into two main categories; administrative and individual employee development. Some of the major uses of performance appraisal measures in each category are given below:

Administrative

As a basis for making decisions regarding promotions, and transfers (where seniority is not the all-important factor).

As a means of determining training needs for various organizational units.

As criteria when validating selection and placement devices.

As a basis for evaluating the worth of training programs and the effectiveness of work schedules, work methods, organizational structure, supervisory styles, working conditions, and equipment.

As a basis for evaluating the productive efficiency of the organization as a whole as units within it.

As a method of administrative wages and salaries so that they are contingent on performance.

Individual employee development

As a means of identifying employee weakness that might be alleviated through additional formal training.

As a means of improving the performance of employee by providing each of them with a feedback regarding their performance during periodic appraisal interviews with their superiors.

As a means of increasing employee motivation by establishing behavioural and performance goals.

As a means of encouraging managers to observe the behaviour of each of their subordinates and to take an interest in each individual's training and development needs.

As a means of pointing out past deficiencies and reinforcing employee strengths.

When appraising

Good appraisals actually start at the time of target setting. Good target setting means half the job is done. Ensure that you mention 'what' and 'how' in the target setting exercise. A clear goal is easier to achieve and evaluate.

Focus on 'what' When doing the appraisals, make sure that you discuss the results and the achievement of the employee in detail.

Whatever your perception, discussing things at length will help the employee see your point of view. Discuss what your expectations were and measure the performance accordingly.

Don't lose focus on 'how However, when discussing the numbers, do not forget the way they have been attained. The "how" is just as important as "what".

Ensure that the same standards and means of assessing are employed throughout the organization. Typically, this is role that the HR team fulfills.

Ensure that the new managers use the current organization's appraisal methods and not those of the organization they worked earlier. This is the most common and biggest mistake.

Talk about examples of behaviour and attitudes, not perceptions When doing appraisals, talk about displayed and documented behaviour and attitudes and not hearsay. Perceptions can be questioned but not behaviour. List incidents that support or go against the behaviour that the organization is trying to promote and then take a balanced view of the same.

Appraisals are not a once a year exercise. Complete this exercise every quarter if not every month. At time behaviour and attitudes change over a period of time. Too much time gets wasted if this documentation is done at the end of each year.

Too many incidents would have been forgotten. In short, maintaining equality in appraisals is about consistent, people-focused and objective.

The most recent behaviour of the employee affects the evaluation of the entire appraisal period, rather than the entire evaluation period.

The practice of not incorporating any unfavourable comments in the evaluation, even if they are justified are considered by employee as a means of retaining 'problem employees' in the organization. This is obviously not a very popular practice. Most employees would give a fair evaluation of themselves and their peers and they want this to be included in the appraisal, without any modifications.

Similarly, the practice of ranking all the employees at the same level in the ranking scale, generally, around the middle is not very popular among employees.

Factors such as social standing, appearance or participation in employee assistance programs affect an employee's evaluation. Unfortunately, these factors, which are not job related in any way, are given more importance by managers than the actual performance.

Sometimes there is a "hidden side" in appraisals; this is when a good or bad characteristic of the performance or a job aspect affects the entire appraisal process. Some managers might concentrate on a single outstanding characteristic, which can overshadow the entire appraisal report of an employee.

Appraisals are regularly marred by the moods of the managers. Employees are particularly dissatisfied when managers allow their personal feelings to colour the appraisal.

Performance appraisals cannot be done away with. However, there is a need to change our outlook towards the appraisal system. There is also a need to change the present formal appraisals into a more casual discussion. An appraisal should be a frank discussion, which decides our present objectives, outlines our career goals and makes us more productive workers.