How HRM can turn the Great Resignation into the Great Retention

 

1        Performance Evaluation System

 

Performance evaluation is a systematic process of evaluating how well employees are performing their jobs. The appraisal is based on results obtained by the employee in his/her job, not on the employee’s personality characteristics. Performance evaluations are highly important for any organization. It is an art of “winning from within” by focusing on their employees. Performance evaluation area systematic process to measure and evaluate performance of employees regularly, although they may be difficult to conduct. In most of the organizations, employees have graded annually on their work which they either promoted or financially awarded. Performance evaluation also directly provides periodic feedback to employees, such that they are more self-aware in terms of their performance metrics (Bhat). 

 Purpose of Performance Evaluation

 There are many purposes in performance evaluation. Listed below are few main purposes an organization look for.

·       The aim of the performance evaluation is to measure an employee’s job performance to determine how well they fulfill their duties and responsibilities.

·       Performance evaluations help with multiple aspects of building and retaining a productive workforce. 

·       Employer can provide consistent feedback on employee’s strength and strive for improvement as well as the weaknesses which are to be overcome.

·       Performance evaluation is an integrated platform for both employer and employee to get fit for quality performance which leads in improving communication and team work.

·       Performance evaluation is a process which targets to improve and achieve organizational goals as a team.

·       Continues evaluation of employees leads to improve competence and efficiency.

·       Frequent employee training and skill development sessions helps employees to overcome identified development areas through performance evaluation.

·       Frequent performance evaluation leads to determine the scope of the growth in an employee’s career and the level of motivation with which he/she contributes to an organization’s growth.

·       Performance evaluation lets an employee understand where he/she stands as compared to others in the organization.

 

2 .   Performance Evaluation Process Methods an Organization Could Use

 

During a performance evaluation process, Managers have detailed discussions with employees about their workplace strengths and weaknesses. Here, we will discuss the process of performance evaluation in a simple way. The methods and processes implemented under the evaluation exercise need to be precise, accurate, and efficient enough to make a difference in the organization (Cflow, 2023).

                                                    Figure 1: Top 5 HR Assessment Methods

1.     360° Feedback

 The 360-degree feedback performance evaluation process is an appraisal system for employee review and assessment based on feedback. The employee feedback comes from the inner circle in the office, including supervisors, colleagues, and customers, and from pan-organizational reports.

                                                        Figure 2: 360 Degree Analysis

1.1.Self-Appraisals

Employees can do a self-appraisal to reflect on their performance and rectify their strengths and weaknesses.

 

1.2.Review By Managers

Managerial reviews and ratings of the employees are an integrated and conventional method of appraisal.

 

1.3.Review By Peers

Coworkers and peers have a unique perspective on an employee’s performance. These evaluations aid in determining an employee’s capacity to work effectively with others, take the initiative, and contribute consistently. At the same time, peer enmity and biases can also drive the evaluation process in the wrong direction.

 

           1.4. Subordinates Appraising Manager

 This is the most significant component of the 360-degree performance evaluation process. Both the managers and their superiors share a common view about the subordinates.

2.     Management by Objectives (MBO)

 This is an appraisal process completed by managers and employees. They collaborate to identify the goals for the review, organize them, and communicate with other stakeholders. The technique is to connect company goals with personal objectives in an effectively. Most companies use the SMART method to determine whether the established goals are specific, measurable, attainable, realistic, and time-sensitive. The Management by Objectives (MOB) process fits well with organizations that need to measure the qualitative and quantitative output of the senior management along with the directors and executives.

Figure 3: MBO Analysis                                                                                                         

3. Assessment Center Appraisal

According to this analysis employees can receive a clear review and performance analysis including how others perceive them. The biggest advantage of this method is it can measure an individual’s current performance and predict the future work performance. According to this method, the organizations include intelligence exams, psychological testing, and simulations are frequent in this evaluation model. Besides this, role-playing is also an integral part of the evaluation. There are 3 main stages of Assessment Center Appraisal. They are, 

                                         Figure 4: Assessment Center Appraisal

4.     Behaviorally Anchored Rating Scale

Behaviorally Anchored Rating Scale is also known as BARS.  This is an innovative method for performance management based on scale defining the behavior with different “statements” as a reference point. In this appraisal qualitative and quantitative benefits are been counted. Here the performances and productivity of an employee are compared to particular behavioral standards associated with the numerical evaluations in BARS.

 

 5.      Psychological Appraisals

Psychological evaluations are useful in understanding an employee’s hidden potential, but they are also good at doing many other things. Identified employees are utilized to help an employee find the right path and improve future performance. It helps build the required strategy to build the required traits in an employee. They are Interpersonal skills, Cognitive abilities, Intellectual attributes, Leadership skills, Personality traits and Emotional quotient. Organization which follows this method hire psychologist to conduct the evaluation. The major benefit of this method is that introverted and shy employees will also get an equal opportunity to express their skills.

6. Human Resource (Cost) Accounting Method

For some companies hiring an employee is all about the costs and benefits of having that one person working there. For them, this performance evaluation process method is perfect. This method evaluates an employee’s performance in terms of the monetary advantages the individual lends to the company. In the cost accounting method, some of the general parameters used are; Unit-wise average service value, Quality, Overhead costs, Interpersonal interactions.

 

                                             Figure 5: Human Resource Accounting

6.1. Historical Cost Method:

These expenses include the costs of an organization’s human resource recruitment, selection, training, placement, and development.

 

6.2. Present Value Method:

This measures the employee’s current worth based on the predicted future service until the day of their retirement.

6.3. Replacement Cost Method:

This method considers the cost of replacing an existing human resource with an equivalent and capable of providing equal services. Hence, the name replacement cost.

2.4. Asset Multiplier Method:

The real value of human resources is determined by a variety of factors, including employee motivation and attitude toward work and the organization.

 

Benefits of Employee Performance Evaluation

Let us look at the top 5 key benefits the employee performance evaluation offers.

                Figure 6: Benefits of employee performance evaluation

Improved Communication

 In all the employee evaluation processes, Managers gives continues feedback for the improvement of employees. Through the feedback given by the managers employees can improve and fill their grey areas. In this process managers address any issues employees come across which helps in open and honest communication between the managers and his team.

 

Build a Career Path

Managers help their employees with assignments and how they can effectively do them. A performance evaluation meeting is a perfect time to look at an employee’s career path. It lets the employee know what their future goals are and what they need to do to get there. It helps them create small and achievable goals, assign deadlines to them, and work towards completion. It also lets the employees know where they stand in the hierarchy and where they will be in the years to come.

Check Levels of Engagement

Engaged employees perform better than their counterparts. They are better team players, are more productive, and help their peers out actively. A staff performance evaluation is a perfect time to check how engaged an employee is. 

Resources planning

Staff appraisals help in understanding how an employee is performing and what their future assignments or goals can be. It not only helps in effective goals management but also in resource planning. You can effectively reallocate your resources or hire new members to add to your team.

 Conclusion

Performance evaluation should be more interesting for both managers and employees.  Both the parties should contribute equally to the discussion and employees should be committed to planning as managers. In other words, the discussions should not always be about performance and metrics. It also could include a discussion on the challenges to employee engagement, understating the organizational goals and objectives, feedback from peers, supervisors and managers.

References

Bhat, A. (n.d.). QuestionPro. Retrieved from Performance evaluation – Definition, method, survey questions and example: https://www.questionpro.com/blog/performance-evaluation/

Cflow. (2023, March 08). Retrieved from Improving the Employee Productivity with Performance Evaluation Process and Methods: https://www.cflowapps.com/performance-evaluation-process/

Tips, S. L. (n.d.). Youtube. Retrieved from PERFORMANCE APPRAISAL | DEFINITION | OBJECTIVES | PROCESS | METHODS - PART I: https://youtu.be/KgrOaDupvQ4

University, H. (n.d.). Youtube. Retrieved from What is a Behaviorally Anchored Rating Scale (BARS)?: https://youtu.be/wSxV9TV89Ss