#Employee Performance Appraisal and Motivation
Motivation can be defined as the work performed by managers to induce subordinates to act in the desired manner by satisfying their needs and desires. It is the process that energizes employees and propels them to pursue their goals. Well-designed and well-executed performance appraisals have a strong motivational impact. In many companies, appraisals are used for distributing rewards such as bonuses, annual pay raises, and promotions. Appraisals have the power to motivate employees because they provide several interconnected benefits. Adding to this, other significant reasons for using performance appraisal are:
Used for promotion, and retention decisions
Training needs are identified
Links performance management to company goals
The manager can correct deficiencies and reinforce strengths
With appraisals, employee’s can review career plans
Researchers show that it is more effective when performance appraisal is tied with rewards and termination of lower performers. This can be understood from the reinforcement theory, which indicates that the rewarded behavior is repeated. Also, tying appraisal results to rewards may lead to the perception that performance is rewarded. Today, performance appraisal has been extended beyond the rating of employees to aspects such as motivation. Employee performance has been the prime focus of human resource managers, resulting in several performance appraisal techniques to help establish employee performance.
Steps of performance appraisal include:
1. Sets work/performance standards: Different types of standards are-
Goals / Targets
2. Assessing (techniques) performance: There are several techniques which companies or organization use for the assessment of their employees, Some of the methods for evaluation are:-
Graphic Rating Scale- The simplest and most popular method for appraising performance. A scale that lists several traits and ranges of performance for each. Identifying the score that best describes the level of performance for each trait.
Alternation Ranking - Ranking employees from best to worst on a particular trait, choosing highest, then lowest, until all are ranked.
Paired Comparison- Ranking employees by making a chart of all possible pairs of the employees for each trait, indicating which is the better employee of the pair.
Forced Distribution- Predetermined percentages of rates are placed in various performance categories. The technique follows the Bell Curve approach.
Critical Incident Method-Keeping a record of uncommonly good or undesirable examples related to employee’s work-related behavior and reviewing it with the employee at predetermined times.
Management by Objectives (MBO)- Refers to a multistep companywide goal-setting and appraisal program. It requires the manager to set specific, measurable, relevant goals with each employee and then periodically discuss the latter’s progress toward these goals.
3. Provides feedback to the employee: appraisals can be an essential tool to give feedback and aid in employee development.
However, if performance appraisal ratings are not accurate, appraisals can be a significant cause of reward unfairness. When performance management is handled less positively, employees may find it demotivating. If feedback is more negative without any illustration for improvement can cause disengagement of employees. Some of the errors in performance appraisal are:
Unclear standards- Too open to interpretation
Halo Effect - When a rating on one trait biases the rating on other traits
Central Tendency - Tendency to rate all employees the same way, such as average
Leniency or Strictness - Tendency to rate all as either high or low
Recency Effects Rater Error - Recent events blind your judgment and forget past incidents
Now the question arises, how to improve performance management in the company?
There are several things that can be done to improve performance management and motivate employees to work more efficiently towards their goals.
1. Shift focus on feedback, i.e., instead of pointing on what is wrong, focus on the area that can be improved.
2. Offer training and development opportunities
3. Take technical support such as human resource information system to provide real-time feedback and to minimizing error
4. Try to meet higher-level psychological needs of the employees, such as, recognition which is one of the most potent forms of motivation
5. Increasing performance-based appraisal can contribute to the employees’ job satisfaction
6. Conducting the Appraisal Meeting serves as the key medium through which the rater gives feedback to the employees
Annual employee appraisal is critical for any company to evaluate employee performance. Almost every industry has an appraisal method; only the way of performing varies from one manager to another, but the standardized assessment system is essential for the company’s benefit. An established employee appraisal program is necessary to get the most out of them.
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Shruti Priya [MBA IIM-s]
Manager HR [ Internship Incharge]
AirCrews Aviation Pvt. Ltd.
+91 73210 81169