The Importance of Conducting Appraisals and Rewarding Employee Performance

Performance appraisal (PA) is a practice done by virtually every organisation. It is a routine organisational activity done to ascertain whether the characteristics of current employees meet the threshold of helping the organization to achieve its goals and objectives. Campelli and Conyon (2016) describe performance appraisal as the practice of evaluating employees' performance over a given period by their supervisors. The appraisal usually focuses on an employee's performance over a period covering the previous fiscal year. Previously, the exercise was been limited to feedback exchanges between supervisors and employees. However, with the business environment becoming dynamic each day, appraisals have shifted their focus and test the suitability of employees based on a multiplicity of characteristics (Doanis, 2012). Despite the unpopularity of performance appraisal among employees, evidence shows that it can be helpful to both employers and employees if carried out diligently (Campelli and Conyon, 2016). This essay will explore the value of performance appraisals and make suggestions on how such practice could be used to address employee problems at Skyline International.

Every job that an employee occupies has a value. This value is attached to the job through a process known as employee evaluation. As such, every employee is expected to perform as per the expectations of the employers in the context of the position that they occupy in the organisation (Mullins & Christy, 2013). To ascertain whether current employees meet organisational expectations, conducting an appraisal becomes an imperative. As Doanis (2012) notes, appraisals help management to gauge and monitor whether the institutional expectations and objectives are being met through delegation of duties and responsibilities. The aggregate outcome of these reviews vis-a-vis organisational standards, expectations, and objectives help the management to assess whether the organisation is headed towards the desired direction. For Skyline International, it is critical to conduct appraisals to enable management to come up with the best estimates of the quantitative contribution of each employee to the overall performance of the organization. This would in turn help the management to decide on the employees that would be affected in the upcoming layoff.

Appraisal entails an assessment of performance and giving performance feedbacks of employees. In their assessment reports, supervisors give comments on how their subordinates performed during the period under review (Cintron & Flaniken, 2012; Doanis, 2012).These feedbacks can help the management to identify the reasons that make some employees underperform in their areas of responsibility. According to Doanis (2012), the feedbacks obtained from appraisals can guide management in establishing individual training needs of employees that deliver results below the set standards. Such awareness would also enable the organisation to design appropriate skills upgrade programs for the employees. In the context of Skyline International, the appraisal could help management in identifying those employees that require training for them to be eligible for employment with Skyline Mini. At the same time, appraisal feedbacks can be useful to the management in identifying the employees that are likely to make Skyline incur higher individual costs in addressing their skills needs. Owing to the current situation of the company, information on individual costs of trainings can assist the management to select employees who would relieved of their duties to save the company from incurring more expenses on employees.

An appraisal is an essential tool for promoting equality and justice among employees. This is because the process uses a standard criterion to measure the performance of all employees against their job expectations. Through these standards, management ensures that each employee is subjected to similar criteria in establishing contractually based employment relationships. For instance, scholarly evidence shows that performance appraisal results inform and influence human resource department (HRD) decisions such as employee bonuses, employee promotions, merit pay, and exit or termination decisions (Campelli and Conyon, 2016).When employees feel that they are treated fairly by the leadership of the organisation in matters relating to promotions or pay, they are likely to develop a sense of loyalty and commitment to working towards achieving both individual goals and those of the organisation(Kampkotter, 2014). As a consequence, they become highly motivated individuals.

Performance appraisals significantly increase employee job satisfaction. Once employees are informed of their performance through assessments, they create their own career goals regarding professional growth and development. Goal creation on personal growth and development is highly pronounced especially when monetary-related factors are inserted into the equation (Campelli and Conyon, 2016). Similarly, a study conducted by Kampkotter (2014) find that performance appraisals linked to monetary outcomes are strongly appreciated by employees and have a higher effect on job satisfaction compared to non-monetary factors. Indeed the same study also finds that appraisals with no monetary consequences can be harmful to the self-minded and open-minded workers. These findings suggest that employees feel more motivated when their performance is reviewed against their career growth objectives such as promotions. Given this reason, it is imperative that the HRD of Skyline International understand that the proposed employee appraisals would require more attention to matters relating to salary and related benefits. The situation needs further considering in that some Skyline International staff have taken pay cuts to stay with the company.

Conclusion

In conclusion, a performance appraisal is a valuable tool in determining rewards for employees. If done well, it can result in higher levels of job satisfaction among employees. This is particularly the case when the employees perceive that fairness has been applied in conducting appraisals. Performance appraisal enables organisations to identify skill deficits of their employees and design appropriate programs to address such skills gaps. Performance appraisal creates a sense of responsibility among employees as it informs them of their areas of weakness as well as prescribes ways of addressing the inadequacies of every one of them. The technique of employee appraisal can equip the HRD of Skyline International to identify employees that will require further training, as well as those that will face dismissal. Moreover, employee appraisal can help the company design the remuneration package appropriate for the new employees at Skyline Mini. In developing this package, monetary factors must be given more priority because of high levels of job satisfaction associated with appraisals that have monetary consequences.

References

Cappelli, P., & Conyon, M. (2016). What do performance appraisals Do? ILR Review, 71(1), 88-116.

Cintron, R., & Flaniken, F. (2012). Performance appraisal: A supervision or leadership tool? International Journal of Business and Social Science, 2(17), 29-37.

Daoanis, L. E. (2012). Performance appraisal system: Its implication to employee performance. International Journal of Economics and Management Sciences, 2(3), 55-62.

Kampkotter, P. (2014). Performance appraisals and job satisfaction. International Journal of Human Resource Management, 28(5), 750-774. doi:10.2139/ssrn.2469875

Mullins, L. J. with Christy, G (2013) Management and Organisational Behaviour. 10e. Harlow : FT Prentice Hall.