Performance Review Systems

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Performance Review Systems

  1. 1. Proposal to Open Access Inc. Adopt 360 Degrees Performance Review System
  2. 2. Table of Contents Employee Turnover at Open Access Inc. ……………………….1 Chart of Employee Cost Turnover at Open Access Inc. ………..2 Pie Graph of Employee Turnover cost at Open Access Inc. ……3 Research Coverage and Tested Hypothesis to Optimize performance Review……………………………………………..4 Performance Measurement Process for Open Access Inc. ……...5 Results Summary of Performance Measurement System……….6 Adoption of 360 Degrees Performance Appraisal System……….7 Recommendations to Senior Management: Adopt 360 Degree Performance Appraisal System at Open Access Inc. …………….8
  3. 3. Employee Turnover at Open Access Inc.  According to the study, high turnover rate of 2% of the employees (150 employees) is costing the company $885,000  High turnover has affected profits and the growth of the company  Traditional form of Performance Review is not conducive to employee growth nor it fulfills organizational objectives  360 Degrees method of Performance Review will align the needs of the employees and the objectives of the company 1
  4. 4. Chart of Employee Turnover Cost at Open Access Inc. Cost Factor Recruitment cost of replacements Loss of productivity cost Cost of learning curve Training cost Loss of pre-termination productivity Total Cost Associated Cost $380,000 $185,000 210,000 $45,000 $65,000 $885,000 2
  5. 5. Pie Graph of Employee Turnover Cost at Open Access Inc. $65,000 Recruitment cost of replacements $45,000 Loss of productivity cost $210,000 $380,000 Cost of learning curve Training cost $185,000 Loss of pre-termination productivity 3
  6. 6. Research Coverage and Tested Hypotheses to Optimize Performance Review  A structured confidential questionnaire was prepared and presented to 75 employees and 15 supervisors  Data was collected, analyzed and tested based on the following hypotheses: Present form of Appraisal System is not conducive to employee growth nor it fulfills organizational goals and objectives.  Recommendations to change the Performance Measurement System was submitted to the Senior Management. 4
  7. 7. Performance Measurement Process for Open Access Inc. 5
  8. 8. Results Summary of the Performance Measurement System at Open Access Inc.  Traditional review system is measuring wrong and irrelevant performance measures  Supervisors are not trained in conducting performance review nor do they interpret the results of the review correctly  Person to Person review is viewed as creating “rater biases” and personal prejudice  Performance review does not align employee expectations to the objectives and goals of the organization 6
  9. 9. Adoption of 360 Degree Performance Appraisal System at Open Access Inc. 360 Degree Performance appraisal is performed by self, peers, supervisors, customers, and subordinates Advantages of 360 Degree Performance Measurement  Provides a more comprehensive view of employee performance  Increases credibility of performance appraisal  Feedback from peers enhances employee self-development  Increases accountability of employees to their customers  The combination of opinions can approximate to an „accurate‟ view  Comments expressed by several colleagues tend to carry weight 7
  10. 10. Recommendations to Senior Management: Adopt 360 Degrees Performance Review System  Majority of the personnel showed some degree of dissatisfaction with the current performance appraisal system  Current system is costing the company $885,000 per year on employee turnover cost  Current performance review is impeding growth of the company and keeping projects and objectives incomplete  Morale of the employee is low due to high turnover and exodus of talented employees to competitors.  360 Degrees Appraisal System will allow alignment of employees and company objectives 8

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