1. Advantages of performance appraisal
Employee relations practices are major causes of manifest problems such as low
productivity, poor quality, missed delivery dates, and excessive costs. Personnel
practices can be indirectly measured, for each manager, by the following standards:
- Turnover in terms of voluntary resignations.
- Attendance.
- Number of promotions made within the manager operation and from his operation to
other segments or functions of the enterprise.
- Number, frequency, and severity of lost-time accidents and dispensary visits
involving hourly employees.
- Number and contributed value of ideas for improving operations which are
submitted by hourly and salaried employees.
- Training time and loss of productivity to break in new employees.
- The existence or lack of formal orientation and indoctrination programs and regular
follow-up meetings.
- Frequency of staff meetings.
- Use of management by objectives.
- The existence or absence of organization charts, position descriptions, and
performance standards.
- The number, nature, and extent of expressed employee disappointments at all levels.
- Difficulty or ease of recruitment of exempt employees-that is, the ratio of job offers
to acceptances.
- What has been done to develop and improve the performance of key people.
A manager should be held fully accountable for the proper use and development of his
human resources. These simple quantitative measures, coupled with exit interviews,
and counseling interviews by the human resources executive, will show how well or
how poorly a manager is managing his human resources.
Measurement of performance encompasses appraisal of individuals and the collective
work group as well as feeding back results to those appraised. Simply stated,
performance appraisal is an attempt to think clearly about what each person does, how
well he does it, and what his future prospects are when viewed against the background
2. of his total work situation, including the direction and opportunities which his
manager has provided.
The fact of the matter is that, whether the manager intends it or not, his every word,
every suggestion, every criticism, every look tells a man how his performance is
being judged. Each builds him up or tears him down. Performance appraisal is the
most sensitive part of the manager's job. Either he uses this managerial tool
effectively to build loyalty, teamwork, cooperation, and understanding or he abuses it
and fails to achieve both highest job satisfaction and highest productivity. All
employees have a right to be told where they stand, for better or for worse. The
manner in which it is done is important.
What should a performance appraisal accomplish? This question was asked of 20
personnel directors who represented the composite opinion of 20 division presidents
in a large decentralized company. The overwhelming majority cited a number of
benefits to be derived from a well-administered performance appraisal system. The
men had been brought together to consider the problems they faced in implementing
such a system. During the day, four concurrent workshop sessions were held covering
training and development, performance appraisal and salary administration, new
employee orientation, and safety. The groups rotated.
The groups further agreed that appraisal is a line responsibility, but specific guidelines
are needed from the corporate office so that a factor such as a rating of outstanding in
division A means the same thing as a rating of outstanding where product, process,
technology, and markets differ and the corporation is beginning to experiment with
inter-divisional promotional transfers.
The 20 personnel directors pointed out that feeding back results is perhaps the most
important responsibility a manager has to his subordinates and to himself. How he
handles this task will determine whether he builds or destroys morale, whether he
increases or decreases productivity and profitability, and whether he helps or hinders
individual development.
Feedback of results has many labels-performance appraisal, personnel evaluation,
progress review, merit review, and a host of others. Whatever the label, there is much
to be gained when a manager is conscientious about appraisal review.
Formal appraisals serve a number of purposes.
- One of the most important is to pinpoint areas where improvement is needed.
- A second is to make clear who is responsible for what.
- A third is to reassess and communicate priorities.
- A fourth is to note obstacles so that they can subsequently be eliminated.
Performance appraisal should commend good work, serve as one base for pay
increases and promotions, stimulate individual self-development, teach subordinates-
3. and reveal how well a manager himself is doing and what some of his own
developmental needs are.
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