Importance of employee performance appraisal


For any organisation to evaluate the performance of an employee they need to implement performance management system. These lead to the appraisals of each employee. The performance of employee is a big success factor. Therefore HNT will have to be very careful and come up with a performance management system that will help them best utilise their workforce.

An appraisal is considered as a formal assessment of performance of staff member. It is a one-on-one discussion between manager and. Appraisals can be held more often but usually once a year. These discussions usually concentrate on specific performance measures for example individual output or involve more general review of contributions made by a certain employee.

Main objectives of a performance appraisal are:

Improve performance and motivation of employee: It will help HNT to meet their aims and objectives as they improve the performance of their employee and will help them to motivate them in a much better way than before. Therefore, this will result in organisations repute to get better in the market.

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Provide feedback about performance of individual: When the organisation will get feedback they can analyse how a certain doctor or nurse is performing in their respective tasks. This will enable HNT to strengthen the good points in their employees and eliminate the aspects which are weak in them.

Recognise future training needs: One important aspect of appraisals for HNT will be that they will be able to recognise the future need of training that is required for their employees to perform better. It will provide the organisation with a better and efficient workforce and will also act as the self actualisation (Maslow) for them.

Consider the development of individual's career: Appraisals will also make sure that HNT plans properly for the development of individuals in the organisation. When the employees will see that they have a better level of satisfaction and hence there will be less mortality rate in the organisation.

Identify employees with potential of advancement: Performance appraisals will help HNT in indentifying employees that the organisation should retain and those who have the potential of advancement. Retaining these employees like specialised doctors will let the organisation retain their experience and skill and will also help in providing better services to the patients.

Ways of measuring and monitoring employee's efficiency

Different factors needs to be considered while measuring and monitoring employee efficiency. Here are some of them:

Clearly define and develop the employee plans of action (performance) with their role, duties and responsibilities. HNT will need to define a clear plan of action that can be used by the employees for better performance. The plan should state the roles, duties and responsibilities of each and every employee and should help them in developing a better way of providing good services to their patients. For example a doctor should exactly know which days he/she is working and what is exactly needed by them to do on duty so that the doctor exactly knows what to do and how to do. Hence providing better service to the patients.

Organizational outcomes or the achievement of organizational goals should also be kept in mind. The goals and objectives set by HNT will also need to be kept in mind to evaluate the performance of the employees. If the number of nurse in each ward has been increased to provide better facilities to patients then it should be monitored that those nurses are helping Hargreen Hospital achieve that goal or not.

Focus on accomplishments and results rather than on activities. The focus of HNT should be on the results that have been achieved with the help of good HR planning. The different goals that have been accomplished should always be considered. Like if the x-ray machine is maintained and a lot of patients come for it and are satisfied with the service then that shows that the x-ray department is working good and helping in maintaining a good repute of the hospital.

Also take note of the skills, knowledge and competencies and behaviours of the employees that help the organisation to achieve its goals. The level of skills that is needed for the employees of HNT and the level of competence and knowledge must always be given priority. If the employee in HNT would not know how to operate a certain machine then it is useless to have that machine as it can even be death taking. Therefore, the employee should have skills, knowledge and competency to achieve the goals of the hospital.

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Collection of feedback regarding the performance of employees through multi-point feedback and self-assessments should be practiced.

Superior: HNT has a hierarchy structure so most of the appraisals are carried out by the superior. These are the people who are more experienced and have more knowledge to judge how an employee has been working like a senior surgeon can tell better if his/her junior is doing the surgeries properly or not and how well have they done it.

Peers: Employees as the same level know each other much better. A nurse can be a better judge of a fellow colleague as they spend most of the time together. Therefore, peers can share things which would be more upfront and in-depth. However, peers also are reluctant to apprise each other as they are closely bonded (can also be friends).

Customers (surveys): A survey can be conducted within the organisation, for example Hargreen hospital to check how the staff is working. All the patients coming to the hospital can be asked to fill in a survey where they can rate a certain employee.

Subordinates: The subordinates can be used to check the managerial quality or leadership quality in an employee. However, they have limited knowledge so they cannot be considered as a complete judge. Like a nurse who assists a doctor would know some aspects of the jobs that are being carried out by the doctor and can only judge him/her on that basis.

Employee himself: HNT can also use the self appraisal method where each employee will be asked to rate himself/herself on certain aspects related to their jobs. Like the doctors will be ask how do they rate themselves on their level of skills for the job and can also be asked to share what they think is needed to improve their efficiency like new tools or training etc.

360 degrees: All the stakeholders (doctors, nurse, management etc) of HNT can be used in this to rate an employee, even the patients as well. The combination of evaluations from superiors and subordinates will give a complete and comprehensive evaluation of an employee. This will help HNT in making decisions regarding promotions as to who to choose or not.

Financial measures like the return on investment, the market share, the profit generated by the performance of the team should also be considered. HNT can also use the ROI and profit generated to evaluate the performance of the employee. If more number of patients are coming with the help of new doctors from foreign countries then that shows that the patients are satisfied and are happy with the facilities of the hospital and the treatment given by those doctors.

Routine issues: Certain routine issues can also be considered in an employee's appraisal like:

Attendance: The punctuality of an employee can be checked to see how he/she is performing. If a doctor is coming on time everyday for his/her shifts that shows that he/she is dedicated to their job and are enjoying it as well. If they are not punctual then with performance appraisal the reasons can be figured out and rectified as accordingly.

Observation: All employees can be monitored by different staff members and a report can be generated which can be utilised at the time of appraisal. It will help the management in understanding how well the employee has been performing. Like the head nurse can be asked to observe junior nurses and see how well are they working? This will enables HNT to remove small issues and plan better for the employees so that they can provide better services.

Warning: If the employee is not disciplined properly then there are chances of them getting warning from their superiors or the management. These warnings can be later included at the time of an employee's appraisal. If a doctor misbehaved with any of the staff members or patient then he/she can be given a warning in written and will be added to the appraisal. This might cause him/her their job or not to be picked as a prospect candidate for promotion.

Mortality rates: If the mortality rate of Hargreen Hospital drops from the previous records, this shows that the employees are working much better. If the doctors are operating their patients properly and prescribing the right medicines and treatment then the number of casualties will definitely decrease and will show that their performance is good.

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Bed occupancy: Hargreen Hospital can also measure performance through the number of bed occupied in a given period of time. In recent months, hospitals have been crowded due to swine flu and doctors have to make sure that beds are not shared therefore they have to try their best to make sure that patients are treated quickly so that the hospital can have empty beds for new affected patients.

Reward system and target setting to monitor performance

Different types of rewards can be given to the employees to appraise and encourage and also motivate them to perform better than ever. HNT can use these to monitor the performance of their employees and can use the concept of target setting as well. I have divided the rewards systems into two parts as follows:

Financial rewards

Base pay- It is the basic wage or salary that represents the rate for the job that is being done by a certain employee. It is based on internal comparison that reflects the importance of job within the company. External comparison reflects the market rate for that post in other firms.

Additions to base pay- Additional pay is given to the employees based on their skills, performance and experience. Like merit pay reflects assessment of an individual's performance.

Employee benefits- Different benefits can be used like sick pay, pension scheme, holiday entitlement, company car and insurance cover.

Non-financial rewards

Build a Recognition Culture- Establishing a recognition culture in an organisation is important for motivating the staff and also for a better overall performance of the company. Rewards in the simplest form can be used for this purpose for exampling praising someone on a well done job. The employees should feel that their achievements have been recognised and appreciated by the company. Therefore, if the manager only listens to the staff and act upon their suggestion that will also encourage the staff to work better.

Establish Career Opportunities and Personal Development- According to the well established hierarchy of needs presented by Maslow self actualization is considered as the biggest motivator and is applicable at all levels of jobs in an organisation. In practical terms, providing the staff with opportunities to learn and develop or enhance their existing skills will work as a powerful motivator.

Make influence central to decision making- How the staff can influence if they are given power is also a major motivator and plays a vital role in effective decision making. Hence, if staff members are given a chance to have their say in decision making then that will always have a positive effect.

Focus on the Work Environment- The environment in which the employees are working must be considered at all times. They can be given the facility to work at flexible working opportunities. Giving them independence to carry out their job roles will boost their morale and providing the employee tools that will help them perform their jobs in a better way. If the organisation takes care of these aspect it will definitely improve the performance of the company and will help in maintaining the retention levels.

Target setting: It can be used to incentivise the employees to work better. The three different target settings that can be used to monitor the performance can be as:

Sales target: If a nurse attends more than 50 patients a day in E & A and gets no complain then they can be given an extra commission. This will enable HNT to train nurses who can work more proficiently and provide better satisfaction.

Finance target: HNT can give a target to the maternity department that they have to generate this much amount of money in the coming six months. This will enable the management to see if it's even a wise decision to extend the maternity ward or not.

Growth target: The Hargreen Hospital can be given a target that the overall rate of patients coming to the hospital should increase by 10%. HNT can use these types of targets to see if the currently employee workforce has the ability to perform well in the hour of need or not and how much effort can they put in for the growth of the organisation.

Different financial and non financial rewards can be offered to the employees on achieving the given targets like paid leaves or bonus, a certificate or medal of appreciation. It will boost the morale of the employees and will encourage them to perform even better.

Necessity of an active performance appraisal system for HNT

HNT is in a situation where they need a strong HR planning that will help them survive in this time of hardship. They need to understand the needs of their employees and try to motivate and encourage them to the maximum level possible. Performance appraisals will be a key for HNT in achieving this task. Here are some of the reasons for HNT to have a performance appraisal system:

To improve performance in the hospital by:

Providing feedback to staff on their performances. All staff members will get feedbacks on their work from the different sources mentioned earlier in the presentation. It will help in their evaluation and will motivate them to work better.

Identifying the strengths and weaknesses of each staff number. With the help of the appraisal HNT will get to know where their workforce is doing well and where they need to improve their selves.

Identifying HNT's individual personnel training needs. HNT will know which of their employees have the potential to do well in the future and they can enhance their skills by providing trainings of different kinds. These training will improve the ability of staff to work better hence the repute of the hospital will get better.

To identifying career opportunities and development for the staff of HNT. With a good performance management system (PMS) HNT will be able to identify all the opportunities that are required for their staff to perform better and will also have an understanding of what is needed for the development of the workforce as some of the staff will have the skills and experience to be retained in the company for a longer time.

To clarify job objective in order to reduce misunderstanding and possible friction. The appraisals will make it easier for the company to clarify their job objectives to each and every employee. This will eliminate any sort of doubt that can lie in the head of the staff. Hence, will improve the performance of the staff and providing better services will lead to customer satisfaction.

To create meaningful action plans and training opportunities. For HNT to have a good repute and high level of satisfaction from their customers they need to have a good action plan and that is only possible with a good implementation of PMS. It will let the organisation plan properly like for example for the trainings that needs to be provided to different staff members as they all will be different from each other. A doctor will need different training from a porter etc.

To provide HNT with information for HR Planning. HNT will be able to assess which of their employees have the calibre to stay in their organisation and can concentrate on them. On the other hand those who are weak in skills or experience can be provided with ample training facilities so that HNT will have a good efficient work force.

Continuous professional Development. This will surely not be a onetime process but will be held frequently so that the needs of the employees could be understood by the management of HNT and the employees can be given all the encouragement and support needed so that they can perform better than ever.

Rewards and recognition. Both financial and non-financial rewards must be given to encourage employees to work better. For example they can be given merit pay on top of their base pay in order to show that they have performed well, like a doctor who did well can be given some commission on every successful operation done or can be given a vacation trip allowance.


An effective PMS system will enable HNT to perform much better than before and will allow its management to identify its personnel's strengths and weaknesses. The value of this powerful and purposeful way of interaction between a supervisor and subordinate should never be underrated as it is a critical success factor for the down falling HNT at the moment. Here are some factors that I want to highlight in my conclusion:

Motivation and Satisfaction

Performance appraisals can have a profound effect on the levels of employee motivation and satisfaction. Performance appraisal helps the employees to gain recognition for their work and efforts. If nothing else, the sole existence of an appraisal program indicates to an employee that the organization is genuinely interested in them and their individual performance and development. This alone can have a positive effect on the individual's (in HNT) sense of belonging, worth, and commitment.

Training and Development

Performance appraisal offers an excellent opportunity to recognize and agree upon individual training and development needs. With the help of performance appraisal it becomes easier for the company to diagnose the presence of absence of skills in their employees. Therefore, a good PMS will always press on the need of training for better performance and more satisfied work force.

HNT will be able to recognise the needs of their employees and can train them so that they are able to develop a team of employees who are best at their work, hence, will be giving better services to the customers.

Recruitment and Induction

The data gathered with the help of appraisals can be used to assess the success of the company's recruitment and induction system For example, it can tell how well are the employees working who were hired in the last two years?

This data from appraisals can also be used to check the success of changes in the recruitment strategies. By following the data gathered on a yearly basis will help the company to draw conclusions as in to check whether the quality of workforce is declining, staying the same or improving at Hargreen Hospital.

Employee Evaluation

Evaluation is a legitimate and major objective of performance appraisals. It is a process of examination and evaluation of the performance of an individual. HNT can evaluate employee objectively and can identify the need to encourage and develop them so that they can perform better than their usual.