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Performance appraisal is the process of collecting, observing and analyzing the recorded information about the relative worth of an employee. The min motive behind carrying out the process of performance appraisal is to measure the actual performance of the employees with the expected performance that has been set.
1.2 Process of Performance Appraisal:
ESTABLISHING PERFORMANCE STANDARDS: this accounts for the first step in the performance appraisal system which involves setting up of the standards that will act as a base to judge the performance of the employees. It also measures the degree of their contribution towards achieving organizational goals and objectives. The standards set should be clearly communicated, easily understandable and in measurable terms.
COMMUNICATING THE STANDARDS: once the standards have been set, it is the duty of the management to effectively communicate the same to their employees so that they are well aware of their duties and responsibilities to be performed. This enables the employees to understand their roles and the kind of performance expected. The standards also have to be duly communicated to the evaluators or appraisers and can undergo changes at this stage if required, on the basis of feedback received from employees or evaluators.
MEASURING THE ACTUAL PERFORMANCE: this stage is the most important as it is crucial to measure the actual performance of the employees in the right manner within the specified period of time. Performance appraisal being a continuous process involves monitoring the performance throughout the year and it requires careful selection of appraisal techniques, eliminating degree of personal biasness and providing assistance rather than interfering in an employees work.
COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE: as apparent, this stage involves comparing the actual performance with standard performance and identifying deviations in the same. The deviation can be positive, i.e. actual performance is more than the standard performance or negative, i.e. the actual performance is lower than the desired performance. Thus, the crucial functions to be carried out in this stage are recalling, evaluating and analyzing of the data related to employees’ performance.
DISCUSSING RESULTS: then the result of the performance appraised is communicated and a follow up session with the employees on a one to one basis takes place. The aim of this follow up is to solve problems and reach a consensus. The feedback should be given with a positive attitude or else it might have a negative impact on the employees’ morale and performance.
DECISION MAKING: the final step to performance appraisal system is to take decisions as to improve the performance of the employees, take corrective measures to eliminate the deviations identified and HR related decisions like rewards, promotions, transfers, etc.
Samsung is one of the leading brands of electronics in the world. It has become even more popular with the launch of its android smart phones which are similar to the Apple iPhones.
Samsung has several branches in India which are running successfully. Samsung also sells basic mobile phones that are very cheap, thus popular with the lower income groups.
We interviewed Mr. Rajesh Dhadich, the Area Business Manager of Samsung, Pune. He was very helpful and provided us with the necessary information about the performance appraisal system that is used in their organization.
Samsung uses the traditional method of performance appraisal, i.e target vs. achievement method. The employees’ performance is evaluated based on their achievement in the specified period, whether they are able to meet their target or not.
- Vice president
- All India head regional manager
- Zonal Self Manager
- Area Business Manager
2. Objectives of the Study:
- To observe and analyze the performance of the employees over a specified period of time.
- To find out the difference between the actual performance and the expected performance.
- To give the employees feedback of their previous performance.
3. Methodology Adopted:
There are two types of methodologies to find out the system of performance appraisal used. They are:
- Primary data collection
- Secondary data collection
This survey was conducted using primary data collection. Mr. Rajesh Dhadich, Area Business Manager of Samsung, Pune was interviewed.
4.Data Analysis and Interpretation:
- Do you follow a well-defined performance appraisal system in your organization?
Yes, a well-defined performance appraisal system is carried out in the organization where in the employees are judged on the basis of the targets achieved by them. The employees have the freedom to cross question their bosses if they are not satisfied with the rating.
- Which type of performance appraisal system do you use?
Samsung uses a traditional system of performance appraisal. They follow the system of target vs. achievement wherein every employee is given a specific target to achieve in the beginning of the month. This target may vary from an increase in the market share or an increase in the total sales. Depending on the target achieved, performance of the employees is rated. For example, an employee may be given the target of selling 1000 smartphones in one quarter. If the employee achieves his target, he is given a high rating.
- What is the purpose of having a well-defined performance appraisal process in your organization?
Training and development: performance appraisal helps to find out the drawbacks in an employee’s performance and hence he can be trained in those skills which would help him perform better.
Succession planning: through performance appraisal, employees with good leadership are identified, which helps the organization to spot people to fill future key role positions.
- Does the employee have a clear understanding of his duties and responsibilities?
The office provides the employees with an employee friendly Human Resource (HR) Manual at the date of joining which gives them a brief idea about what is expected out of them, their duties, responsibilities, along with their rights.
- Are the employees free to express themselves in case of a mismatch between the actual and the desired performance?
In case the employees are unsatisfied with their bosses’ ratings and think they deserve more, they are free to post their grievances and differences through a great workplace portal. They are free to express themselves and negotiate with their bosses. For example, if an employee is rated 8 on 10, and he feels he deserves more because of his performance, he is free to express himself and negotiate with his boss and find out the reasons for the boss’s rating. This shows that Samsung’s work environment is open to discussions and extremely work friendly, which satisfies the employees in the long run.
- What are the incentives given to the employees apart from monetary benefits?
If the employee wishes to buy any electronic gadget, Samsung products are available to him at a discounted rate, say for example 25%. Quarterly rewards are given to the people with the best performance. Further, outstanding performers are given special rewards and allowances. All these induce the employees to perform better and achieve their target.
- What are the challenges faced by you while evaluating the performance appraisal of the employees?
Sometimes due to a positive change in the market conditions, an employee may be able to perform better than his colleague in the previous quarter leading to confusion for the manager as to who has performed better. Due to this reason, it becomes difficult for the manager to differentiate between a performer and non-performer, and rating becomes a little confusing.
- What is the feedback given by your employees on your performance appraisal system?
Employees were asked to rate the performance appraisal system of the company in which it was concluded that 85% of the employees are satisfied with the feedback given to them.
Samsung is one of the leading electronic brands having its branches all over India which are running successfully. After conducting a thorough research, it was found that Samsung follows an employee friendly approach of performance appraisal wherein target vs. achievement method is used. Performance appraisal in an organization is very important as it helps in finding out the difference between the actual and the desired performance of an employee. It also helps the employers in guiding their employees to achieve their goals. Training and development of the employees is also possible with the help of a good performance appraisal system. Thus, it is necessary for every organization to have a well-defined performance appraisal system.
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