Key principles involved in designing and implementing an effective Employee Appraisal System part 1/3

In today's post to our blog, we will address the topic of effective employee evaluations. This is an issue that requires insight to explore well. Therefore, we will divide the article into two parts, so as to keep it clear and pleasant to read. Get to it!

An evaluation here, an evaluation there...

Evaluation, understood as a way of valuing personal qualities, attitudes, behavior and actions taken by an individual, is an immanent feature of every human being, activating at every stage of his functioning, both in his personal and professional life.

In the aspect of functioning in the work environment, making assessments of the effectiveness of the tasks performed by other employees takes place, whether we want it or not, because each employee (each of us) has certain thoughts and opinions about his colleagues (co-workers), superiors, achievements and failures. These thoughts and opinions are topics of conversation at work, are the basis for discussions, both in formal and informal circles, while their objectivity depends on a number of factors, among which are also personal preferences and "personal inclinations" that affect a fair and reliable assessment. The subjectivity of assessments made through a personal prism can cause them to take the form of private judgments of an unfair and often hurtful nature, and their occurrence can significantly undermine the potential of an employee team to effectively carry out tasks. Wanting to avoid such a situation, more and more companies are taking action related to the introduction of systemic solutions for valuing their employees, deciding (depending on the degree of development and size of the organization) to implement formalized evaluation mechanisms(SOP - Employee Appraisal System) or using ordinary feedback, as a way of evaluating and providing feedback on work factors, allowing the aggregation of knowledge about the expectations, opinions, strengths of employees and areas requiring improvement in the context of the development of their competencies that determine the effective implementation of the tasks performed.

People-friendly evaluations

Regardless of the degree of formalization, when implementing any evaluation system, one should keep in mind the desirability of its use and the tangible benefits it is expected to bring to the organization, especially since the entire personnel policy of the company should be based on the evaluation. Meanwhile, as Scheiner, Shaw and Beatty point out in their publication, "in most companies, the ways of employee evaluations, with their forms and procedures, are typical acts of bureaucracy and nothing more, they are a burden for the manager and a source of demotivation for the employees, all efforts to improve these ways relate to changing the form and content of the forms, and thus have a streamlining effect only on the symptoms, while the real causes of trouble remain unchanged." Although the above thesis was put forward in the early 1990s, its message should still be relevant to all those who are responsible for implementing systemic solutions in the area of employee appraisals, because an effective system is one that is transparent, clear and easy to use for both appraisers and appraisees, creating an opportunity to link the strategic goals of the company with the individual goals of employees. The effectiveness of the system should also be evidenced by the correlation of the results of the evaluation with the main elements of the personnel process (personnel strategy), in the context of, among other things: identifying the social potential of the organization in terms of planning personnel needs, recruitment and selection, compensation and employee development. An efficiently functioning Employee Appraisal System:

• also provides feedback on job performance,
• teaches and disciplines the employee (and the evaluator),
• allows to compare the capabilities of a person with the requirements and conditions of work,
• builds communication channels, procedures for communicating with subordinates and superiors,
• brings out the hidden capabilities of a person (allowing to determine his development potential),
• is the basis for planning career paths, identifies the best and those to be fired.

Someone from us or a stranger?

Developing a concept and then implementing an effective Employee Appraisal System, regardless of whether this activity is outsourced to an external entity or conducted internally by designated employees, is a complex undertaking. Hence, when designing the system, it is worth remembering the following principles, which constitute the philosophy of an effective appraisal system.

Principle 1 - When designing the system, review the options and select an adequate evaluation model

Starting work on the design of an Employee Evaluation System means making a basic strategic decision on precisely whether the evaluation will be done using a summative model or an averaging model, whether a conjunctive or alternative option will be used. The summation model means that the evaluation is the sum of evaluations of all incoming information about the employee, while in the averaging model, it is the average of the sum of partial information. In contrast, the evaluation of an employee when using the conjunctive option is positive when all evaluable characteristics are at least equal to the accepted threshold value. With the alternative option, on the other hand, the evaluation is positive when at least one of the important characteristics reaches the threshold value. This is because the choice of an option is a signpost that determines the further direction of work on the system.

Principle 2 - Define precisely the goals of the evaluation, making sure that they are based on criteria that are consistent with the company's overall strategy

Defining the purpose of the evaluation to be conducted is an extremely important strategic choice. The purpose may be purely evaluative, amounting only to an assessment of the level and quality of work in a given position, the fulfillment of duties, and the result of the conducted evaluation will be verification of suitability for work in a specific position (evaluation linked to remuneration). The purpose of the conducted evaluation may have a developmental character, verifying the capabilities and potential of the employee in a given position, stimulating the growth of his competencies, for example, through a system of training, or determining the career path. The purpose of the evaluation can also fulfill an informational function, as it will provide information on how the evaluated person is perceived by superiors and co-workers, as well as information on how the evaluated person perceives the organization and prospects in the workplace. The evaluation objective can serve a motivational function (by examining how the evaluation affects the work of the appraisee), as well as a decision-making function, providing a basis for making personnel changes.

Precise determination of evaluation objectives at the strategic level is an important premise for effective programming and implementation of the process, since (at the tactical level) it allows to determine the degree of formalization of the evaluation, to choose an adequate method of evaluation, to create procedures and evaluation tools, so that (at the operational level) it will be possible to effectively monitor the characteristics, behavior and results of the work being evaluated. In an effective Employee Appraisal System, objectives must be based on criteria that are in line with the company's overall strategy. Evaluating employees must be done according to predetermined criteria that reflect the specifics of the job. However, if the evaluation criteria are not, moreover, consistent with the company's strategy, the evaluation system does not fulfill its primary function, that is, it does not lead to the development of human potential in the desired direction, and thus does not lead to the development of the company.

In the next part, we will describe the rest of the principles of proper employee evaluations. You can find the entry here.