Nowadays, human resources management requires close review and feedback of employee performance. The identified issue is the annual appraisal, which is proven to be unsatisfactory. The annual appraisal does not consider any ways to analyse and recommend a specific course of action for the evaluated employee to improve. No comments, appraisal process structure, or improvement steps are in place.
In order for the company to serve the employees better, a performance management system with emphasis on the performance appraisal is suggested, which includes a set of activities and steps to align human resources and the overall system in order to meet the strategic objectives and goals of the company. In order to implement the best practices of the performance appraisal a company should consider training for the managers on the right way to prepare for and conduct the appraisal. In addition, the company should identificate all the reasons for ineffective appraisal, show appreciation, create a culture of learning, and develop action plans for performance improvement.
The current appraisal issues affect not only the employees, but also the customers of the company. The finance-centric approach of the employees does not allow the focus on the customer satisfaction, service improvement, and loyalty to the company. Employee satisfaction or dissatisfaction also directly affects the quality of customer service. Unstable service quality is critical for any company in the market. Simply involving employees in setting up a target for the month, quarter, or year would help reduce wage dissatisfaction. Managers need to track employees and be able to deal with their grievances by promoting a motivating approach, career opportunities and learning opportunities.
The performance management system should consist of a number of Key Performance Indicators, such as listening to and reacting to customers effectively, addressing customer problems to improve satisfaction and evaluating and measuring guest satisfaction. In addition, the efficient competencies evaluation criteria and appraisal follow up should be developed. An effective performance management system will allow the development of other values of the company’s employees, which will not pursue their work for financial benefits.
Upon hiring, employees should initially have an understanding of their development opportunities and financial motivation. Contracts with employees should be concluded in such a way that the company will have the opportunity to replace an employee even if he leaves and there will be sufficient time for recruitment, selection and training of a new one candidate. Undoubtedly, it is convenient for the company if the old employees stay as long as possible and the turnover decreases. However, any employee must have a clear understanding of his own substitutability for the absence of requirements to increase the conditions of motivation without any specific reason.
At the same time, financial gain always remains one of the most important motivators for work, since it provides many benefits that a person can afford. If the lack of motivation is noticeable, an incentive implementation could increase motivation and improve the performance. In order to ensure that everyone strives to perform at the highest level or put effort into improving significantly, some form of reward or recognition can be provided by the employees. The reward can be financial such as a slight salary increase or a one-time bonus, or provided in alternative ways such as recognition, celebration, a private appreciation conversation with the General Manager or any other non-monetary motivation. An employer should not underestimate the value of financial motivation and reward employees who deserve it.
However, those employees who do not play a large role in the company, are easily replaceable, and not promising for development should not receive an increase in their salaries. For this, a correct analysis and assessment of the company’s employees must be carried out, with an understanding of the quality of the employee’s work and his potential. At this point, it is important that the employees of the company strive not only for financial gain, but for this there must be their other goals.
Certain instruments can be used to ensure that the performance management system is effective. First, the extraction and cross-comparison of last year’s scores to the current year’s allows managers to provide continuous feedback through statistical representation of the progress. Secondly, managers of various departments should be responsible for the implementation of the performance management system. Briefings should be held, information about the meaning, goals of performance management, and the objectives that the company wants to achieve should be communicated correctly. Performance management and feedback should motivate employees, promote work ethics, and company investigators.
In conclusion, at the moment, monetary motivation will still remain the number one for increasing the interest of employees and their quality of work. However, the absence of other instruments of influence on the part of the company can negatively affect the use of the budget. Performance management in any company is an important tool for building a relationship between employer and employee, which promotes not only financial motivation, but also company dedication, fulfillment of work duties, and improvement of the quality of functions performed.