The Importance of Performance Appraisal

Human resources become one of competitive advantage and a key element to support success of company. Therefore, the management of human resources within an organization takes an important part, particularly if a company has such a mission as to serve community with the finest product of any.

Basically, human resources management is a part of the company’s workforce, in which humans are always active and plays dominant role in any activities of the organization. Human, or in this sense, employees, are valuable asset; just like any other assets, they need to be managed. At which point, such a department as Human Resource Development become the one to handle that asset.

Any goal that has set up by a company could not be realized without active participation of employees. So essentially we could say it is employee that would provide expected benefit. Every company knows that such an asset like staffs and employees are complex and difficult to manage, because each employee have their own desire, thoughts, background, and status. The presence of Human Resource Department is intended to manage this complexity. Within that department, there is performance appraisal which becomes one of key activities which is often done by HR Management. This article would like to talk about all subjects related to that key activity.

Performance appraisal is a type of activity undertaken by managers to evaluate employee performance and setting future policy. Plenty of elements will be assessed, and these could be included loyalty, honesty, leadership, teamwork, loyalty, dedication, and employee participation; on the other hands, a lot more elements will also be evaluated, such as employees’ skill, knowledge, and their capability as well. So actually, performance appraisal is related to the formal procedures performed in the organization, aiming to evaluate the employee’s performance and their contribution to the advancement of the company.

So, why performance appraisal is essential for every organization, particularly for a big one? It is because performance appraisal becomes periodic process, yet systematic, which eventually helps managers to assess both productivity and job performance of employees. We could say that achievement of company goals are directly related to people who work for them, therefore the more talented the employees the greater the chances of organizational success. However, performance appraisal is not only important for organization, as it also important for employees – mature appraisal gives employees chance to achieve individual success.

Few features that will be explained below shows how the performance appraisal becomes essential for any organization:

1. Performance Feedback. This feature used to measure how well the employees are performing currently. By understanding this feedback, employees can try improving their productivity, as well as performance, so that they might get future benefits and promotions. Employees could also get some motivation from performance feedback.
2. Training and Development Decisions. This feature used to measure the performance rating of employees. The higher the rating the greater chance for employees to achieve higher position. Nevertheless, if lower performance resulting in an individual rating, it indicates that he needs mentoring and training.
3. Promotion Decisions. Used to measure segregation that may occur in both low performing and high performing employees. It helps employer to select right individual for promotion.
4. Validation of Selection Process. Basically it refers to selection of the tools to be used during the recruitment process. Tools could be analytical test, interviews, and many more. Performance of candidate can be predicted with these tools.
5. Transfers. It usually used to determine who is an employee that able to take certain responsibilities in a changing environment. In general, this one is often used to take transfer decisions.
6. Rewards and benefits decisions. Used to identify benefit and reward decision by measuring how much the individual make contribution in the overall activity.
7. Terminated Decisions. As the name suggest, it used to determine who the weakest employee is. When the weakest one is found, the manager will decide whether he needs to be “terminated” or not.
8. Career development and planning. There will be a lot of information to be extracted from performance appraisal. These types of information will surely help management to take lots of decision.

Performance Appraisal at Coca Cola: an Example of Event

We have shown you the general introduction of performance appraisal, and now it’s time to show you an example of performance that has been done by Coca Cola. They do a performance evaluation based on goals of organization, which are designed in the early first half of the year. Usually, Coca Cola tells the employees about the goal of this year, and if they achieve the goal the company appraises the employees. It seems that performance appraisal at Coca Cola is likely to have connection with that of performance feedback. Very little information we do know about, but this should give much idea of the performance appraisal system at Coca Cola.

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