Appraisal should be linked to performance: Gallup

Human resource consultants are increasingly seeing sales performance, customer satisfaction and engagement of employees with work and organisation as the best ways of assessing an employee.

So, employees in call centres and marketing divisions of organisations may soon find themselves being appraised on the basis of "hard sales and customer satisfaction data".

"Unlike the traditional staffing reviews and 360 degree methods, hard data about an employee performance help a company to assess and reward an individual," Guido de Koning, performance strategy practice leader at Gallup Organisation, said.

"Some companies that resort to staffing reviews usually find that 95 per cent of employees are very efficient but on the other hand, the revenues remain flat. This is why firms should look at a 'balanced scorecard' to eliminate inefficient workforce," Koning added.

The concept of balanced scrorecard, designed by Kaplan and Norton in 1997, focuses more on aligning sales data with group performance to link entitlements to actual numbers. The scorecard looks at performance management in an integrated way by looking at monitoring, evaluating, rewarding, developing and influencing the performance of an employee or group of employees.

"Usually, employees get a 4-5 per cent appraisal every year even when they do not deserve it. This hurts the company's growth. So, firms should now look at just giving a 1 per cent appraisal every year with additional bonus which should be based on performance throughout the year," Koning said.

The critical issue of the human and emotional side of enterprises that make an organisation work should also be taken into consideration. The balanced scorecard strategy will not work for institutions like hospitals where doctors and nurses work under different circumstances.

Koning said many institutions would have to customise the balanced scorecard to suit their needs.

Worldwide, companies are also stressing on improvements in performance, at both the individual and corporate level by focusing on individual managers and employees.

"Rather than spending time helping their associates become "well-rounded", many of the world's best managers have instead invested time in learning about the individual strengths of each of their associates, and managing with that uniqueness in mind. This has helped teams and organisations to succeed based on the quality of their managers. The principle is simple and straightforward but the challenge is in finding and developing great managers and equipping them to lead their teams," Koning said.