Performance Appraisal: Alignment with Employee Compensation

The assignment content discusses the impact of performance appraisal on three different stakeholders, namely employees, managers, and organizations. It highlights that a well-designed performance plan can reflect positively on an organization's overall performance in the long term. The content also touches upon ethical and legal challenges faced by organizations due to the alignment of performance appraisal and employee compensation, suggesting recommendations for prevention.

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HUMAN RESOURCE
MANAGEMENT
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Method of employee performance appraisal..........................................................................3
Use of employee performance appraisal method for employee compensation......................3
Impact of performance appraisal on three different stakeholders..........................................3
Recommendation for prevention of ethical and legal challenges faced by an organization due
to the alignment of performance appraisal and employee compensation...............................3
CONCLUSION................................................................................................................................3
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INTRODUCTION
There are various kinds of performance appraisal methods that are being used
consistently by management around the world to make sure that employees are given the reward
for their efforts and work in an efficient manner. However, it is also essential that such
performance appraisal method is used efficiently for the purpose of determining employee
compensation. The current report will discuss the importance of performance appraisal program
for employees and its overall impact on employee compensation in the longer run (Board, 2018).
The impact of performance appraisal on three different stakeholders of the company will also be
analyzed in detail under the report. It will help in better understanding of job analysis etc.
Through proper evaluation and implementation of such a strategy, it becomes easier for an
organization to align performance appraisal and compensation plan over time.
MAIN BODY
Method of employee performance appraisal
Employee performance evaluation or appraisal is a key factor which is essential to
improve as well as enhance the quality of work and inspire them to do well in an effective
manner. A comprehensive employee performance evaluation process often consists of different
evaluation methods to help judge an employee’s performance (Bogner, 2018). Using multiple
techniques can help an organization get a broader perspective of the areas where the
organization's employees need to improve and the steps you can take to support the growth of the
employees. There are plenty of performance appraisal methods which can be used by
management for the purpose of evaluating the employee performance in an effective manner.
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One of the methods, which is being used as performance appraisal and evaluation is Paired
comparison method (Bothur, Zheng & Valli, 2017).
360-degree feedback method
360-degree feedback method is one of the strategies which are often used by various
organizations and employees evaluation software for carrying out the evaluation process in an
efficient manner. The process consists of taking anonymous feedbacks from teammates,
employees and other peers on various aspects of employee’s performance in an efficient manner
in the longer run (Goh & Yip, 2014). The person from whom feedback will be taken includes
subordinates, customers, and even the individual himself about his perception of his own self and
what future expectations he carries.
This method helps in providing an opportunity for the purpose of studying various skills as well
as the capabilities of employees in an effective manner (Byrnes, 2014). It also helps in making
necessary networks, igniting leadership and collaboration among all the employees of the
organization. The aim of such kind of method is to make sure that only the best employee in the
team is rewarded for the work done. This will inspire and motivate other individuals as well to
do well in upcoming tasks of the organization.
Use of employee performance appraisal method for employee compensation
As far as aligning a remuneration plan with execution, there is no all-inclusive or right
decision. A framework that is useful for one association might be incapable and
counterproductive for another (Head & Alford, 2015). "For instance, compensating people who
create the best measure of yield might be proper in certain associations that are very production
oriented. However, this methodology could be dangerous in an association whose work demands
close consideration regarding how results are accomplished, especially as to issues, for example,
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quality, safety, or cooperation." If the performance plan is effectively designed then the same
will reflect in the good performance of the whole organization in general, it is a long term
process which can be achieved through planning and strategies made specifically for enhancing
employee motivation (Lasserre, 2017).
Impact of performance appraisal on three different stakeholders
Recommendation for prevention of ethical and legal challenges faced by an organization due to
the alignment of performance appraisal and employee compensation
CONCLUSION
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