Performance appraisal system as a factor of job satisfaction

 Performance appraisal

Most firms have implemented performance appraisal as one of the most crucial human resources (HR) strategies. In general, prior studies have shown that there are numerous issues that are connected to the use of performance appraisal, regardless of the outcomes of their use. (Snow, J.D,2002)The companies like Google use bell curve system. this is opposite to preexisting performance categories. According to these performance rankings, which were assessed using the Bell curve, the 20% of those who are ranked highest and eligible for the highest rewards from the company and another 70% are receiving average rewards will typically be in danger of losing their jobs.(Tapomoy deb, 2009).

Process and human components make into a performance management system. Setting detailed goals is the first step in an efficient performance management system, which is then followed by frequent feedback and reviews/appraisals. Along with identifying employees' developmental needs, it also has effective procedures for rewarding and recognising employees. Additionally, the system needs to promote cooperation, teamwork, and communication.(Tapomoy deb, 2009).

In order to address employee motivation within firms, equity theory was established. According to the principle, people desire to be treated fairly, or equitably. Abraham Maslow, a psychologist, devised the hierarchy of needs, which is applicable to innate human motivation in any context—natural, social, or psychological. (Tapomoy deb, 2009).Maslow established a hierarchy of needs because he believed that the four lower order wants must first be satisfied in order to satisfy the top need, which is self-actualisation. it is proved that the performance appraisal has more important in the satisfaction of the employees.

Theoretical approach

A performance management theory called Maslow's hierarchy of needs explains how employees are often driven to satisfy their wants in ascending sequence, beginning with the most fundamental and moving up to higher-level requirements. According to the theory, an employee cannot fulfil more than one requirement at a time. Five levels make up the hierarchy: physiologic, safe, love/belonging, esteem, and self-actualisation. The first two levels are deficit needs, which means that a person cannot function normally if these requirements are not met. The third, fourth, and fifth levels are growth needs, which encourage workers to advance professionally.

Analysis

LOLC Finance claims a highly performance-driven work ethos that is supported by an innovative rewards and recognition program. A framework for recognition that primarily comprises of performance-based bonuses, annual raises, and a promotion system. This approach is specifically intended to increase employee morale, attract, and keep critical talent, and maintain healthy attrition rates while also increasing overall productivity.

Modern performance evaluation systems assist in recognising and evaluating individual contributions to the accomplishments of the entire company. Employee reward and recognition decisions are made using the performance evaluation method, which divides employees into many categories. Employees at LOLC Finance produce prominent levels of output, give excellent performances in their jobs, and help to generate profits with the knowledge that their efforts will be recognised and rewarded in a fair and just manner, while those who fall short of the minimum performance standards must go through rigorous training and development. these all were done after COVID pandemic period.

there are two types of appraisal system. one is based on seniority. other is performance-based evaluation system. in LOLC the company practices a performance-based appraisal system. employees are rewarded and given promotion based on their performance. it is a better system comparing to seniority base. For performance-based system LOLC practices bell curve system.

This performance-based appraisal system supports to compare each and every employee. A bell curve is typically used to describe how employees performed in comparison to one another over time. The curve gets its name from how it looks, which is like a bell. To pinpoint problem regions and focus interventions, use the bell curve. It can help determine how professionally training and development initiatives are working. A bell curve, according to some experts, is no longer a reliable gauge of employee success. They contend that it ignores the particularities of every person and their particular situation. It is easy to identify the top performers of the organisation. this can help to identify the training and development programs. but it is not suitable for the hyper-growth organisation like LOLC finance. it does not consider about the employee differences and situations.

The accounting firm Spoor Bunch Franz measures performance by conducting semi-annual reviews and monthly feedback. They use the performance appraisal approach.Top streaming platform, Netflix, currently uses the 360-degree method to assess the performance of their employees.

I suggest both the seniority as well as performance-based appraisal system could be used. People with better performance and seniority should be given more appraisal when comparing to people only with seniority. If people with superior performance without seniority, senior people will be disappointed. in my opinion appraisal need to be given to all when there is economic crisis. the pay should be adjusted based on the economic situation.

          Reference

Snow, J.D. (2002) The effect of a leader’s psychological size and distance through performance appraisal on a follower’s job satisfaction.

Tapomoy deb (2009) Performance Appraisal And Management.

Febrian, T.B. and Simangunsong, A. (2020) ‘Decision support system employee performance appraisal method using  topsis’, Journal Of Computer Networks, Architecture and High Performance Computing.