Introduction
Employee appraisal is necessary for any business setting since it gives proper information to the management which is essential in the formulation of future decisions and facilitates the mitigation of challenges that employees face. External and internal factors could impact the value of a business necessitating an appraisal to ascertain whether the needs of the employees are met within the company to ensure that their satisfaction is guaranteed (Tricker, 2015). Management teams often use different indicators in determining whether the output of an employee is increasing stagnant or decreasing. The principle objective of this paper is to explain the benefits of employee appraisal by considering the elements that are used by management teams as performance indicators. Additionally, the paper will address the advantages and the disadvantages of using the OUCH test as a tool for employee appraisal.
Arguments for Appraisal of Employees
Appraisal of an employee is done by measuring the output of such an employee using various tools. An employer may decide to conduct an assessment of the employees on a regular basis. It is important to do this to ascertain whether the costs incurred in paying the employees commensurate with the benefits accrued for hiring such an employee (Alavi et al. 2013). An appraisal is also done to determine the amount that should be paid in the event of a breach of contract or when an employee is dismissed, and the company needs to identify a severance package for the employee. An appraisal is more common in private corporations which have stricter guidelines governing employee output and performance than public companies, which tend to have more relaxed guidelines (Tricker, 2015). Assessment assists employers to consistently know the value of their employee, particularly when the employee requests for a salary increment on their basis of output, additional education and experience. Managers appraise their employees to set performance goals for their employees to assist them improve employee productivity and eventually improve the overall profitability of the company. These goals may be used to refocus different departments in the company to ensure a clear articulating and clarification of the company vision to the employees.
Elements that should be considered in Appraising Employees
In evaluating the output and the productivity of company employees, the management team could consider appraising the performance of the employee to ensure that this information is documented and evaluated by the human resource department. An analysis of the future performance of the employee is necessary since it gives a company a framework that can be used to determine whether an employee’s activities are helping the company attain its objectives (Alavi et al. 2013). By weighing the current performance of an employee through performance indicators, the management of a company can be able to determine and project future performance of the organization. There are three primary methods are usually used to gather data that describes an employee's performance and productivity: Personnel, judgmental evaluation, and actual production.
Although the three methods are common in numerous cases, judgment assessments are more commonly used. In this process information is usually gathered through interviews and observation of employee performance, which ensures that the human resource department can collect sufficient information to provide counseling services (Alavi et al. 2013). This data can also be used to develop employees to discuss compensation packages, job status or disciplinary actions in cases where employees contravene guidelines set by the company. As a matter of fact, performance appraisals help an organization to align and manage its resources to ensure that the company attains the highest possible performance. The management of data gathered from a performance appraisal in an organization is a major contributor to the ultimate success or failure of the company.
Merits and demerits of using the OUCH test
Advantages
The OUCH test is an acronym which is employed in the managerial evaluation. It is mostly applied when managers are hiring new employees, promoting employees, making a decision on whether to engage an employee and evaluate the potential or risks posed by the performance of employees. O stands for objective U represent a uniformity C refers to the consistency and H signifies the relationship. The advantage of the OUCH test is that it provides objectivity in employee appraisal (Townley, 2014). Rather than inculcating and imposing the ideas of the manager to the issues at hand, the test ensures that management can deal with the subject matter adequately. Similarly, the OUCH test encourages uniformity in application. Consistency is of particular importance in employee appraisal since it ensures that the results gathered are reliable by applying the test to different decisions made and the actions are taken irrespective of the individuals responsible for making the decision.
The OUCH test is relevant in employee appraisal as it helps the management to ascertain whether an action or a decision can be implemented uniformly across all departments in an organization. The consistency that is guaranteed by the OUCH test is harder to achieve, but the test ensures that the results obtained as a result of applying the test are consistent throughout the time periods considered (Alavi et al. 2013). The test also has an advantage of demonstrating whether an action taken by the management has a relationship to the aspects of the job in question. This is critical in ensuring that the measures adopted by the Directorate have a link to the job being performed and will lead to increased productivity.
Disadvantages
The OUCH test has a problem of not presenting accurate results since the conclusions that are derived from running the test vary from one employee to another. In periods of high employee turnover, the test could yield different results from those of a situation where the employee’s employees are relatively stable (Townley, 2014). Internal and external economic conditions are also responsible for the outcome that is drawn from this test. Macroeconomic factors such as inflation, unemployment, and fluctuation interest rates are some of the factors that could influence the results of the test.
Conclusion
The benefits of appraisal outweigh the costs. Moreover, appraisal paints a clear picture to the management team about the current performance of an employee based on their productivity and consistency in working to help the company achieve its objectives (Tricker, 2015). By using the OUCH test, the management can obtain a consistent and reliable results that the management team can rely on to formulate organizational policies. Suitable employee policies are necessary to ensure optimal performance among the employees of an organization.
References
Alavi, H., Abdi, F., Mazuchi, M., Bighami, M., & Heidari, A. (2013). An investigation on effective factors influencing employee performance: A case study. Management Science Letters, 3(6), 1789-1794.
Townley, B. (2014). Selection and appraisal: reconstituting. New Perspectives on Human Resource Management (Routledge Revivals), 92.
Tricker, B. (2015). Corporate Governance: Principles, policies, and practices. Oxford University Press, USA.
