Importance of human resource in an organization has increased over the past few years. Today managers are too busy and one thing is found that they put employee appraisal aside in order to keep up with other tasks. This will reduce the motivation of the employees. The after-effect will be seen only in the coming years. So when an employee quits from an organization it is understood that the employee is less motivated by the organization.
Employees require regular feedback about their work and performance appraisal which keeps them motivated. We can say that employee appraisal and motivation are related each other and both will contribute to the effective organizational management. If a newly joined employee performs well and the management does not appreciate him, then a negative attitude towards the company and work arises in the mind of the employee and finally he quits from the organization. This vacancy should be filled in order to be productive and it will incur cost. Only few organizations are able to afford this cost. So it is better to conduct the employee appraisal for organizational management and motivation. (Moore 2008).
Today managers are taking more attention towards motivation and employee appraisal. So the managers should have a clear idea about the factors which motivate an employee. The study is mainly concerned with motivation and its relation with organizational management and employee appraisal. Motivation and employee appraisal are the concentrated areas in the study.
Objectives of the study
The organization’s objective may be to increase profit, market share etc. Employee turnover and dissatisfaction are increasing day by day and the HR professionals take various measures to reduce it as it adversely affects the productiveness and objectives of the organization. Different companies use different strategies for retaining the employee. Motivation and employee appraisal are mostly used to retain the employee in the organization. The main objectives of the study are as follows:
- To check whether there is any relationship between motivation and organizational management.
- To check the relationship between motivation and employee appraisal.
- To get insight into the theoretical aspects of motivation and employee appraisal
- To discuss the issues relating with employee appraisal and motivation.
Based on the objectives stated above, two arguments have been developed relating to motivation. They are as follows:
- Motivation will improve the effectiveness of the organization: Motivation is the most important factor which helps to achieve an organization’s goal. Not only the organizational goals could be achieved but the personal needs could also be met. If the personal needs are not able to be satisfied by the employee then it will negatively affect the organization through employee attrition, indiscipline etc. Motivational factors may include performance appraisal, salary increase, rewards and incentives etc, and it differs from one individual employee to other.
- Employee appraisal will motivate the employees: An employee always expects to be rewarded or appreciated by his superiors for his performance. Even a single pat on the shoulder by the management motivates an employee to do work.
There are various theories and researches conducted previously in employee motivation, employee appraisal, and organizational management. Different Theories on staff motivation are discussed below.
Victor Vroom through his expectancy theory states that conduct of a person is the outcome of the preferences in the middle of number of options. This selection is to decrease the pain and increase the happiness in working. According to Vroom the performance of an individual is constructed upon the qualities and abilities he owes. In this theory it is said that attempt of a person is very much related to his own action. Rewards are must for the positive performances which will be adding to the performance of that individual next time.
Human beings have some essential requirements, un-completeness of which lead to displeasure. According to Hertzberg the accomplishments of these necessaries too may not lead the employees to pleasure, but to an extend it can obstruct them from discontent. These hygiene requirements, as per Hertzberg’s theory, of a human are just medical or safeguarding requirements. There are certain various wants, on the accomplishment of which will give satisfaction, are well known as motivators and also the theory regarding this motivators is called as ‘two factor theory’ of Hertzberg. (Hertzberg’s Motivation-Hygiene Theory)
In the human side of enterprise, according to Douglas McGregor (1960) along with basic functions managers are required to perform motivational efforts to improve the operational efficiency of employees. In theory X management McGregor suggested that work is inherently distasteful to most of the workers and thus there will always the tendency to avoid work in possible environment. Lack of responsibility and creativity in solving organisational problems is the main feature of employees; most of the employees are self centred and thus organisational changes that affect their personal interests seriously will generate restrictions from the part of employees. Due to these reasons there is a need for better management and controlling of the organisational personnel for their better performance.
Two feature of theory X employee motivation are soft approach and hard approach. In hard approach, implicit threats, and strict controls are adopted for control purpose. In soft approach, rewards and motivations are adopted for the employee performance improvement. In monetary reward system, only lower level needs of employees are satisfied. Thus when the need is fulfilled, it will not be capable of motivating the employees. For getting maximum efficiency in motivation, higher level needs have to be focused. Decentralisation and delegation, job enlargement, participative management, performance appraisal etc are some useful tools for employee motivation.
In decentralisation, authority and responsibility are delegated to the lower level. In participative management, employees are involved in the decision making process and providing limited control over their work environment. Performance appraisal system allows the participation of employees in the decision making process and it improves their operational morale and efficiency. Proper implementation of this strategy would help to get high level motivation effect. (Motivation Theory X-Y (McGregor) 2007).
Motivation of employees
In any organisation employees are considered to be the imperative parts. The performance of organisations is incredibly supported by the capability of the employees and the motivation provided to them, or in simple words it can be expressed that performance is the sum of ability and motivation. Motivation of the employees is concerned with the protection of each one’s dignity as human being and by that approaching towards some unsatisfied goals. To carry out motivation as an important factor of any organisation, certain principles are to be tagged on, which will, no doubt, draw out positive results. It is well to recognize that there is a gap flanked by the employees’ current state and the expected state. And motivation is said to be the key to lessen this distance. (Employee motivation: theory and practice 2008).
As per concept of Abraham Maslow, one of the renowned psychologist from Russia, employees have five basic needs including their loyalty, their physiological needs, needs regarding the security, personal needs and finally an employee’s social needs. And all these aspects of employees’ needs are briefly discussed below. At the outset, providing safety measures to the job as much as necessary will be a strong motivating feature. The organisation, to which the employees are committed, should be approachable by the employees in their personal problems, which in turn adds to the motivation. When each one is accepted as he is, then the employee is respected in the organisation. Coming to the next point, it is noteworthy for the managers to make the work something interesting which will surely empower the workers.
The availability of better workplaces can make the employees more attached to the organisation and their profession. Constituting some sensible and positive corrective actions can inspire the employees. Taking the terms of wages as another important element in the motivation of employees, organisation must make sure that each one of them is satisfied with their wages. Another factor to be stated regarding the motivation of the employees is the promotions they are getting which will in turn increase their confidence level and make them more honest towards the organization. Approval of employees’ efforts by means of rewards and encouraging remarks can make them motivated and to an extent it gives completeness to the motivational procedure. (Understanding employee motivation 1998).
Additional motivational techniques
Good management practices and excellent leadership efficiency are required to motivate the employees. On the accomplishment of the above explained motivational principles, providing a careful hold for the employees, interacting with them about the advantages of the changes they have to acquire, it is sure that the employees will stand on the side of the management or the head. (Hinshelwood).
Construction of apt career plans is a stimulating factor for the employees. If the individuals are finding discomforts with the support from the management then be ready to make a change. In their mistakes and shortcomings they expect a good advice from the top and the management must at their reach. Application of the individual improvement policies, trainings conducted regularly are some of the motivational plans to be provided. (Employee motivation 2007).
Managers in an organisation have the responsibility to guide the organisation towards its objectives. It is the responsibility of the managers to maintain control over the entire activities of the organisation and better utilisation of organisational resources to attain the targeted organisational objectives. Lead, inspire and direct the people for forwarding better operational performance is the basic function in the organisational management. For getting better operational results, define and implementation of the organisational performance is an effective tool.
Managers’ role in the organisation is mainly relating to co-ordination and controlling the organisational resources in the most appropriate manner for achieving the organisation goals. The managers have the primary responsibility to motivate the employees. For getting positive result on the employee behaviour with high self-esteem better work environment have to be maintained in the business work place. (Manager’s role in successful employee motivation 2009).
Scientific management theory of Frederic Taylor suggests that careful specification and measurement of all organisational tasks are essential for getting maximum efficiency in operation. Tasks have to be standardised and workers have to be better compensated. The bureaucratic management theory of Max Weber deals with the relation of organisational performance and the organisational hierarchy. This theory states that organisational performance can be improved through setting up of organisational hierarchy. In organisation management different functions such as planning, organising, directing, motivating and controlling are involved. The basic functions involved are design and production, finance, human resources, sales and marketing, administration. While considering the human resource in the organisation, recruitment, selection, training, and development of staff are included. The development of staff to maximise their efficiencies and potential towards the organisational goals are to be carried out. (Organizational functions).
Maximisation of potential of employees will help the organisation to reduce costs and increase profitability and getting competitive advantages. An organisation “is an assembly of people working together to achieve common objectives through a division of labour. An organization provides a means of using individual strengths within a group to achieve more than can be accomplished by the aggregate efforts of group members working individually.” (Encyclopedia of small business: organization theory 2009).
For getting maximum organisational performance, human resources of the organisation have to be carefully managed and motivated. Human resource management is an important function in the organisation which is greatly related to the competency of the entire organisation. The human elements in the organisation have to be carefully dealt with in order to assure their productivity and efficiency at a greater level. Development of human resource is important and as such employee motivation
Employee motivation and organisation management
Motivating the employees is the most effective manner which will provide positive results in the operational performance of organisation. “While some employees produce to their highest capability regardless of the incentive, others need an occasional spark of motivation. When handled effectively, the result can be greater productivity and increased employee morale.” (Motivating employees: nationwide studies have shown that up to 80% of employees are not engaged by their work 2009).
For maintaining a productive and successful business, adequate ways for improving the potential of the employees have to be adopted by the managers. Job satisfaction as well as better work environment is essential elements of employee motivation. Human relations movement theory is built on the concept that individuals and their unique capabilities have greater importance in the overall performance of the organisation. Thus in order to prosper the organisational performance, the support from the part of the employees has to be ensured. The human resource management in the organisation is based on this concept. (McNamara 2009).
As per the modern organisation theory of Max Weber, an idealised organisational structure, employees have to be directed by accurately defined responsibilities. The human element in the organisation has to be carefully handled, as the personal frailties and imperfections among the work force should result in potential damage to the efficiency of the organisational system. In the concept of Henry Fayol, strategic planning, staff recruitment, employee motivation and direction of employee guidance through policies and procedures are important management functions, in generating and prospering a triumphant organisation. Frederick Taylor, in his work ‘Principles of Scientific Management’, pointed out the importance of training, wage incentives, selection of employees, and work standards in the overall performance of the organisation.
In Hawthorn Studies of Elton Mayo, the importance of human element in the organisation output is put under experiment. Through this study, Mayo states that rather than mechanic motivation systems, the inborn forces of human deeds may have improved the operational performance of individuals. To achieve the inborn forces creation of social relationships through group interaction should be adopted. (Organization theory: Background 2009). The employees supported with better motivational forces should be more productive and thus the overall performance of the organisation should be positively influenced. As per the theory of Barnard (1968), the success of an organisation greatly depends on the ability of the leader to build a consistent organisational environment. (Walonick).
“Organisational performance is related to productivity, efficiency, effectiveness, and more recently competitiveness. Labour productivity, greatly depends on the good human resource policy can make to improving, organisational performance so much.” (Human resource management strategies and goals by Preetam)
Thomas Wright suggested that psychological well being and job satisfaction of employees will motivate them to perform with higher efficiency level and this will contribute to the maximization of organisational outcomes. Thus employers have to concentrate on well being of the employees in order to ensure organisational success and establishing competitive advantage. According to his concept, “excessive negative focus in the work place could be harmful such as in performance evaluations, where negatives like what an employee failed to do are the focus of concentration.” (Science news: happy employees are critical for an organization’s success study shows 2009).
Employees having higher level job satisfaction will provide valuable decisions. Cost effective employee retention strategy is possible through providing maximum job satisfaction to the employees with physical and mental well being. (Science news: happy employees are critical for an organization’s success study shows 2009).
This calculation is done on the basis of quality, quantity, cost and time. Employee appraisal is the regular analysis of the employee within the organization. It leads to achieve higher productivity and it also explains that how employees meet job specification. Job specification means a statement of employee’s characteristics and qualification required for the performance of duties and tasks comprising a specific job or function. The purpose of the performance provides pay increase and promotions. It also helps to be a developmental experience for the employee and a teaching moment for the manager. Employee appraisal is a factor to improve the organisational objectives.
This system is determined the qualification of employees. An appraisal means evaluation of performance by the manager together with the employees, with their observations and opinions. The performance evaluation is recorded and the employees use it as feedback. Employee appraisal is an ongoing or never ending process. The appraisal may be conducted by the manager but sometimes agreed by the employee’s immediate supervisor. The manager must co-operate with the employees and he knows about the all details regarding the employees. So the supervisor can study about all employees and evaluate their performance efficiently.
Objectives of Employee appraisal
- Find out the employee who need training
- It formulates the personal decisions such as disciplinary accomplishment, promotion, salary problem etc.
- Organizational analysis and development opportunity provided by the performance appraisal
- Very close relationship between the employee and the administrator
- For the Equal Employment Opportunity, in the organization formulate so many selection technique and human resource policies. (Pre requisites for effective & successful performance appraisal 2007).
- The employee-employer relationship helps increase the work more accurately
- Provide feedback to the employees
- Clear idea about the real work of the employees. (Employee appraisal: introduction 2008).
Process of Employee Appraisal
- Establishing performance standards: The first step in the employee appraisal process is the setting up of the standards. It means that setting to analyze the performance of the employees as good or bad and identify their involvement to the organizational goals and objectives.
- Communication of the established standard: The standard provides a clear idea about their work. If required the standard should be communicated to the appraiser or the evaluators and also adapted a relevant response from the employees or the evaluators
- Measuring the actual performance: The third step is to measuring the actual performance of the employees. It is very complicated element of the performance appraisal process. The manager provide a specific period of time for doing the work i.e. it is an ongoing or never ending process which involves analyzing the performance throughout the year.
- Comparing the actual with standard: This step describe that comparison between actual with standard performance. The changes of the employees from the standard and actual. The two types of changes are positive and negative i.e. positive deviation and negative deviation. Positive deviation will show the actual performance is m ore than the standard performance; Actual performance is lower than the desired performance is termed as the negative change
- Verification of Result: This step indicates the verification of result. The result of the appraisal is communicated with employees directly. In this result, in an organisation overcome all employee related problems. The aim of the meeting should be to solve the problem and encourage the employees to perform better.
- Find out the decision: The decisions can be taken either to improve the performance of the employees, and take corrective actions, or the related human resources like rewards, promotions, demotions, transfers etc. (Pre requisites for effective & successful performance appraisal 2007).
To get best performance from employees, theoretical approach should be necessary. According to Maslow’ theory human behaviour and needs are continuously changing. After completing the existing needs, the human beings will be looking for higher achievement. Participation of employees at all levels of organisation should be beneficial for getting improved operational results. Adequate motivational force must be provided to the employees for getting the maximum result from them. For ensuring perfect service to the customers, participation from the employees is necessary. Attracting and sustaining of customers towards the business should require better servicing from the human resource personnel. The human resource talent is main success factor. Employees are required to work with the requirements in the business firm.
They have to get more benefit from their service for getting satisfaction in their job. Without better satisfaction of employees’ personal needs no better result can be expected from them for a long term. While taking major decisions relating to the employment, the opinion and suggestions of employees must be considered by the management. No managerial pressure is imposed on employees in selecting the time schedule. The theory of Herzberg on employment motivation should be based on environmental needs. The efficiency in working of employees is based on environment. In the motivation theory of Mayo, we can see that productivity of workers can be improved through participation in the decision making process
Correlation between Employee Appraisal and Motivation
Successful organisations greatly focus on the performance of their employees. Performance based payment systems are followed by these organisations. “Their performance goals and targets are clearly defined and communicated to them in a formal way. The employees feel motivated and accountable for their performance and strive to achieve/exceed the targets set for them. The only thing that pleases the managers and leadership is higher achievements and performance delivery.” (Sharma 2008). In order to gain the positive feedback from the employers, the lower level organizational personnel take their own self initiatives to provide improved performance.
There exists competition among the lower level employees and this leads to the continuous improvement in the employee performance. A performance driven organizational culture involves certain challenges. Establishment of performance metrics is the main challenge. To feedback and rate employee performance, systematic approach is essential. However this provides greater feedback to the organization about the requirements of improvement in the employee performance. The difference between targeted performance and actual performance can be identified through the performance evaluation. In case of variation, employees are to be self motivated to provide improved performance to meet the performance targets. Categorizing of employees on the basis of their performance is an effective tool for motivating the employees.
Fixing the reward system on the basis of outstanding performance, will create a competitive environment among the employees to perform better than colleagues. Thus integration of performance in the reward system will support better compensation to the good performers and at the same time motivate the non-performers to improve their performance. (Sharma 2008). Performance feedback will act as reward to the better performed employees.
Thus performance appraisal is an influential tool for improved motivation of employees. It provides accurate data relating to the degree of efficiency and performance expected from each individual in the organisation together with their current performance level. Employees get a feeling of involvement in the decision making operations of the organisation and appreciation of their efforts. By identifying the strengths and weaknesses of each individual, appropriate improvement policies can be framed in time. “Appraisals are significant for the motivation of a staff, correct behaviour, effective communication process, and developing positive attitude of management to the staff.” (Hunt 2009).
Effectiveness of performance appraisal depends upon specific nature of the organisation. Weaknesses in the parameters applied for the appraisal of the performance will affect the human resource development in the organisation badly. Managers’ attitude is another important element that determines the degree of effectiveness of performance appraisal. In order to improve the efficiency of performance appraisal as an effective motivational tool, managers have to take the appraisal as a moral managerial obligation. Valid and reliable appraisal parameters have to be selected. (Shafiq 2000).
Performance appraisal tool can be counterproductive in nature. A successful performance appraisal is adoptive for organisational situations providing high intrinsic job motivation. In such case it will generate personal responsibility among the individual to improve their performance. Organisational situations where employees have only limited intrinsic motivation, performance appraisal does not become effective and sometimes it may act as counter productive damaging the human resource development. Successful appraisal system will have positive results on the loyalty of the employees towards the organisation. “Performance appraisals and other tools which involve feedback and target management should be adapted to the employee’s individual needs and characteristics. Otherwise, there is a risk of harming the good employees without being able to help the less good.” (Performance appraisals – a double edged sword 2006).
Findings and analysis
The human resource management of Sainsbury
Sainsbury Plc is a leading food retailing business organisation in UK. It has three distinct supermarket chains. It is prominent retailer in the UK and the success of the business is greatly related to their manpower planning and human resource development programs. They achieved greater efficiency in employee productivity and thus they better control their operating costs.
Adequate training is provided to the employees to enhance their skills and efficiencies. Efficiency standards are also adopted by the organisation to measure their employees’ performance level. As a pert of employee appraisal, appraisal interviews are conducted by them annually to measure the performance of individuals. The appraisal results are used for deciding future human resource policies. In Sainsbury, employee appraisal is used as a tool for motivating the employees to achieve their potential performance targets. The appraisal system encourages workers to achieve their individual goals. Through this system Sainsbury ensures a strong and good quality human capital.
Dismissal strategy is also adopted by the company to encourage the workforce. Performance review policy is helpful to get adulate training for those employees who are performing below standard. The company is considering its human capital as the most valuable resource. Thus better work environment is ensured for each of its employees with adequate compensation. They have the view that employee development will contribute to the organisational success through improved productivity and loyalty. Their training programs are with the object of motivating the employees to meet the organisational goals.
Through the training programs, the actions of the workers are directed towards the organisational goals. Thus good customer service is ensured from their employees and it supports customer satisfaction. (A report on Sainsbury’s Resource Management).
Performance Appraisal System in Sainsbury PLC
Sainsbury uses performance appraisal system for evaluating the effectiveness of its employees as well as suppliers in discharging their duties with targeted standards. The company have the mission to achieve leadership position in the food market industry. (Sainsbury’s management essay).
Performance based payment system is adopted by the company to promote the performance of the individuals. A basic pay system is followed and for improved performance, additional benefits are added with the basic pay. The payment of each of the individuals in the organisation is decided through appraisal of the performance on annual basis. To motivate the employees, diversity in the labour force is allowed. (Highlights from j-sainsbury.co.uk for Section C).
Work councils are introduced by Sainsbury to support better communication within the organisation. Through this system, workers and mangers are better communicated and thus the transmission of business ideas and mission between the employees and the managers are better facilitated. (Talking shop: J. Sainsbury’s new works councils; Abstract)
Through these motivational techniques, Sainsbury achieved greater operational success in the retail food industry with improved customer satisfaction and reduced operating costs.
Analysis of the theoretical data on motivation, employee appraisal and operational performance
The discussion on employee motivation and the organisational management on the basis of theoretical management approach reveals that there exists greater correlation between motivation and the overall performance of the organisation. Human capital is an important resource in the organisation. Its better and effective utilisation is an essential factor that determines the competitive strength of the organisation.
Performance appraisal as a process of determining and communicating to an employee how he is performing the job is an effective tool for enhancing the operational performance of the organization. When properly conducted, performance appraisal not only let the employee know how he is performing, but also influence the employees’ future level of effort, activities, results and task direction. It assists the managers to observe their subordinates more closely and to do a better job of coaching and it leads to influence the employees by getting better feedback on their performance. It achieves better operational results and improved work performance. It provides back up data for making decisions about employee compensation. It reduces favouritism in making managerial decisions about employees.
From the theoretical discussion on the motivation and organisation management reveals that motivation is greatly influencing the performance of the employees and thus it leads to the improvement in effectiveness of the organization. It is the essential factor for better utilizing the human resource in the organization towards the organizational goals. Through motivation, along with organizational goals, the personal needs of individuals also are met.
In case of absence of satisfaction of employees’ personal needs then it will negatively affect the organization through leaving the job by the employees. Motivational factors are related to performance appraisal and it supports better development of the human resource through performance based payment system, rewards and incentives etc, and it differs from one individual employee to other. It supports the establishment of effective human resource development tool in the organization. The discussion on the employee appraisal and employee motivation reveals that performance appraisal will motivate the employees on a greater level.
An employee always expects to be rewarded or appreciated for his performance by his superiors. Employee appraisal based on feed back information as the motivational tool will provide positive result on the organizational performance. Performance appraisal helps the organisation to develop their human resource capabilities and it contributes greater competitive advantages to the organisation in the industry. It facilitates effective planning of various organisational resources. Hiring of efficient and productive employees becomes possible through this model. Placing of the persons in the right position and developing their abilities and skills will add success to the organisation. The key benefits of successful employee appraisal are improved productivity and morale of employees and increased profitability to the organisation.
From the discussion on the motivation and organizational performance, it can be concluded that motivational forces adopted by an organization has greater positive influence on the organizational performance with improved productivity and efficiency. When properly applied, the employee appraisal is an effective tool for motivating the employees. Management of human resource is very important in any modern organisation for the attainment of the organisational objectives.
The success of an organisation largely depends on the calibre and motivation of persons working in it. “All managers are required to supervise, motivate, train, develop and look after the welfare of their subordinates. They are required to make continuous efforts to strike a balance between motivating for productivity and evaluating and judging that very productivity.” (Shafiq 2000). Managers are required to maintain the employee motivation for productivity and at the same time evaluate and judge their productivity on a continuous basis. This will give rise to a conflicting environment in the organisation. Performance appraisal will help to develop important decisions relating to career development plans, pay and promotion, training and placement etc of employees.
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