Recognise good performance

An appraisal system is used by Tesco’s to review the standard of work being undertaken by people within the organisation and to assess the value or contribution of individual employees. Appraisal and performance review interviews are used by Tesco’s to: Reinforce company goals – Ensure that the employee is aware of the aims and objectives of which Tesco aim to achieve. Recognise good performance – Reward an employee for a good performance, and reinforce the employees value to Tesco.

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Identify training needs and career opportunities – If a vacancy was to arise Tesco initially need to assess their current staff to investigate into whether any current employee has the potential to take on the job once he or she has been fully trained. Review and set targets – This is where all departmental managers conduct a consultation with employees to discuss their current achievements and targets before ensuring that the new targets set are specific, measurable, achievable, realistic and timed.

Good appraisals have a positive effect on an employee’s motivation, but bad appraisals can be costly, time consuming and have a negative impact on the manager-employee relationship. A poor approach is to simply appraise employees by rating their performance against specific factors such as knowledge of the job, accuracy, reliability and output capability. This system discourages employee involvement and does not identify the means of overcoming weaknesses. A better from of appraisal is the personal performance review interview, adopted by Tesco who encourage all their managers to use this form of appraisal.

The personal performance review interview allows solutions and objectives to be identified by both the manager and employee. Under this system, the formal appraisal interview should cover: A review of performance against objectives over the previous year An assessment of an employee’s strengths and weaknesses based upon key job-related criteria Personal job improvement plan A career development plan A performance rating Comments from the employee and reviewing manager Agreement or reconfirmation of the objectives for the next year.

It is important that consideration is given during the appraisal interview to the extent to which an employee has reached objectives agreed at an earlier meeting (such as the previous year’s appraisal interview). Tesco managers categorise these objectives into three areas: Key results – reviewing the employee’s contribution to the business objectives of his or her unit or department. Performance standards – contributing to an improvement in the employee’s job performance.

Personal development – objectives relating to increasing the knowledge or skills of an employee. Tesco requires that objectives should be SMART. The company recognises the need to have a system for measuring the extent to which the various objectives have been achieved. Tesco’s suggests that all its stores should observe these guidelines when conducting performance appraisals: Appraisals should be regular – At Tesco’s, formal appraisals are held annually, while informal appraisals are treated as an ongoing process.

Managers should be trained in conducting interviews and make an effort to place the employee at ease – Therefore managers should not challenge or insult the employee nor should the manager make the employee feel as if they have failed, but motivate the employee to improve the level of output at Tesco. The interview room should be neutral and a timetable should be organised to allow both parties time to prepare – Thus meaning that the employee should be fully aware of any consultation well before the scheduled date.

Managers should assess if targets are still relevant and realistic, by considering how the company has changed and whether unavoidable factors such as inadequate resources have affected performance, and managers should also ensure that all employees targets are specific, measurable, achievable, realistic and timed. Targets should be SMART and any numerical targets should be realistic. At Tesco’s managers negotiate between six to eight targets. Both parties must feel satisfied with the outcome and be clear about what is going to be achieved.

Following the appraisal interview, the manager needs to help the employee to determine a suitable strategy and plan of action in order to help them to achieve their objectives and take advantage of future opportunities. This often involves the drawing up of a personal job improvement plan and a career development plan. The “Personal job improvement plan” recognises that all Tesco’s employees can improve their performance. The plan deals with areas for improvement and considers the need to respond to new demands.

It is effectively taking an overview of where the employee is now and how he or she needs to change in order to embrace the new context in which he or she is likely to be working in the future. For example, a Tesco’s marketing manager may be required to improve his or her strategic planning, and in particular to do this in the context of the future which recognises the importance of Internet trading. The “Career development plan” helps to identify the most suitable job progression for Tesco’s employee in question.

Career development takes account of the employee’s aims but will also take into account the needs of Tesco as an organisation. Development is not just concerned with promotion. An employee may aim to develop vertically through promotion or to move horizontally through the career structure by moving into different sections within Tesco and functional areas or taking on a different role at a similar level. Career development might involve gaining beneficial experience or considering ways of increasing job satisfaction.

Someone who has worked successfully as an administrator within the personnel function might be placed in another functional area in order to provide a broader range of experience that will eventually lead to move into management. 3. 6cii Self Evaluation Before attending, performance review interviews, individual employees might be asked to consider their own view of their performance. This normally starts with identifying the extent to which they have achieved the targets, which they have been set, and then evaluating the factors, which have either encouraged or hindered the achievement of performance targets.

By informing the employee in advance upon the consultation Tesco’s allow employees the chance to evaluate themselves in order to make a decision upon what the employee believes that they have achieved. Self-evaluation enables an employee at Tesco to decide what his or her objectives are and identify training and development needs. Tesco have discovered that the main problem with self-evaluation is that it can be highly biased. Some employees overestimate their performance through a fear of admitting their weaknesses; others underestimate their performance because they do not want extra responsibility or because of false modesty.

Employees might propose objectives which they are interested in but do not have sufficient ability to achieve. Managers can use self-evaluations to gauge employees’ expectations but must recognise the potential for bias. Therefore a self-evaluation procedure enhances Tesco’s knowledge upon each and every employee. The evaluation provides Tesco with valuable information upon what the employee believes that they can achieve, this proves to be extremely interesting for Tesco managers.

For example during the past three moths if an employee has only gained experience but very few new skills and has attended very little training and development courses, Tesco would need to question the contribution of that employee. Then once the employee evaluated himself or herself and felt that he or she deserved a pay rise or promotion, the Tesco manager would have the facts upon the employee present and would be capable of assuming that the employee is either biased or sets unrealistic targets for themselves.

Hence the reason why a self-evaluation can be extremely misleading, however it can also be exceptionally informative for the Tesco manager upon the expectations of the employee. 3. 6ciii Peer Evaluation To inform the performance review process, many organisations also look at peer evaluations of the individual. This is based on the idea that the best people to provide feedback on an individual’s performance are those who operate at a comparative level. However the problem with a peer evaluation at Tesco’s is that the procedure can again be biased. However Tesco have constructed a manner in which the evaluation can be performed.

Tesco discovered that the evaluation can only work if it is carried out in complete confidentiality, so that the employees making the peer evaluation do not feel that there can be any repercussions. Again, there is a danger about objectivity at Tesco as many peers may be in competition for a promotion or they may favour a friend in order to promote their own interests. Therefore Tesco have to be extremely careful in which way they interpret the information provided by the peer evaluation in order to gain an insight in how fellow employees feel about other employees.

A misinterpretation could lead to many repercussions, such as de-motivated employees, hence the reason why it is vital for Tesco to acknowledge the possibility of biased evaluations. 3. 6civ 360 Degree Evaluation The ultimate form of employee evaluation is where Tesco put its staff, especially managers, through a 360-degree review. This provides an opportunity for receiving feedback upon their effectiveness from people that they have contact with at all levels. These perceptions are very useful for evaluating management style and in clarifying development needs.

The review is normally carried out through the completion of a series of questionnaires by the employee under scrutiny, together with their peers, their line manager and the people that they line manage, and may also involve customers and suppliers. The respective responses are then collated and compared. If there is a consistent response, the question has to be asked whether this represents a strength or limitation. The review normally reflects on the skills the manager under scrutiny brings to: