Performance Appraisal

A study of the Human Resource issue of Nakilat Damen Shipyards Qatar Table of Contents 1. 0Executive Summery5 2. 0Introduction of the Company6 3. 0The background of the issue – high employee turnover6 4. 0The impact on the business7 4. 1 Drop in production7 4. 2 Cost for the company7 4. 3 Time7 4. 4 Team dynamics8 4. 5 Continuity8 5. 0Root cause of the issue9 6. 0The Human Resource issue10 7. 0Impact on Human resource11 7. 1 Low employee morale11 7. 1 Loss of Trained workforce12 7. 2 Cost for new recruitment12 8. 0Conclusion13 9. 0References16 ANNEX A. NDSQ Performance appraisal (iniciated in Nov 2012)17 Executive SummeryHuman Resource management refers to the policies, practices, and systems that influence employees’ behavior, attitudes, and performance. There are some important human resource practices which are shown in figure 1, that influence the company performance. | |Strategic HRM | | | | |Analysis and design of work |HR planning |Recruiting |Selecting |Training and development |Compensation |Performance management |employee relations | | |Company Performance | | | | | | | | | | | | | | |Figure 1: Human Resource Management PracticesThe roles of the Human Resource functions include three product lines, Administrative role, Business partner and Strategic partner. In most companies the Human resource department handles mainly the administrative part, but for a growth of the company performance the human resource manager needs to focus on all the three areas. In my report I would like to discuss an issue that the company faced that involved a human resource practice. I will further elaborate how this issue has influenced the company and its functions and the solutions that could be used to solve the problem.Note: As I have left the company in 2012 March, the statistics includes in my report are when I was working in the company and the problem faced was during that time. In order to manage performance effectively the following human resource practices should be in place so that the performance of the employees can be measured and reviewed accordingly in order for them to know where they stand in the organization and what improvements need to be done so that they will be more competent in their job role.Performance management is the means through which managers ensure that employee’ activities and outputs are congruent with the organization’s goals. Performance appraisal is the process through which an organization gets information on how well an employee is doing his job. Performance feedback is the process of providing employees information regarding their performance effectiveness. Introduction of the Company Nakilat Damen Shipyards Qatar (NDSQ) which was established in 2010, which was joint venture of Qatar Gas Transport Ltd (Nakilat) and Damen Shipyards Qatar Holding BV (Damen Shipyards Group).As a startup company we had a small number of employees initially. The work force was recruited in batches of about 20 persons, from India and Philippines. The company staff was consists of a different mix of cultures. The background of the issue – high employee turnover The company which was started in 2010 with the initial number of 80 employees increased the head counts within a year to more than 200 employees. According to the statistics from Human resource department which was in January 2011, the total number of employees was 328 and the End of Service (EOS) was 62.Which creates a problem in the company as the turnover comes to about 15%. From this number most were the initial employees who had started off with the company and grown learning and performing from the beginning of the project. The impact on the business Nakilat Damen Shipyards Qatar, as a new company was given the initial project of completing the ‘LOR Barge’ for Qatar Gas Transport Company. This project was started with the incorporation and was due to be launched in mid 2012, which was delayed to September 2012.The high turnover in the early stage of the company with the employees who know their work better had a major contribution for this factor. This slows the business performance. 4. 1 Drop in production The overall productivity of the work place tends to decrease with the high turnover. Since a new employee has a period of adjustment, he won’t complete tasks as quickly as the person he replaces. Group projects that rely on the new team member may slow down, which effects experienced employees’ productivity levels. 4. 2 Cost for the companyEach employee that resigns cost the company, the cost for visa training them of the process and procedure. These employees were hired during the initial stages and they were exposed to the environment form the beginning and the hands on experience they have had was unique. When new employees are hired the earlier cost for recruitment, advertising need to be spent again. 4. 3 Time Managers and human resources staff spend time conducting exit interviews, advertising the job, recruiting candidates and interviewing. The new employees may take several months to fully learn the job and achieve competency in the position. 4. 4 Team dynamicsWhen the staff changes frequently, the employees who stay have a difficult time building a positive team dynamics. A group of employees learns to work together, only to have one or more members leave. Teams need to be rearranged regularly. 4. 5 Continuity High turnover rate affects the continuity of production, which will lead to production drops. Root cause of the issue When the issue is put through the ‘why why analysis’, the root cause was found to be that there was no proper performance management system, in order to measure and manage the performance of the individuals in order to motivate and increase the production.Cause : High employee turnover Why : Job dissatisfaction Why : Absenteeism Why : change of attitudes/ behaviour Why : No recondition / job security Why : salary / benefit packages Why : change of levels Why : No proper appraisal Why : No proper performance management The reasons for voluntary turnover can be grouped as follows; salary related reasons (salary, benefit packages, and staff levels). In order to gather more accurate information the analysis can be done by exit interviews and conduct a survey of former employees. The Human Resource issueThe high turnover was mainly from the employees that were recruited at the start of the company. There were no proper performance measurements and appraisals when Forman and Team leaders were allocated. The Line Managers choose the next career advancements from their teams, which created a unrest among the other employees. This creates a dissatisfaction of the job which in time leads to high employee turnover. The dissatisfaction of the job can be termed mainly because there was no proper appraisal done for the previous batches. The new employees were appraised in a month due to visa purposes, but no proper system was in place.This creates unrest with the employees that the new batches get more benefits in terms of career levels and salary. There was no way of measuring the performance of each employee, this brings about indications of none reconditions of employees who learned and worked hard. When all the above were considered the main reason for the turnover was due to none recondition of employees who are skilled and knew the work as there was no proper performance management system. Impact on Human resource The human resources can provide a sustained competitive advantage when four basic requirements are met.They must add value to the company’s production process; levels of individual performance must matter. Second, the skills the company looks for matters. The performance plays a major role here. The third the combined human capital investments a company’s employees represent cannot be easily imitated. Human resources practises influence employee skills through the acquisition and development of a company’s human capital. Recruiting procedures that provide a large pool of qualified applicants, pared with a reliable and valid selection process, will have a substantial influence over the quality and type of skills new employee possess.Providing formal and informal training experience such as basic skills training, on-the-job experience, coaching, mentoring can further influence an employee’s development. The company’s human resource is important in the development and execution of its strategic business plan. Human resource management practices can help to create a source of sustained competitive advantage, especially when they are aligned with a firm’s competitive advantage. The impact on human resource indicating the high turnover of the employees is as follows; 7. 1 Low employee morale High turnover rate can result in low employee morale.This can result from overworked employees who had increased workloads and responsibilities due to lack of an active or trained workforce. New employees can also suffer from low morale as they struggle to learn new job duties and procedures. Continuation of this environment can cost the company. 7. 1 Loss of Trained workforce The training gained on the job from the beginning of the project is hard to teach. These employees are highly skilled and know the job better than the new recruits. Loss of these employees cost the company a lot, which leads to drop of production and trained workforce. . 2 Cost for new recruitment The cost of hiring a new employee is more than the salary; it all comes to a high cost in the process of recruitment alone. Advertisements, time cost for the initial recruiter, time cost for the line managers, time cost for conducting interviews, medical and other visa purpose and documentations, cost of travelling, cost of uniforms and tools. Also the cost of the time taken and the loss of production till the employee are present at the work station. (Visa, documentation, travelling, induction) ConclusionThe effectiveness of even highly skilled employees will be limited if they are not motivated to perform, Human resource management practices can affect employee motivation by encouraging them to work both harder and smarter. One of the examples a company uses to direct and motivate employee behaviour include the use of performance appraisals that assess individual or work group performance, linking these appraisals tightly with incentives compensation systems, the use of internal promotion systems that focus on employee merit, and other forms of incentives intended to align the interests of the employees.Also the contribution of a highly skilled and motivated workforce will be limited if jobs are structured, or programmed in such a way that employees, who know their work better than anyone else, do not have the opportunity to use their skills and abilities to design new and better ways of performing their roles. In this instance Human resource management practices can influence company performance through structuring of the organization that encourages participation among employees and allow them to improve how their jobs are performed.Cross-functional teams, job rotation, and quality circles are all examples of such structures. These clearly suggests that the behaviour of employees within the organization has important implications for organizational performance and that human resources management practices can effect individual employee performance through their influence over employees’ skills and motivation and through organizational structure that allow employees to improve how their jobs are performed.If proper human resource practices in performance management is practised, it can directly have a control on employee turnover and productivity, which the employees have direct control. Lower turnover and greater productivity in turn enhance corporate financial performance. The performance management should be in place that the employee can evaluate his own performance at a frame of time, which the line manager can approve. Proper objectives can be in place as per the individual (job specific) and team objectives.These can be reviewed monthly, with one on one discussion with the line manager and the human resource team which can be recorded for the career advancements and increments. These proper systems will lead the employee to know where they stand and what needs to be improved to get to the next level in career. The proper system will help the line managers in choosing the team leaders with a more accurate indication that the person is capable and competent in the new role. A well developed performance management system will include the following; • A statement outlining the organizational values A statement of the organization’s objectives (each teams can have differently according to the projects) • Individual objectives which are linked to the organizational objectives • Regular performance reviews throughout the year • Performance related pay/ career advancements • Training and counselling Appraisals should be used to review constructively individual’s performance in order to encourage them. Accurate assessments can only be achieved if appraisers and appraisees are both very clear about what criteria will be used in determining how strong or weak the performance is.The major purpose of performance appraisals are to; • Define the specific job criteria against which performance will be measured • Measure past job performance accurately • Justify the rewards given to individuals and/or groups thereby, discriminating between high and low performers • Define the development experiences that the person being appraised needs to enhance their performance in the present job, and to prepare them for future responsibilities References Academic of Management Journal 1995 Vol. 58The impact of human resources management practices on turnover, productivity, and cooperate financial performance. Mark A. Huselid (Rutgers University) Human Resource Management – Gaining a Competitive Advantage Noe, Hollenbeck, Gerhart and Wright (8th edition) Nakilat Damen Shipyards Qatar website http://www. ndsq. com. qa NDSQ company forms and data from internal documentation Studies in Economics and Business Human Resource Management – Rob Dransfield A. NDSQ Performance appraisal (iniciated in Nov 2012) [pic] [pic]

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