Some companies never have formal performance
evaluations, others "go through the motions", and some have
evaluation processes that really do result in increased performance and
improved morale. In Pakistan normally companies do performance
evaluation only for the assessment of the employees. They don't think
that the result of performance evaluation can help increase the
retention rate of the employees that is why they don't take this process
serious. It is a big reality that companies take serious only those
thing in which they feel that they are getting the advantage so in this
era it is very necessary to understand that performance evaluation is
beneficial for the company. Actually in Pakistan companies don't know
that how much performance evaluation can protect them in the results of
the following two issues:
*How to retain
their employees and
we can save the recruiting cost
This year companies need to adopt effective
performance evaluation process and it is very necessary to understand
the importance of this process. They need to understand performance
*People do the
things that are rewarded.
reward people for things the company evaluates.
company evaluates people for things easily measured.
people do what is easily measured.
Before creating the relationship between how can
result of performance evaluation helps to retain the employee, companies
should know that why people leave the organization. Commonly employees
leave the organization because of these reasons:
doesn't feel good around here." This can include any number of
issues having to do with the corporate culture and the physical working
wouldn't miss me if I were gone." Many people don't feel personally
valued. When people don't feel engaged or appreciated, all the money in
the world can't hold them.
don't get the support I need to get my job done." People want to do
a good job; they want to excel. At the same time, most feel like their
boss won't let them do a good job. When frustrations exceed the
employee's threshold, they leave.
4. Lack of
opportunity for advancement. "Advancement doesn't necessarily mean
promotion," actually it means personal and professional growth.
People want to be better tomorrow than they are today. Personal growth
constitutes a very strong driver in today's work force, particularly
with the younger generation.
People want fair compensation but contrary to most
managers' beliefs money rarely comes first when deciding whether to stay
or go. A certain percentage of people will always chase more income, but
the majority of workers look at non-monetary reasons first.
If companies takes seriously performance evaluation
process. They can eliminate these all reasons because through this
process companies are able to find out:
*Gap in the
can find out the stress level in the existing job and environment
can also find out who deserve reward and how much
reward increases the motivation level of the employees either monetary
they can help in their self-development
type of relationship is required between employees and management
also can identify that where the training and development programs
Performance reviews are a great opportunity to
revisit expectations and goals. It gives the employee a chance to
discuss their own perception of their performance. In addition, it opens
the door to talk about the employee's career goals and how their
performance ties to career growth.
The result of performance evaluation helps to make
strategy to retain employees. Companies can make different strategies to
retain their employees and they can only make effective strategy when
they know where problem exists, what their employees actually want to
get from the organization. They can get the answers of these questions
with the support of performance evaluation
STRATEGIES FOR RETENTION
The primary strategies for keeping good people have
to do with creating and maintaining a workplace that attracts, retains
and develop good people.
"Environmental strategies address three
fundamental aspects of the workplace — the ethics and values
foundation upon which the organization rests, the policies that
interpret those values and translate them into day-to-day actions, and
the physical environment in which people work."
Employees want a culture of openness and shared
information. They want to know where the company is going and what it
will look like in the future. How is the company doing financially? So
the companies should communicate about the mission and business strategy
to the employees and their performance evaluation should be on the basis
that how much they contribute to achieve the mission of the
Second strategy to retain employees is growth
strategy that deals with personal and professional growth. Good
employees want to develop new knowledge and skills in order to improve
their value in the marketplace and enhance their own self-esteem.
There are many ways to help your people in personal
growth that not only makes a difference in their lives, but bonds them
more closely to the organization. Giving training and education is the
one way for the growth of the employees. Here again the process of
performance evaluation helps to identify the training and development
need in the job and their career.
For retaining the employees companies should adopt
support strategy. The purpose of this strategy is to provide tools and
equipment to the people to make their job easy. People need support:
* To get
adequate resources to get the job done
They need to support from your managers to take the initiatives
Other recommended support strategies include:
individual learning plans.
people to join professional and trade associations.
in career planning.
a corporate mentoring program.
incentives for learning.
advantage of Internet learning.
Performance evaluation helps to identify that what
type of support employees require and to what extent.
Effective compensation strategies stem from one
fundamental principle — money alone will not retain most employees. In
the old days, companies essentially paid people for their time. Today,
more and more companies pay for performance — in every position, not
just sales. To retain employees, your compensation plan needs to
incorporate this trend.
In pay for performance plans, two basic activities
involve defining the job and checking performance against expectations.
This strategy is playing a very important role to retain the employees
but it will work only when the companies will do performance evaluation
of the employees effectively.
So Performance Evaluation may also include
performance goals tailored to support the business goals of the
individual's organization. These performance goals may be specific to
the organization, job classification, targets (e.g. Quality, Cost,
Delivery, Safety, and Morale), or values.
Hypothesis1: the reason of low retention rate is that
companies are using informal method to evaluate employees that is why
they are failed to identify the reasons of low retention rate.
Hypothesis2: companies are conducting performance
evaluation process only to assess the employees not to develop the
employees that is why the companies think that performance evaluation
has no role to retain the employees
For proving this hypothesis a survey has been
conducted. In this survey only private companies were involved. For
collecting data, interview session with the HR managers and CEO's of the
companies to fill the questionnaire have taken place.
Survey says that the trend has been changed now, the
companies are using formal method to evaluate their employees. They are
using the result of performance evaluation to promote their employees
and to give bonus and increase in the salary. Their ultimate purpose is
to retain employees. 65% companies are using formal method to evaluate
employees. 82% companies are using result of performance evaluation to
increase the efficiency of the employees. 82% companies are using pay
for performance approach. 76% companies are giving extrinsic reward to
the employees in the shape of salary increment.84% companies are using
the result of performance evaluation for the development of the
employees. Their purpose is not only to assess the employees.
The result of survey does not support the both
hypothesis. In Pakistan, now the trend has been changed. Companies are
getting success to increase their retention rate with the help of
The result of performance evaluation is the key for
the companies to solve these issues: How to retain their employees and
how we can save the recruiting cost. With the help of performance
evaluation, companies can eliminate all the reasons why employees leave.
This is the right time when organization in Pakistan should realized the
importance of the performance evaluation and its impact in the retention
rate of employees.