2.4 - Appraisal, Dismissal & Redundancy
The meaning and purposes of appraisal
Appraisal refers to the formal assessment of an employee's performance with reference to the roles and responsibilities set out in the job description.
Purposes of conducting appraisals
- Assessing performance - They assess an employee's performance against pre-agreed targets.
- Identifying training needs - They identify training needs of the individual employee.
- Rewarding high performers - They help management to reward high achieving employees.
Target setting in appraisals
Target setting is an integral part of appraisals. Targets should be SMART: specific, measurable, achievable, realistic and time bound.
Handling unsatisfactory performance
If an employee's performance is deemed less than satisfactory, it should be followed by relevant training or counselling. Such appraisals do not necessarily result in severe measures such as warning letters or dismissal.
Different types of appraisal systems
Different organisations use different appraisal systems: formative, summative, 360-degree feedback, and self-appraisal.
| Type of appraisal | Key features | How it is conducted | Main benefits |
|---|---|---|---|
| Formative appraisal | Takes place on an on-going basis to enable employees to improve their job performance; helps identify an employee's strengths and weaknesses in a specific role or progress in a particular task/project. | Regular check-ins or feedback sessions throughout the year. | Helps the organisation identify training needs of individual employees. |
| Summative appraisal | Takes place periodically (quarterly or annually), conducted by line managers who summarise personal performance and achievements. | Led by line managers, often involving a formal meeting to discuss outcomes and areas for growth. | The appraisee is held accountable for work outcomes, including identifying areas for improvement. |
| 360-degree feedback | An appraisal system involving comments, opinions and information about an appraisee from various groups who work with that person (peers, line managers and subordinates). | Usually obtained using questionnaires, surveys, observations or interviews; in some cultures, having a junior colleague appraise a senior member would be deemed inappropriate and might not produce open and truthful discussions. | Reduces bias by incorporating diverse viewpoints and encourages open communication. |
| Self-appraisal | Involves employees evaluating themselves against predetermined criteria; the appraisee reflects on their strengths and weaknesses to set new targets. | Individuals complete evaluations, often reviewed alongside manager input to ensure consistency. | Often used in conjunction with line manager appraisals to avoid potential bias and inconsistencies. |
The process and reasons for dismissal
Dismissal refers to the termination of a worker's employment due to their incompetence or breach of employment contract.
Fair and unfair dismissal
- Fair dismissal - Occurs if an employee loses their job due to incompetence or gross misconduct such as theft, fraud, drunkenness, violence or sleeping on the job.
- Unfair dismissal - Happens if dismissal is based on race, religion, age, gender, or sexual preferences.
The dismissal process
Dismissals typically follow a three-stage process:
- Verbal warning - An initial verbal warning.
- Written warning - A formal written warning.
- Contract termination - Termination of contract if the employee fails to meet agreed targets.
Managers must handle dismissals carefully with comprehensive reasons to prevent legal challenges.
Understanding redundancy and its procedures
Redundancy occurs when a business can no longer afford to hire a certain number or group of workers or because the job ceases to exist, perhaps due to seasonal or technological factors.
Causes of redundancy
- An organisation can no longer afford to employ workers.
- Jobs cease to exist due to project completion.
- Lack of available work.
Types of redundancy
- Voluntary redundancy - Often include generous compensation packages.
- Compulsory (involuntary) redundancy - Happen as a last resort, often causing low staff morale and organisational instability.
Procedures for selecting employees for redundancy
Businesses must use objective criteria when selecting workers for involuntary redundancy, such as last-in-first-out systems based on years of service.