Performance appraisal system in a software development company

Managing People and Groups in the Global Workplace

The Organization

The company was founded eight years ago and its main operations revolve around the development of software applications. It serves numerous customers which conduct diverse activities, such as libraries, financial institutions or automobile organizations. The software company employs 150 individuals, out of whom 20 workers are administrative, 10 are testing and 120 are developers (some of the developers are operational or project managers, performing as such both administrative and technical tasks). I have been employed within the organization for four years now and my position is that of a tester. As an employee, the features that most stand out are the pleasant, yet challenging, working environment, integrated within a strong corporate culture. The workers have different backgrounds in terms of education, expertise or even socio-cultural features. This often reflects in their wages. It means then that the company should use a rather elaborated appraisal scheme, which is able to differentiate between the employees and establish the according remunerations and future positions within the organization.

2. The Appraisal System

The appraisal scheme used by the software company is based on observations of the employee performances and discussions with various individuals directly interacting with the respective worker. A tester is for instance assessed through an analysis of the number and types of bugs he discovered in a software application. The evaluation will continue with conversations with the colleagues of the tester and the developers who worked directly with him / her. Once all the necessary information has been gathered, the human resource department processes it and sends it to management. Here, it is once again analyzed and an interview with the employee is scheduled. This occurs every six months throughout the first two years of working for the organization and once a year starting with the third year. Based on the performances, a raise is negotiated and future courses of action are decided.

3. Goals of the Performance Appraisal System

The primary aim of the appraisal scheme used by the software organization is that of identifying the performance features of the staff members. Based on the results of the evaluation, the manager will be able to make the best informed decisions relative to the salary of the employee or his future within the organization. The future generally refers to the next approaches to be made to reward the employee or further improve his skills and productivity levels. The company has yet to fire an employee due to poor performances and the measures often revolve around maintaining the same salary or increasing it, enrolling the employee into a training program, moving him to another department or an another project, or promoting him / her. To conclude then, the goal of the appraisal system is to learn more about the employee and make the best informed future decisions, which increase his levels of productivity and sustain the company in reaching its overall goals.

4. Strengths and Limitations of the Current System

The main benefit of the system is that it conducts the evaluation on multiple channels. Had it only discussed with the direct supervisor of the employee, the result could have been biased. But since it considers various individuals and also technical evaluation, the scheme stands better chances of retrieving an objective result. Another strength is that it includes an interview, during which the employee is given the chance to freely speak his mind and negotiate his/her position and salary within the company.

The most relevant limitation is that the evaluation is only focused on assessing the performances of the employee. It should however focus on investigating other aspects of his corporate behavior, such as his ability to become integrated in the corporate culture or his ability to fruitfully and efficiently interact with the colleagues.

5. Concerns Associated with the System

The legal concerns associated with the system are relatively reduced and are included in the same category as all the legal concerns faced by companies all over the world. In other words, the system must focus on being objective and fair; otherwise, the company stands the risks of being sued for discrimination and unfair treatment of the staff members.

The objectivity and fairness of the system is not only a matter for legal concerns, but also for ethical ones. If the employees come into contact with information of biased evaluations, they will lose their trust in the entity. This will lead to reduced performances, low employee morale or even high employee turnover rates, generating additional expenditure. Foremost, all these will negatively impact the company's image and perception on the market.

7. Suggestions to Improving the System

As revealed by the previous sections, the main limitation of the current appraisal scheme is that it implements a unified approach for all workers and that it is focused exclusively on productivity measurement. The suggestion to improving the system then revolves around two courses of action:

becoming interested in the social interactions of the employee and his ability to become integrated and properly function within the organization recognize the individuality of each and every worker and adapt the evaluations to the unique characteristics of each evaluated staff member

Integrating these suggestions within the system is rather challenging and may require additional investments. The results would however be worth it, as they would materialize in increased employee morale and higher performances.

8. Reflections

The situation previously analyzed points once again to the importance of appraisal schemes within a for-profit institution. Also, it further emphasizes on the pivotal part played by technical knowledge to achieve the corporate goals. Aside these however, it also reveals that a focus on profitability and performance is not sufficient to achieving corporate success. The managerial teams must then also pay attention to the socio-cultural aspects of their operations and must assess the staff members based on the unique features that characterize them.