Employers typically use an annual performance appraisal system to evaluate their employees. The appraisal measures performance against specific objectives employees strive to achieve during the year. In many instances, the employee's ability to receive a pay increase or performance-based incentives such as bonuses hinges on whether they can meet the objectives.
Annual objectives can be used to measure productivity. A common example occurs in sales organizations, where workers are often rated in large part on their ability to meet annual sales quotas. Productivity objectives are typically tied to the objectives of the organization as a whole. For instance, if the goal of an organization is to increase its revenues by $1 million over the previous year and it employees 10 salespeople, each sales person may be required to increase her sales by $100,000.
Companies that encourage self-improvement for their workers may institute annual objectives for those seeking advancement. Employees who wish to move into management at some point may be required to complete a specific number of management training courses during the year to warrant further consideration. Self-improvement objectives can also developing a new technical skill that increases the employee's value to the organization, such as attaining certification in Excel or Word.
Annual objectives can include measuring worker performance against predetermined quality standards for the year. These objectives can be used where quality is of particular importance and is evaluated through the implementation of a quality control system, such as when manufacturing a product with an assembly line process. Quality can be determined by tallying the number of errors made during the year or calculating the percentage of work completed without mistakes.
Employers count on workers to be at work on time and avoid excessive absenteeism. Annual objectives can include evaluating the employee's attendance record for the year, such as whether he exceeded a predetermined allowable number of sick days or limiting the number of reprimands for abusing time taken for breaks. Employers may also use dependability as an indicator in other areas, such as whether excessive absenteeism may be a factor in not reaching productivity goals.
- female boss and employee image by jimcox40 from Fotolia.com