For those in charge of human resources, the turnover rate in their company is one of their biggest concerns. One of the reasons for the high turnover rate is the lack of a well-developed personnel evaluation system.
In this article, I will explain the purpose of the personnel evaluation system and its three elements. Let’s use this article as a reference to establish an appropriate personnel evaluation system and achieve a lower turnover rate.
Purpose of the Personnel Evaluation System
The purpose of the personnel evaluation system is to promote the growth of the company and its employees. Specifically, it has the following aims
To motivate employees by treating them appropriately.
Appropriate staffing by objectively evaluating employees’ abilities.
To visualize employee evaluations for use in human resource development.
Visualization of employee evaluations is useful for human resource development. – Show employees the current situation and lead them in the direction they should aim for.
Encourage employees to take action to raise their evaluations.
As mentioned above, if the personnel evaluation system is operated properly, it will be beneficial for both the company and the employees. As a result, both the company and the employees can grow, which is the purpose of developing a personnel evaluation system.
Three elements in the personnel evaluation system
Three elements exist in the personnel evaluation system. “Evaluation System”, “Grading System”, and “Compensation System”.
From here, I will explain the three elements that are necessary for a deeper understanding of the personnel evaluation system.
1. Evaluation system
The evaluation system is a system that defines the evaluation standards and methods for business. In order to properly operate the evaluation system, corporate action guidelines should be formulated. The action guidelines show the direction of the company and organize how each employee should act in order to realize the vision.
The evaluation system evaluates the work of employees during the evaluation period based on the company’s action guidelines. Since the evaluation by the evaluation system usually determines the grade and remuneration, the grading system and the evaluation system are closely related to each other.
2. Grade system
A grading system is an organizational system that classifies employees according to their abilities, duties, and roles. The purpose of establishing a grading system is to clarify the hierarchy within a company. Clarify how the company’s organizational structure is structured and clarify what roles and abilities each grade should have.
A feature of the grading system is that authority and responsibility changes with each grade. The higher the grade, the greater the authority, but also the greater the responsibility.
The grading system is linked to the evaluation system, as the grade is determined based on the evaluation. It is also closely related to the compensation system, as compensation is determined by grade.
3. Remuneration system
The remuneration system is a system that determines the rules for remuneration, including salary, bonuses, and salary increases. Remuneration is often determined by the grade determined based on evaluation. Since the compensation system is linked to the evaluation system and the reward system, it allows for the payment of wages that match the evaluation of each employee.
In this way, the personnel evaluation system is made up of three interrelated elements: the evaluation system, the grading system, and the compensation system. In the past, many Japanese companies adopted a personnel evaluation system based on the so-called seniority system, which emphasized years of service and age.
However, as work styles become more diverse, the old-style personnel evaluation system is no longer able to properly evaluate employees. More and more companies are shifting their emphasis from seniority-based systems to performance-based systems.
In any case, it is important to develop a personnel evaluation system that suits the company so that employees can feel that they are being evaluated appropriately.
Personnel evaluation system realizes an appropriate evaluation system
The introduction of a modern personnel evaluation system is helpful in realizing an appropriate personnel evaluation system.
In the case of traditional analog personnel evaluation, the evaluation can be subjective. However, if we use the latest digital tools, we will be able to conduct highly objective personnel evaluations based on data.
To ensure that personnel evaluations are conducted fairly, it is recommended to use a dedicated personnel evaluation system.
Since a variety of personnel evaluation systems are now available, it is important to introduce a system that suits your company.
If you introduce a personnel evaluation system, you will be able to conduct efficient personnel evaluations through analysis functions and data acquisition. This will reduce the workload of the HR staff and allow them to focus on the original purpose of the HR evaluation system, which is the growth of the employees and the company.
SNS-type goal management tool Goalous also has functions that are useful for fair and efficient personnel evaluation. Goal function
The goal function allows each goal to be shared.
The evaluation function allows you to see the process and results toward the goal.
The key point is that the results and actions for each goal can be visualized so that evaluations can be conducted properly. Equitable evaluation is effective in reducing employee dissatisfaction, which in turn leads to a lower retirement rate.
In addition, Goalous has a variety of functions that are useful for team management. If implemented, it will greatly reduce the workload of HR staff.
As you can see, a proper personnel evaluation system is very important for a company. A fair evaluation of employees will lead to a lower turnover rate, so it is important to have a well-developed personnel evaluation system.
In order to develop and build a highly fair personnel evaluation system, it is fundamental to use the three elements introduced in this article as criteria. In addition, the introduction of the latest personnel evaluation system will help to realize a more accurate personnel evaluation.