Assessing The Impact Of Saudi Aramcos Appraisal System On Its Employees' Morale And Performanc - Essay Example

Human Resource Department also noticed that almost all non-Saudi employees resign once they receive better jobs offer. In light of Industrial Security letter and Human Resources findings, it is clear that the employees’ commitment and morale is at unprecedentedly low level and as a result, Saudi Aramco management’s new challenge is to motivate, recognize, increase self-belonging and reward their employees properly to ensure their optimum productivity. The lack of commitment and interest to work is attributed by many, to the employees’ “below expectation” appraisals and rewards although, the current appraisal system has been used since 2003 and hence it is considered as fairly new appraisal system.

This research is intended to provide Saudi Aramco’s management with sufficient reasoning on how vital the current appraisal system can be on the success of the company and its employees. Saudi Aramco’s appraisal and reward systems are based on two components: • A Performance Management Program (PMP) that utilizes a five-categories rating scale in apprising their employees. • A multi stage forced ranking criteria. The old appraisal system was a simple word document filled by the supervisor that contains tasks completed, strength areas, and weakness areas, development areas.

To overcome the many disadvantages of the old system, Saudi Aramco shifted to a Performance Management Program (PMP).. The PMP, according to the company; is a continuous, three-phase cycle of planning, managing, and reviewing performance. Within each phase, the supervisor and the employee will both have responsibilities. PMP is not something to be done to employees, it is an activity undertaken with employees. It is a partnership. The Performance Management Program (PMP) is designed to: Improve the performance of Aramco and its employees.

Enable supervisors and employees to plan and review performance. Provide a forum for career planning discussions. Figure 1: PMP process The PMP utilizes a five-categories rating scale ranging from “S” which is significantly exceeds job requirements to “D” which is dissatisfactory performance. Each of the five-categories has a range of annual salary increase percentages for example; “S” category ranges from (9-11%) increase while “M” which is meeting job requirements ranges from (2-4%) increase.

An employee’s performance is being measured by the supervisor against some competences and goals accomplished during the year (Murphy & Cleveland, 1995). Then, the general supervisor meets with his supervisors where they start discussing and defending their employees having in mind that the stronger the supervisor is the greater the chance that the employee will get a satisfactory appraisal rating. Once this stage is completed, the manager meets with his general supervisors to discuss and approve their employees rating.

Again, the stronger the general supervisor is, the greater the chance that the employees will get a satisfactory appraisal rating. Figure 2: Rating Factors 1.2. Problem Statement: Evaluation of an individual work performance as a formal management procedure is