Performance evaluation and management in SMEs

This project provides new insights on how to design Performance Appraisal Systems in the context of Portuguese SMEs. This is a case study based on the activity of Silent Living, a small hospitality company with nineteen employees, that were named by the student after Silent Livers. It is widely recognized that the overall performance is a crucial factor to improve or harm companies’ outcomes. Simultaneously, human resources are one of the most impacting means to achieve an advantage in the competitive set we face today. This is even more critical in an industry that offers experiences, and that bases a huge part of its operation on connections between people, which is the reality of the hospitality industry. Therefore, it is increasingly pertinent to invest more time and resources in strategic human resources management, something that has been neglected by SMEs, due to the demanding relationship between the several challenges they live and the resources they possess. For that, Performance Appraisal Systems can be an important tool. In such manner, after observing the operation and behaviour of the Silent Livers, and collecting their feedback on how to design a Performance Appraisal System and on the company’s particularities, a framework was created to translate the possible evolution of this process. The framework is simple, demonstrating that to be effective a Performance Appraisal System needs to adapt to the characteristics and expectations of the people involved, have a defined structure but also some flexibility. The system was called “Growing Together” and relies on a competencies model, encompassing four stages: Planning, Monitoring, Reviewing, and Adjusting. The final goal of the project is to show the various strokes of the system’s design. Lastly, “Growing Together” intends to improve the individual and joint performance of its employees, expand their competencies, strengthen their organizational culture and motivate them to be the best performers they can be.