Employee Assessment

A performance review system is an approach to assessing and encouraging positive job performance. It is a tool for development, but it also provides the basis for the company to give raises and promotions or take corrective actions. There are various evaluation methods, including rating scales, essays, checklists, critical incident appraisals, work standards approach, and ranking methods. With the management by objectives (MBO) approach, performance is measured against the goals set by the manager and employee. A narrative is included with the behaviorally anchored rating scale (BARS) approach for each rating. This text addresses how to design an effective performance appraisal system.

Performance Evaluation Systems

Learning Objectives

  1. Define the reasons for a formal performance evaluation system.
  2. Explain the process to develop a performance review system.

A performance evaluation system is a systematic way to examine how well an employee is performing in his or her job. If you notice, the word systematic implies the performance evaluation process should be a planned system that allows feedback to be given in a formal - as opposed to informal - sense. Performance evaluations can also be called performance appraisals, performance assessments, or employee appraisals.

There are four reasons why a systematic performance evaluation system should be implemented. First, the evaluation process should encourage positive performance and behavior. Second, it is a way to satisfy employee curiosity as to how well they are performing in their job. It can also be used as a tool to develop employees. Lastly, it can provide a basis for pay raises, promotions, and legal disciplinary actions.

Source: University of Minnesota, https://open.lib.umn.edu/humanresourcemanagement/chapter/11-1-performance-evaluation-systems/
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