Boundless Business: "Chapter 12, Section 4: Developing Employees: Performance Assessment"

This article notes the importance of assessing employee job performance on clear pre-established criteria and objectives. Since employee performance can make or break a company, performance management can be critical. Review the graphic that reflects how performance standards, performance measurement, reporting of progress, and quality improvement processes are all components of an effective performance management system.

Performance Assessment

Businesses conduct performance appraisals to assess the job performance and productivity of their employees according to certain pre-established criteria and objectives.

Learning Objective: Explain the steps in performance appraisal (PA).

Key Points

    • A performance appraisal is a systematic and periodic process that employers use to assess an individual employee's job performance and productivity in relation to certain pre-established criteria and organizational objectives.

    • Businesses use three main methods to collect performance appraisal data: objective production, personnel, and judgmental evaluation. Businesses use a variety of tools to evaluate judgement.

    • Most companies conduct an annual performance appraisal. However, the frequency of evaluation and associated policies vary widely from workplace-to-workplace.

    • An evaluation may include an assessment of how well the employee is doing and the goals employees are expected to meet (or make significant progress) by a set time, such before as the next evaluation.

    • Many performance management systems include performance assessment. Businesses use these systems to "manage and align" their resources to achieve the highest possible performance levels.

Definitions

    • Evaluation: an assessment, such as an annual personnel performance review, organizations use to determine whether they should give an employee a salary increase, bonus, or provide other types of feedback regarding job performance.
    • Performance appraisal: a method organizations use to evaluate how well an employee performs in their job.

Example

    • Employees who have performed well since their last review period may receive an increase in pay or be promoted to a more prestigious position. However, a pay raise that is denied does not necessarily reflect poor performance or a bad review: economic conditions and other factors may dictate whether an employer is able to raise their workers' pay.

Graphic of a performance management system.

Performance Appraisal

A performance appraisal (PA) or performance evaluation is a systematic and periodic process that assesses an individual employee's job performance and productivity, in relation to certain pre-established criteria and organizational objectives. Employers also consider other aspects of individual employees, such as organizational citizenship behavior, accomplishments, potential for future improvement, strengths and weaknesses.

Businesses use three main methods to collect performance appraisal data: objective production, personnel, and judgmental evaluation. Businesses use a variety of tools to evaluate judgement.

Most companies conduct an annual performance appraisal. However, the frequency of evaluation and associated policies vary widely from workplace-to-workplace. For example, employers often evaluate new employees when their probationary period has ended, and on a regular basis thereafter (such as every year).

Usually, the employee's supervisor, or a more senior manager, is responsible for evaluating the employee. A private conference is usually scheduled to discuss the evaluation. The interview can provide feedback to employees, counsel and develop employees, or convey and discuss compensation, job status, and disciplinary decisions.

The evaluation process may include the following:

    • An assessment on how well the employee is doing. This may include a scale that rates strengths and weaknesses in key areas, such as following instructions, promptness, and ability to get along with others. The supervisor and manager will usually discuss these key areas. However, depending on the job, some employers may be less concerned about whether an employee follows instructions, arrives on time, or gets along well with others.

    • Employee goals that are expected to be met (or have made significant progress) by a set time, such as by the next evaluation. The employer or employee may set these goals. An underperforming employee may receive a performance improvement plan, which details specific goals they must meet to maintain their position at the company.

    • Feedback from an employee's co-workers and supervisors. The employee should have an opportunity to share their feelings, concerns and suggestions about the workplace.

    • Details about workplace standing, promotions, and pay raises. Sometimes, an employee who has performed well since their last review period receives a pay increase or is promoted to a more prestigious position. However, a pay raise that is denied does not necessarily reflect poor performance or a bad review: economic conditions and other factors may dictate whether employers are able to give their employees a pay raise.

Performance appraisal is part of many performance management systems. Businesses use these systems "to manage and align" the organization's resources to achieve the highest possible performance levels. The way an organization manages performance can determine its success or failure. Consequently, improving performance appraisal for everyone should be one of the organization's highest priorities.

Source: Boundless. “Performance Assessment.” Boundless Business, May 26, 2016.

Last modified: Tuesday, April 23, 2019, 12:05 PM