Performance Evaluation

What is Performance
Evaluation
In simple terms, performance Evaluation may be understood as
the assessment of an individual’s performance in a systematic
way, the performance being measured against such factors as job
knowledge, quality and quantity of output, initiative, leadership
abilities, supervision, dependability, co-operation, judgment,
versatility, health and the alike. Assessment should not be
condensed to past performance alone. Potentials of the employee
for future performance must also be assessed.

A formal definition of performance Evaluation is:

It is the systematic evaluations of the individual with respect to his
her performance on the job and his or her potential for
development.
Performance Appraisal
Comparison
Job Analysis:
Describe work and requirement of a particular job.

Performance Standards:
Translate job requirements into levels of acceptable or
unacceptable performance

Performance Appraisal:
Describe the job-relevant strengths and weaknesses
of each individual
Objectives of Performance
Appraisal
Broadly, performance appraisal serves four
major objectives-
II) Development uses,
III) Administrative uses/decisions,
IV) Organizational maintenance/objectives,
and
V) Documentation purposes.
Objectives of Performance
Appraisal
Data relating to performance assessment of employees are recorded, stored, and used for
several purposes. The main purposes of employee assessment are:

1. To effect promotions based on competence and performance

2. To confirm the services of probationary employees upon their completing the probationary
period satisfactorily.

3. To assess the training and development needs of employees.

4. To decide upon a pay raise where (as in the unorganized sector) regular pay scales have not
been fixed.

5. To let the employees know where they stand insofar as their performance is concerned and to
assist them with constructive criticism and guidance for the purpose of their development.

6. To improve communication. Performance appraisal provides a format for dialogue between the
superior and the subordinate, and improves understanding of personal goals and concerns.
This can also have the effect of increasing the trust between the rater and the rate.

7. Finally, performance appraisal can be used to determine whether HR programmers such as

selection, training, and transfers have been effective or not.
Problems of Rating:

Performance appraisals are subject to a wide variety

of inaccuracies and biases referred to as ‘rating
errors’. These errors occur in the rater’s
observation; judgment, information procession and
can seriously affect assessment results.
The most common rating errors are leniency or
severity, halo effect, rater effect, primacy and
regency effects, perceptual set, performance
dimension behavior, spill over effect and status
effect.
Rating Errors
Halo error:
A halo effect takes place when one aspect of an individual’s performance
influences the evaluation of the entire performance of the individual
Spillover Effect:
This refers to allowing past performance appraisal ratings to unjustifiably
influence current ratings.
Leniency or severity:
Leniency or severity on the part of the rater makes the assessment a
subjective. Subjective assessment defeats the very purpose of
performance appraisal.
Primacy and Regency Effects:
The rater’s ratings are heavily influenced either by behavior exhibited by
the ratee during the early stages of the review period (primacy) or by
outcomes, or behaviors exhibited by the ratee near the end of the
review period (recently).
What should be rated?
One of the steps in designing an appraisal programme is to determine the evaluation criteria .It
is obvious that the criteria should be related to the job. The six criteria for assessing
performance are:
1. Quality: The degree to which the process or result of carrying out an activity approaches
perfection in terms of either conforming to some ideal way of performing the activity, or
fulfilling the activity’s intended purpose.

2. Quantity: The amount produced, expressed in monetary terms, number of units, or

number of competed activity cycles.

3. Timeliness: The degree to which an activity is completed or a result produced, at the

earliest time desirable from the standpoints of both coordinating with the outputs of others
and of maximizing the time available for other activities.
4. Cost of Effectiveness: the degree to which the use of the organizations
resources9e.g.human, monetary, technological and material) is maximized in the sense of
getting the highest gain or reduction in loss from each unit or instance of use of a resource.
5. Need for supervision: The degree to which a job performer can carry out a job function
without either having to request supervisory assistance or requiring supervisory
intervention to prevent an adverse outcome.
6. Interpersonal impact: The degree to which a performance promotes feeling of self-
esteem, goodwill and cooperation among co-workers and subordinates.
Methods of Appraisal
Numerous methods have been devised to measure
the quantity and quality of employees’ job
performance. Each of the methods discussed could
be effective for some purposes, for some
organizations. None should be dismissed or
accepted as appropriate except as they relate to the
particular needs of the organization or of a particular
type or employees. Broadly, all the approaches to
appraisal can be classified into

I) Past-oriented methods

II) Future-oriented methods

Past-oriented Methods:
 Rating scales

 Checklists

 Forced choice method

 Critical incident method

 Performance tests and observations

 Comparative evaluation approach

Future Oriented tests:
 Management by objective ~ identifies its common goal, define
each individuals responsibilities and use these measures as
guides for operating the unit and assessing the contribution of
each of its members

 360-Degree appraisal ~ The 360-degree technique is

understood as systematic collection of performance data on an
individual or group, derived from a number of stake holders- the
stakeholders being the immediate supervisor, team members,
customers, peers, and it

 Assessment centers~ An assessment center is a central

location where managers may come together to have their
participation in job-related exercise evaluated by trained
observers. The most important feature of the assessment center
is job-related stimulations. This stimulation include the
characteristics that managers feel are important for the job. On
this basis the evaluators evaluate the employees.
Use of Evaluation data:
The final step in evaluation process is the use of appraisal data. The data and
information generated through performance evaluation must be used by the
HR dept. In one way or the other, data and information outputs of
performance-appraisal programme can critically influence these coveted
employer-employee reward opportunities. Specifically, the data and
information will be useful in the following areas in HRM:

 Remuneration administration

 Validation of selection programmes

 Employee training and development programmes

 Promotion, transfer and lay-off decisions

 Grievance and discipline programmes

 HR planning.