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Performance Evaluation Techniques


How performance evaluation systems influence behaviour. Major determinants of your office behaviour and out-of-office studying effort are the criteria and techniques your superior uses to evaluate your performance. This applies to employees at work. How the choice of a performance evaluation system and the way it’s administered can be an important force influencing employee behaviour.

In many organizations, this inconsistency is aggravated by the practice of having separate wage and salary reviews, in which merit rises and bonuses are decided arbitrarily, and often secretly, by supervisors and managers.


Why Performance Appraisal?

Performance Evaluation Performance appraisal is a vehicle to: (1) validate and refine organizational actions (e.g., selection, training); and (2) provide feedback to employees with an eye on improving future performance.

Validating and refining organizational action, Employee selection, training and just about any cultural or management practice—such as the introduction of a new pruning method or an incentive pay program—may be evaluated in part by obtaining worker performance data.

The evaluation may provide ideas for refining established practices or instituting new ones. For instance, appraisal data may show that a farm supervisor has had a number of interpersonal conflicts with other managers and employees. Some options include: (1) Paying more attention to interpersonal skills when selecting new supervisors, (2) Encouraging present supervisors to attend communication or conflict management classes at the local community college, or (3) Providing the supervisor one-on-one counseling. Data from performance appraisals can also help farmers: (1) Plan for long-term staffing and worker development, (2) Give pay raises or other rewards, (3) Set up an employee counseling session, or (4) Institute discipline or discharge procedures.

For validation purposes, it is easier to evaluate performance data when large numbers of workers are involved. Useful performance data may still be collected when workers are evaluated singly, but it may take years to obtain significant data trends.

Employee need for feedback

Although employees vary in their desire for improvement, generally workers want to know how well they are performing. A successful people need positive feedback and validation on a regular basis. Once an employee has been selected, few management actions can have as positive an effect on worker performance as encouraging affirmation. These are, in effect, good-will deposits, without which withdrawls cannot be made. This does not mean you should gloss over areas needing improvement. When presented in a constructive fashion, workers will often be grateful for information on how to improve shortcomings. Such constructive feedback, however, “can happen only within the context of listening to and caring about the person”. In general, supervisors who tend to look for worker’s positive behaviours—and do so in a sincere, non-manipulative way—will have less difficulty giving constructive feedback or suggestions. Furthermore, in the negotiated approach, the burden for performance analysis does not fall on the supervisor alone, but requires introspection on the part of the individual being evaluated. Feedback may be qualitative or quantitative. Qualitative comments are descriptive, such as telling the shop mechanic you appreciate the timeliness and quality of his repairs. In contrast, quantitative feedback is based on numerical figures, such as the percentage of plant grafts that have taken. Some researchers feel feedback is particularly useful when workers have an achievement objective. Performance improved substantially in a number of settings when workers were given specific goals to achieve and received performance feedback. Next to employee discipline, performance appraisal interviews are probably the most dreaded management activity. Traditional performance appraisals put the supervisor in a position of being the expert on the employee’s performance. Although the appraisal process can take place between supervisor and employee alone, the use of a third party can greatly facilitate the success of the approach. The message is thus clearly sent to all involved that this process is important to the farm organization.


Appraisals, social responsibility and whole-person development

There is increasingly a need for performance appraisals of staff and especially managers, directors and CEO’s, to include accountabilities relating to corporate responsibility, represented by various converging corporate responsibility concepts including: the ‘Triple Bottom Line’ (‘Profit People Planet’); Corporate Social Responsibility (CSR); Sustainability; Corporate Integrity and Ethics; Fair Trade, etc. The organisation must decide the extent to which these accountabilities are reflected in job responsibilities, which would then naturally feature accordingly in performance appraisals. More about this aspect of responsibility is in the directors job descriptions section. Significantly also, while this appraisal outline is necessarily a formal structure this does not mean that the development discussed with the appraise, must be formal and constrained. In fact the opposite applies. Appraisals must address ‘whole person’ development not just job skills or the skills required for the next promotion. Appraisals must not discriminate against anyone on the grounds of age, gender, sexual orientation, race, religion, disability, etc.


Performance evaluation serves a number of purposes in organizations. Management uses evaluations for general human resource decisions. Evaluations provide in put into such important decisions as promotions, transfers, and terminations. Evaluations identify training and development needs. They pinpoint employee skills and competencies that are currently inadequate but for which programs can be developed to remedy. Performance evaluations can be used as a criterion against which selection and development programs are validated. Newly hired employees who perform poorly can be identified through performance evaluation. Similarly, the effectiveness of training and development programs can be determined by assessing how well those employees who have participated do on their performance evaluation. Evaluations also fulfill the purpose of providing feedback to employees on how the organization views their performance. Furthermore, performance evaluations are used as the basis for reward allocations. Decisions as to who gets merit pay increases and other rewards are frequently determined by performance evaluations. Each of these functions of performance evaluation is important. Yet their importance to us depends on the perspective we are taking. Several are clearly relevant to human resource management decisions. But our interest is in organizational behaviour. As a result, we shall be emphasizing performance evaluation in its role as a mechanism for providing feedback and as a determinant of reward allocations.

Performance appraisals seek to meet specific objectives. They include tell and sell, tell and listen, problem solving, and mixed model. Tell and sell is evaluative in nature. It is used for purely evaluative purposes. The supervisor coaches by telling the employee the evaluation and then persuading the employee to follow recommendations for improvement. Tell and listen is evaluative in nature. The supervisor coaches by telling the employee the evaluation and then listens to the employee’s reactions to the evaluation in a nonjudgmental manner. Problem solving is developmental in nature and involves counseling. It is used for employee development purposes. The supervisor does not offer evaluation but lets the employee decide his or her weak areas and works with the employee to develop an action plan for improvement. The mixed model combines coaching and counseling. It is used for both evaluative and development purposes. The supervisor begins the appraisal with a problemsolving session and concludes with a more directive tell and sell approach. Performance appraisals can achieve and contribute to when they are properly managed, for example:

  •  Performance measurement—transparent, short, medium and long-term.
  •  Clarifying, defining, redefining priorities and objectives.
  •  Motivation through agreeing helpful aims and targets.
  •  Motivation through achievement and feedback.
  •  Training needs and learning desires–assessment and agreement.
  •  Identification of personal strengths and direction–including unused hidden strengths.
  •  Career and succession planning–personal and organizational.
  •  Team roles clarification and team building.
  •  Organizational training needs assessment and analysis.
  •  Appraisee and manager mutual awareness, understanding and relationship.
  •  Resolving confusions and misunderstandings.
  •  Reinforcing and cascading organizational philosophies, values, aims, strategies, priorities, etc.
  •  Delegation, additional responsibilities, employee growth and development.
  •  Counseling and feedback.
  •  Manager development—all good managers should be able to conduct appraisals well—it’s a fundamental process.


Performance Evaluation and Motivation:

A vital component of this model is performance, specifically the effort–performance and performance– reward linkages. But what defines performance? In the expectancy model, it’s the individual’s performance evaluation. To maximize motivation, people need to perceive that the effort they exert leads to a favourable performance evaluation and that the favourable evaluation will lead to the rewards that the value. Following the expectancy model of motivation, if the objectives that employees are expected to achieve are unclear, if the criteria for measuring those objectives are vague, and if the employees lack confidence that their efforts will lead to a satisfactory appraisal of their performance or believe that there will be an unsatisfactory payoff by the organization when their performance objectives are achieved, we can expect individuals to work considerably below their potential.

What do we Evaluate?

The criteria or criterion that management chooses to evaluate, when appraising employee performance, will have a major influence on what employees do. Two examples illustrate this. In a public employment agency, which served workers seeking employment and employers seeking workers, employment interviewers were appraised by the number of interviews they conducted. Consistent with the thesis that the evaluating criteria influence behaviour, interviewers emphasized the number of inter placements client in jobs.

A management consultant specializing in police research noticed that, in one community, officers would come on duty for their shift, proceed to get into their police cars, drive to the highway that cut through the town, and speed back and forth along this highway for their entire shift. Clearly this fast cruising had little to do with good police work, but this behaviour made considerably more sense once the consultant learned that the community’s city council used mileage on police vehicles as an evaluative measure of police effectiveness. These examples demonstrate the importance of criteria in performance evaluation. This, of course, begs the question: What should management evaluate? The three most popular sets of criteria are individual task outcomes, behaviours, and traits. Individual Task Outcomes if ends count rather than means, then management should evaluate an employee’s task outcomes. Using task outcomes, a plant manager could be judged on criteria such as quantity produced, scrap generated, and cost per unit of production. Similarly, a salesperson could be assessed on overall sales volume in his or her territory, dollar increase in sales, and number of new accounts established.

Behaviours in many cases, it is difficult to identify specific outcomes that can be directly attributable to an employee’s actions. This is particularly true of personnel in staff positions and individuals whose work assignments are intrinsically part of a group effort. In the latter case, the group’s performance may be readily evaluated, but the contribution of each group member may be difficult or impossible to identify clearly. In such instances, it is not unusual for management to evaluate the employee’s behaviour. Using the previous examples, behaviours of a plant manager that could be used for performance evaluation purposes might include promptness in submitting his or her monthly reports or the leadership style that the manager exhibits. Pertinent salesperson behaviours could be average number of contact calls made per day or sick days used per year.

Note that these behaviours needn’t be limited to those directly related to individual productivity. As we pointed out in our previous discussion on organizational citizenship behaviour, helping others, making suggestions for improvements, and volunteering for extra duties make work groups and organizations more effective. So including subjective or contextual factors in a performance evaluation—as long as these factors contribute to organizational effectiveness—may not only make sense; they may also improve coordination, teamwork, cooperation, and overall organizational performance.

Traits the weakest set of criteria, yet one that is still widely used by organizations, is individual traits. We say they are weaker than either task outcomes or behaviours because they are farthest removed from the actual performance of the job itself. Traits such as having “a good attitude,” showing “confidence,” being “dependable,” “looking busy,” or possessing “a wealth of experience” may or may not be highly correlated with positive task outcomes, but only the native would ignore the reality that such traits are frequently used in organizations as criteria for assessing an employee’s level of performance.

Who should Do the Evaluating?

Who should evaluate an employee’s performance? The obvious answer would seem to be his or her immediate boss! By tradition, a manager’s authority typically has included appraising sub-ordinates’ performance. The logic behind this tradition seems to be that since managers are held responsible for their employees’ performance, it only makes sense that these managers do the evaluating of their performance. But that logic may be flawed. Others may actually be able to do the job better.

Immediate Superior: As we implied, about 95 per cent of all performance evaluations at the lower and middle levels of the organization are conducted by the employee’s immediate boss. Yet a number of organizations are recognizing the drawbacks to using this source of evaluation. For instance, many bosses feel unqualified to evaluate the unique contributions of each of their employees. Others resent being asked to “play God” with their employees’ careers. Additionally, with many of today’s organizations using self-managed teams, and other organizing devices that distance bosses from their employees, an employee’s immediate superior may not be a reliable judge of that employee’s performance.

Peers: Peer evaluations are one of the most reliable sources of appraisal data. Why? First, peers are close to the action. Daily interactions provide them with a comprehensive view of an employee’s job performance. Second, using peers as raters results in a number of independent judgments. A boss can offer only a single but peers can provide multiple appraisals. And the average of several ratings is often more reliable than a single evaluation. On the downside, peer evaluations can suffer from co-workers’ unwillingness to evaluate one another and from biases based on friendship or animosity.

Self-evaluation: Having employees evaluate their own performance is consistent with values such as self-management and empowerment. Self-evaluations get high marks from employees themselves; they tend to lessen employees’ defensiveness about the appraisal process; and they make excellent vehicles for stimulating job performance discussions between employees and their superiors. However, as you might guess, they suffer from over inflated assessment and self-serving bias. Moreover, self-evaluations are often low in agreement with superiors’ ratings. Because of these serious drawbacks, self-evaluations are probably better suited to developmental uses than evaluative purposes.

Immediate subordinates: A fourth judgment source is an employee’s immediate subordinates. For instance, XYZ Industries, a maker of in-store to computer systems, uses this form of appraisal. The company’s president says it’s consistent with the firm’s core values of honesty, openness, and employee empowerment. Immediate subordinates’ evaluations can provide accurate and detailed in formation about a manager’s behaviour because the evaluators typically have frequent contact with the evaluate. The obvious problem with this form of rating is fear of reprisal from bosses given unfavorable evaluations. Therefore, respondent anonymity is crucial if these evaluations are to be accurate.

360-Degree evaluations: The latest approach to performance evaluation is the use of 360-degree evaluations. It provides for performance feedback from the full circle of daily contacts that an employee might have, ranging from mailroom personnel to customers to bosses to peers. The number of appraisals can be as few as three or four evaluations or as many as 25; with most organizations collecting five to ten per employee.


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