Evaluating Employee Performance

Performance Appraisal Process

• The performance appraisal process consists of several critical steps that organizations follow to evaluate employee performance effectively.

Steps in the Performance Appraisal Process:

1. Determine Purpose of Appraisal

   • Establish the reasons for evaluating employee performance, such as:

     • Providing Feedback: Meetings between supervisors and employees to discuss strengths and weaknesses.

     • Determining Salary Increases: Assessing employee salaries based on job descriptions and KSAOs (Knowledge, Skills, Abilities, and Other characteristics).

     • Making Promotion Decisions: Promotions can be based on seniority or job performance, ensuring alignment with job requirements.

     • Making Termination Decisions: Terminations based on performance evaluations after providing necessary feedback and support.

     • Conducting Personnel Research: Evaluating the effectiveness of appraisal methods and methods of correlating job performance and evaluation results.

2. Identify Environmental and Cultural Limitations

   • Recognize factors that could influence performance evaluations; for instance, teamwork-oriented cultures may require peer evaluations.

3. Determine Who Will Evaluate Performance

   • Identify sources of evaluation:

     • Supervisors: Most common evaluators (74% of evaluations).

     • Peers: Provide reliable feedback when familiar with the employee being rated.

     • Subordinates: Difficult to obtain ratings due to fear of backlash.

     • Customers: Informal feedback on performance.

     • Self-Appraisals: Employees assess their performance, usually not used for administrative actions.

4. Select the Best Appraisal Methods

   • Key decisions include:

     • Focus of Appraisal Dimensions:

     • Trait-Focused: Attributes like dependability and courtesy (may lead to defensiveness).

     • Competency-Focused: Knowledge, skills, and abilities (better feedback).

     • Task-Focused: Based on similarities of tasks performed.

     • Goal-Focused: Goals that the employee is expected to accomplish.

     • Measurement and Rating: Methods include rank order, paired comparison, and forced distribution of performance ratings.

5. Train Raters

   • Training supervisors enhances accuracy and reduces errors in performance evaluations. Frame-of-reference training is beneficial in providing job-related information and examples.

6. Observe and Document Performance

   • Supervisors should document critical incidents (specific observed behaviors) to provide concrete examples during performance evaluations.

   • Documentation is crucial for fostering focus on behaviors, aiding recall during evaluations, and defending against legal actions.

7. Evaluate Performance

   • Review objective data and critical incidents before assigning performance ratings.

   • Be aware of common rating errors: leniency error (high ratings for all), central tendency (middle ratings for all), and strictness error (low ratings for all).

8. Communicate Appraisal Results to Employees

   • Feedback to employees is essential for identifying areas for further training.

   • Techniques for effective appraisal interviews include allocating time properly, scheduling, and preparing adequately.

9. Make Personnel Decisions

   • Use appraisal results to guide decisions regarding:

     • Training programs

     • Raises and promotions

     • Terminations, based on specific legal justifications (e.g., probation, rule violations).

10. Monitor the Fairness of the Appraisal Process

    • Continually assess the fairness and effectiveness of the appraisal methods used to ensure that they meet the organization's objectives.

Source: Aamodt (2016)