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 objectivesI) Development uses, II) Administrative uses/decisions, III) Organizational maintenance/objectives, and IV) 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 selfesteem, 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.