Interested in why organizations do employee performance evaluation? It's both an evaluative process and a communication tool. Done traditionally, employee performance evaluation is universally disliked by supervisors and employees.
Performance management, on the other hand, provides the advantages organizations seek in doing performance evaluation. But, performance management, participated in effectively and with the appropriate mindset, accomplishes the same goals, and more. Performance management also supplies additional advantages to both the manager and the employee.
The question on the table now is why organizations would want to ask employees to participate in either employee performance evaluation or a performance management system. Good reasons exist for advocating the basic concept of performance evaluation. I’m just not a fan of the traditional process.
Where Employee Performance Evaluation Fits
In some form, most organizations have an overall plan for business success. The employee performance evaluation process, including goal setting, performance measurement, regular performance feedback, employee recognition, and documentation of employee progress, ensures this success. The process — done with care and understanding — helps employees see how their jobs and expected contributions fit within the bigger picture of their organization.
The more effective evaluation processes accomplish these goals and have additional benefits. Documented performance evaluations are communication tools that ensure the supervisor and her reporting staff members are clear about the requirements of each employee’s job. The evaluation also communicates the desired outcomes or outputs needed from each employee’s job and defines how they will be measured.
Goals of Employee Performance Evaluation
These are goals of an effective employee evaluation process.
- The employee and the supervisor are clear about the employee’s goals, required outcomes or outputs, and how the success of the contributions will be assessed.
- The goals of the best employee performance evaluations are also employee development and organizational improvement. The employee performance evaluation helps employees accomplish both personal development and organizational goals. The act of writing down the goals takes the employee one step closer to accomplishing them.
Since goals, deliverables and measurements are negotiated in an effective employee performance evaluation, the employee and the supervisor are committed to achieving them. The written personal development goals are a commitment from the organization to assist the employee to grow in his or her career.
- Employee performance evaluation provides legal, ethical, and visible evidence that employees were actively involved in understanding the requirements of their jobs and their performance. The accompanying goal setting, performance feedback, and documentation ensure that employees understand their required outputs.
In the event that an employee is not succeeding or improving in his job performance, the performance evaluation documentation can be used to develop a Performance Improvement Plan (PIP). This plan provides more detailed goals with more frequent feedback to an employee who is struggling to perform. The goal is improvement but non-performance can lead to disciplinary action up to and including employment termination.
- In many organizations numeric rankings are used to compare an employee’s performance with the performance of other employees. Numeric ratings are frequent components of these systems, too. No matter how fair and non-discriminatory, these ratings are made to appear through endless establishment of criteria for rating, they basically boil down to the supervisor’s opinion of an employee’s performance. This is why I don’t particularly support numeric components in a employee performance evaluation process.
- The employee performance evaluation provides evidence of non-discriminatory promotion, pay, and recognition processes. This is an important consideration in training supervisors to perform consistent, regular, non-discriminatory employee performance evaluations. The documentation of success and failure to achieve goals is a critical component of the employee performance evaluation process.
While employee performance evaluation systems take many forms from organization to organization, these are the components likely to be included. Some are more effective than others. But the goals for the employee performance evaluation system, or the appraisal process, or the performance management process are similar. The differences appear in the approach and the details. And, that can make all the difference in how the system is perceived by and carried out by employees.