Performance Evaluation: Methods, Importance, and Impact

Posted on Jan 27, 2025 in International Business Economics

Decisions in Performance Yield Evaluation

Evaluating the System

The system must be valid and reliable.

  • Reliable: Consistent evaluation of the subordinate, regardless of who performs it. If the yield does not change with time, the system will produce consistent results.
  • Valid: Important yield criteria should be related to the job and easily identifiable.

Criteria for Analysis

  • Single or Multiple Criteria: Analyze identified job performance criteria that reflect employee contributions.
  • Weighting Criteria: Recognize the importance of criteria in obtaining desired outcomes.
  • Action Patterns: Determine performance standards for each worker to facilitate objective judgments.

Who Evaluates?

  • Superior: Possesses knowledge and assesses performance.
  • Self-Evaluation: Important for management by objectives. Influences individual commitment with equal consideration of objectives.
  • Peer Evaluation: Colleagues may not have access to the superior yield of subordinates within the workgroup.
  • Subordinate Evaluation: Provides upward feedback.
  • Rating Evaluation: Addresses satisfaction points to correct and stimulate behavior.
  • 360-Degree Evaluation: Combines all previous methods. Several sources establish a weighted evaluation. Should be systematic in evaluating judgments. Generates satisfaction: fast and objective. Careful use is needed to avoid privacy invasion.

When to Assess

Timely assessment can generate frustration and dissatisfaction if it does not reflect the effort.

Purpose and Importance of Evaluation

Measurement for management. Enhances performance. Provides feedback. Facilitates HR planning. Ensures compliance with regulations. Improves communication and job performance.

Relationships and Influence

  1. Job Analysis: Identifies issues in developing evaluation criteria and placement.
  2. Selection: Only selected candidates will yield adequately.
  3. Remuneration: Evaluation provides a basis for distributing rewards.
  4. Training: Informs training, upgrading, and career development programs.
  5. Motivation and Productivity: Effort will be active and lead to positive performance outcomes.

Methods for Evaluating Performance Yield

Comparative Approaches

  1. Direct Ranking: Orders subordinates from best to worst based on performance. Useful in small businesses.
  2. Alternative Classifications: Lists the best subordinate first and the worst last, measuring the rest against the average. Useful for comparing group work.
  3. Paired Comparisons: Compares each subject with each other, one by one, determining the best. The subject selected most often is ranked highest.
  4. Forced Distribution: Assigns a predetermined proportion of subordinates to each category of each factor.

Behavioral Approaches

Focuses on the behavior of each person according to individual criteria.

  1. Narrative Essay: Describes the evaluated employee’s strengths and weaknesses and suggests methods to improve their performance.
  2. Rating Scale: Uses personality traits as performance indicators. Rates the degree to which the trait is possessed.
  3. Critical Incidents: Observes what makes a subordinate effective or ineffective at work. Describes behavior towards people and situations.
  4. Weighted Checklists: Notes the frequency of each event. Experts evaluate the frequency category for each event for each subordinate.
  5. Forced Choice: To reduce leniency error, requires the supervisor to choose two elements from a pair that best describe the subordinate. Does not provide feedback to the subordinate.
  6. Behaviorally Anchored Rating Scales (BARS): Uses results to provide subordinates with ways to improve observed behavior.
  7. Performance Scale: Similar to BARS, except for the scales. Indicates the variety of behaviors that evaluators often use.

Results-Based Approaches

  1. Direct Target: Methods for assessing acceptable objectives between managers. Reduces matters unrelated to work.
  2. Management by Objectives (MBO): Applies to specific positions within management. Measures are not always consistent with objectives. Advantage: Orients the owner towards desired results. Disadvantage: Cost and time.
  3. Direct Index Approach: Performance is measured by objective, impersonal criteria such as productivity, absenteeism, and turnover.
  4. Record of Achievements: Achievements are related to a scale to assess accuracy. A team of experts evaluates the record. High cost and time involved.

Steps for Setting Objectives

  1. Set objectives to be achieved by the subordinate.
  2. Determine the timeframe for achieving objectives.
  3. Compare achieved objectives with set objectives.
  4. Decide on new targets to achieve.