All management professionals need to know the degree of accomplishment of the tasks that make part of every employee’s job in a business organization. This is the employee’s performance and it is based on the results he/she provides through his/her efforts. Assessment of employee performance is underlain by three main objectives:
- Providing the employees feedback on their performance
- Working out ways of more effective performance
- Obtaining data for making decisions on prospective tasks within jobs and compensation
However, assessment of performance is not as simple a matter as it appears. In a large number of cases, appraisals made by the managers regarding employee performance fail due to one or more flaws in the manager’s judgment. Some of these flaws are:
- Subjective Judgment
- Judgment based primarily on the employee’s personality traits rather than his/her actual performance
- The manager’s own lack of skills required to make a fair appraisal
Techniques of Evaluating Employee Performance
Three techniques most commonly used to examine the performance of an employee include: checklist, rating scale, and critical incident. Management by Objectives (MBO) is another method used to gauge the degree of success of an employee’s efforts.
The checklist method is actually based on recording the performance rather than evaluating it. This method works by a list of statements or questions to which the employee provides a yes/no response.
Several different rating scales have been developed for measuring employee performance. The one most commonly used, what may be called the ‘traditional’ rating scale, includes different variables like initiative, quality of work, amount of work done successfully, and so on. Usually, the employee is rated on a 3 to 5 points scale. More sophisticated rating scales are used in institutes or organizations according to the nature of the assigned tasks.
In the critical incident technique, the manager identifies the recorded incidents of an employee’s behavior. An incident that shows a result of unusual success or failure of the employee on some job task is regarded as ‘critical’. Success with the task reckons a positive performance and failure shows the contrary. The main disadvantage of this assessment as a background check technique, for example, is its time-consuming nature.
In the MBO system, ample objective feedback is provided on the performance of employees (usually the managers themselves) so as to make an evaluation based on the degree to which certain specified objectives were (or were not) achieved in a pre-determined period of time.
Avoiding Evaluation Errors
All techniques of assessment on employee performance are likely to have some shortcomings and errors which the managers need to be aware of in order to make a fair judgment of the employee performance. The most common errors come with the rating method of assessment. Important ones of these include:
Strictness/Leniency: If the rater goes overly harsh or too lenient in sizing up the performance, erroneous assessment is the result.
Halo Effect: Well-known among psychologists, the halo effect results when rating on one dimension (regarded very important) considerably influences rating on other dimensions (assumed less significant).
Central Tendency Error: Sometimes, the rater tends to rate all employees equally, usually rating everyone as ‘average’. This facilitates the rating process for the rater but may produce discontent among employees.
Recency Effect: It is common among raters to be biased in rating a recent behavior which may shadow the previous performance. Employees are often very conscious to this and this leads to better performance each time the rating is conducted.