Purposes of Performance Evaluation
Performance evaluation serves a number of purposes. One is to help management make general human resource decisions about promotions, transfers, and terminations. Evaluations also identify training and development needs. They pinpoint employee skills and competencies for which remedial programs can be developed. Finally, they provide feedback to employees on how the organization views their performance and are often the basis for reward allocations, including merit pay increases.
Because our interest is in organizational behavior, here we emphasize performance evaluation as a mechanism for providing feedback and determining reward allocations.
What Do We Evaluate? The criteria management chooses to evaluate will have a major influence on what employees do. The three most popular sets of criteria are individual task outcomes, behaviors, and traits.
Individual Task Outcomes If ends count rather then means, management should evaluate an employee’s task on outcomes such as quantity produced, scrap generated, and cost per unit of production for a plant manager or on overall sales volume in the territory, dollar increase in sales, and number of new accounts established for a salesperson.
Behaviors It is difficult to attribute specific outcomes to the actions of employees in advisory or support positions or employees whose work assignments are part of a group effort. We may readily evaluate the group’s performance, but if it is hand to identify the contribution of each group member, management will often evaluate the employee’s behavior. A plant manager might be evaluated on promptness in submitting monthly reports or leadership style, and a salesperson on average number of contact calls made per day or sick days used per year.
Measured behaviors needn’t be limited to those directly related to individual productivity. As we pointed out in discussing organizational citizenship behavior (see Chapters 1 and 3), helping others, making suggestions for improvements, and volunteering for extra duties make work groups and organizations more effective and often are incorporated into evaluations of employee performance.
Traits The weakest criteria, because they’re furthest removed form actual job performance, are individual traits. Having a good attitude, showing confidence, being dependable, looking busy, or possessing a wealth of experience may or may not be highly correlated with positive task outcomes, but it’s naïve to ignore the reality that organizations still use such traits to assess job performance.
Who Should Do the Evaluating?
Who should evaluate an employee’s performance? By tradition, the task has fallen to managers because they are held responsible for their employees’ performance. But others may do the job better.
With many of today’s organizations using self-managed teams, telecommuting, and other organizing devices that distance form employees, the immediate superior may not be the most reliable judge of an employee’s