Once the employee has been selected, trained & motivated the next step of management is to find out how effective it has been at hiring and placing. The tools used to ascertain whether an employee has shown her/his best performance on a given job is called performance evaluation. It is the assessment of an individual’s performance in a systematic way against such factors as job knowledge, quality & quantity of output, initiative, leadership abilities, dependability, cooperation, judgement etc.
The assessment is not only concerned with past performance, it is also concerned with potentials of the employees for future performance.
Pupose of Performance Evaluation
The overall objectives of PE is to improve the efficiency of an employee by attempting to mobilize the best possible efforts from individuals employed in it. Such evaluation achieves four objectives includiing the salary reviews; the development & training of individuals; planning job ratation and assistance promotion. - Cummings
Performance Evaluation Plans
Performance evaluation plans are designed to meet three needs, one of the organization & the other two of the individuals.
i) They provide systematic judgements to back up salary increases, transfers, demotions or terminations.
ii) They are means of telling a subordinate how they are doing and suggesting needed changes in their behavior, attitudes, skills or job knowledge. They let them know where they stands with the boss.
iii) They are used as a base for coaching and conselling the individual by the superior.
Process of Performance Evaluation
The evaluation process consists following steps:
1. Establish performance standards
2. Communicate performance expectations to employees
3. Measure actual performance
4. Compare actual performance with standards
5. Discuss the appraisal with the employees
6. If necessary, initiate corrective action
Uses of Performance Evaluation
1. Performance feedback
2. Reward management
3. Training & development decisions
4. Promotion, transfer, separation decisions
5. Validation of selection tests
6. Career & succession planning
7. Supervisory understanding
8. Policy formulation