Employee performance evaluations have received their fair share of critique over the years. From supervisor bias to unfair rankings, it’s understandable why many employees and companies may decide to give up on employee evaluations altogether. But done correctly and in conjunction with management and employee, performance evaluations can be positive for both sides.
Purpose of Employee Performance Evaluations
Employee performance evaluations are an opportunity for management and the employee to have an open dialogue in a formal setting. From the employee’s point of view, it gives them a chance to provide feedback to their managing supervisor, alert them to unsafe working conditions, stops in the workflow, issues on the workroom floor, or other co-worker issues.
The key to encouraging this type of open communication is a supervisor who is willing and able to lay down any preconceived notions about how their department is running and being open and willing to learn from their subordinates. The employee’s feedback in the performance evaluation gives the supervisor information to make future changes.
Whether your organization chooses to hold evaluations quarterly, twice a year, or yearly, this is the time for the supervisor to provide feedback to their employees on their performance and motivate them to reach the organization’s goals. It’s also essential to discuss employee’s future within the company and provide the employee with development and training opportunities.
For these reasons, it’s best for the employee’s immediate supervisor to be the one to conduct the employee performance evaluations. The immediate supervisor is the only person in management who understands each employee’s day-to-day workflow and performance enough to provide guidance and make the necessary changes going forward.
Methods of Employee Performance Evaluation
The method used to evaluate the employee’s performance varies significantly from company to company. Most simply can be a formal conversation where the employee’s manager or supervisor writes a statement about the employee’s performance, and these notes are considered the official evaluation. This method is called the narrative method and can be filled with bias and not recommended if a pay raise or end-of-year ranking for bonuses is associated with the evaluation.
The following methods are widely used across organizations today. Both the employee and supervisor typically sign off on the results before entering into a system or put into the employee’s file. Additionally, upper management may sign off as well.
In large corporations, Management by Objectives (MBO) is often used. MBO is when an employee’s goals are set against the organization’s goals at large. The goals start as big goals from the top, then as the goals cascade down, the goals become smaller and more actionable. The employee is expected to meet specific criteria each quarter or fiscal year and pay raises may be set against these goals.
360-Degree Feedback method is more common for upper management appraisals. This method can be in the form of a survey to the employee’s professional circle. It’s named 360 because it asks for feedback from those in positions above (management), below (subordinates), and alongside (peers) of the employee.
Graphic Rating Scale Form is where performance for multiple factors is on a scale such as excellent, good, average, fair, and poor. Excellent has the value of 5, while Poor has the value of 1. There is potential for bias using this method.
The Human Resource Cost Accounting Method is a way to determine the cost of your employee to the company after training, onboarding, salary, benefits, etc. In short, the employee’s contribution should be more significant than the cost of retaining them. This method could work well in Sales, Recruiting, or other jobs where the employee could quickly be evaluated on dollars saved or earned for the company on an ongoing basis.
There are many other methods of employee appraisals; these certainly aren’t the only options. What’s important is finding an appraisal method that works well for your company, getting complete buy-in from both supervisors and employees, and sticking with it on an ongoing basis. Additionally, having clear expectations and goals for everyone in the organization will help ensure a successful process.
