BEHAVIORAL ASPECT OF
PEFORMANCE EVALUATION
DEFINITION AND CHARACTERISTIC
• Performance evaluation is the process of evaluating how effectively
employees/managers are fulfilling their job responsibilities and
contributing to the accomplishment of organization’s goal.
• Performance refers to an employee’s accomplishment of assigned
tasks. Performance means doing a job effectively and efficiently.
• PE is periodic assessment of operational effectiveness of an
organization, its sub unit or its employee/managers based or
predetermined goals, and standards
DEFINITION AND CHARACTERISTIC
• To appraise performance effectively, a manager must be aware of the
specific expectation for a job, monitor the employee’s behavior and
results, compare the observed behavior and results to expectations
and measure the match between them (expectation and results).
• Performance evaluations, are the basis on which managers make
decisions about reward and punishment (compensation or
promotion).
• PE is evaluation of people behaviour in the role assigned to them in
the organisation
EFFECTIVE PERFORMANCE EVALUATION
• Explain the appraisal process: objective and step
• Clarify job expectations based on company vision, mission goals and
objectives of the organization
• Review and update job skills: training related to the development of
business practices
• Performance Measurement Results must be linked to
rewards/compensation
OBJECTIVE PEFORMANCE EVALUATION
• To make promotions and rotation decision
• To assess the training and development needs of employees.
• To make decision about compensation/bonus allocation
• To increase motivation and another positive behavior
STEP: 1) Establishing performance standards
• setting up of the standards which will be used to as the base to
compare the actual performance of the employees.
• setting the criteria to judge the performance of the employees as
successful or unsuccessful and the degrees of their contribution to
the organizational goals and objectives.
• Example: production cost standards (to measure the performance of
production managers); standard selling price per unit (to measure
sales manager performance)
STEP 2) Communicating the standards
• After standard was developed, it is the responsibility of the
management to communicate the standards to all the employees of
the organization.
• The employees should be informed and the standards should be
clearly explained to them. This will help them to understand their
roles and to know what exactly is expected from them.
• The standards should also be communicated to the appraisers or the
evaluators
STEP 3) Measuring the actual performance
• Measuring the actual performance using accounting information
system
• It is a continuous process which involves monitoring the performance
throughout the year.
STEP 3) Matching the actual with the desired
performance
• using accounting information system
• The system tells the deviations in the performance of the employees
from the standards set.
STEP 4: rewards and punishments
• Good performance is given a reward, bad performance is given a
warning, and suggestions for improvement in the future. Identify the
cause of deviation
EXPECTANCY THEORY: behavior influenced by
• The effort necessary to achieve the goal
• Performance and reward
• Reward satisfying personal goal
EFFECT OF REWARD ON BEHAVIOR: type of
reinforcement
• Positive reinforcement: giving something pleasant (a praise and
reward)
• Negative reinforcement: eliminating something unpleasant
(supervisor stop wathing employee)
• Punishment: transfer to less desirable unit, fired