METHODS FOR THE EMPLOYEES’ PERFORMANCE
EVALUATION
Sebastian Adrian Uriesi
PhD Student at the Faculty of Economics and Business Administration,
“Al.I.Cuza” University, Iasi, Romania
E-mail address: md.personal@yahoo.com
Abstract
Employee’s performance has the same landmark as the employee’s motivation, namely the
employee’s behaviour. Thereby, a definition of this concept might be (Campbell, 1990): “the
employee’s performance represents the behaviours which are relevant the company’s purposes and
which can be measured by taking into consideration the subject’s contribution to these purposes.”
Therefore, the essential element in evaluating behaviours in terms of performance is the distance
between them and the standard enforced by the organisation in this matter.
Keywords: performance, motivation, evaluation, methods, employees, programmes.
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Employee’s performance has the same landmark as the employee’s motivation,
namely the employee’s behaviour. Thereby, a definition of this concept might be (Campbell,
1990): “the employee’s performance represents the behaviours which are relevant the
company’s purposes and which can be measured by taking into consideration the subject’s
contribution to these purposes.” Therefore, the essential element in evaluating behaviours in
terms of performance is the distance between them and the standard enforced by the
organisation in this matter.
The relationship between motivation and performance is one of determination: high
levels of motivation produce, at least in theory, high levels of performance. Nevertheless,
this is not a relationship of absolute causality, because in every organisational context there
are two other important factors, namely:
the subjects’ ability – their capacity to develop their tasks;
situational constrains, that is the opportunities provided by the organisation in order to
complete this tasks.
Therefore, both motivation and abilities and actual conditions determine the
employees’ performance. High levels of performance can be met when every one of the
three factors is present at a high level – the individuals have the necessary abilities, they are
fully motivated and the work environment helps them manifest those behaviours. On the
other side, in case of a lower level of performance, there are four possible causes.
(According to Muchinski, 2000):
a) too high organizational standards – it is possible that within another
organization, the same behavior would be considered efficient;
b) lack of the subjects’ personal abilities, necessary for the successful result of the
necessary behavior;
c) insufficient motivation of the subjects in order to show the required behavior;
d) lack of equipments or opportunities necessary in order to develop the behavior
required by the standards.
Once the performance criterion has been identified, an evaluating instrument needs
to be created for individual performances. Organizations have used various recording
techniques for performance evaluation throughout the years. Method selection is a very
important aspect, since it may have an impact both on the evaluation accuracy and on the
employees’ satisfaction degree. Moreover, there are research works that have shown that
even the evaluator’s characteristics may have influence the performance evaluation (Hartel,
1993).
Research in the field underline the importance that an appropriate construction of
performance evaluating methods has for the success of its stimulating programmes by
financial means. At this point, we may mention two essential recommendations resulting
from the study completed by Kauhanen and Piekkola (2006) on the population of Finnish
clerks. First of all, the efficiency of the performance financial remuneration programmes is
increased if their assessment is placed on a level that is closest to the employee; in other
words, the individual level, or the team level, at most, is preferable to the department level
of the level of the entire organization. Secondly, the employees must know the details of the
criteria and the methods based on which their performances are to be evaluated.
We are hereby going to briefly present the most frequently used general methods
for the employees’ performance evaluation.
1.
COMPARATIVE METHODS
Comparative methods refer to an employee’s performance as being connected to
the other people’s performance. These methods, which require hierarchies, paired
comparisons or forced distribution, are more easily applicable than other approaches.
The hierarchy ranking method requires the supervisor’s ordering the employees
within a hierarchy, from the best to the poorest, according to a particular dimension, such as
productivity or performance in general. Good and bad employees may be easily identified in
a ranking of this kind; moreover, this method has an increased degree of fidelity among
evaluators, and it is easy to use.
The major problem of this method is the fact that it does not provide an actual
performance evaluation. For instance, a telephone operator may process 20 calls per hour,
while a second operator will process 10 calls, and the third operator 5. A hierarchical order
cannot provide an increased degree of subjects’ differentiation. On the other, 20 calls per
hour may reflect the poorest performance of another group in another department.
Another problem referring to this method is that it is difficult to apply on a big
number of employees, and the hierarchical order does not provide information on the
monitored criteria. The best operator may just as well be superior or inferior to a particular
criterion. The hierarchical order may certainly tell the supervisor only if some employees
are better than others.
Paired comparisons is a method by means of which the supervisor compares each
employee to all the others, making all the possible pairs of two employees, and identifying
the best employee in every pair, whether based on separate dimensions, or based on the
professional efficiency as a whole. Despite the fact that this method is precise and efficient
in practice, its use may become difficult if the assessed group exceeds 50 employees, since
there will be a number of 1225 pairs.
Forced distribution - If the number of the assessed employees is very big, and there
is no claim of a highly accurate evaluation, a coarse distribution may be achieved by means
of the forced distribution method. The evaluator distributes the assessed employees based
on the Gaussian curve, including each subject in a class, according to previously established
percentages. Usually, the curve is distributed in 5 proportional categories, as follows: 10%
very good, 20% good, 40% medium, 20% poor, 10% very poor. At first, the evaluator
distributes the subjects to the very poor class, followed by the class of the good ones and the
class of the poor, while those who remain undistributed are construed as moderate.
Although the paired comparisons and the forced distribution, as well as the method
of the hierarchical ranking are easy to use, they all have the same problem related to the
criterion. – they do no provide indications on the fact that an individual’s performance is
superior or unacceptable. All the assessed employees may be remarkable or unsatisfactory,
the only certain piece of information being that some of them are better or worse than
others. The comparison of some people’s position to others’ does not provide information
on the performance level itself. This is why there are some performance evaluation
specialists who do not approve of this category of methods, and therefore they are not very
much used.
2.
ATTRIBUTE LISTS
The lists of attributes are the lists of those particular features of behaviours that the
supervisor checks as relevant for the employees’ performance. These methods are easy to
elaborate and use, although their main disadvantage is that they are focused on the “all or
nothing” evaluation criterion; for example, the employees are evaluated as cooperating
whether all the time, or not at all. Another disadvantage regarding the simple lists of
attributes refers to the fact that all the behaviours or features that are relevant for the job are
construed as equally important or, in fact, as far as many jobs are concerned, tasks have
different importance level.
In order to overcome this issue, certain mixed lists of attributes have been created, a
set of discriminating lists as far as the importance of various tasks are concerned. When
certain aspects of job performance are more important than others, various scores are
awarded for each task. Ideally, this method provides important data for both the evaluator,
and the evaluated person, the latter being aware of the value that different tasks have, and
may therefore appropriately direct their efforts.
An important issue raised by such lists is the evaluator’s tendency towards
indulgence or strictness. Since supervisors are aware of the fact that they positively or
negatively evaluate an employee, this type of knowledge may interfere with the accuracy of
the evaluation.
The forced-choice attribute lists have been created precisely in order to eliminate
this disadvantage. According to the lists in this format, supervisors are presented groups of
four sentences referring to various aspects of job performance. Two of them are positive,
and two negative. Only one of the positive sentences is relevant to the performance, while
only one negative sentence is relevant to an unacceptable performance. Considering the fact
that the evaluator cannot identify the positive connotation of the sentence at first glance,
there is a reduced risk of errors. Moreover, evaluators are not allowed to score the
evaluation instrument, since this operation is performed by others.
Although the forced-choice attribute lists seem to control indulgence, there are,
however, two obvious disadvantages. First of all, the elaboration of such a scale requires the
assistance of trained professionals, and the creation of the four relevant and plausible
performance descriptors is costly and time-consuming. Secondly, supervisors are not very
receptive in using evaluation forms when they do not know the results. Therefore, the
forced-choice attribute lists are scarcely outspread.
3. EVALUATION SCALES
Evaluation scales allow the employees’ performance to be evaluated throughout a
continuum that varies from “always” to “never”. This evaluation format provides more
accuracy to individual performance than the hierarchical ordering or the lists of attributes.
Graphic scales, which were introduced in 1922, represent the first quantitative
evaluation technique of performance. These scales use a feature description throughout a
continuum that the employee is evaluated upon. For instance, employees may be evaluated
as “extremely reliable”, “very reliable”, “reliable”, “occasionally reliable”, and “unreliable”.
The manager checks the level that corresponds to the employee within this continuum.
Graphic scales are easy to create and use, but a correct application requires a
profound understanding of what the described behaviour means. For example, supervisors
may have problems in making the difference between the “reliable” performance and the
“extremely reliable” one, unless these terms are sufficiently operationalized.
Mixed standard scales have been elaborated by Blanz and Ghiselli (1972) precisely
in order to reduce the halo and indulgence errors in performance evaluation. The reason
beyond this method is the fact that the evaluation will be more accurate if the evaluator has
access to behavioral description at various levels. Three critical incidents on “good”,
“medium” and “poor” performance are summarized in this format, on an evaluation scale
taking the forms of statements. These statements are randomly arranged, and it is therefore
difficult for the evaluator to identify the valence of the statement. Evaluators write “+” when
the employee’s performance is superior to the standard, “-” when the performance reflects
the bottom level of the standard, and “0” when it is equal to the standard.
Although a mixed standard scale seems to control biases, it still raises questions on
fidelity. Moreover, this scale has the disadvantage of being difficult to use, and with a timeconsuming elaboration.
Another evaluation instrument, which has become quite popular in the last years, is
the behaviorally anchored rating scale, introduced by Smith and Kendall (1963). This scale
includes paragraphs describing working behaviours that are considered “excellent”, “good”,
“poor”, etc. Thus the supervisor has concrete examples by means of which an evaluative
assessment of working behaviours may be achieved, which, most of the time, increases the
precision (accuracy) of the evaluation.
A method that is based on this behaviorally anchored rating scale is the behavioral
observation scale; in its first stage, the evaluator collects information about critical incidents
and uses these data in order to elaborate categories of tasks implied by that job. Unlike the
previous type of scale, the behavioral observation scale uses a continuum to measure the
occurring frequency of those behaviours in the case of the evaluated employee, based on
several reference points such as “never”, “very often”, etc.
4. NARRATIVE METHODS
Although the current tendency in human resources management encourages the use
of quantitative systems for performance evaluation, the narrative methods are still intensely
used, especially for the evaluation of employees with managing responsibilities. This is due
to the fact that the narrative methods have a superior applicability especially in the case of
complex and unstructured working tasks, or when the development of quantitative reference
points does not seem to be justified.
One of the classical methods belonging to the narrative category is the evaluation
essay method, when the evaluator describes the employee’s strong points and weaknesses,
the fields where improvement is required, the potential purposes that may be set for that
employee, as well as other qualities. A special advantage of this evaluation method is the
provided opportunity to identify certain performance aspects, which may be “overlooked”
when other evaluation methods are applied.
The critical incident method represents another narrative approach of performance
evaluation. In this case, supervisors make an inventory of each employee’s negative and
positive behaviours, with the advantage that this method is based on real behaviours, not on
the inferred behaviours of the evaluated people. Nevertheless, the disadvantage of the
narrative methods is usually the fact that they are rather expensive and time-consuming,
without necessarily bringing a significant plus to the accuracy of the completed evaluations.
5. MANAGEMENT BY OBJECTIVES
This employee evaluation approach was developed by Peter Drucker in 1950’s, and
it is widely applied in organizations nowadays. In the case of an evaluation system based on
objectives, the manager identifies about seven or eight specific results that an employee
should achieve within a particular time interval. The manager may also support the
employee in planning the necessary steps for the achievement of these objectives; in other
cases, this planning may be left entirely at the employee’s free will. Moreover, the
objectives are generally established after the employees have been consulted; this is why
this approach is very successful in organizations with participative management.
The advantage of the management by objectives is the fact that employees clearly
know what is expected from them before the evaluation period. It is also a more flexible
approach compared to others, since its particular implementation means may be developed,
modified or adapted much more rapidly.
A disadvantage of this approach is the fact that it implies a rather “narrow” focus,
on precise objectives, excluding other aspects of the activity, which may be important as far
as performance is concerned. Thus, the employee may become exclusively preoccupied by
the goals brought to the foreground, which are merely relevant for his subsequent
evaluation, ignoring less important duties.
The table hereby is a comparative presentation of the five evaluation methods for
employees’ performance, as exposed in the previous pages, as well as their specific variants
and their characteristics in terms of advantages and disadvantages.
Method
Comparative
methods
Type
Hierarchical ranking
Paired comparisons
Forced distributions
Advantages / disadvantages
They are simple to develop and use; they
provide comparisons between employees, but
they do not establish the actual performance
level.
The simple variant is easy to develop and
Lists of attributes Simple
Mixed
use, but it construes all behaviours as equally
With forced
important; problems related to the indulgence
distributions
tendency in the case of the mixed variant;
forced choices control this problem, but they
are difficult to develop.
The graphic variant is easy to develop and
Evaluation scales Graphics
Mixed-standard
use, but it requires a clear understanding of
Behaviorally
evaluations; the mixed-standard variant
anchored
controls this problem, but it is difficult to
Behavioral
develop; the behaviorally anchored and the
observation
behavioral observation ones increase
accuracy, but they are rather costly.
Evaluation essay
They are particularly efficient when job tasks
Narrative
Critical incidents
are poorly structured; they allow the
methods
evaluator to cover many areas; they may be
influenced by the halo error.
Employees clearly know what is expected
Management by
from them, and they may be involved in the
objectives
identification of these objectives; however,
the method may have a rather narrow focus,
and it ignores the external factors that may
influence performance.
Table 1. Comparisons of performance evaluation methods
We may notice that one of the assessing criteria of these general performance
evaluation methods is the one of their clarity to the evaluated persons. This issue underlines
that importance of the employees’ perception and reaction on their own professional
performance evaluating process. One of the dimensions of this importance is the one of its
influence on the efficiency of performance financial rewarding programmes: in the case of
an evaluating system that the employees suspect as imperfect, contaminated or subjective,
the purposes of such programmes cannot be achieved. Therefore, the topic of performance
evaluation methods is extremely important, both at the objective level – of the actually
practiced methods for performance measuring – and on the subjective level, of how they are
perceived by the employees.
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