Top 5 Tips for Evaluating Employee Performance

Updated: June 15, 2010

Although approaches to evaluating employee performance vary widely across organizations, the "key ingredients" indicated below should always be included in the recipe of a successful performance management system.

BizTip #1 - Use a sound framework and structured approach for developing your employees in a consistent, fair manner.

Unlike casual approaches for enhancing job effectiveness, a structured system emphasizes the use of standardized tools and procedures to achieve significant organizational results in a timely manner. One of the main "spokes" of your management wheel is improving employee performance through proper observation, assessment, and feedback. The main objective is not to manage employee performance but to help employees develop job-related competencies needed for success. Hence, "performance development" is a better term than "performance management" to describe the process.

BizTip #2 - Clearly define key job performance dimensions, which should be used as the basis for conducting performance evaluations.

One of the most important aspects of an effective performance management system is to ensure that managers use valid, unbiased procedures to interpret employee job behaviors and performance outcomes. To simplify such interpretation, it is important to categorize observations into well-defined dimensions that specifically relate to organizational values and goals. Relevant job performance dimensions might include productivity, quality of work, customer relations, teamwork, safety, and organizational commitment.

BizTip #3 - Rely on multiple sources of information when evaluating job performance.

Sources of information about employee performance may include customers, co-workers, other supervisors and managers, and even the employees being evaluated. Keep in mind that certain sources may not be reliable or trustworthy. If available, statistical measures of employee productivity and quality of work also offer a rich source of information for determining the performance levels of employees.

BizTip #4 - Make sure that all steps in the performance evaluation process are reliable.

One of the worst things you can do when evaluating job performance is to use tools and techniques that are unreliable or inaccurate. Be sure to use reliable procedures to quantify your observations regarding job behaviors and outcomes (e.g., understandable rating scales). In addition, employ statistical standards in key areas to make it easier to interpret and communicate job performance findings. Keep in mind that reliability is paramount in each of the following phases in a performance development system: (1) gathering information; (2) evaluating findings; (3) making decisions; (4) documenting evaluations; and (5) providing feedback to employees.

BizTip #5 - Emphasize strengths and development needs when conducting monthly, quarterly, or annual performance review sessions with employees.

Don't forget that the fundamental goal of a performance management system is to improve the effectiveness of employees by obtaining valid information about job behaviors and outcomes, making reliable assessments, and providing constructive feedback. Providing feedback to experienced, successful employees should be aimed at enhancing or "fine-tuning" job performance. Inexperienced employees and employees who are not meeting all job expectations can be helped by constructively addressing their development needs.

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