Log In Start studying!

Select your language

Suggested languages for you:
StudySmarter - The all-in-one study app.
4.8 • +11k Ratings
More than 3 Million Downloads
Free
|
|

Performance Evaluation

Just as students work harder when they are being graded, employees also behave differently depending on the company's choices of performance evaluation systems. Are you a bit confused about Performance Evaluation? Let's dive right into this new business concept!A performance evaluation is a formal business procedure used to evaluate employees' work and productivity based on their job responsibilities.   Modern organizations…

Content verified by subject matter experts
Free StudySmarter App with over 20 million students
Mockup Schule

Explore our app and discover over 50 million learning materials for free.

Performance Evaluation

Performance Evaluation
Illustration

Lerne mit deinen Freunden und bleibe auf dem richtigen Kurs mit deinen persönlichen Lernstatistiken

Jetzt kostenlos anmelden

Nie wieder prokastinieren mit unseren Lernerinnerungen.

Jetzt kostenlos anmelden
Illustration

Just as students work harder when they are being graded, employees also behave differently depending on the company's choices of performance evaluation systems. Are you a bit confused about Performance Evaluation? Let's dive right into this new business concept!

Performance Evaluation Definition

A performance evaluation is a formal business procedure used to evaluate employees' work and productivity based on their job responsibilities.

Modern organizations have adopted more complex performance evaluation principles, which consist of three major types of behaviors:

  1. Task performance refers to employees' duties and responsibilities in their current roles. These encompass tasks that are included in their job descriptions.

  2. Citizenship refers to employees' contribution to the psychological environment of organizations, such as their willingness to help others or how they treat their coworkers.

  3. Counter-productivity: this refers to harmful behaviors that damage the image of the organization, such as harassment, damage, avoidable absences, or noncooperation.

Thus, in performance evaluation, good employees should demonstrate the first two dimensions while minimizing the third.

Performance Evaluation Importance

In business, performance evaluation can bring companies various benefits.

First, performance evaluation allows the management team to make appropriate human resources (HR) decisions such as promotions, transfers, or terminations.

Second, performance evaluation assists HR practitioners in identifying the staff's needs and arranging timely training and development sessions.

Thirdly, performance evaluation enables organizations to give transparent and evident employee feedback.

Lastly, performance evaluation backs companies in providing the basis for rewards, promotions, or pay raises.

What is the most apparent benefit of performance evaluation in organizational behavior?

When it comes to organizational behavior, performance evaluation is often regarded as a mechanism for communicating feedback and determining reward allocations.

Performance Evaluation Performance evaluation is beneficial for businesses StudySmarterFig. 1 - Performance evaluation is beneficial for businesses

Types of Performance Evaluation

While various types of performance evaluation at work exist, most companies rely on the three most popular criteria to evaluate their employees' performance, which include individual task outcomes, behaviors, and traits.

Types of Performance Evaluation: Individual Task Outcomes

When it comes to individual task outcomes, there are diverse measurement metrics: production quantity, cost per unit of production, overall sales, etc.

What is a possible outcome indicator for a marketer?

It could be everything ranging from the total generated leads or return on investment (ROI) to social media engagement.

Types of Performance Evaluation: Behaviors

When there is a need to evaluate the contribution of each group member to the group's performance, management will try to evaluate the individuals' behaviors to determine their performance.

What are some criteria to evaluate individuals' behaviors at work?

There are various criteria depending on specific roles and industries. For example, a social media marketer can be evaluated based on their activeness in producing social media content, while a professor can be evaluated considering their teaching style and method. Besides, you can find various criteria such as one's activeness within a team, individual communication skills, and so on.

Types of Performance Evaluation: Traits

Management also refers to individuals' traits at work as a means of evaluation. Modern organizations are greatly concerned about their employees' personalities at work, assuming that good employees with positive traits may perform well.

Accordingly, managers might look for positive traits ranging from a good working attitude, willingness to learn new skills, communicating effectively and convincingly within teams, etc.

Are you still in the mood for more examples of positive traits? Have a quick glance at our explanation of the Trait Theory of Leadership.

Performance Evaluation Process

At the heart of the performance evaluation process lies the question, "Who should evaluate an employee's performance?".

Can people other than managers do well in performance evaluations?

The answer is yes! As current workplaces have become more diverse in organizational structure consisting of various teams and departments, managers may sometimes find it hard to personally connect with their employees. Instead, it is team leaders or coworkers that have formed a closer relationship with team members. Thereby, peers, subordinates, etc., can do a good job evaluating other employees at work.

Within modern workplaces, there are two main processes of performance evaluation, which are multiple sources of rating and the 360-degree evaluations. They both require different evaluators to evaluate a specific individual and average the diverse ratings to generalize one's evaluation result. Accordingly, such evaluators can range from managers and subordinates to clients and coworkers. Thus, both processes assist companies in implementing a more objective, unbiased, and equal performance evaluation procedure.

Performance Evaluation The 360-degree evaluation is popular StudySmarterFig. 2 The 360-degree evaluation is popular

Performance Evaluation Methods

You may now search for methods to evaluate employees' performance. Accordingly, there are five most popular performance evaluation methods at work, which are:

  1. Written Essays,

  2. Critical Incidents,

  3. Graphic Rating Scales,

  4. Behaviorally Anchored Rating Scales,

  5. Forced Comparisons.

Performance Evaluation Methods: Written Essays

In the written essays method, evaluators evaluate an employee's performance-related characteristics, including individuals' strengths and weaknesses, previous work results, possible work violations, etc. While this is a performance-centric approach, written essays are often subject to no standardized scoring system; thus, managers might find it difficult to compare and contrast between different essays.

Performance Evaluation Methods: Critical Incidents

The critical incidents method aims to separate incidents when employees execute a job effectively from incidents when they do not.

The critical incidents method evaluates employees' behavior to differentiate between an effective job execution and an ineffective one.

For example, when it comes to a social media marketing team, managers may wish to perform critical incident methods to show employees what should be incorporated into a social media post and what should not be, thus leaving room for future improvement.

Performance Evaluation Methods: Graphic Rating Scales

In the graphic rating scales method, evaluators rate performance factors on incremental scales, often following a five-point Likert scale format. As opposed to the other methods mentioned previously, this method is more time-saving for managers. Further, results from graphic rating scales can be coded as quantitative data for comparison if needed.

A graphic rating scale is a method to rate performance factors on an incremental scale.

Performance Evaluation Methods: Behaviorally Anchored Rating Scales

In the behaviorally anchored rating scales (BARS) method, evaluators combine two methods: critical incidents and graphic rating scales. To execute the BARS method, evaluators should first complete the critical incidents list, followed by ranking these factors on incremental scales.

Behaviorally anchored rating scales (BARS) combine factors from the critical incidents and graphic rating scale methods to rate employees' performance.

Performance Evaluation Methods: Forced Comparisons

Forced comparisons allow the organization to compare employees' performance. The two most popular comparisons are individual ranking and group order ranking.

Forced comparisons evaluate an employee's performance by comparing it to other employees' performance.

In group order ranking, employees are compared based on a particular classification. For example, marketing evaluators can classify marketers into the top one-fifth individuals with highest generated leads to compare their performance.

In group order ranking, evaluators divide employees into classifications to make comparisons.

In individual ranking, employees are often ranked from best to worst. For example, evaluators can rank marketers from best to worst regarding their total generated leads from email marketing activities.

In individual ranking, evaluators rank employees from best to worst.

Performance Evaluation Improvements

Although there is no guaranteed way to achieve 100 percent accurate performance evaluations, there are various ways to improve their objectivity and fairness.

Performance Evaluation: Multiple Evaluators

The more the number of evaluators, the higher the accuracy of information gets. Thus, organizations can improve the quality of performance evaluations by inviting multiple evaluators to assess an individual's performance.

Why should evaluators trust multiple evaluators in performance evaluation?

At universities, students have their final GPA calculated by averaging multiple grades from different courses to ensure generalization and avoid bias. Similarly, in performance evaluation at work, multiple evaluators are highly recommended to produce a generalized and unbiased view of an individual's performance.

Performance Evaluation: Selective Evaluation and Evaluator Training

To improve agreement among evaluations, raters should only rate areas of their expertise. Further, raters should work closely with the evaluatee to ensure they can objectively observe the individual's behavior and traits.

Besides, organizations should properly train evaluators to develop a standard definition of good performance at work. Also, evaluators should be encouraged to give more detailed descriptions of individuals' behaviors to validate their evaluation.

Performance Evaluation: Due Process Systems

Due process is an emerging method in modern workplaces to improve fairness in performance evaluation.

What are the typical characteristics of due process systems?

There are three main characteristics of due process systems:

  1. Individuals know exactly what the organization expects from them.

  2. There is a fair hearing regarding violations to encourage the employee to respond.

  3. The final decision relies on evidence, not bias.

Performance Evaluation Examples

How is a real-life written essay in performance evaluation? Let us guide you through a typical example in a business context.

A short evaluating essay from the Chief Director to a Project Manager

As a quarter has passed, I would like to review your performance.

As a Project Manager at ABC company, you have satisfactorily met your role's expectations. Firstly, you and your team have completed every project on time and within the provided budget. Some projects even finished early, which is wonderful. Secondly, our client's feedback has been positive so far, implying a successful implementation.

However, there are still some areas for skill improvement. In Project A, some team members were confused about the timeline and KPIs. Thus, I expect better communication of goals and strategies from you next time. Further, in Project B, team members reported a hostile attitude from you during final project meetings. Although I understand your huge workload and stress, you should manage your emotions more wisely at work.

Congratulations on your performance this quarter. I hope my evaluations will be convincing and constructive for your future improvements.

Performance Evaluation - Key takeaways

  • Performance evaluation is the formal business procedure to evaluate employees' work and productivity based on their job responsibilities.
  • The three most popular types of performance evaluations are based on individual task outcomes, behaviors, and traits.
  • Generally, there are five most popular performance evaluation methods: written essays, critical incidents, graphic rating scales, behaviorally anchored rating scales, and forced comparisons.
  • There are various ways to improve the objectiveness and fairness of performance evaluations through multiple evaluators, selective evaluation, evaluator training, or due process systems.

Frequently Asked Questions about Performance Evaluation

Performance evaluation is the formal business procedure to evaluate an employee's work and productivity based on their job responsibilities. 

Suitable methods depend on specific roles and industries. Generally, there are 5 most popular methods are:

  1. Written Essays
  2. Critical Incidents
  3. Graphic Rating Scales
  4. Behaviorally Anchored Rating Scales
  5. Forced Comparisons

Generally, the most popular types of performance evaluation are:

  1. Written Essays
  2. Critical Incidents
  3. Graphic Rating Scales
  4. Behaviorally Anchored Rating Scales
  5. Forced Comparisons

First, performance evaluation allows the management team to make appropriate human resources (HR) decisions regarding promotions, transfers, or terminations.


Second, performance evaluation assists HR practitioners in identifying staff needs and arranging timely training and development sessions.


Thirdly, performance evaluation enables organizations to give transparent and evident feedback to their employees.


Lastly, performance evaluation backs companies in providing the basis for rewards, promotions, or pay rises.

Suitable methods depend on specific roles and industries. Generally, there are 5 most popular methods, which are:

  1. Written Essays
  2. Critical Incidents
  3. Graphic Rating Scales
  4. Behaviorally Anchored Rating Scales
  5. Forced Comparisons

Most companies rely on the three most popular sets of criteria to evaluate their employees' performance which include individual task outcomes, behaviors, and traits. 

Final Performance Evaluation Quiz

Performance Evaluation Quiz - Teste dein Wissen

Question

[Fill in the Blank]


Performance evaluation is a ____  procedure to evaluate an employee's work and productivity based on their job responsibilities.

Show answer

Answer

formal

Show question

Question

What are three factors of performance evaluation principles?

Show answer

Answer

Task performance.

Show question

Question

Where will you often find factors to evaluate individuals' task performance?

Show answer

Answer

Job descriptions.

Show question

Question

What are the principles that are associated with good performance?

Show answer

Answer

Task performance. 

Show question

Question

Can HR rely on performance evaluation to make appropriate decisions such as promotions, transfers, or terminations?

Show answer

Answer

Yes.

Show question

Question

[Fill in the Blank]


Performance evaluation assists HR practitioners in identifying staffs' ____  and arranging timely training and development sessions.

Show answer

Answer

needs.

Show question

Question

What are three most popular sets of criteria to evaluate their employees' performance?

Show answer

Answer

Individual task outcomes.

Show question

Question

[Fill in the Blank]


When there is a need to evaluate the contribution of ____  group member to the group's performance, management will often evaluate individuals' ____  to determine their performance.

Show answer

Answer

each, behaviors

Show question

Question

Why are managers no longer suitable for conducting performance evaluation?

Show answer

Answer

They are too busy.

Show question

Question

[Fill in the Blank]


Multiple sources of ratings imply the use of multiple ____  to rate a specific individual's performance.

Show answer

Answer

raters

Show question

Question

[Fill in the Blank]


The ____ degree performance evaluation method is popular nowadays.

Show answer

Answer

360

Show question

Question

Is there any scoring standard for written evaluation essays?

Show answer

Answer

Yes.

Show question

Question

Is the five-point Likert scale a suitable scale in the Graphic Rating Scales method?

Show answer

Answer

Yes.

Show question

Question

From which methods are factors in the Behaviorally Anchored Rating Scales method made up from?

Show answer

Answer

Graphic Rating Scales.

Show question

Question

If an evaluator ranks salespeople from best to worst in terms of their monthly successful deals with clients, they are applying ________.

Show answer

Answer

Group Order Ranking

Show question

Question

________ imply strategic and structural changes within the company. For example, employees are laid off if the company is downsizing, relocating, or exiting a certain market. 

Show answer

Answer

Layoffs

Show question

Question

When someone ________, it implies they are being terminated due to their performance or behavior at the workplace.

Show answer

Answer

gets fired

Show question

Question

 ___________ is a general term that encompasses layoffs and firing.

Show answer

Answer

Termination

Show question

Question

A ___________ is a formal letter that outlines the employee's termination process. 

Show answer

Answer

termination letter

Show question

Question

Name an example of why an employee might be getting fired.

Show answer

Answer

For example, poor performance, misconduct, or harassment can lead to an employee getting fired.

Show question

Question

Name an example of when an employee would get laid off. 

Show answer

Answer

For example, employees are laid off if the company is downsizing, relocating, or exiting a certain market. 

Show question

Question

The termination agreement is a formal document that signifies the contract's termination.

Show answer

Answer

True

Show question

Question

Termination agreements are only necessary when an employee is fired.

Show answer

Answer

False

Show question

Question

_________ is when an employee declares that they are leaving their current job. 

Show answer

Answer

Resignation

Show question

Question

Employees are usually required to give either ______ or _______ notice to their employer about their resignation.

Show answer

Answer

verbal or written

Show question

Question

What is a notice period?

Show answer

Answer

The notice period specified in the contract states the number of weeks or months an employee legally has to continue working after they have informed their employer that they are leaving the organization, i.e., after they have handed in their resignation.

Show question

Question

What are the five types of termination?

Show answer

Answer

Restructuring, redundancy, retirement, medical concerns, and disciplinary action are the types of termination. 

Show question

Question

Unwanted behavior generally falls into three categories. What are they?

Show answer

Answer

  1. Performance-related issues, 

  2. Misconduct, 

  3. Violation of organizational rules.

Show question

Question

_____________ is the process of confronting and/or punishing an employee for violating the terms of their contract and the organization's rules. 

Show answer

Answer

Disciplinary action

Show question

Question

Name two examples of unwanted behavior. 

Show answer

Answer

Any of: 

  • Absenteeism 

  • Sexual harassment 

  • Aggression or bullying others

  • Discrimination (e.g., sexism or racism), 

  • Poor performance, 

  • Misconduct (e.g., theft, insider trading, etc.).

Show question

Question

___________ is when an employer does not have a valid reason to fire an employee yet still dismisses them. 

Show answer

Answer

Unfair dismissal

Show question

Question

Define work-life balance 

Show answer

Answer

Work-life balance is an arrangement to balance professional and personal lives to maintain good health and personal satisfaction without negatively affecting professional growth. 

Show question

Question

A uniform work-life balance could work for everyone. 

Show answer

Answer

False

Show question

Question

You cannot fulfill the roles of your personal and professional life without jeopardizing your mental or physical health. 

Show answer

Answer

False

Show question

Question

To attain work-life balance, you need effective planning and conscious efforts.

Show answer

Answer

True 

Show question

Question

You should always make work the center of your life

Show answer

Answer

False

Show question

Question

 It is important to find time for hobbies and to build relations outside of work.  

Show answer

Answer

True

Show question

Question

Finding the right balance between professional and personal lives is important for every employee

Show answer

Answer

True

Show question

Question

An employee could struggle to focus on work with _______ or _______ health issues. 

Show answer

Answer

mental or physical

Show question

Question

_________ could eventually lead to a decrease in personal satisfaction and professional growth. 

Show answer

Answer

Lack of work-life balance

Show question

Question

Employers should invest resources to support the well-being of employees.

Show answer

Answer

True

Show question

Question

Healthy employees are a liability to the organization

Show answer

Answer

False

Show question

Question

How can open communication help in creating a healthy work environment? 

Show answer

Answer

Open communication allows employees to share their ideas or problems with the management. This could massively improve the workplace environment. 

Show question

Question

Why is it a good strategy to delegate authority to the employees? 

Show answer

Answer

It adds responsibility and accountability to employees. It increases employee engagement as they feel more involved in the decision-making process.  

Show question

Question

_________ increases employee engagement as they feel more involved in the decision-making process. 

Show answer

Answer

Employee recognition 

Show question

Question

Why is building relationships outside of work important? 

Show answer

Answer

It helps you unwind and balance your personal and professional life. 

Show question

Question

Define employment policy.

Show answer

Answer

Employment policy includes all the processes, formalities, and programs set in place to create a positive work environment for employees.

Show question

Question

Human resources (HR) involves relaying _________ for everyone within the organization. 

Show answer

Answer

HR practices

Show question

Question

When employees are informed of HR practices and the purpose they serve, they may feel more certain about their ______ and ______ within an organization

Show answer

Answer

roles

Show question

Question

HR practices can lead to increased performance and motivation in the workplace. 

Show answer

Answer

True

Show question

60%

of the users don't pass the Performance Evaluation quiz! Will you pass the quiz?

Start Quiz

How would you like to learn this content?

Creating flashcards
Studying with content from your peer
Taking a short quiz

94% of StudySmarter users achieve better grades.

Sign up for free!

94% of StudySmarter users achieve better grades.

Sign up for free!

How would you like to learn this content?

Creating flashcards
Studying with content from your peer
Taking a short quiz

Free business-studies cheat sheet!

Everything you need to know on . A perfect summary so you can easily remember everything.

Access cheat sheet

Discover the right content for your subjects

No need to cheat if you have everything you need to succeed! Packed into one app!

Study Plan

Be perfectly prepared on time with an individual plan.

Quizzes

Test your knowledge with gamified quizzes.

Flashcards

Create and find flashcards in record time.

Notes

Create beautiful notes faster than ever before.

Study Sets

Have all your study materials in one place.

Documents

Upload unlimited documents and save them online.

Study Analytics

Identify your study strength and weaknesses.

Weekly Goals

Set individual study goals and earn points reaching them.

Smart Reminders

Stop procrastinating with our study reminders.

Rewards

Earn points, unlock badges and level up while studying.

Magic Marker

Create flashcards in notes completely automatically.

Smart Formatting

Create the most beautiful study materials using our templates.

Sign up to highlight and take notes. It’s 100% free.

Start learning with StudySmarter, the only learning app you need.

Sign up now for free
Illustration