Performance evaluation: what is it and how is it used in the company?
These are the characteristics of performance evaluation in the world of organizations.
In every company it is necessary to know the performance of each of its workers to be able to see if the proposed goals are being met or not.
There are many factors that can influence the achievement of such goals, such as motivation, skills and abilities of workers, as well as the fluidity of communication within the organization.
Performance appraisal is a technique that, as its name suggests, aims to evaluate performance within an organization. This tool is widely used in the human resources world, although not without some misgivings. Let's take a closer look.
What is performance appraisal?
Performance appraisal could be considered as a tool or, rather, a set of strategies focused on evaluating the performance of a company's employees. a tool or, rather, a set of strategies focused on evaluating the performance of a company's employees.. This evaluation can be made on the basis of very diverse criteria, taking into consideration personal characteristics, competencies and results that are evaluated with a stipulated periodicity, generally once a year. It is considered a key element in the world of human resources.
What aspects does it evaluate?
Although each company may need to evaluate some resources or others, as a general rule the aspects analyzed in a performance evaluation, all of them influencing the success and fulfillment of the goals that the organization wishes to achieve, are:
- Strengths
- Capabilities
- Inadequacies
- Possibilities
- Aptitudes
- Problems
- Degree of integration
All these aspects focus on the characteristics of the workers.. By evaluating them, the company obtains basic but necessary information to be able to make decisions. If everything indicates that the objectives are being achieved or even surpassed, the organization should encourage its employees to continue on the right track.
On the other hand, if everything indicates that the objectives are far from being achieved, the organization should not look for those to blame for this "failure", but should rather detect the problems that may exist, satisfy the needs and eradicate the elements that act as a ballast..
In turn, we can indicate that there are three main blocks that are evaluated using this technique:
- Personality, qualities and individual behavior.
- Degree of contribution of the worker to the proposed objectives.
- Potential to be developed.
In order to evaluate these blocks it is necessary to take into consideration the following individual aspects of each of the parts of the organization:
- Knowledge of the work performed.
- Degree of quality of the work performed.
- Relationship with the rest of the company's employees.
- Psychological stability (emotional and cognitive).
- Analytical and synthesis skills.
How is this type of evaluation carried out?
There are really many different ways to evaluate the performance of an organization, but we can indicate some general guidelines that can serve as a guide.
1. Establishing an evaluation plan
First of all, an appraisal plan must be established. Performance appraisal is a systematic process in which there should be no ambiguity or improvisation.. For this reason, several aspects must be established on which the evaluators will base their evaluation. Among these the most important are:
- What is to be evaluated.
- How to apply the evaluation.
- Time period to be evaluated.
- Period of time that the evaluation will last.
- Periodicity (weekly, semi-annual, annual,...).
- Who is going to perform the evaluation.
- Which meters will be used for the evaluation.
It is recommended that the evaluator be an external company, since in this case the evaluation will not be influenced by personal perceptions.In this case, the evaluation will not be influenced by personal perceptions or prejudices that the company's own employees have with respect to their colleagues and the company's efficiency.
As far as the measures are concerned, there are many that can be taken into account, such as, for example, the quality of work, opportunities, productivity, employee motivation?
2. Principles on which it is based
Performance appraisal must be based on a number of basic principles in order to be useful:
- It must be aligned with the business strategy.
- It should be focused on the best training of employees.
- Standards should be based on useful information about the job.
- Objectives should be clearly delimited.
- Employees should actively participate in the evaluation.
- The evaluator should offer knowledge and skills for improvement.
3. Indicators to be used in the evaluation
As in any type of evaluation, different indicators should be taken into account to determine the degree of employee performance. These will be fundamental to be able to measure and analyze the skills, abilities, productivity and motivation of the organization, among other aspects.among other aspects.
3.1. Strategic indicators
- Degree of compliance with the objectives set.
- Correction of strategies.
- Orientation of resources.
- Organizational strategies and forms of implementation.
3.2. Management indicators
- Degree of progress achieved through activities and processes.
- Data on activities carried out.
4. Evaluation methods
Finally we come to the section on evaluation methods. There are several tools within this technique that can be used to evaluate the degree of performance of the organization.
Opting for one or another instrument will depend on each company, although it should be noted that this tool will tend to have a customized design, adapting to the characteristics and needs of the organization.It should be noted that this tool will tend to have a customized design, adapting to the characteristics and needs of the organization.
There are many methods with which performance evaluation can be carried out and here we will mention only a few, such as self-evaluation, evaluation by peers, evaluation by subordinates, evaluation by superiors, evaluation by clients or 360º evaluation in which all the above-mentioned evaluations are integrated.
Criticism of this technique
Up to this point we have described what performance appraisal is, indicating that it has several utilities focused on improving the performance of any company.. In addition to all that we have already commented so far, there are those who consider that this tool has many more advantages, among which we could highlight:
- Making decisions regarding remuneration and promotions.
- Supervise the evaluations of all jobs.
- Providing feedback to employees.
- Identifying and developing training.
- Helping to decide who to fire.
However, within the world of human resources there seems to be a rather different reality to what this tool is supposed to offer. Performance management and appraisal as it seems to be practiced in most companies has become a bureaucratic and therefore tedious process. and therefore tedious. In addition, these types of evaluations, far from fulfilling their purpose, which is nothing more or less than to see the performance of the organization, have become a bad pill that workers want to get rid of once and for all.
This has meant that far from being seen as a tool for learning and improving the organization, employees, managers and even the Human Resources department have come to detest them. In fact, performance appraisals have been in use for more than half a century and the vast majority of them are unsatisfactory. This has not improved in the last decades, even though changes have been added to the methodology to make it more attractive and easier to apply, with techniques such as 360° evaluation, Stack Ranking or Performance Review.
But apart from all this, it seems to be that the main problem with performance appraisal is its infrequency.. Most of the companies that apply it only do it once a year, partly because they do not see it as a tasteful task and simply do it when it is their turn. The problem with this is that it makes this technique completely lose its usefulness, since it implies that the evaluation, the analysis of the organization and the feedback given to its workers takes too long a period of time, making the information received have very little impact.
Organizations are not fixed entities, but are in constant evolution and, therefore, it is necessary to carry out performance evaluations with a certain periodicity. A year is a very long period of time, long enough that everything that was evaluated in the previous session and that was indicated to be on track may now have gone awry and become a problem. By applying it on a regular basis, performance appraisal can improve results.The performance evaluations should be carried out more frequently, at least once a month, to increase productivity and quality, as well as to solve possible communication problems between managers and employees.
That is why performance evaluations should be carried out more frequently, at least once a month. If only one is done every year, there are many aspects that need to be evaluated and a longer period of time needs to be taken into account, while if it is done monthly, only the last month's performance will need to be evaluated, something much more affordable and easier to modify in the short term when the next month's evaluation is due. The greater the periodicity, the less bureaucratic and cumbersome this technique becomes.
(Updated at Apr 13 / 2024)