Developing Employee Performance Evaluation System

How to Evaluate and Measure Employee Performance?

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While job descriptions are excellent tools for HR and managers to summarize the scope of employees’ responsibilities, duties and major focus – performance metrics are tools for converting those general statements into actionable and measurable initiatives.

The key initiatives for each employee can be defined in a specific manner by defining the key performance indicators and the most critical for success metrics.

This allows managers to set measurable objectives and targets. The actual employee performance can be easily compared against the targets and as result areas for improvement can be determined. Simple gap analysis reveals the strengths and weaknesses for every individual employee by comparing the actual performance against the targets.

The reality is that business managers are often required to evaluate their employees overall performance to ensure that their particular work will be completed effectively as well as on time. Supervisors generally think it is useful within this course of action to compare the actual performance vs planned and forecasted outcomes.

At the same time, employees in many cases are requested to build a written report, referred to as a self assessment, in which they will frankly review their achievements and efforts.

These types of reviews may also be frequently used by workers in order to deal with their own boss to demonstrate the value they create for the business (this is a common practice seen when employees ask for a raise).

The three forms of employee performance evaluation and job performance reviews

As noted above the 3 different ways to demonstrate or evaluate job performance generally found in most organizations are:

  1. Well organized performance measurements system
  2. Managers evaluate employees without specifically defined measurement system but primarily based on intuition, experience and daily interactions
  3. Employees demonstrate their contributions to the business by pointing on their strengths and efforts

In many companies all of these forms of performance review can be fined. The company will generally have some sort of performance reporting and management process, the management will personally evaluate each and every employee within their teams or departments and employees will demonstrate self evaluation on their own.

In order to avoid potential conflict among these three forms of performance management review the best case scenario for management is when the official performance measurement system is in line with the managers’ as well as employees’ opinions and experiences. By having aligned performance management and evaluation system organizations can achieve higher performance.

Finally, having an ongoing performance management system versus once-per-year review is the key for success in business performance management. Many companies fail to address this issue and the evaluation is performed usually at the end of their fiscal year.


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