What is a Performance Evaluation?

Performance evaluation is part of the performance management process. It is an evaluation of the activities and performance of the individual employee based upon organizational goals and objectives. 

The purpose of the evaluation is to align individual performance with organizational goals and objectives. 

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How does a Performance Evaluation Work? 

A performance evaluation includes such activity as: 

• establishing common understanding on duties, individual goals, organizational goals and objectives, 
• establishing an evaluation method and performance measurement, 
• establishing a monitoring plan and schedule for feedback, self-assessment, 
• recognizing the employee for positive attributes or activities, and 
• documentation of all aspects of the process. 

This process should meet certain criteria or goals:

• Clarity - The employee should fully understand the supervisors expectations and how her performance will be assessed.
• Employee Development - The expectations and manner of assessment should leave room for the employee to continue to develop both personally and professionally.
• Evidence of Understanding - Supervisors should document student understanding.
• Rating - Supervisors should identify a manner and method for evaluating the employee that is reliable and equitable.

Methods of Evaluation

To meet these standards, it will require coming up with a manner of rating the employee. This may compare the employee to benchmarks, against other employees, or against their own past performance. Some methods of assessment include:

• Written Essay - A written report characterizing aspects of the employees performance.
• Critical Incident - An assessment of specific positive or negative activity.
• Graphic Rating Scale - This lists a set of performance factors and an incremental scale to rate the employee on each factor.
• Behaviorally-Anchored Rating Scale - Employs graphic rating scales for specific critical incidents.
• Multi-person Comparison - This compares the employee against other employees in different positions.
• 360-Degree Appraisal - This incorporates quantitative measures (such as graphic rating) and also qualitative assessment - such as feedback from supervisors and other employees.

Common Performance Management Systems

Common Performance Management Systems include:

• Management by Objective
• Balanced Scorecard
• Activity-Based Management
• Strategic Cost Management
• Quality Assurance
• Lean Control
• Performance Prism

How are Budgets Used in Performance Evaluation?