Formal determination of an individual's job-related actions and their outcomes within a particular position or setting. In financial trading, its objective is to assess the extent to which the individual added wealth to the firm and/or its clients, and whether his or her achievement was above or below or industry norms. also called performance. Performance appraisal is the procuring, analyzing and documenting of facts and information about an employee's net worth to the organization. It aims at measuring and constantly improving the employee's present performance and tapping on the future potential. "Performance appraisal is the systematic description of an employee's job relevant strengths and weaknesses." by Sir Wayne Cascio According to top family business expert Don Schwerzler, “Having a performance evaluation system in place to measure and monitor how well the business (managers and associates) is doing in meeting “mission critical” benchmarks is a basic building block for every successful family business.”
The uses of performance evaluation in the organization are outlined below. Performance evaluation is the continuous assessment of the employee to asertain his/her performance in comparison with the set standards.
Uses of performance evaluation;
To find out the strengths and weaknesses of the employee and inform him.
To motivate weak employees
To align performance with organization's strategies.
To identify personnel for promotion and transfer
To identify criteria for compensation and benefits according to the usefulness of the employee to the organization.
To help in succession planning
For employees and management to meet and discuss objectives
To identify problems preventing the employee performing well.
To identify training needs.
• The over-riding goal of the performance evaluation process is to improve performance. This includes the employee's personal performance, the department's performance and, ultimately, the company's performance. It is often said that a chain is only as strong as its weakest link (or a wall as strong as its weakest brick, etc). By evaluating each employee regularly, a company can find and improve areas of weakness that may affect overall company performance.
Identify Strengths and Areas of Improvement
• A performance evaluation often contains a multiple-choice rating section in which the supervisor ranks the employee on specific job functions. This method of breaking down each job function allows the supervisor and the employee to analyze where the employee is succeeding and where he is failing. This information can be used to set goals for the next period and may also be used to determine training needs. It may also be used to reassign responsibilities in a group setting. For example, if each worker sometimes takes customer service calls and sometimes processes paperwork, the supervisor may want to use the strongest call-takers to take the majority of the calls and the strongest paperwork processors to handle most of the paperwork.
• An employee cannot improve his performance unless he knows what is expected of him. While initial expectations are often set upon hire, expectations may change from time to time and often become increasingly advanced as the employee's length of employment increases. The personnel evaluation process is traditionally used not only to review performance against past expectations but to set expectations for the upcoming review period. Expectations should be clear, focused and measurable.
Increase Employee Morale
• Though often overlooked, this aspect of the performance evaluation process is important. Confident employees who believe their work is valuable and appreciated are less likely to seek...