Employee Performance Evaluation Systems: an Evaluative Study of Selected Public Quoted Manufacturing Firms in Sri Lanka

Topics: Human resource management, Performance appraisal, Management Pages: 27 (8453 words) Published: April 30, 2013
Employee Performance Evaluation Systems: An Evaluative Study of Selected Public Quoted Manufacturing Firms in Sri Lanka

H.H.D.N.P. Opatha,
Department of Business Administration, University of Jayewardenepura, Sri Lanka.


This paper provides a description of the Employee Performance Evaluation Systems (EPESs) in five selected manufacturing firms in Sri Lanka and an evaluation of those systems in the light of an evaluative framework developed from the current theoretical arguments, empirical findings and expert opinion. The evaluative framework has its focus on eight dimensions of Employee Performance Evaluation System (EPES) including Employee Performance Evaluation (EPE) purposes, EPE policies, EPE criteria and standards, EPE methods, feedback interviews, evaluator training, practices for ensuring accurate implementation and review and renewal. The results indicate that the degrees of systematic utilization/quality of EPESs in three firms (A, C, and D) are moderate and those of EPESs in two firms (B and E) are low as per 5-point scale suggesting significant revisions to be made to the EPESs so as to improve them.


Socio-economic development of Sri Lanka depends heavily on the success of all the organizations operating in the country, particularly firms in manufacturing sector, which has potential for creation of employment opportunities and income opportunities on a sustained basis. Success of an organization largely depends on how effectively employees perform their jobs (Heneman 111 and Schwab, 1982). Employee Performance Evaluation (EPE) is concerned with how far and how well employees perform their jobs. EPE identifies, measures and develops job performance of employees in an organization. Employees in a firm are required to generate a total commitment to desired standards of performance to achieve a competitive advantage and improved performance for sustaining that competitive advantage at least for a prolonged period of time, if not forever. In view of Judge and Ferris (1993), perhaps there is no more important human resources system in organizations other than performance evaluation and ratings of employees’ performance represent critical decisions that are key influences on a variety of subsequent human resources actions and outcomes. Effective EPE drives employees in a firm to produce excellent standards of performance and even beyond the excellent (exceptional) standards of performance.

There are a very few studies carried out in Sri Lanka in respect of EPE including an in-depth audit research carried out by the author (Opatha, 1992) focusing on employee performance appraisal practices of selected state corporations in Sri Lanka. It is noted that no prior empirical case studies carried out on EPE of public quoted manufacturing companies in Sri Lanka. Hence there is a gap in the empirical research knowledge in respect of the practices of Employee Performance Evaluation Systems (EPESs) of manufacturing firms in Sri Lanka.

It is hoped that this study will primarily be important for manufacturing firms and they will be in a position to identify the strengths and weaknesses of the current EPESs and to improve the systems. Also this study may be of assistance to all other organizations in Sri Lanka in general for the purpose of improving their EPESs. Also the paper may be useful for those who are interested in understanding the practice of EPE in Sri Lankan firms.

Objectives of the Study

This study attempted to achieve the following two objectives: i.To explore and describe the EPESs in the selected manufacturing firms in Sri Lanka. ii.To evaluate EPESs in the light of the evaluation framework developed from the current theoretical arguments, empirical research findings and expert opinion.

Study Design

As this study went beyond merely describing the current EPESs in the manufacturing firms selected to evaluation of the EPESs the nature of the study was...
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