Performance Evaluation Using Accounting Information

What is performance evaluation? o Performance evaluations are formal review processes designed to encourage the informal day-to-day practice of performance management, while providing a framework in support of merit pay adjustments, promotion and employment decisions. Evaluating staff performance and helping employees develop their skills are important duties associated with performance management. Performance management begins with supervisors and employees collaboratively setting goals and standards, clearly communicating performance expectations and evaluating the results during the performance evaluation process. o o A performance appraisal is a systematic and periodic process that assesses an individual employee’s job performance and productivity in relation to certain pre-established criteria and organizational objectives. o o Performance evaluation tools are quantitatively and qualitatively based. They utilize a scoring system that assesses numerical data relative to productivity, as well as characteristic data that measures the quality of the employee 's work. The indicators on performance evaluations include items such as business ethics, innovation, motivation, job knowledge, skills and expertise, communication, teamwork, work quality, professionalism, task management and project completion.

Benefits of performance evaluation:

• Facilitation of communication: communication in organizations is considered an essential function of worker motivation. It has been proposed that feedback from performance evaluation aid in minimizing employees’ perceptions of uncertainty. Fundamentally, feedback and management-employee communication can serve as a guide in job performance. • Enhancement of employee focus through promoting trust: behaviors, thoughts, and/or issues may distract employees from their work, and trust issues may be among these distracting factors. Such factors that consume psychological

References: El-Shishimi, H. and Drury C. (2001) : Divisional Performance Measuring in UK companies, paper presented to the annual Congress of the European Accounting Association, Athens Esptein, M and Ray, M. J (1997):Eniromental Management to improve corporate profitability, Journal of cost management , November-December, pp 26-34 Kaplan R. S and Norton D.P (2001) “ Transforming the balance scorecard from performance measurement to strategic management : part 2’, Accounting Horizons March, pp87 Kaplan, S. E., and J. T. Mackey. 1992. An Examination of the association between organizational design factors and the use of accounting information for managerial performance evaluation. Journal of Management Accounting Research (4): 116-130. BABCOCK UNIVERSITY, ILISAN, OGUN STATE Performance Evaluation uses accounting information, limitation reconsidered Emerging issues Assignment BY ADEYEMI EBENEZER ADESUJI MATRIC NO NS/4270