This document discusses the importance of employee performance management and evaluation. It notes that employees are the biggest asset and expense for companies, so developing an effective performance appraisal system is crucial. An effective system clearly defines expectations, aligns with company goals, uses valid metrics and feedback, and creates action plans. While performance reviews can improve outcomes for employees and companies, they may also introduce subjectivity and negatively impact employees in need of development if not implemented properly. The document explores different evaluation methods and tools to enhance objectivity and development.

1. Employee Performance
Management
By Katarzyna Jedrys

2. Employees are:
 The biggest asset to the
company
 The biggest expense(35%-40%)
Employees hold the success or
failure of your company in their
hands!!!

3. Therefore, it is crucial to develop
performance appraisal systems
(PA) Provides foundation for:
 recruiting and selecting new
hires
 training and development of
existing staff
 motivating and maintaining a
quality work force by adequately
and properly rewarding their
performance

4. Purpose of PA:
 Evaluative-information of
performance standing
(promotion, merit increase)
 Developmental-identification of
performance problems
(communication,
encouragement)

5. Key Elements of an effective
PA System:
 Clearly defined expectations
 Company’s mission and goals
 Performance metrics
 Training and tools necessary
 Valid feedback-objectivity
 Action plan

6. PA measurement methods:
 Graphic Rating Scale
 Behaviorally Anchored Rating Scale
 Narrative Technique
 Critical-Incident Method
 Paired Comparison Method
 Forced Choice Method
 Forced Distribution Method
 Management by Objectives
 Ranking

7. Subjectivity vs. Objectivity
Researchers have found that
personal preferences,
prejudices, appearances, first
impressions, race, and gender
can influence many
performance appraisals.
Note: violation of Title VII of the civil Rights
Act!!!

8. Subjectivity vs. Objectivity
 Halo error
 Horn error
 First impression error
 Recency error
 Leniency error
 Severity error
 Central tendency error
 Clone error
 Spillover error

9. Performance evaluation tools:
 Performance reviews
 Corrective action
Note: See distributed Target forms

10. Performance/Leadership
Development Tools:
360 Degree Feedback

12. 360 Degree Feedback
 10% of companies- gaining on
popularity
 59% of companies believe that
it’s purpose is developmental
and 41% evaluational

13. Performance/Leadership
Development Tools:
 Leadership Status (monthly)
Companies: Target
“Leadership is the capacity to
translate vision into reality.” -
Warren G. Bennis

14. So Why Bother With
Performance Evaluation?
Employee:
 knows what’s expected of
him/her-clear communication
 job satisfaction-sense of
fairness, equality and fulfillment
 loyalty to the company
 training gaps- can be detected
and addressed

15. So Why Bother with the
Performance Evaluation?
Company:
 improved morale
 reduced turnover
 improved productivity
 successful company
performance-profitability

16. DOES PERFORMANCE
EVALUATION HAVE A
POSITIVE OR NEGATIVE
EFFECT ON WORK
PERFORMANCE?

17. According to Professor Bård
Kuvaas, from the BI Norwegian
School of Management
Performance, appraisals can
actually be counter-productive
for employees who are in the
greatest need of training and
further development and also
depend on employees intrinsic
job motivation.

18.  Do you agree or disagree?

19. Sources:
 “Compensation”-Milkovich & Newman
 http://www.innovations-
report.com/html/reports/studies/report-58701.html
 http://www.family-business-
experts.com/performance-evaluation.html
 http://iso9k1.home.att.net/pa/performance_appraisal
.html
 http://www.answers.com/topic/performance-
appraisal
 www.gengroup.com.au/articles/october2002.html