Evaluation and measurement of employee performance at the workplace is important for various reasons. The objectives of evaluation and measurement vary depending on the type of organization. Evaluation of employee performance is important because it helps define success, analyze situations and determine critical factors of success (Schultz & Schultz, 2010).
Measuring and evaluating employee performance helps analyze situations that an organization is going through. This analysis helps the organization discover its strengths and weaknesses hence; it can determine the best steps to undertake to improve. Situational analysis also helps management to understand its internal aspects like competence and external factors like customers. The company will have an insight into the situation it is and how it can achieve its long term and short term objectives (Schultz & Schultz, 2010).
Different companies have different definitions of success. Some organizations consider success to be the profit margins, sales, number of customers and many other achievements. Organizations evaluate the different aspects of the employees to determine their productivity and their contribution towards the organization’s success (Schultz & Schultz, 2010).
Critical success factors
Evaluating and measuring employees’ performances help the organizations manage the firm’s success effectively. The factors of success must be evaluated on the basis of the organization’s objectives. Identifying important factors of success helps guide employees considering the priorities of the organization hence; employees work for a common goal (Schultz & Schultz, 2005).
Organizational consultants use various methods to measure employee performance. Some of the most commonly used methods include; quality of work, quantity of work, cost effectiveness of hiring employees, timeliness and creativity of employees and adherence to policies. It could also be based on employee characteristics like absenteeism, personal appearance and habits. It could also be based on the appraiser such as self-appraisal, manager appraisal, peer appraisal and team appraisal. The most effective approach is the 360-degree feedback where appraisal is based on feedback from peers, managers, self, direct reports, customers and other sources. It is effective because it is comprehensive and accurate (Schultz & Schultz, 2010).
Schultz, D. P., & Schultz, S. E. (2010). Psychology and Work Today. An Introduction to Industrial and Organizational Psychology. New York: Pearson Education.