Abstract:

The following essay is concerned with research about the topic of performance management and evaluation systems. Since performance management systems and its components such as performance evaluation are nowadays more than ever an important key factor within organizations to satisfy employees and to support and improve productivity, outcomes and organizational competitive advantages, it is imperative to consider a handful of aspects to be able to deliver effective and forward looking performance evaluation. Within this context establishing a ‘culture of dialogue’ with open two-way communication, performance selfappraisal forms and ongoing feedback is forward looking and can help firms to satisfy their employees in order to achieve acceptance with the performance management system as a whole. Moreover, organizations are increasing their emphasis on developing people what is an important aspect considered in the following assignment. If performance evaluation is to be effective it needs to identify employees’ developmental needs linking them with training and developmental activities that provide employees with opportunities to enhance strengths and to improve weaknesses. How managers and supervisors can ensure this is achieved and what other important aspects are required to be considered in order to provide the organization and their employees with effective and forward looking performance evaluation will be researched and described in the following essay. Implications for effective performance evaluation

As the topic of this assignment predicts that performance evaluation is to be effective only when it is forward looking in its focus and integrated with training and development activities, one essential aspect to be discussed within this context are “Performance Dialogues”. Performance dialogues are forward-looking rather than retrospective and focus on employee development which is an important key component within every performance management and evaluation system (Lecture on Managing, Evaluating and Developing Human Resources by Megan Paull, Murdoch University, S2 2010, Week 4, Slide 11; Aguinis 2009, 201). Two statements from key stakeholders (Rodriguez 2002, 2) pointed out in a performance management survey published in May-June issue 2001 of Harvard Business Review express obviously the need and the absence of performance dialogues as well as training and developmental activities pretty clear:

“Why should I devote a lot of energy to the performance management process? I can’t remember the last time I sat down with my boss to talk about my performance.” “Our managers don’t know how to coach their staff and provide them with meaningful feedback.”

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Even when those statements are just two of one survey about performance management, research revealed that achieving effective performance management processes requires a culture of dialogue that is constituted by pervasive and regular two-way communication meetings. Thus, individuals and groups are provided with the opportunity to question, challenge, interpret and clarify goals in order to align employees’ actions with the corporate goals (Rodriguez 2002, 2). Creating a culture of dialogue includes two things to be considered as essential components. First it needs to be ensured thorough clarity around functional and corporate goals what means that employees understand what they are expected to achieve, the importance of their performance for the accomplishment of the organizational goals and how their performance is actually linked to these corporate goals. Second, to ensure clarity of goals appropriate systems and processes are required to be found and implemented by HR managers. For example, this might be done by creating a “learning map” that displays graphically how each team and department and its functional goals are connected to organizational goals. Another method to achieve clarity around goals may be to create scorecards which determine five to seven individual annual goals. Those goals are set up between managers and subordinates when they finally agreed upon. The accomplishment of the goals will then be evaluated within the performance assessment phase through performance evaluation meetings (Rodriguez 2002, 3-4). As already mentioned beforehand, that individual performance and goals must be linked and aligned with organizational objectives it is imperative that performance evaluation systems are aligned as well with the firm’s strategic plan and corporate goals in order to deliver effective evaluation outcomes. Gary Boomer (2009, 27), president of Boomer Consulting in Manhattan, Kansas, confirms this point by explaining that “how an employee’s performance integrates with the firm’s strategic plan is often missing from performance evaluation systems.”

Once performance evaluation meetings have been scheduled and managers and employees are supposed to meet each other, it is important to conduct the performance appraisal in a two-way communication in order to participate the employee in the evaluation process of his own performance (Aguinis 2009, 42). That also means that the manager or the supervisor should avoid dominance of the conversation. Brian Gill (1998, 72-74) supports this argument in the American Printer Magazine stating that “evaluations should be an open communication in which both the manager and the employee can determine what things are done well and where there is room for improvement”.

A helpful instrument to facilitate and achieve those participative meetings is the use of self appraisal forms provided to the evaluated employee. As within the assessment phase both the manager and the employee are supposed to deliver information about the employees’

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performance, self appraisal forms provide a good opportunity for the employee to assess his own behaviors, results and goals expected to be displayed and achieved in the foregoing review period. Since the performance of the employee is illuminated by both individuals the assessment delivers better information (Aguinis 2009, 41-42). Hence, having better information to be used as a discussion-basis makes the evaluation process finally more effective. Furthermore, Aguinis (2009) explains that self-ratings are useful to reveal potential discrepancies between self-views and the views of others that relate to the evaluated results, behaviors and goals. He also points out that it is more likely to initiate developmental efforts when there are any discrepancies between supervisor and employees (42). Gary Boomer (2009, 27) makes the point that “(…) self-assessment is a powerful motivator.” Thus, giving the employee the opportunity to participate within the performance evaluation process leads to higher satisfaction with the evaluation system and the performance management system as a whole since employees are able to assess themselves making any suggestions, comments or interpretations regarding her own performance. Also it displays accuracy and fairness that supports the acceptance of the system by the employee and therefore the effectiveness of the performance evaluation process (Aguinis 2009, 42). Finally, an important step that never should be missing in the evaluation process is the need to review and re-develop the actual job descriptions ensuring that job tasks, knowledge, skills and abilities are kept up-dated and performance measurement and evaluation refers to that tasks and behaviors relevant and required to the job in question. Gill (1998, 72-74) underlines this essential point by emphasizing that “without a good, accurate job description, there is nothing substantial to evaluate performance against.” He further points out that “managers and employees should be able to review it before the actual evaluation to make changes, additions and corrections.” Thus, without regularly up-dated job descriptions effectiveness of performance evaluation will be declining and might be distorted by making wrong performance and development decisions due to the use of obsolete or inappropriate job descriptions as evaluation basis.

What is also important when managers and supervisors want to be engaged in effective performance evaluation?

First, it is necessary that managers and supervisors prepare their employees for evaluation meetings in order to avoid surprising situations giving the employee the opportunity to prepare him or herself for the meeting. That should include handing out the appraisal forms to the employee before the actual meeting takes place to make the employee aware of how he or she will be evaluated (Gill 1998, 72-74). Preparing the employee on time for her performance evaluation and giving her the opportunity to participate in the evaluation process most likely will increase the satisfaction and acceptance with the system as the employee will feel esteem and involvement in the process. Another point that Gill and

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