How to Evaluate Employee Performance?

Evaluating employee performance is one of the key functions of human resources department. It is the basis for improving and developing employee performance and is part of the reward system for employees. Performance management is a systematic process for improving organizational performance by developing the performance of individuals and teams. A well designed employee performance process and management system can help cultivate and promote good corporate culture and improve business performance in long term, especially under the knowledge economy when the talented people are the precious assets of business.


Define Roles and Requirements for Employee

Employee performance management needs to define roles and objectives for employees. Before evaluating the employee performance, it is important to reach an agreement with the employees about their objectives and targets. The roles requirements and expectations form the basis for development, assessment and feedback in the performance management process. In your agreement, you need to set out role requirements in terms of key result areas and the competencies required for effective performance. The role profile provides the basis for agreeing objectives and methods of measuring performance and assessing the level of competency reached. The performance agreement incorporates any performance improvement plans that may be necessary and a personal development plan. It describes what individuals are expected to do but also indicates what support they will receive from their manager. As the employee development agreement is the foundation of the employee evaluation and performance measurement, it is crucial to have a meeting and discussion with the employee.

Measuring the Performance of Employee

After you have discussed the objectives and requirements with employees, you may begin to evaluate the performance of employees based on the criteria set up in the agreement. The results of the performance measure can give signals to employee where where things are not going so well, so that corrective action can be taken.

Performance measurement needs to distinguish between output and results. An output is a result that can be measured quantifiable, while an outcome is a visible effect that is the result of effort but cannot necessarily be measured in quantified terms. Measuring performance is relatively easy for those who are responsible for achieving quantified targets, for example sales. It is more difficult in the case of knowledge workers, for example research and development. For the assessment of quantified targets, it does not have a universal standard and often related to the industry and business experience.

Personal Development Planning

The key objective of the performance measurement is to help employees grow and develop their careers. A personal development plan provides a learning action plan for which individuals are responsible with the support of their managers and the organization. A personal development planning is a roadmap for employees to improve their capabilities and skills in the future.