Methods for Measuring Employee Effectiveness
All performance appraisal systems are driven by the same objective: to establish a systematic and efficient way of evaluating performance, providing constructive feedback, and enabling employees to continually improve their performance.
The basic ingredients in all systems are pretty much the same: setting performance criteria, developing tracking and documenting procedures, determining which areas should be measured quantitatively, and deciding how the information is to be communicated to employees. Where the different methods vary is in the following areas:
The degree to which employees are involved in establishing performance evaluation criteria
How employee performance is tracked and documented
How performance is rated and how it’s aligned with corporate priorities, objectives, and goals
The specific types of appraisal tools used — in some cases, for example, certain approaches are more appropriate for evaluating managers and professionals than other employees
The amount of time and effort required to implement the process
How the results of the appraisal are integrated into other management or HR functions
How the actual appraisal session is conducted
Goal-setting, or management by objectives (MBO)
In a typical MBO scenario, an employee and manager sit down together at the start of an appraisal period and formulate a set of statements that represent specific job goals, targets, or deliverables.
This list of targets becomes the basis for an action plan that spells out what steps need to be taken to achieve each goal. At a later date —six months or a year later — the employee and the manager sit down again and measure employee performance on the basis of how many of those goals were met.
Though less popular than it was a few years ago, the essay approach still has merit. It can be quite useful for a supervisor to periodically compose statements that describe an employee’s performance during the appraisal period. The statements are usually written on standard forms, and they can be as general or as specific as you want.
These written statements can either be forwarded to the HR department or can be used as one element in an appraisal session. Any written evaluation also needs to include more measurable evaluation tools, such as rating scales applied to specific objectives, tasks, and goals.
Critical incidents reporting
The critical incidents method of performance appraisal is built around a list of specific behaviors, generally known as critical behaviors, which are deemed necessary to perform a particular job competently. Managers, the HR department, or outside consultants can draw up the list.
Performance evaluators use a critical incident report to record actual incidents of behavior that illustrate when employees either carried out or didn’t carry out these behaviors. You can use these logs to document a wide variety of job behaviors, such as interpersonal skills, initiative, and leadership ability.
Job rating checklist
The job rating checklist method of performance appraisal is the simplest method to use and lends itself to a variety of approaches. To implement this approach, you supply each evaluator with a prepared list of statements or questions that relate to specific aspects of job performance.
The questions typically require the evaluator to write a simple “yes” or “no” answer or to record a number (or some other notation) that indicates which statement applies to a particular employee’s performance. More often than not, the responsibility for developing the list lies with the HR department.
Behaviorally anchored rating scale (BARS)
Behaviorally anchored rating scale (BARS) systems are designed to emphasize the behavior, traits, and skills needed to successfully perform a job. A typical BARS form has two columns. The left column has a rating scale, usually in stages from Very Poor to Excellent. The right column contains behavioral anchors that are the reflections of those ratings.
If the scale were being used, for example, to evaluate a telephone order taker, the statement in one column may read “1-Very Poor,” and the statement in the right column may read, “Occasionally rude or abrupt to customer” or “Makes frequent mistakes on order form.”
Forced-choice methods generally come in two forms: paired statements and forced ranking. In the paired statements method, evaluators are presented with two statements and must check the one that best describes the employee; it’s either one or the other. In the forced ranking method, a number of options are listed, allowing the evaluator to select a description that may fall somewhere in between the two extremes.
Ranking methods compare employees in a group to one another. All involve an evaluator who asks managers to rank employees from the “best” to the “worst” with respect to specific job performance criteria. The three most common variations of this method are as follows:
Straight ranking: Employees are simply listed in order of ranking.
Forced comparison: Every employee is paired with every other employee in the group, and in each case, the manager identifies the better of the two employees in any pairing. The employees are ranked by the number of times they’re identified as the best.
Forced distribution: The employees are ranked along a standard statistical distribution, the so-called bell curve.
Multi-rater assessments are also called 360-degree assessments. The employee’s supervisors, co-workers, subordinates, and, in some cases, customers are asked to complete detailed questionnaires on the employee. The employee completes the same questionnaire. The results are tabulated, and the employee then compares her assessment with the other results.