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Running head: EMPLOYEE PERFORMANCE EVALUATION

Employee Performance Evaluation Maxine Jones Shorter University MANAGEMENT RESEARCH TOOLS & ANAYLSIS MGNT 3000 Dr. Debra Hunter June 07, 2011

EMPLOYEE PERFORMANCE EVALUATION Abstract

This research paper shows that employee performance evaluations can make a significant impact on employees during the course of a fiscal year. According to an eHow article, Performance evaluations are a companys way of evaluating the talent, skills, and abilities of the staff. It also provides an opportunity for the employee and manager to have a one-on-one discussion of where the employee stands and what it takes to get to the next step. Therefore, when Onity, Inc., employees complained that three was the highest rating they received from the rating system set at 1-5, they began to wonder if there was a salary cap, or if they did not meet qualifications for promotion. Upon investigation, in some instances evaluations were designed for specific departments, and the questions asked did not pertain to the employees who were evaluated. Consequently, these evaluations were faulty. Another result of the investigation revealed that supervisors were not communicating well and/or clearly with employees. Therefore, employees were not making strides to meet company expectations because of inadequate guidance. It is important that employees are given a SMART (Specific, Measurable, Actions, Relevant, and Time-framed) evaluation. The SMART aim is to direct employees objectives to the companys objectives. This is only achieved when employees are aware of their own goals as they relate to the goals of the company. And it is the job of the supervisor to make sure that employee goals are synchronized with the company goals.

EMPLOYEE PERFORMANCE EVALUATION Employee Performance Evaluation EMPLOYEE PERFORMANCE EVALUATION: HOW GOOD ARE YOUR EMPLOYEES?

Introduction James, Rodney, Carol, Debra, and Richard were at lunch following the end of the fiscal year evaluation at Onity, Inc. None of them were pleased about the outcome of their evaluation. On a 1-5 scale, three of the employees talking had earned a level-3 rating; one had received a level-2 rating, and one had received a level-1 rating. As they continued to discuss their situations, they revealed to one another that none of them had received a rating higher than three. The more they talked, other factors came to light. Other employees they knew in technical support, project management, and financial services were just as disgruntled. The lunch crew realized several significant points Richard and Debra, realized that in some instances evaluations were designed for specific departments, and the questions asked did not pertain directly to the employees who were evaluated. Consequently, the employee-evaluation match was faulty. James, Carol and Rodney, commented that some supervisors did not communicate well with the employees, nor did they communicate clearly with them. Therefore, employees were not making strides to meet company expectations because of inadequate communication and guidance. What can James, Rodney, Carol, Debra, Richard, and other employees do to improve their performance evaluation scores? Purpose of Employee Performance Evaluation

EMPLOYEE PERFORMANCE EVALUATION This research project shows that employee performance evaluations can make a

significantly positive impact on employees, supervisors, and the company during the course of a fiscal year. According to an eHow.com article entitled Money, employee performance evaluations are extremely important. Performance evaluations provide an opportunity for the employee and manager to have a one-on-one discussion of where the employee stands and what it takes to get to the next step(ehow,2011). In order for the evaluation to be a viable exchange, the evaluation must be tailored to fit the responsibilities and expectations the company requires of the employee. In addition, the evaluation should follow the SMART (Specific, Measurable, Actions, Relevant, and Time-framed) plan of evaluating employees. Since most performance evaluations are about achieving goals, improving tasks, and career development, the SMART plan provides a clear path of communication between employee and supervisor. The employee is given specific instructions for doing a job or task; there are criteria for measuring job/task performance; specific actions are taken to achieve goals; actions are relevant to the outcome of the job/task; there is a specific time-frame from set goal(s) to outcome. When these guidelines are clearly communicated, employees can work comfortably in the company to fulfill their responsibilities. And according to Robert J. Solomon, professor of organizational behavior at William & Marys Mason School of Business in Williamsburg, VA author of The Physician Managers Handbook, The payoff is improved job performanceits as simple as that(Dean,Wiseman,2011). Next, employee performance evaluations can make a significant impact on supervisors, as well. Since supervisors are held accountable for the performance of the employees who are under the supervisors charge, it is to their advantage to communicate well with employees. In a recent survey of managers, 82% agreed that leaders can have a significant impact on an

EMPLOYEE PERFORMANCE EVALUATION employees level of motivation and engagement (Longenecker, 2011). A SMART evaluation plan can help the supervisor to communicate well with employees and manage employee

performance, rather than react to it(Fitch, 2011). When employees have a clear vision of what is expected of them, the supervisors job is less taxing. In short, his or her job is made easier. The evaluation between employee and supervisor should be a joint process in which both parties feel free to speak, and be heard. The performance evaluation conference between employee and supervisor is an opportunity for the employee to get feedback on the perception of his/her performance, and to design a plan for areas where improvement needs to be made. At Onity, Inc., evaluations are conducted one time per year. However, some companies have supervisors who have interim evaluation checks that are conducted monthly, quarterly, or semi-annually. Sometimes the frequency of these checks are dictated by certain factors, such as, evaluating new employees to appraise their progress against job responsibilities, or evaluating employees to check the progress being made on a new or important project that the company has undertaken. Finally, employee performance evaluations can make a significant impact on the company. According to the Money article, Performance evaluations are a companys way of evaluating the talent, skills, and abilities of the staff(ehow,2011). Evaluations provide the opportunity to place employees in positions best suited for the welfare and growth of the company. When the talents, skills, and abilities of employees are used optimally, the company reaps the rewards. Components of the Employee Performance Evaluation There are several components to the employee performance evaluation. These usually consist of the following: objectives, competency, business ethics, employee engagement,

EMPLOYEE PERFORMANCE EVALUATION customers, operational excellence/key performances, and performance development. First, it is necessary to define employee performance objectives clearly. The objectives should be specific. For example, imagine that Onity, Inc., had an objective for technical support employees that stated: To handle technical support problems within a timely manner. It is easy for persons to interpret the meaning of a timely manner differently because a specific time-frame was not given. Therefore, one employee may interpret a timely manner as 45 minutes and another employee can interpret the phrase to mean 2 hours. When the company decided the technical support personnel needed to be more time-conscious, a specific objective was stated in these

words: To handle technical support problems within a 15 minute to 1-hour time frame. Second, the object must be measurable. For example, it is easy to measure whether or not technical support employees complete technical support assistance within the designated 15 minute to 1hour time allotted for their services. Third, an objective must be able to be achieved. For example, more complicated problems for technical support may call for more time than the designated hour time limit. Third, objectives must be relevant to job expectations and performance. To have an objective that is irrelevant and outside of the job expectation is counterproductive to the outcome of the employees evaluation. Finally, objectives should be able to be achieved within a specific time-frame. For example, it is not specific enough to say that a task must be completed by June. One employee may target June 1, as the deadline; another may target June 15th, as the deadline, and another employee may target June 30th. An objective which identifies a specific dateTo complete the handbook for publication by June 21st clears up the confusion about time. The competency component of the employee performance evaluation identifies base-line or minimum satisfactory competencies that should be achieved. Employees who fall below the

EMPLOYEE PERFORMANCE EVALUATION minimal expectations are subject to a probationary term or dismissal, among other possible penalties. Business ethics assess behavior and business practices that align with the ethics and values of the company. According to Brian Fitch, A leaders job is to ensure that [employees] perform their duties in accordance with organizational policy (The Two Roles of Supervision

in Performance Counseling)(Finch,2011). Ethical business practices are employee actions that are void of selfishness, greed, and other infractions caused by these dispositions. It is noteworthy that many high-profile companies practice unethical behavior. Ethics Resource Center, the oldest nonprofit organization in America, revealed, The riskiest, and most frequent [business] misconducts [include] putting ones own interests ahead of those of the organization, lying, abusive behavior, stealing, Internet abuse, discrimination, sexual harassment, and provision of low-quality goods and services (Locker,Kienzler,p.104). Employee engagement is a major component of employee performance evaluations. A supervisor will note how the employee interacts with his/her peers on the job and will note whether or not the employee is engaged in attitudes, dispositions, and actions that contribute to the values and goals of the company. The supervisor will note whether the employee takes initiatives and works effectively toward problem-solving. In other words, the supervisor is interested to what degree the employee grasps the vision of the company and works toward making the vision a reality. Customer relations and/or customer service are/is another component of employee performance evaluations. Poor behavior and/or poor communication with customers can cost a company millions of dollars, even billions. For example, Sosa, Eppinger, and Rowles (2007), contend that Ford and Bridgestone Firestones failure to coordinate the design of the Ford

EMPLOYEE PERFORMANCE EVALUATION Explorer and its tires cost them billions of dollars. In retrospect, authorities agree the mistakes could have been prevented if the teams involved had communicated more effectively with one another (Sosa,Eppinger,Rowles,2007). Not only is there a loss of money, but poor customer relations and service can result in wasted time, wasted efforts, and a poor company image (Locker & Kienzler, p.8). Companies are adamant about maintaining a sparkling image;

therefore, an employee who does something to tarnish that sparkling image, or an employee who fails to do a task which results in a smudge on the image of the company usually has to pay a penalty for the infraction, the worst of which is job loss. Operational excellence is identified in key performances that are noted in employees. For example, an employee may be given a score that denotes excellence in the area of sales. If the average car salesman sells 35 cars in a year, and a salesman sells 52 cars in a year, he/she earns an excellent rating. When this rating is consistent, the employee positions himself or herself to earn a raise and/or a promotion. Moreover, the supervisor and the company benefit from such a productive employee. Developing an Effective Evaluation Form When the group of employees at Onity, Inc., spoke at lunch concerning their performance evaluations, one important piece of information they realized was that they had undergone evaluations that were not suitable for all of their job descriptions. According to Woodford & Maes (2002), . . . evaluations are essential to ensuring that each employee understands his or her role within the organization and is acting in accordance with the organizations overall strategies and objectives. There is a trickle-down effect that occurs when developing employee performance evaluations. Since many companies use employee evaluations as part of a strategic

EMPLOYEE PERFORMANCE EVALUATION plan, the trickle-down effect usually goes like this: (1) the CEO has a vision and mission for the

company; (2) goals and objectives are set for the entire organization to promote the CEOs vision and mission; (3) departmental goals and objectives are set to meet the overall goals and objectives of the company; (4) supervisors and managers are charged with developing strategies for meeting departmental objectives that feed into and nourish accomplishing the overall goals of the company, and (5) the strategies developed by supervisors and managers are supported by individual goals for employees (Woodford & Maes,2002). To develop an effective management by objective evaluation, four elements are key to the process. First, the employee and supervisor should review the job description and key responsibilities of the employees job. Second, specific standards of performance must be agreed upon. The supervisor and employee should agree upon a satisfactory level of performance and determine how to measure the performance. Third, the employee establishes goals and objectives in conjunction with the supervisor; and fourth, the supervisor and employee meet at formal times to discuss the progress of the employee and where the employee needs to improve. If these guidelines had been followed by Onity, Inc., supervisors, it is far less likely that James, Rodney, Carol, Debra, and Richard, would have had the problems that precipitated the displeasure they felt with their performance evaluation outcomes. Perils of an Ineffective Evaluation Form This research project shows that employee performance evaluations can make a significantly positive impact on employees, supervisors, and the company during the course of a fiscal year. However, there are times when improper evaluations are given to employees, and in such cases the outcome results in a significantly negative impact on employees, as well as the

EMPLOYEE PERFORMANCE EVALUATION

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supervisor and the company. An evaluation is deemed improper if it does not address clearly and specifically the employees job responsibilities, if the employee does not know the satisfactory level of performance he/she must meet, if the employee cannot identify his or her job performance goals and objectives, and if the employee is unsure of his or her progress and where the employee needs to improve. I recently took a survey of 60 employees and received 38 responses and was not surprised at the information received. A number of perils for all concerned can occur when employees thoughts and actions are not in alignment with the supervisor, the department, and the overall company. When all parties are not aligned in thought, purpose, and action, the results can be loss of time, energy, and money for the company. Conclusion So then, How good are your employees? There will be a significant impact on the employees if they take and use the information to their advantage. Having performance evaluations on a quarterly basis the success and challenges will benefit both parties. The employee needs to know when the company has changed the goals, and how to fit into the new parameters. The employees are as good as the level of training, and preparation they get prior to beginning their job. The concept is comparable to students taking an examination. If students are taught the subject matter, if they are given one-on-one time for individualized discussion and assistance as needed, and if they are given progress reports along the way, then the teacher expects the students to pass the test when it is given. The same principle applies to the success of a supervisors employees. When a supervisor gives employees their specific job descriptions, develop clear performance standards for them, set clearly established goals and objectives, and have regular performance conferences that identify strengths and areas that need improvement, and a plan to improve, then the supervisor expects his employees to be good, very good, and

EMPLOYEE PERFORMANCE EVALUATION excellent. When employees earn such ratings as these, then they benefit in the areas of awards,

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rewards, pay raises, and promotions. The supervisor benefits by earning the same and/or similar perks for heading a group of employees who prove to be valuable to the company. And the company benefits by earning and/or maintaining an outstanding reputation, goodwill, and financial gains.

EMPLOYEE PERFORMANCE EVALUATION References

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eHow Money [Article]. (2011). Retrieved from www.ehow.com/facts _5032345_purposeperformance-evaluation.html Fitch, B. (2011, Mar2011). The two roles of supervision in performance counseling [article]. FBI Law Enforcement Bulletin, 80(3), 10-15. Retrieved from vnweb.hwwilsonweb.comwf2dnvr13.webfeat.org/hww/results/results_single_fulltex Gesme, D. H., & Wiseman, M. (2011, Mar2011). Performance appraisal: A tool for practice improvement [Article]. Journal of Oncology Practice, 7(2), 131-134. doi: 10.1200/JOP.2010.000214 Locker, K. O., & Kienzler, D. S. (2010). Cost of poor communication. In Business and administrative communication (9th ed., p. 8). New York,NY: McGraw-Hill. Longenecker, C. O. (2011). How the best moitivate workers [article]. Industrial management, 53(1), 8-13. Retrieved from vnweb.hwwilsonweb.com.wf2dnvr14.webfeat.org/hww/results/results_single_fulltex Sosa, M. E., Eppinger, S. D., & Rowles, C. M. (2007). Are your engineers talking to one another when they should? Harvard Business Review (Business and Administrative Communication). . Woodford, K., & Maes, J. D. (2002). Employee performance evalutions [article]. Administering and writing them correctly in the multi-national setting, 21(7), 1-8. Retrieved from wf2dnvr14.webfeat.org/e0JRQ111634/URL=HTTP:/proquest.umi.com/pqdweb?vinst=P