Performance Reviews and Employee Assessments: An Overview

Performance management is the overall process employers use to evaluate
the productivity, creativity, and accomplishments of the organization and its
employees. The overall intention is to identify and reward good performers, provide
incentives to work harder in the future, and provide feedback to those employees
who are not meeting expectations. Different companies use different types of systems
and programs, but we will explain the most common approaches to Performance Management.

Generally, there are two elements of an individual’s work that are evaluated:

1. Individual: The goals, qualities or behaviors of the employee, specific to that person’s job and/or the organization.
   Some companies tag these as symbols of job competence and are considered critical
   to the success of both the employee and the organization. Employees should
   be given the opportunity to provide input on what their goals will be during
   the coming evaluation period, and the employee’s supervisor should approve
   these goals.
   
   
   
   Some organizations use the term SMART Goals. SMART stands for Specific, Measurable, Achievable, Rewarding, and Time-based. Goals are measured
   with results achieved over a pre-determined period of time, and are generally
   measured with a percentage or rating that describes the degree of completion.

2. Organizational: The company-wide behaviors that are required for the organization to succeed.
   These behaviors vary by organization, from generic and subjective to specific
   and well described. However, these are specific criteria that are required
   for the organization to be successful. For example, qualities such as teamwork,
   entrepreneurship, innovation, etc. are often included in this section. Note
   the distinction between organizational success and individual success.
   
   
   One
   problem with performance appraisals is the way that they often only assess
   individual achievement and completely forget about how that individual’s contribution
   is affecting the overall organization. A person could be great at building
   spreadsheets and doing data analysis, but if they are working on a team and
   build spreadsheets that others can’t understand or use, then they are worthless
   to the team, and therefore the organization. In this kind of scenario, everyone
   fails.
   

As you can see, the main shortfall of all typical performance management systems
is the high degree of subjectivity. One person has to assess the quality of your
work. Most of the time, your destiny depends on your boss’ opinion. The better
prepared you are to defend your performance with fact-based reasoning, the better
your chances of success in the process.


Some organizations have been more proactive
in the assessment process and have developed what are known as 360 degree assessments.
These types of performance tools are more objective, as the employee is assessed
by his/her supervisor, some peers, subordinates (if applicable) and internal or
external customers. This type of approach allows employees to have a broader,
more objective assessment. The only shortfall is that this type of evaluation
only focuses on behavior or competence, not on results or achievements, which
are both important factors.