The Significance of Employee Performance Evaluation

Today's fast-evolving business environment requires an organization to be able to anticipate the changes in an appropriate and innovative way. From the several important factors that determine the success of a company, the aspect of employee welfare or Human Resources (HR) is the most important thing in anticipating this change.

A large number of employees or human resources of a company needs to be evaluated on their performance. By carrying out the process of evaluating employee performance, the company gets a picture of how the behavior and conditions of its employees are related to the work or task that he/she has done. Mathis and Jackson (2006) stated that employee performance evaluation is a process to assess/evaluate how well employees complete their tasks/work when compared to existing standards and the feedback is communicated to the employees. Performance evaluation can be done effectively if it includes two things, standards used to benchmark and feedback of the results of the evaluation. This is supported by Gary Dessler (2017) who states that “Effective appraisal also requires that the supervisor set performance standards. And it requires that employees receive the training, feedback, and incentives required to eliminate performance deficiencies”.

Performance evaluation is carried out on the quality of work that has certain standards which represent systematic, formal, and evaluative descriptions that provide information about the strengths and weaknesses of employees individually or in groups. Jobs in companies in any line of business require this employee performance evaluation process. By carrying out this process properly, the company will be able to optimize employee competencies in order to achieve organizational goals. Likewise, if the opposite happens, when the evaluation process is carried out in a haphazard manner, the motivation of the employees is reduced and in the long run, it will adversely impact the company performance (Steensma & Visser, 2007).

The discussion in this section covers the terms and benefits in the application of employee performance evaluation.

Terms in the Employee Performance Evaluation Application

The following are some of the requirements that should be met in applying employee performance evaluations:

1. Sensitivity: The first requirement that must be met is sensitivity, where the employee performance evaluation system must be able to make a difference between employees who perform well and those who do not.
2. Reliable:  Employee performance evaluation applications must be able to show a high level of consistency. The system used for the evaluation process must be reliable by using criteria, benchmarks that are accurate, objective, and consistent.
3. Relevant: The criteria and benchmarks used in evaluating employee performance must be interrelated and in line with the parameters that become the company's vision, mission, and objectives.
4. Practical: Employee performance evaluations should be easy to understand and use, both by employees and line managers. The terms or terminology used must be short, clear, and not contain biased meanings.
5. Acceptable: Each criterion assessed in the employee performance evaluation process must be acceptable to both the employee and the company.

Based on the explanation of some of the requirements above, it is illustrated that an effective employee performance evaluation process will be able to guarantee satisfaction to both the employee and company and should be in line with the company's process in achieving the desired goals.

Employee Performance Evaluation Application Benefits

Employee performance evaluation applications provide benefits for all parties. The parties who get this benefit are:

1. Assessed employees
2. Line Manager as assessor
3. Company

The employee performance evaluation process ends with the process of making a report containing the results of the employee's performance evaluation. The results of this process will be mutually agreed upon between the employee and the line manager who is the employee's direct supervisor. After mutual agreement, the results of this performance evaluation need to be conveyed to each employee so that employees can find out the results of the whole exercise and receive feedback to continue to make further improvements.