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Effective Methods for Employee Performance Evaluation

Kundan Pandey Nov 1, 2018
Performance evaluation of employees forms an integral part of every firm's management policies. Here is some information about the factors that form the crucial part of this process.
Monitoring organizational efficiency and getting insights about further growth and improvement possibilities are some of the keys to impart stability and competence to firms. Since employees are assets of any firm, they have to be aware of the immense value of such evaluation.
The report card of an employee reflects, what he has done as an individual and in teams, that has resulted in the success of the firm. Indeed, this process is not an easy task for managers, as they have to consider many parameters while evaluating various work areas of employees.
Nonetheless, it is necessary for developing and implementing improvement plans for achieving long term business profits. Since cutthroat competition is an integral part of today's business environment; perform or perish is supposedly the new age mantra for working professionals.

The Methods

'How to evaluate employee performance' is a question that concerns many managers and recruiters. There are various methods one can employ to undertake this task. A few of them are discussed here.


In the ranking method, employee performance is analyzed by ranking them from worst performers to best performers. Based on the performance, employee graphs are drawn and top performers are always on the top of chart, while worst ones are down the graph.
This method is generally regarded negative, as worst performers may feel demotivated. Besides, rivalry among colleagues may trigger negative work environment and sometimes cause unhealthy competition.


In this method, they are rated based on their traits, which may include attitude towards work, punctuality, quantity and quality of work, and team participation. The objective is to foster employee motivation. One disadvantage of this criterion is that, there is no well-defined scale for every trait, and it may differ from one person to other.


This is by far, one of the most transparent and objective based methods. In this process, employees have to submit frequent reports about their targets. The employer sets specific targets for every employee, and achieving or exceeding those targets is counted as a measure of performance. It is popularly known as Management by Objectives (MBO).
In this method, sometimes it may happen that in the quest to outperform another employee, a non-cooperative work environment may be created in the work place. However, being objective oriented, it certainly works better than others.

Multi-source Feedback

Multi-source feedback is an interesting method as in this process, the HR manager and employees give written feedback about the performance of an employee.
Either they are asked to write a page or two, defining the qualities and work of the employee, or they are given certain options to evaluate the performance. This way of feedback is generally quite insightful for the management team, as sometimes it can bring various flaws and limitations of work in the organization.
The final outcome depends on how well a firm responds to any specific set of evaluation methods. Since these methods vary significantly, many organizations use two to three such methods to track the correct potential and performance of an employee.