Many organizations conduct periodical employee evaluations. Traditionally, the evaluation process is performed by managers or supervisors, but some organizations expand the process to include other participants, i.e., professional managers, colleagues, and employees themselves. The employee evaluation consists of a variety of subjects, which usually includes an assessment of performance, both in mission and interpersonal aspects, a comparison between performance and expectations or goals, identification of training and professional development needs, promotion, and compensation. The organization provides the participants with tools and resources: structured assessment forms, computerized feedback platforms, relevant training, schedules, and appropriate conditions for the feedback conversation.
Considering the huge investment in the employee evaluation process and the organizational capacity that the process takes, a new managerial need emerges: to examine the effectiveness of the employee evaluation process. The stakeholders and players who participate in the evaluation process, the available tools and resources, the issues discussed in the feedback conversations, all affect the effectiveness of the process. Therefore, at the end of the process, managers tend to raise questions in regards to these sources of influence. A study of the employee evaluation process will help the organization to answer four main questions:
1. How did managers face with the assessment tools, i.e., how valid were the assessments given to employees?
Managers may be aware of the possible biases in employee evaluation. Biases may occur, for example, due to a tendency to evaluate different performance dimensions based on one outstanding characteristic, a tendency to attribute characteristics to an employee or to review work behaviors according to background characteristics, a tendency to avoid low assessments though realistic, and more. Organizations try to reduce these biases, before the evaluation process starts, through training, in which managers are provided with tools and guidelines for valid employee assessment.
Preventing biases in the employee evaluation process is extremely important since the process outcomes directly influence the employees and managers who participated, and indirectly, influence the entire organization. Therefore, an assessment of biases in the performed evaluation process is essential. Statistical analysis of the overall evaluation data is used to examine the managers’ assessment skills, i.e., their ability to distinguish between employees, and between different assessment dimensions. Rating the managers by these skills is useful for ongoing improvement in evaluation processes and as a part of the managers’ training and feedback.
2. Is the organizations’ employee evaluation form valid and reliable?
The wording of the evaluation form has considerable influence. The way it is organized, its items phrasing, the measurement scales, all affect the answers obtained while performing the evaluation process. This is true regarding all kinds of questionnaires, and evaluation forms are no exception. Therefore, it is essential to evaluate the form as an assessment tool. When the employee evaluation process is based on “quantitative” feedback, in which the measurement scales are appropriate for statistical analysis, the validity and reliability of the evaluation form can be easily tested, using “factor analysis” and other statistical models.
The statistical feedback is particularly crucial when the form is new to the organization and is used for the first time. The statistical analysis enables us to point out recommended modifications that the organization should consider for future evaluation processes. Also, examining the evaluation form and identifying biases is very important when the decision-making about employee compensations and incentives is based on the results of the evaluation process.
3. What can we learn from the attitudes of employees and managers towards the evaluation process?
Employees and managers, who participated in the evaluation process, usually have valuable opinions, which are useful to study in a survey of all process participants, or in a random and representative sample of participants. Employees and managers can offer important feedback to the evaluation process and to the evaluation tools that they were provided with. Such feedback can be obtained in a group discussion or by an anonymous survey. Participants can relate to the perceived objectivity and fairness of the assessments, the content of the evaluation form, the contribution of the training they had before the evaluation process, and other issues. A survey can also cover how appropriate was the process for the different needs of employees, managers, and the organization in general.
4. How to use aggregated data, generated from the employee evaluation process, as a long-run management tool?
Many organizations usually complete the employee evaluation process with the production of certain reports. The purpose of such production is an intention to provide managerial tools to directors at various levels in the organizational hierarchy. These reports typically include a summary of measures and items from the quantitative part of the evaluation forms and various comparisons according to the organization’s needs. Naturally, the reports are designed based on the organizational structure and are based on data that the organization collected and provided.
When analyzing the results of the employee evaluation process, it is interesting to explore and compare the results in two levels of the organizational hierarchy: one level above the manager who receives the report, and one level below it. For example, the report for a head of a department will include a comparison to the findings of the entire company (the level reported above), and details of the findings in all teams under him (the level reported below). The manager may identify strengths and weaknesses and compare them to the norms within the organization, according to its position in the hierarchy.
If possible and depending on the scope of the data generated in the evaluation process, reports also include multivariate inferential statistics of items and measures in the evaluation form. Sometimes findings are compared over time, to map change that occurs in the organization, both in the organization unit performance and the quality of the evaluation process. Reports also help to control and monitor the activities derived from the process of evaluating employees.