9.topic 7 - Performance Evaluation

Topic
 Performance
Evaluation
7
LEARNING OUTCOMES
By the end of this topic, you should be able to do the following:
1. Explain the roles of performance evaluation.
2. Describe the processes of performance evaluation.
3. Discuss the main sources to evaluate employee performance.
4. Compare the main methods to evaluate employee performance.
5. Examine the characteristics of an effective performance evaluation
system.
 INTRODUCTION
The previous topics focused more on how an organisation can attract and develop
productive, flexible, and motivated human resources. This topic will focus on the
aspects of maintaining human resource productivity in an organisation. Although,
initially, all supervisors or managers will observe their employeesÊ work
behaviour, and evaluate their performance at the end of the year, they must also
focus on the non-cost value increase to the organisation. The unconcerned attitude
of supervisors and managers is a challenge to the human resource department,
which needs to develop supervisors and managers who are able to motivate
employees to improve their performance. Supervisors and employeesÊ acceptance
of and commitment to performance improvement are critical in order to increase
productivity in the organisation. Thus, performance evaluation is a complicated
activity but it is important to an organisationÊs competitiveness in the market.
Copyright © Open University Malaysia (OUM)

148  TOPIC 7 PERFORMANCE EVALUATION
7.1 DEFINITION OF PERFORMANCE

EVALUATION
Before we start our discussion on the performance evaluation system, we need to
know what is meant by performance and performance evaluation. We can define
performance as carrying out a task with the result of being able to reach the job
goals or certain activities throughout the duration given.
Bernardin and Russell (1998) more specifically stated that performance is „a record
of outcomes that result in the specification of functions or work activities over a
certain period of time‰. Meanwhile, Mondy et al. (1999) stated that performance
evaluation is a formal system that examines and evaluates employee performance
periodically, that it is also a process that measures employee performance whereby
employee performance is the degree to which an employee completes all the work
requirements given. Cardy and Dobbins (1994) defined performance evaluation
as a process of identifying, observing, measuring, and developing employee
performance in an organisation. Therefore, performance evaluation not only
functions as a tool to measure performance but also as a tool to develop employees.
Many terms can be used to refer to performance evaluation. Some of the more often
used are performance rating, performance study, and merit rating.
SELF-CHECK 7.1
Can you define performance evaluation?
7.2 PURPOSES AND USES OF PERFORMANCE

EVALUATION
Performance evaluation basically aims to increase employee and organisation
productivity effectively, but specifically, the roles played by performance
evaluation are much more than that. According to Ivancevich (2001), among the
roles played by performance evaluation are:
(a) Development
Performance evaluation determines which employees need training. This
will enhance employee-supervisor relationship and encourage the supervisor
to contribute to the reinforcement process of employee behaviour.

TOPIC 7 PERFORMANCE EVALUATION  149
(b) Motivation
Performance evaluation encourages attempts, develops responsibilities, and
propels efforts towards improving performance.
(c) Human Resource Planning

Performance evaluation functions as a valuable input to human resource
planning activities.
(d) Communication
Performance evaluation acts as a basis for discussion between the supervisor
and employees regarding work matters through daily interaction.
(e) Compliance to Regulations

Performance evaluation acts as a valid foundation for promotions, transfers,
rewards, and employee terminations.
(f) Human Resource Management Research

Performance evaluation verifies methods or techniques used in human
resource management activities. For example, during the selection activity,
improving or selecting the effective selection test.
Apart from the general and specific purposes listed above, performance evaluation
can be used for administrative and employee development purposes (Bohlander
et al., 2009). From the administrative aspect, performance evaluation is an input
that can be used in human resource management activities while the development
aspect focuses on feedback of employeesÊ strengths and weaknesses, and stresses
on performance improvement. Among the uses of performance evaluation for
administrative and development purposes are as follows:
(a) Administrative Purposes
 salary administration
 promotion
 decisions to terminate or transfer employees
 reinforce authority structure
 human resource planning
 documentation on human resource decisions

(b) Development Purposes
 performance feedback
 identify the strengths and weaknesses of employeesÊ performance
 acknowledge employeeÊs outstanding performance
 identify training needs
 determine employee development programmes
ACTIVITY 7.1
Based on your experience, has performance evaluation helped in your

career? Share and discuss your experiences with your coursemates
through the myINSPIRE online forum.
7.3 MAIN CAUSES OF PERFORMANCE

EVALUATION FAILURE
Basically, the performance evaluation process is a simple process whereby a
supervisor or manager only needs to observe the work performance of staff and
give feedback on their performance from time to time. In reality, this process is not
that simple. The supervisor or manager as well as the staff often have different
opinions on performance evaluation. Some of the factors that lead to the failure of
the performance evaluation process, according to Bohlander et al. (2009), are:
 The supervisor or manager does not have sufficient information about

employeesÊ real work performance.
 The standard of measuring performance is not clear.
 The supervisor or manager does not have the skills to evaluate employee
performance.
 The supervisor or manager is not prepared to evaluate employee performance,

as he or she does not want to be seen as a judge who is giving out an unfair
sentence.

 Employees do not receive constant performance feedback.
 The supervisor or manager is not sincere during the performance evaluation

process.
 Performance evaluation is not focused on employee development.
 The supervisor or manager uses language that is unclear to the employees

during the performance evaluation process.
 Employees feel that the organisation does not allocate sufficient resources for
performance rewards.
These factors can influence the effectiveness of the performance evaluation process
and create a gap in the relationship between supervisor and staff. Performance
evaluation activities are often annual activities and focus more on employeesÊ
annual salary movement. The disagreement that exists and the misunderstanding
of performance evaluation have caused the performance evaluation process
to fail. Therefore, support from the top management is important in order for
performance evaluation to succeed so that the organisation will be able to compete
in the market.
SELF-CHECK 7.2
Can you recall the factors that lead to the failure of an employeeÊs
performance evaluation?
EXERCISE 7.1
1. What is meant by performance evaluation?
2. State the uses of performance evaluation from the administrative

aspect.
3. State five reasons a performance evaluation process might fail to be

implemented successfully.

7.4 PERFORMANCE EVALUATION PROCESS

Figure 7.1 shows the steps involved in the performance evaluation process.
Figure 7.1: Performance Evaluation Process
Adapted from Mondy et al. (1999)
(a) Identifying Performance Evaluation Objectives

The performance evaluation process begins by developing performance
evaluation objectives. The development of objectives must be related to
the organisationÊs objectives so that there will be an increase in work
performance by employees. For example, some organisationsÊ philosophy is
to focus on employee development aspects while other organisations focus
on the administrative aspects such as salary standardisation.
(b) Developing Performance Standards

After the performance evaluation objectives are set, a standard performance
will be developed. The purpose is to make comparison between real work
performance and the organisationÊs expected work performance easier.
Basically, performance standards must be developed based on a particular
workÊs requirements and these requirements result from the job analysis. A
good performance standard is able to translate an organisationÊs strategic
objectives to a particular work. Figure 7.2 shows four important elements
that must be present when developing performance standards.

Figure 7.2: Performance Standard Development
Adapted from Bohlander et al. (2009)
 Strategic Relevance
The standards that are developed must be related to the organisationÊs
strategic objectives. Indirectly, the organisationÊs strategic objectives
need to be translated into performance standards. For example, 95% of
customer complaints must be solved on the same day. With this in mind,
employees who are in contact with the customers must take into account
this strategic objective when developing their standards.
 No Criteria Contamination
Criteria contamination happens when factors out of employeesÊ control
influence their performance. For example, a typist at an organisation
needs a computer to type and produce quality output. If the organisation
only has a typewriter, then the quality produced will not be as good as
the output quality of a computer. Therefore, the computer becomes a
factor that contaminates the typistÊs performance.

 Reliability
Reliability refers to the consistency of the standards that are developed.
Consistency means how far an employee is able to maintain a level
of performance in a particular timeline. For example, the evaluation
comparison done by two managers on an employee, for a promotion, will
determine the reliability of the employeeÊs performance.
 No criterion deficiency
The development of performance standards must take into account all
the responsibilities of the employee. If the standard that is developed
only takes one aspect of the job, then criterion deficiency occurs. For
example, a salespersonÊs performance evaluation is only measured
through his or her sales volume without taking into account another
important criterion, i.e., customer satisfaction.
(c) Monitor Work Performance

After developing performance standards, the next step is to monitor
employeesÊ work performance so that the performance demonstrated is in
line with the standards set. If the real performance shown by employees
deviates far from the set standards, then the standards developed must be
re-analysed to ensure that they are clear, attainable, measurable, and state
the time period to be carried out. An unclear standard must be altered so that
employees are able to carry out their duties effectively.
(d) Evaluating Performance

Usually, at the end of the year, employee performance will be evaluated
to ensure that the organisationÊs strategic objectives are achieved. The real
performance shown by employees will be compared to the standards that
have been developed.
(e) Discussion on Performance

Employees and managers will review the employeesÊ performance together
based on the standards set. A performance discussion will determine how
far an employee is able to achieve the organisationÊs strategic objectives,
identify the problems that hindered achievement, and find alternatives to
solve the problems. This discussion will also include developing objectives
for the next year.

ACTIVITY 7.2
State whether you agree or disagree on the following issues regarding

performance evaluation, and give a solid reason for your answers.
1. Performance evaluation is the managementÊs technique to control

employee behaviour.
(a) Agree
(b) Disagree
2. Performance evaluation creates employee groups who are

individualistic and selfish.
(a) Agree
(b) Disagree
3. Performance evaluation helps employees to improve their

performance.
(a) Agree
(b) Disagree
Post and check your answers with your coursemates in myINSPIRE.
EXERCISE 7.2
1. State the main elements of an effective performance standard.
2. Explain the key steps involved in the performance evaluation

process.

7.5 RESPONSIBILITY OF EVALUATING

Usually, the manager of a department or unit will be responsible for the evaluation
of his or her employeesÊ work performance. The work difficulties today have
caused some managers to be unable to monitor or evaluate their employeesÊ work
performance. If a department or unit has a small number of employees, then there
is a possibility that only one manager is needed to evaluate his or her employeesÊ
performance. However, for a department or unit with a large number of
employees, the responsibility to evaluate can be assigned to other sources such as
colleagues, self-evaluation, customers, and subordinates.
(a) Immediate Supervisor

This traditional method stresses that performance evaluation must be done
by an employeeÊs immediate supervisor. A supervisor is the most eligible
person to observe and evaluate his or her employeesÊ work performance, and
he or she is also responsible for the management of the unit or department.
Since the immediate supervisor will evaluate the employees, it goes without
saying that the training and development aspects of the employees become
important elements that should be focused on.
If seen from a negative perspective, the immediate supervisor may stress on

certain performance aspects and ignore other performance aspects. For
example, he or she may only stress on the quantity aspect and ignore the
quality aspect.
(b) Self-evaluation
If an employee understands the objectives that must be achieved and is
involved in the development of performance standards, then he or she is
qualified to evaluate himself or herself. This is because the employee knows
what has to be done and how to carry out the task effectively. Moreover, an
employeeÊs involvement in the performance evaluation process is critical so
that an increase in productivity is possible.
From the negative perspective, an employee is more keen to illustrate his or

her strengths and try to cover up his or her weaknesses. With this in mind,
self-evaluation is more suitable for self-development and not as a basis for
promotion or salary increments.
(c) Subordinates
The most suitable people to evaluate a manager are his or her subordinates.
This method is effective because the subordinates are the best source to
observe the effectiveness of the manager. Moreover, the subordinates are

always in contact with the manager. This type of evaluation is more for the
managerÊs self-development so that he or she is able to rectify his/her
weaknesses. The negative aspect of this evaluation is that the subordinate
may give a good evaluation of his or her manager if they have a good
working relationship and evaluate the manager poorly if they are at odds
with each other.
(d) Peers
Peers can be an effective evaluation approach as peers often interact and are
able to identify their colleaguesÊ strengths and weaknesses. Peer evaluation
can also give an accurate and valid input.
However, peer evaluation will also create problems if it is used as a basis to

give favours or seek revenge. For example, employee A often helps employee
B carry out his duties. When the time comes for evaluation, employee B will
give high marks to employee A in return for all the assistance given.
(e) Customer Evaluation

Customer satisfaction determines the success of an organisation. Based on
this idea, most organisations feel that they should obtain their employeesÊ
performance input from customers. Basically, there are two types of
customers, internal and external. Internal customers are employees from a
certain department who depend on the output or other employeesÊ work
results for their input. For example, output that is produced by employee A
from Department A is an input for employee B from Department B. In this
case, employee B is the customer of employee A. External customers are
outside people who use the products or services produced by an
organisation.
(f) 360-Degree Evaluation

Apart from the sources stated above, an organisation may also use the
360-degree evaluation method to assess its employees. This approach is very
popular and an alternative to the traditional method as the organisation gets
complete information about employeesÊ performance. This is important to
increase the organisationÊs competitiveness in the market. The 360-degree
method uses a combination of various evaluation sources as stated above.
Usually, an organisation uses this method for the purpose of employee
development only. The restrictions of this method are that it is expensive and
takes a long time as it involves many parties in the evaluation process.

SELF-CHECK 7.3
Who is involved in an employeeÊs performance evaluation?
EXERCISE 7.3
Explain briefly the sources involved in evaluating employee

performance.
Visit:
http://performance-
appraisals.org/Bacalsappraisalarticles/articles/stupman.htm for information on
the 10 mistakes managers make in evaluating employees.
7.6 PERFORMANCE EVALUATION METHODS

There are a few methods or approaches that can be used to evaluate employee
performance. The selection of certain methods depends on the purpose of the
performance evaluation system of an organisation. If emphasis is placed on
promotion, training, and reward based on merit, then a method like rating scale is
more appropriate. A combination of methods is more appropriate to develop
employee performance and help them produce more effective performance. Three
main methods can be used by an organisation, namely, trait, behaviour, and result.
We shall discuss more on these in the following subtopics.
7.6.1 Trait Methods

Trait methods measure how far an employee is able to acquire certain
characteristics such as creativity, innovation, leadership, and dependency that are
seen as important in carrying out oneÊs work. Some of the trait methods are as
follows:
(a) Graphic Rating Scale

The graphic rating scale focuses on employee evaluation that is based on a
scale or certain characteristics that have been developed, and employees will
be evaluated on how far they have acquired each skill in that particular scale.
The graphic rating scale is shown in Figure 7.3. This method is easy to use as
the evaluation and measurement characteristics are given.

Figure 7.3: Graphic Rating Scale
Adapted from Mondy et al. (1999)
(b) Essay
This is the easiest method because supervisors only have to write statements
depicting employeesÊ performance. Supervisors will talk about the strengths
and weaknesses of employeesÊ behaviour and give recommendations to
improve on the weaknesses. Even though this method is easy, it takes a long
time, and is too subjective as the supervisor needs to illustrate employeesÊ
overall yearly performance.
(c) Forced-Choice Method

This approach needs the appraiser to choose a few statements which are
provided to differentiate between good and bad performance. Figure 7.4
shows the statements which have to be chosen by appraisers. These
statements are developed by experts in the human resource field and

appraisers need to determine the statements which depict the effectiveness

of the work behaviour demonstrated. Neutral statements are sometimes
included in the choices. Appraisers not only choose statements which depict
employeesÊ work behaviour but also arrange the statements from good to
poor.
Figure 7.4: Forced-Choice Method
Adapted from Ivancevich (2006)
ACTIVITY 7.3
Do you agree that rewards need to be stressed during the performance

evaluation process? State the reasons for your answer and discuss with
your coursemates.

7.6.2 Behavioural Methods

This method focuses on behavioural aspects based on a scale that illustrates
certain behavioural descriptions. These descriptions enable appraisers to identify
employee performance based on certain behaviours from weak to excellent. Some
of the behavioural methods are as follows:
(a) Critical Incident Method

The critical incident method technique needs the appraiser to keep records
or log books on employeesÊ behaviour. The supervisor needs to observe the
employeesÊ critical behaviour all year long and record them in a log book.
When an action demonstrated by an employee affects the effectiveness of the
department, the supervisor has to record it, whether positive or negative.
Indirectly, the supervisor has to record workersÊ behaviour that is seen as
critical and can influence the departmentÊs effectiveness.
During the evaluation period, the supervisor will use the records together
with other information to evaluate employeesÊ performance. The advantage
of this method is that it illustrates the employeesÊ overall real performance
whereas the disadvantage is that the supervisor has to observe the critical
work behaviour of all of his or her employees. If there are many employees
in the supervisorÊs department, the observation will require a long time.
Examples of the critical incident method which are positive and negative in
nature are as follows:
 First Critical Incident

4 January 2020: Ali patiently listened to a complaint from his customer,
answered each of the customerÊs questions, took back the product, and
refunded the customer. Ali was very polite to the customer, prompt, and
showed interest in listening to the customerÊs problems.
 Second Critical Incident

20 April 2020: Today was a very busy day due to product inventory. Even
though it was a hectic day, Ali went to the canteen for 15 minutes.
Throughout the time he was at the canteen, the store manager called him
three times asking about the inventory in the store.

(b) Behavioural Checklist and Weighted Checklist

These are easy approaches to utilise as these checklists are statements
describing characteristics of work behaviour. The supervisor only has to
mark the statements which describe the work behaviour demonstrated by
the employees. If the statements given do not show employeesÊ work
behaviour, then the supervisor need not mark the allocated space.
Supervisors can also weigh each work behaviour demonstrated. Then, each
mark is totalled. An example of the weighted checklist is shown in Figure 7.5.
Figure 7.5: Weighted Checklist
(c) Behaviourally Anchored Rating Scale (BARS)

This technique is based on critical incidents. Evaluation is done based on a
scale of 1 to 9, for example, and each scale has a description of certain
behaviour, be it positive or negative. An example of the use of this technique
for a teacherÊs evaluation is shown in Figure 7.6.

Figure 7.6: Behaviourally Anchored Rating Scale (BARS)

(d) Behaviour Observation Scale (BOS)

This technique is also based on critical incident just like BARS which
identifies a few behaviour dimensions critical in a certain job. The obvious
difference between BARS and BOS is that BOS focuses more on the frequency
of a particular behaviour throughout the year. An example of BOS is shown
in Figure 7.7.
Figure 7.7: Behaviour Observation Scale (BOS)
Adapted from Ivancevich (2006)
7.6.3 Results Methods

Aside from behavioural and trait methods, an organisation can also utilise results
methods to evaluate employee performance. These methods enable supervisors to
evaluate the results achieved by employees. Therefore, these are more quantitative,
objective, and enable empowerment. This will lessen bias. These methods also
stress that employees are responsible for all the results achieved. There are two
techniques in this category:

(a) Productivity Measures

There are many measurement techniques to evaluate employee performance.
A salespersonÊs performance is measured through his or her sales volume (in
unit and ringgit) whereas a production operatorÊs performance is measured
through the output and scrap volume. Each measurement is directly related
to the achievement of an employee. Indirectly, the performance of an
employee is related to the organisationÊs strategic objectives and employee
objectives.
Even though this measurement technique seems easy, it may be influenced

by „criteria pollution‰ because performance result may be tainted by factors
which are out of the employeeÊs control. For example, a production operator
may not achieve his or her target as the raw materials needed are insufficient.
In addition, measurements based on results may be short term and

employees may ignore the organisationÊs long-term strategy objectives.
Aside from that, factors such as cooperation, initiative, and suitability in
teams are important in achieving targets. Therefore, to achieve an effective
evaluation, results and process have to be taken into account in the
evaluation.
(b) Management by Objectives (MBO)

This technique can be used as an alternative to prevent problems in the
productivity measurement technique. MBO stresses that each employee form
his or her performance objective at the beginning of the year through
discussions with the supervisor. The objectives act as a standard which will
be used to evaluate the employeeÊs performance at the end of the year.
Figure 7.8 shows the performance evaluation cycle based on the MBO
method. After the setting of objectives is agreed upon by the supervisor and
employee, duties are carried out and the supervisor needs to observe the
employeeÊs work behaviour. An interim study has to be carried out, usually
in the middle of the year, to make sure the objectives formed are suitable and
achievable.

If the objectives are not clear and difficult to achieve, the supervisor and
employee will formulate other objectives which are more realistic and
achievable. At the end of the year, performance will be evaluated based on
the set objectives. After that, the organisationÊs performance will be reviewed
based on the overall employee performance. If the performance shows no
improvement, then the organisationÊs goals need to be studied and changed
in order to be more realistic.
Figure 7.8: Management by Objectives (MBO)
Adapted from Bohlander et al. (2009)
EXERCISE 7.4
Briefly explain three main methods to evaluate employee performance.

7.7 ERRORS IN PERFORMANCE EVALUATION

In the efforts to increase effectiveness in the performance evaluation system,
various human errors will emerge. In theory, performance evaluation is easy but
in reality it is not. This is because appraisers are often exposed to errors during the
performance evaluation process. Some of these errors are as follows:
(a) Halo Effect

An appraiser conducts a total evaluation based on only one aspect of
performance. For example, an appraiser who places importance on the
quantity aspect will give a high value on an employee without considering
other aspects such as communication, involvement, and quality. The
appraiser sees the employee as being efficient in all his or her work aspects
when he or she is able to meet the quantity required by the organisation.
(b) Central Tendency

An appraiser awards the same evaluation to all evaluated employees. The
appraiser is inclined to give an average evaluation to all employees with the
excuse of maintaining a good working relationship with everyone so that
friction does not occur.
(c) Recency Error

An appraiser often focuses on work performance that is close to the
evaluation period as it is difficult to remember work performance at the
beginning of the year.
(d) Contrast Error

A manager compares an employeeÊs performance with that of another
colleague who has been evaluated, and not based on the standards set. For
example, employee A is seen as innovative and participating actively in her
work. When employee CÊs turn for evaluation comes up, her performance is
compared to employee AÊs performance, and not based on the standards set.
(e) Leniency/Strictness Error

Leniency error happens when an appraiser gives a high rating to an
employee because the appraiser does not have the heart to give a low rating.
Strictness error happens when an appraiser awards a low rating to an
employee because the appraiser feels none of the employees deserve a high
rating.

(f) Similar-to-Me Error

An appraiser gives a high rating because the employee being evaluated has
similar personal characteristics with the appraiser. For example, an appraiser
awards a high mark to an employee because they both like to drink tea.
In order to ensure that managers or supervisors do not make these mistakes, they
have to be given training on how to evaluate employees effectively and fairly,
and to focus only on employeesÊ work performance. This training is aimed at
increasing the appraiserÊs skills in observing and giving feedback to employees.
Employees also need to provide support by giving information which is needed
by the appraiser in order to ensure that the evaluation is done justly.
SELF-CHECK 7.4
What factors cause errors in performance evaluation?
ACTIVITY 7.4
State whether you agree or disagree on the following issues regarding

performance evaluation and give one reason for your answer.
1. The performance evaluation process should be conducted as often

as possible so that employees know about their strengths and
weaknesses.
(a) Agree
(b) Disagree
2. All employees need to be informed about their performance

evaluation marks.
(a) Agree
(b) Disagree
Discuss your answers with your coursemates.

EXERCISE 7.5
Explain briefly the mistakes or errors often made by appraisers in

evaluating employees.
7.8 PERFORMANCE INTERVIEW

A performance interview is an important process in the performance evaluation
system as appraisers need to give effective feedback about the employeesÊ
performance achievement. Apart from that, appraisers also need to ensure that
employee performance improvement occurs. Managers or supervisors need to
conduct formal performance interviews at the end of each year even though they
face a lot of problems in evaluating their employeesÊ work performance.
The success of a performance interview depends on how the manager or

supervisor continuously interacts with the employees, focuses on responsibilities
in the development of employees, and receives support from the top management.
Stone (1998) stated that performance interviews are conducted for the purposes of:
 studying employeesÊ work responsibilities together;
 evaluating employee performance together;
 exploring the alternatives together to ensure that performance improvement

happens; and
 studying the short-term and long-term objectives together.
An effective interview has to be planned and structured well in order for the
supervisor and employees to view the interview as a problem-solving session and
not as a fault-finding session (Mondy et al., 1999). A supervisor has to ensure that
these three elements are considered when planning a performance interview, i.e.,
the discussion must:
 be based on the employeesÊ performance and not their personality;
 help employees set work objectives and career development plan; and
 give suggestions and help to achieve objectives which have been set as well as
gain support from top management.

Apart from that, Stone (1998) stated that an effective performance interview needs
to consider three factors. A supervisor needs to:
 possess information about employeesÊ performance and work;
 give support and assistance to employees at all times; and
 involve employees during performance discussions.
Before the performance interview session, the supervisor needs to inform

employees about the date of interview so that the employees have an opportunity
to re-examine their job description, analyse any problems faced, and compare their
real performance with the standards set.
The supervisor needs to collect information about employees whose work

performance is being evaluated, study the job description of every employee to
ensure they are still correct, read the performance report to identify matters that
need to be focused on, compare their real performance with the performance
standards set, list matters that need to be discussed, and ensure that the time
allocated is sufficient and no disturbance occurs during the interview process.
The supervisor must realise that there are differences among individuals. The
supervisor must know how to criticise an employeeÊs weakness and praise when
necessary so that there is no dissatisfaction between the supervisor and employee.
This way, a fair and transparent performance evaluation can be presented to the
employee who is being evaluated. Performance improvement can then occur after
the interview session.
The performance evaluation process does not end after the performance interview
session. In fact, a supervisor needs to ensure that all the alternatives which were
proposed are carried out effectively and monitor employeesÊ performance from
time to time by giving feedback.

EXERCISE 7.6
Multiple Choice Questions
1. All of the following are administrative roles in evaluating

performance EXCEPT:
A. Compensation
B. Termination
C. Career planning
D. Promotion
2. An appraiser will give an average rating for all dimensions that are
being evaluated so that all employees will not be dissatisfied. By
this, the appraiser has committed the mistake of ________________.
A. attribution
B. leniency error
C. recency error
D. central tendency
3. Which one of the following are steps in the performance evaluation

process?
A. Conduct job analysis, set standards, evaluate performance,
reassess performance
B. Set objectives and standards, monitor performance, evaluate
performance, performance discussion
C. Set standards, conduct job analysis, evaluate performance,
reassess evaluation
D. Evaluate performance, set objectives, conduct job analysis, set
standards, reassess performance
4. The criteria which must be present in an effective performance

evaluation system are as follows EXCEPT:
A. A clear objective
B. Monitor performance
C. Performance interview
D. End-of-the-year checking system
5. The performance evaluation method which lists descriptive

statements on a particular work behaviour is __________________.
A. rating scale
B. checklist
C. forced choice
D. critical incident

Essay Questions
1. Discuss the six roles of performance evaluation.
2. Explain these terms:

(a) strategic relevance
(b) criteria contamination
(c) criteria deficiency
3. Explain the preparations which need to be made by supervisors

BEFORE a performance interview process.
 Performance evaluation is a critical activity in human resource management as

it is important in increasing an organisationÊs competitiveness.
 Performance evaluation is a process to evaluate work performance in a

particular duration, in order to determine that the level of achievement is based
on the organisationÊs strategic objectives.
 The performance evaluation system must motivate employees to improve their

performance, thus increasing the organisationÊs productivity.
 An effective performance evaluation system ensures that all parties, be it

management or employees, benefit from it.
 This will strengthen the position of and ease human resource management,
and help to achieve organisational objectives and goals.
Behaviour Observation Scale Performance evaluation

Behaviourally Archored Rating Scale Result
Management by Objectives Trait

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resources (15th ed.). South-Western College Publishing.
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9.topic 7 - Performance Evaluation

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7.1 DEFINITION OF PERFORMANCE

Can you define performance evaluation?

7.2 PURPOSES AND USES OF PERFORMANCE

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(c) Human Resource Planning

(e) Compliance to Regulations

(f) Human Resource Management Research

(a) Administrative Purposes

 decisions to terminate or transfer employees

 reinforce authority structure

 human resource planning

 documentation on human resource decisions

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(b) Development Purposes

 identify the strengths and weaknesses of employeesÊ performance

 acknowledge employeeÊs outstanding performance

 identify training needs

 determine employee development programmes

Based on your experience, has performance evaluation helped in your

7.3 MAIN CAUSES OF PERFORMANCE

 The supervisor or manager does not have sufficient information about

 The standard of measuring performance is not clear.

 The supervisor or manager is not prepared to evaluate employee performance,

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 Employees do not receive constant performance feedback.

 The supervisor or manager is not sincere during the performance evaluation

 Performance evaluation is not focused on employee development.

 The supervisor or manager uses language that is unclear to the employees

1. What is meant by performance evaluation?

2. State the uses of performance evaluation from the administrative

3. State five reasons a performance evaluation process might fail to be

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7.4 PERFORMANCE EVALUATION PROCESS

Figure 7.1: Performance Evaluation Process

Adapted from Mondy et al. (1999)

(a) Identifying Performance Evaluation Objectives

(b) Developing Performance Standards

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Figure 7.2: Performance Standard Development

Adapted from Bohlander et al. (2009)

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(c) Monitor Work Performance

(d) Evaluating Performance

(e) Discussion on Performance

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State whether you agree or disagree on the following issues regarding

1. Performance evaluation is the managementÊs technique to control

2. Performance evaluation creates employee groups who are

3. Performance evaluation helps employees to improve their

Post and check your answers with your coursemates in myINSPIRE.

1. State the main elements of an effective performance standard.

2. Explain the key steps involved in the performance evaluation

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7.5 RESPONSIBILITY OF EVALUATING

(a) Immediate Supervisor

If seen from a negative perspective, the immediate supervisor may stress on

From the negative perspective, an employee is more keen to illustrate his or

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However, peer evaluation will also create problems if it is used as a basis to

(e) Customer Evaluation

(f) 360-Degree Evaluation