Issues Involved in Evaluation System

A good performance evaluation system does not depend upon a single criterion of performance. It involves multiple criteria to judge employees’ efficiency in achieving targets. The following issues must be considered while designing the performance evaluation system,:

1.    Qualitative and quantitative criteria:

Employees cannot be judged purely on qualitative or quantitative bases. Qualitative assessment involves personal bias and subjective valve judgment. Quantitative assessment bases on statistical data, on the other hand, ignores important determinants of employee’s effectiveness like personal skills in handing problem, ability to impress clients etc. Hedging the performance on the basis of only quantitative records does not provide adequate basis of comparison. Sales made by different sales group, for example, cannot be compared merely on the basis of the accounting data. Managers should therefore, have judicious mix o qualitative and quantitative criteria to evaluate their personnel.

2.    Comparison  amongst employees:

Comparison amongst employees cannot be made on ‘man-to-man’ basis as human element is involved in such comparisons which differ in different situation. Different employees work under different environmental conditions and deal with different products and customers differently.

3.    Determining standards of performance:

The standards of performance should be scientific and realistic because the whole performance evaluation process depends upon statures. If the standards are unrealistic, the purple of establishing the performance evaluation system gets defeated.

4.    Periodicity of evaluation:

The period of evaluation should be neither too long nor too short. Very short-term evaluation ignores the actors which are valuable for the firm in the long-run like developing good customer relation. Very long-term evaluation also does not give satisfactory results because it inures the operating results of the company. Though yearly evaluation is a common proactive followed by companies, the period depends upon the types of product sold, practices followed in the industry and outlook of the management. Capital goods and industrial goods companies usually follow a period longer than on year.

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