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Evaluation Quality

The process governing evaluation of work performance is decentralized in the typical organization, and decentralization invites variance because of the number of people making performance evaluations. The typical organization also requires multiple levels of management approval on performance evaluations to minimize the effects of inherent variation.

The performance evaluation process suffers from factors that lower quality and increase cost:

• Competing objectives
  • Evaluation accuracy
  • Evaluation fairness
  • Cost control
  • Retention of employees committed to their work
• Process limitations
  • The limited number of employees evaluated by any one manager in a decentralized process
  • The subjective nature of most performance evaluation criteria
• Human considerations
  • “Halo” effect judgments
  • The tendency to inflate performance ratings when in doubt

The human resource tool to evaluate work performance is the performance appraisal. Most performance appraisals are:

• Too generalized to accurately evaluate the work contribution of specific jobs
• Too heavily reliant on subjective performance evaluation criteria

Human Earning Power^® brings more centralized control to the performance evaluation process for jobs that have high employee headcounts. It applies a “portfolio” management approach to those jobs. It reduces the number of evaluators and increases the number of people evaluated for more reliable performance judgments. Human Earning Power^® places increased emphasis on quantitative work performancse evaluation criteria. Performance evaluation criteria are coordinated between job description and performance appraisal forms. The use of quantitative work performance measurements enables greater use of technology in automating work performance evaluations for high headcount jobs.

Human Earning Power^® performance appraisals:

• Tailor forms to the specific jobs to which they apply
• Coordinate job related quantitative performance measurements between job description and performance appraisal tools

These practices will increase performance evaluation quality through:

• Greater reliability of performance evaluation ratings
• Lower process administration costs

These practices better coordinate merit pay increases with business results, and the cost benefits can be accomplished without sacrificing employee relations.