Small Business Human Resources

Selecting the Best Evaluation Method for Your Company

Written by Amy Bax for Gaebler Ventures

Because each company is different in the way that it is set up, the industry it is in, and the type of employees they have, there is no best way to conduct an employee evaluation. Here are a few different methods to consider, and advice when setting up your own method.

When creating official employee evaluation methods, there is a lot to consider.

Time, objectives to be measured, and who will be involved are a few things you as an employer will need to think about. Here are a few practices that companies use for you to consider.

Team Ratings

This is a good system when a team works together on a project, planning an event, or any other kind of situation that involves various members of your company working together on a common goal. This assessment tool is good to find out how the team worked together, if everyone did their part, and what was learned from the experience.

Generally, each team member will be given a form to fill out on each member of the group, along with a form to rate overall team performance. It will include criteria that the person will rank on scale of how well the other members did. This may include, but is not limited to, items such as meeting attendance, participation, inclusion of opinions/ideas, rating of their assigned section/work, etc.

It may also have a section for a member to express any other opinions or issues they feel are necessary to include in the evaluation so that employers/managers can get a better idea of how well the team worked together.

One thing to watch out for is the concept of groupthink within the team rating system. For various reasons, one person may be is biased against another and may try to convince the group to also turn against the group member. Possibly, things had been going well up to one point at the end, and everyone turns. This can cause an unfair rating of one person who may have done their equal share.

Make sure that you do not only evaluate the group from what the team evaluations say, but also from your or your manager's personal observations of the group throughout the time they work together.

360 Degree Feedback

This is a type of evaluation that is performed on one person by multiple people. It can include assessments from their manager, clients, coworkers, and also their own self. It can be extensive, but the reason many companies like to use it is because it gives a wider and more beneficial scope of employee performance.

Not only do managers understand where the employees are in growth and progress, but the employees also receive more information on how they are perceived and where they need to be in the future.

As stated earlier, the downfalls to this type of evaluation include the extensiveness in time and money it may take to perform them. Also, there is a possible bias some of the contributors may have towards the employee being evaluated. It could be a negative one that a disgruntled employee may have, or an overly positive one that a coworker who is also a friend may turn in. Either way, it skews the overall effectiveness and value of the information.

Management By Objectives

Because to evaluate employees effectively, a manager needs to set standards, many companies feel that just converting these standards into measurement for evaluation is best. Performance standards will be developed using the SMART (specific, measurable, attainable, realistic, and timed) concept. Basically, then an employee knows exactly what they need to do in order to accomplish each set task.

But, critics can argue that because of such strict, cookie-cutter standards, this may cause unethical behavior. It is easier for employees to find loopholes, distort results, and cheat in order to accomplish these benchmark measures.

Also, there are criteria to consider that are more subjective and cannot be easily measured by using SMART objectives. For example, if you have a sales team that prides itself on customer service, you will want to include a sales person's attitude, appearance, and overall helpfulness while conducting a sale. All these things are hard to measure objectively.

What Works Best for Your Company?

Because each approach has benefits and downfalls, a company that is trying to set an evaluation policy needs to assess what they need to discover out of an evaluation, what objectives are important to measure, how much they want to put into the evaluation process, and so on. Because Measurement By Objectives works best for SMART objectives, a manufacturing plant may have better results from it than, for example, a retail store.

It is possible to combine the best features of all of them to cater to your company, which would be highly recommended. For example, getting hard results from objectives that are measured, along with feedback from various sources, may give a good well-rounded evaluation for you if you are willing to put in the time to do so. It all depends on what you feel are the most important aspects of the job and how closely you want employees to adhere to standards.

Amy Bax is interested in providing innovative informational resources to entrepreneurs. She is currently an MBA student at the University of Missouri - Columbia.

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