Value of Performance Evaluations

Some people think of the performance evaluation as little more than a waste of time. They believe that given that they are mandatory and generally completed in a relatively short period of time, performance evaluations fail to capture an employee’s true performance or give the employee meaningful feedback that would enable him or her to improve performance. As a result, many have suggested that the performance evaluation process be eliminated or significantly changed. These criticisms of the performance evaluation process might lead some to the conclusion that performance evaluations have no use or value. However, there are several reasons that such a conclusion is premature.

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Examining this problem is appropriate because employers need to have a way to assess their workforce. It is well-established that employee productivity, job satisfaction, efficiency, and attitude can all have a tremendous impact on an organization’s output, and, therefore, on profitability. However, it can be difficult to assess those different aspects of an employee’s work contributions on a daily basis. Sometimes those employees who are seemingly always busy are the ones who are the least productive, while other employees may engage in a sufficient amount of work and encourage team building without ever drawing attention to themselves. Ideally, the performance evaluation process allows a manager or supervisor to spend a significant amount of time focuses on a particular employee’s performance, so that the manager can assess strengths and weaknesses in that employee’s performance. Moreover, the performance evaluation should provide an opportunity for coaching; it is not enough to inform an employee that his performance in a certain area fails to meet the organization’s standards; a good performance evaluation should then focus on how the employee can change behavior to meet standards.

The problem is an important one because organizations need to have a way of assessing whether their employees are contributing meaningfully to the organizations. Moreover, they need to have a process that measures real performance. The criticisms of the traditional performance evaluation include charges that these evaluations are so generic that they do not provide meaningful insight into an employee’s strengths or weaknesses. Instead, because they are generic, they simply provide an overview of the manager or supervisor’s impression of an employee’s capabilities. This does not provide the organization with sufficient information about the employee to make decisions about promotions, career paths, and additional required training. Furthermore, it does not provide the opportunity for sufficient coaching, which can aid the individual. Therefore, a meaningful evaluation process would be helpful for employers and employees.

This research paper will examine the modern employee performance evaluation. It will examine current research about employee performance evaluations, focusing on those who critique the process as well as those who praise the process. It will look at some of the criticisms in the modern process and what changes may need to be made in the current evaluation procedure in order to make evaluations more meaningful. It seeks to answer the following to questions: 1) What is the use and value of the employee performance evaluation process; and 2) What can be done to enhance the utility of performance evaluations?


This research paper will be a review of the literature. Literature reviews can be a very complex research methodology because the researcher has to be able to assess the merit of sources used in the research before using those sources. In an area like human resources, there is so much research available that it can be difficult to focus on quality research and avoid research that was clearly tailored to meet a particular agenda. In order to find resources, the researcher engaged in a basic Google search using the search term “the use and value of performance evaluations.” From those initial search results, the researcher skimmed a number of articles, and then selected an article from a peer-reviewed journal, which had sufficient evidence to support the author’s perspective, did not show bias, used a scientifically appropriate research methodology, and presented information arguing against the author’s conclusion as well as information that supported that conclusion. The researcher used that references list in that work as a starting point for the examination of other sources; this process was repeated a number of times until the researcher had sufficient information to write the research paper.

Analysis and Discussion

With all of the problems with performance evaluations, some people may be left asking, “Why measure performance?” (Behn, 2003). There are a variety of different possible answers to that question, but it comes down to the fact that, “measuring performance is good. But how do we know it is good? Because business firms all measure their performance and everyone knows that the private sector is managed better than the public sector” (Behn, 2003). Performance measurements help encourage efficiency. However, knowing why one should measure performance does not suggest what kind of performance should they measure, how should they measure it, and what should they do with these measurements?” (Behn, 2003). There is considerable disagreement about these different questions.

Intended Use of Performance Appraisals

In order to determine if performance appraisals are effective, one needs to consider what performance appraisals are intended to do. Many people believe that performance appraisals are only intended to provide top-down assessment of employee performance. However, “performance appraisal is intended to engage, align, and coalesce individual and group effort to continually improve overall organizational mission accomplishment. It provides a basis for identifying and correcting disparities in performance. Thus, it is activities oriented” (Grubb, 2007). An activities orientation means that performance appraisal does not focus on an employee’s personality but on how the employee complies with work expectations. Therefore, the performance appraisal not only provides an opportunity for evaluating performance, but also for assessing the rewards an employee receives for compliance, such as pay raises, as well as identifying training needs. “It also may provide the basis for other personnel actions which typically include: (1) performance pay, (2) training and career development, (3)

promotion and placement, (4) recognition and rewards, (5) disciplinary actions, and (6)

identifying selection criteria” (Grubb, 2007).

Encouraging Employee Change

Clearly, one of the goals of the evaluation process is to try to encourage employee change in order to enhance workplace efficiency. “The primary task of management is to get people to work together in a systematic way. Like orchestra conductors, managers direct the talents and actions of various players to produce a desired result. It’s a complicated job, and it becomes much more so when managers are trying to get people to change, rather than continue with the status quo. Even the best CEOs can stumble in their attempts to encourage people to work together toward a new corporate goal” (Christensen et al., 2006). The problem with this approach is that when people are encouraged to change, they may feel as if they are a problem, rather than examining whether it is simply a matter of behavior.


Focusing on the compensation aspect of the employee performance review procedure reveals something interesting about American financial ideals in the workplace. “Two commonly held American beliefs are that that an individual’s pay should directly reflect the performance and contributions made, and that money motivates improved performance. Many organizations act on these beliefs by tying individual pay increases to their performance ratings following annual review” (Grubb, 2007). However, even exceptional employees face limits in their possible pay increases, which may make it difficult to truly reward exceptional performance. This is particularly true when an organization’s financial resources are strained. Therefore, while the financial aspects of performance reviews may have the goal of rewarding exceptional work behavior, “it turns out that it while the objective is noble, the way it is pursued causes widespread difficulties”(Grubb, 2007).

Employee Perceptions of Performance Appraisals

Performance appraisals are often completed in a compressed amount of time, with the supervisor evaluating the employee on a very limited amount of work rather than focusing on the employee’s work as a whole. Moreover, while employees are often given the opportunity to contest particular parts of the evaluation process, they often have little opportunity for input. This places employees at the mercy of managers and supervisors, who may not actually be sufficiently skilled at their jobs to engage in adequate evaluations. Therefore, it is important to consider employee reactions to the appraisal process. “Employee reactions to the performance appraisal (PA) process have been identified as a potentially important influence on employee acceptance of the performance appraisal process. One such reaction is the perceived fairness of the performance appraisal experience. Previous studies have tended to focus on single aspects of the PA process that impact on PA fairness (Kavanaugh et al., 2007). The perception of fairness depends on a number of factors including the employee’s ability to participate in the evaluation process, how the employee feels about the supervisor, and how much the employee knows about the evaluation process (Kavanaugh et al., 2007).

What the above makes clear is that performance appraisals are not conducted in a vacuum. Instead, they are context-dependent, so that employee perception of the evaluation process depends upon the larger work environment. This is critical because employee response to the appraisal process is now considered an important component of the evaluation process., “Research has broadened the traditional conceptualization of performance appraisal effectiveness to include and emphasize ratee reactions. Second, the influence that the feedback environment or feedback culture has on performance appraisal outcomes is an especially recent focus that seems to have both theoretical and applied implications” (Levy & Williams, 2004).

Emerging Components in Performance Evaluation Research

Performance evaluations and the research surrounding them historically focused on supervisor perceptions. Recent changes have begun examining employee response to the evaluations, which has helped develop what is known about performance evaluations. One can expect this field to continue to develop. “There appears to be a reasonably large set of distal variables such as technology, HR strategies, and economic conditions that are potentially important for understanding the appraisal process, but which have received very little research attention” (Levy & Williams, 2004).

The Value of the Employee Performance Evaluation Process

The employee performance evaluation process is useful for management and employees. It allows managers to assess employee compliance with job expectation, identify areas for employee training, and assess who needs raises. The process is also important for employees, because, when done properly, the evaluation process should lead to coaching and career development. Rather than focusing solely on an employee’s weaknesses, the evaluation process should encourage an employee’s strengths and help the employee develop strategies for dealing with workplace challenges.

Conclusions and Recommendations

While the employee performance review procedure can present a number of problems for employees and employers, it can be an invaluable tool when done properly. The largest issue identified in the research seems to be the use of routine cookie-cutter evaluations that fail to consider each employee as an individual and do not allow sufficient opportunities for employee input into the evaluation process. Therefore, it is clear that the standard evaluation process is failing to live up to the potential of what an evaluation can and should do for the employer and employee. The first recommendation is to look at the overall culture of the organization before determining what type of evaluation should be used. This includes a consideration of which managers and supervisors should be in charge of the evaluation process, as well as the level of employee involvement in the procedure, and the avenues that an employee has to challenge employee reviews. The next recommendation is to ensure that an evaluation includes remedial steps to help an employee conquer problem areas. In some instances, this may require employee-sponsored job training, while, in other circumstances, it may be sufficient to simply tell the employee what changes need to be made. All of these considerations will depend upon context, making it clear that context is a critical factor in performance evaluations.

Future researchers need to focus on the element of context. It is clear that different organizations should use different approaches to employee evaluations. Knowing the correct evaluation tool for a specific organization seems to be an effective way to ensure that the evaluations add value to an organization. Therefore, research that identifies the type of evaluations that are best for different types of organizations would be helpful.


Behn, R.O. (2003). Why measure performance? Different purposes require different measures. Public Administration Review, 63 (5), 586-606.

Christensen, C.M., Marx, M., & Stevenson, H.H. (2006). The tools of cooperation and change. Harvard Business Review, 84 (10), 76.

Grubb, T. (2007). Performance appraisal reappraised: It’s not all positive. Journal of Human

Resource Education, 1(1), 1-22.

Kavanaugh, P., Benson, J., & Brown, M. (2007). Understanding performance appraisal fairness.

Asia Pacific Journal of Human Resources, 45(2), 132-150. doi:10.1177/1038411107079108

Levy, P. & Williams, J. (2004). The social context of performance appraisal: A review and framework for the future. Journal of Management, 30(6), 881-905. doi:10.1016/

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