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Performance Evaluation

This document explores advanced performance evaluation strategies, including the 360-degree feedback system and the Balanced Scorecard framework. It highlights the benefits of multi-source evaluations, providing a more comprehensive view of employee performance by incorporating feedback from supervisors, peers, and customers. It also discusses how to align performance with corporate strategy through measurable goals and defines key principles for implementing these frameworks effectively. The aim is to enhance accountability, improve productivity, and support continuous organizational development.

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Performance Evaluation

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  1. Performance Evaluation

  2. Bibliography • Kaplan, Robert S, and David P. Norton, The Balanced Scorecard, Harvard Business School Press,1996 • Edwards,Mark R. and Ann J. Ewen, 360º Feedback, American Management Association, 1996 • “Using Measurement to Boost Your Unit’s Performance”, Harvard Management Update, 1998

  3. Individual Evaluation • 360° Evaluation • Productivity Measures • Customers Seen • Number of Sales • Accomplishing more • Effectiveness Measures • Number of resolved customer service claims • Customer satisfaction

  4. Corporate Evaluation • Comparison budget to actual • Variance analysis • Return on investment • Residual Income • Management by objectives • Economic Value Added • Balanced Scorecard

  5. Single Source Evaluation • May be biased • May be self-serving • Politics, favoritism • Evaluator may have only limited observation • Less rigor • Not as willing to confront non-performers

  6. 360° Feedback • Multi-source • Tap collective intelligence • More impact • More valid in any legal proceedings

  7. Benefits of 360° • Gives all a say • Supervisor • Peers • Subordinates • Internal and External customers • More information • Anonymous • Better evaluates teams • May give SWOT insight

  8. Uses of 360° • For employee development • Employee appraisal • Increases accountability • Highlights critical competencies • Legal protection • Quality improvement • Process reengineering

  9. How to Do 360° • Corporate Culture requirements • Process Design • Develop survey • Process Implementation • Training • Prototype • Safeguards • Process Evaluation • Stepped implementation

  10. Economic Value Added • Find after-tax operating income for division • Revisions - capitalize R & D • Apply weighted cost of capital as a charge • Analyze if positive or negative, helping the firm or not

  11. Balanced Scorecard • Aligns performance with vision • Uses hard to manipulate measures

  12. Balanced Scorecard Perspectives • Financial – How do we look to our shareholder? • Customer – How do customers see us? • Internal Business – What must we excel at? • Innovation and Learning – Can we continue to improve and create value?

  13. Principles of Balanced Scorecard • Translate firm strategy to operational terms • Strategy maps • Align organization to the strategy • Make strategy everyone’s job • Make strategy a continual process • Link budgets and strategies • Mobilize change through effective leadership

  14. Five Steps to Measurement • In each perspective, have several measures • Figure out the numbers that matter • What are the goals that support objectives • Consequences of using a particular metric • Using leading and lagging measures? • Drill down to understand cause and effect • Set realistic not arbitrary goals • Learn to forecast • Get everyone involved

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