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February 2001
Employee performance evaluations:
How to do them right
WEST LAFAYETTE, Ind. -- With the beginning of the new year, 'tis the season for companies
and organizations to consider employee evaluation.
Employee evaluation should start early -- when management, using a focused selection
process, chooses the right person for the job, according to a Purdue University professor
who studies employer-employee relations.
"In a more perfect world, all employees would begin their orientation by being shown
around -- not just where the break room is but also where the real culture and history
of the business or organization lives," says Daniel O. Lybrook, associate professor
of organizational leadership and supervision. "The new hire needs to know not just
what the company espouses but also the truth about what it really values. This requires
organizational self-awareness and reflection.
"A good evaluation process is knitted into everything -- job expectations, career path,
compensation, advancement -- in a healthy organization. It is important to the employee
to understand what he or she is to give and to get."
Talk to most managers, and they will say that evaluations divert them from the real
work of the company -- producing and making money, according to Lybrook. Talk to most
employees, and they will say management doesn't evaluate or does a poor job of it.
So why don't more businesses use the employee evaluation process more effectively?
Lybrook says that on a basic human level people don't like to be evaluated themselves,
so they tend not to like evaluating others.
"Many managers view the process itself as threatening and leading to conflict on interpersonal
and organizational levels," Lybrook says. "One way to reduce potential conflict is
to avoid it. This leads to the once-a-year 'You did a good job. See you next year,' syndrome."
Lybrook also says short-term demands on managers to produce keep employee performance
reviews from being a more meaningful long-term evaluative and developmental tool.
"Evaluations tend to be an unexamined part of the corporate culture," Lybrook says.
"They aren't seen as contributing to the company's bottom line."
Lybrook points to some pitfalls leading to ineffective evaluations:
-- Routine evaluations are often not tied to promotion or advancement. Because of this,
neither management nor employees tend to take them seriously.
-- If employee evaluations are tied to upward mobility in the organization, they can
create competition among employees. This also can lead to a centralizing tendency
in which everyone gets a three or four on a five-point scale.
-- The recency effect, in which employees are judged on what they did last week instead
of last year or last quarter.
-- The Lake Woebegone effect, in which all the employees are rated above average.
How can organizations evaluate employees effectively?
-- "Employers and employees need to be clear going into the evaluation process what
they want the outcomes to be," Lybrook says. From the management point of view, what
a good evaluation process accomplishes is that the employee clearly understands the
organization's goals and how to orient his or her work toward accomplishing the goals.
-- From the employee's point of view, evaluations should encourage organizational involvement
and present opportunities for career and personal growth through contributing to
the achievement of organizational goals.
-- Lybrook counsels management to take a measured, three-fold, quantitative approach
to evaluation -- what the employee is doing, how the organization can do it better
and what the rewards will be for achieving these goals.
-- Management needs to understand that there is a direct line from mutually agreed
upon, long-term organizational goals to success and profits, according to Lybrook.
Employees will come to understand that organizational success translates into professional
advancement.
Are there model businesses and organizations doing evaluation well? Recently, a Wall
Street financial analyst worked undercover at Amazon.com and reiterated his buy rating
on the company based on "the high energy and morale among warehouse management and
workers alike." Lybrook says employee morale is a good measure of how healthy a relationship
exists between employer and employee.
Lybrook cites Cisco Systems as having demonstrated the ability to assimilate smoothly
into its corporate culture the employees who have joined the company in the many
mergers and acquisitions Cisco has completed.
If a Cisco can integrate employees from a different organizational culture into its
own, it should, in theory, be easier to orient a new employee to the company's goals,
Lybrook says. That is, if there is an effective continual evaluation process operating.
Source: Daniel O. Lybrook, office (765) 494-7676, dolybrook@tech.purdue.edu
Writer: J. Michael Lillich, (765) 494-2077, mlillich@purdue.edu
Purdue News Service: (765) 494-2096; purduenews@purdue.edu
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