Appraising Employee Performance Evaluation Systems

By Clausen, Thomas S.; Jones, Keith T. et al. | The CPA Journal, February 2008 | Go to article overview

Appraising Employee Performance Evaluation Systems


Clausen, Thomas S., Jones, Keith T., Rich, Jay S., The CPA Journal


How to Determine If an Overhaul Is Needed

Performance appraisals are a reality in organizations of all sizes and types. The process may take considerable time on the part of supervisors and may require subordinates to gather reams of information and prepare descriptions of their own performance. Some take the process very seriously, while others simply see it as a burden. Supervisors must be careful how they deliver the results, and subordinates must be careful how they respond. Relationships and trust may become permanently strained due to misunderstanding and miscommunication.

An effective system of evaluating job performance should accurately outline employees' responsibilities and contributions to an organization, motivate employees, and provide valid and important input in personnel decisions. However, employees often find the evaluation system ineffective, and frustrations with their appraisals can lead to discontent, apathy, turnover, or, worse, lawsuits due to real or perceived unfairness. Furthermore, many may find that they are wasting time on administrative matters, and become cynical and unmotivated in the process if they sense that the evaluations do not really matter.

The following survey asked accountants working in government industry, and public accounting about tiieir perceptions of performance evaluations. Participants were asked general questions, including how often they receive evaluations, whether these evaluations are written or oral, and the relative importance of certain factors in their evaluations. In addition, the survey asked how important respondents believe performance evaluations are for key compensation and promotion decisions. The answers to the latter question may be surprising, especially for employers and employees who may perceive the evaluation process differently. It may be time for organizations to reevaluate whether their systems are meeting their needs and if their efforts add as much value as expected.

How Often Should Performance Evaluations Occur?

Best practices suggest that employees receive performance evaluations at least once per year, but is that really enough? The survey's first question was how many times per year respondents receive performance evaluations. The answers ranged from zero (typically from those in organizations with three or fewer employees) to 13. The participants were then asked how many evaluations they would like to receive per year. Interestingly, employees who received three or fewer performance evaluations annually wanted more. Moreover, respondents generally indicated they wanted one more than they had had. Those receiving four or more per year, on the other hand, wanted fewer performance evaluations. (In fact, the one participant who received 13 performance evaluations annually preferred to receive zero.)

Finally, the survey asked how satisfied respondents were with the frequency of their performance evaluations. Consistent with their stated preferences, those respondents receiving three or four performance evaluations per year were significantly more satisfied with the frequency than those receiving more or less. Despite the participants' clear preference for three or four performance evaluations per year, approximately 75% of the sample group received two or fewer.

The authors also asked how frequently performance evaluations included written and oral communication. Across all types of organizations, evaluations included written communications only about half of the time, while oral communications took place most of the time. The survey revealed that participants' level of satisfaction with tiie format of their performance evaluations was higher when the frequency of written communication was greater. It is not clear from the survey why this is so; however, one possibility is that written evaluations provide a more comprehensive, uniform feedback mechanism.

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