TOPIC 5: EMPLOYEE PERFORMANCE RATING AND

CHANGES IN EMPLOYEE STATUS

“When feedback on job performance is ambiguous or is given only once a year, employees
and managers alike may have trouble grasping how their efforts are perceived by the
organization. Almost everyone who has worked at a job can remember times when they were
unclear on how their performance was being judged.”
John W. Lawrie

EMPLOYEE PERFORMANCE RATING

- used to measure and evaluate the worth or contribution of an employee to determine
his level of competence in a particular position or job.
- a system of measuring and evaluating the traits, behavior and effectiveness of an
employee on the job for either judgmental or developmental use of management.

Employee rating is judgmental in purpose when it requires information on what happened or

what was accomplished to be able to make decisions for promotions, transfers, pay increases,
and terminations.

Employee rating is developmental in purpose when information sought in the rating is on how
the outcome occurred.

Factors that Influence Employee Performance and Learning (by G. Rummer)

1. Person Characteristics - Ability and skill

- Attitudes and motivation
2. Input - Understand need to perform
- Necessary resources
- Interference from other job demands
- Opportunity to perform
3. Output - Standard to evaluate successful performers
4. Consequences - Positive consequences/incentives to perform
- Few negative consequences to perform
5. Feedback - Frequent and specific feedback on his/her job is performed

PROCEDURES FOR EMPLOYEE PERFORMANCE RATING

1. Ranking method - used when the performance of an employee is compared.

Kinds of Ranking Method

a. Simple Ranking - the evaluator considers all the employees to be rated to select the
very best and to rank that employee as number one. The next best is ranked number
two, the third best as number three and so on.
b. Paired comparisons - the rater is to consider two employees at a time and to decide
which of the two is better. Another pair of names of employees is next evaluated and
the process continues until the ranking of all the employees to be evaluated have been
determined.
c. Forced distribution ranking method - the rater is to identify the very best employee
and the poorest employee among those in the list. These two names are then removed
 from the list and are placed at opposite ends of another list. Next, the rater identifies
the best and the poorest employee among those remaining in the first list and these
names are removed and listed on the other. This permits the rater to consider a shorter
list of names when he would have to consider the employees in the middle of the list
who are usually the most difficult to evaluate.

2. Rating Scales - different characteristics both performance connected characteristics and

personality characteristics are evaluated in rating scales.
Two steps are involved:
a. scaling the characteristics
b. selecting the characteristics or factors to be rated

3. Management by objectives
Individualized goal setting between a supervisor and a subordinate with feedback of
results is the cornerstone of management by objectives (MBO) as a device for rating the
performance of an employee. MBO is best described as goal setting through mutual
participation and agreement between a supervisor and a subordinate for the purpose of
achieving managerial and organizational goals. Results are assessed against the established
goals and feedback on results is provided to the subordinate. New goals are then established
on the basis of the feedback for the next performance rating period.
The significance of MBO is that it focuses on results - the final product of the effort -
and the consequent ability to motivate better performance through participation, MBO is job-
specific in identifying goals to be accomplished. MBO identifies what has occured.

WHO SHOULD RATE EMPLOYEES?

Clients/Customers
All who are in a position to observe the behavior or performance of ernployces should
be included in the rating process. There are situations when clients or customers may be
asked for their observations.

Peers
There are situations when the most capable persons to evaluate are an employee's
peers. In fact, they may be in a better position to evaluate than their supervisors, Peer
appraisals are frequently used among professional and technical employees subject to certain
conditions Peers have the opportunities to observe each other's performance.

Supervisor
An effective and valuable rater for the subordinates can be provided by their
supervisor. The supervisor has a direct observation to their subordinates.

Subordinates
A valuable profile of the effectiveness of a supervisor can be provided by his
subordinates. The comments of subordinates are useful for the personal development of
executives. Employees' comments that contradict with an executive's self-evaluation may lead
the executive to re-examine his leadership style and consider changing it.

Self
Employees consciously or unconsciously evaluate themselves when they compare
themselves to others. Self-appraisal or Honest-appraisal motivates the job incumbent to take
more responsibility for his or her own performance and growth. It can be performed as often
as necessary because it is initiated by the person being assessed; it can be early and
specifically focused on job behavior and therefore not confused by other issues such as
compensation, promotion, and so forth; and performance ambiguity is decreased.

FREQUENCY OF RATING
Rating of employees to be effective should be made on a regular basis. In some
organizations it is done annually, semi-annually, quarterly, or monthly depending on the job
and level in the organization.

CHANGES IN PERSONNEL STATUS

“There is nothing as constant as change" is a common expression we hear. Changes in
personnel status is imperative if we are to continue to get the best performance out of the
human resource of an organization. People have to grow and employees have to experience
changes in personnel status for them to remain motivated and happy on the job.

Movements of Personnel
1. Promotion - the process of moving to a higher position with the increase of responsibility,
status and pay.
2. Transfer - employee movement or change in personnel status from one job to another on
the same level in the organization.
3. Demotion - the process of moving to a lower position with the decrease of responsibility,
status and pay.
4. Separation - the process of moving out in the organization.

Types of Separation
a. Lay-off (involuntary and temporary) - the separation of an employee initiated by the
employer due to business reverses, the introduction of labor-saving devices, or the
reduction in the demand for particular manpower skills. However, when future conditions
would require the re-hiring of employees of a certain job the employees previously
separated because of layoff may be employed again by the organization.
b. Resignation (voluntary and permanent) - the separation of an employee initiated by the
employee due to finding much greener pasture, or the employees do not like the work or
job anymore.
c. Termination (involuntary and permanent) - the separation of an employee initiated by the
employer due to misconduct or low performance rating.
d. Retirement
➢ Voluntary or optional retirement -in the age of 60, or already haver 15 years in service;
➢ Involuntary or forced retirement - in the age of 65, and permanent separation that will
receive benefits such as pension)