Why Standardize Performance Appraisals

Performance Discussion

Performance appraisals are a tool that managers use to track and enhance employee development. A company that use standardized performance appraisals can ensure that it is grading its employees using consistent criteria to create a fair system of evaluation. Performance appraisals present an employee's strengths and weaknesses in his current job for a given period of time (usually six months or one year) and address areas for further training and development.

Standardization Helps the Employee Understand Expectations

Utilizing a standardized performance appraisal helps employees to understand the criteria on which they are evaluated. Most performance appraisals judge employees based on a set of criteria such as communication, teamwork, and decision making. They measure these areas with quantifiable data similar to a report card. When an employee knows how he is being 'graded,' he has a basis on which to make autonomous decisions in conducting his daily work.

Standardization Creates Fair Merit Increases

Although performance appraisals are not required by law, many companies choose to base their employee's raises and salary (or merit) increases on a standardized measurement. Performance appraisals offer managers an unbiased springboard from which to discuss an employee's strengths and development needs. This allows managers to give raises to employees based on their efforts and accomplishments.

Standardization Assists Managers with Promotion Decisions

With scores from standardized performance evaluations, managers are able to determine if the employee is working at the expected level for their position. While sometimes employees are in need of further help and training to do their job properly, other employees may stand out as high potential candidates for promotions. Employees who score exceptionally well on many areas of their performance appraisal and continuously meet or exceed goals set from the previous year (or prior 6 months depending on the company) can be considered for promotions. This helps to create an environment based on performance rather than office politics.

Standardization Provides Documentation for Layoffs or Disciplinary Action

Ongoing systems of evaluations become a part of an employee's permanent personnel record. This documentation comes in handy when an employer needs to make tough business decisions that directly effect employees. In cases where a company has to downsize and must choose to lay off employees, many times the lower performers will be laid off first.

Performance evaluations also serve as a record for employees who are having trouble improving their work and as a result face disciplinary action. The evaluations create a written track record of events that can help employers make more objective decisions in taking disciplinary action against---or firing---an employee who continues to perform far below the expected levels for their job.

Standardization Provides Documentation for Equal Employment Issues

In some cases, a protected class of employee may file a claim against a company citing unfair employment practices or discrimination. For example, a woman who continually exceeds expectations in her job feels that she is being passed over for promotions year after year, while she sees that men are being promoted quickly to higher positions.

In this situation, the woman's performance review (and the performance appraisals of those promoted above her) would be used as documentation to prove or disprove her case.

References

• U.S. Department of Labor: The ETA Performance Management Appraisal Guide

Resources

• U.S. Department of Commerce: Summary Guidance for Benchmark Performance Statdards