Performance Evaluation of Company

Employees apply their existing skills while working and develop expertise that is required for tackling problems of different complexity. As a result, it is critical to properly and thoroughly analyze workers, examining the features of each work process. It aids in determining employees' compliance with the positions they occupy, as well as identifying all of their potential, which should be sensibly utilised to solve the company's major goals and objectives. The assessment occurs once a month on average in all types of businesses, whether large and small, and once a year internationally. It does not aim at dismissal or punishment; however, not very diligent employees will either be re-educated or dismissed. The purpose of this study is analyzing of the existing methods for assessing performance for organizations, as well as identification of their significant advantages and disadvantages.

Keywords: assessment, enterprise, management, personnel.


Introduction………………………………………………………………………………………. 4

Background and Significance……………………………………………………………………..5

Literature Review………………………………………………………………………………….6

Methods and Design........................................................................................................................7

Discussion and Implications............................................................................................................8




The issue of efficiency of enterprises in the current economic conditions is the most urgent and important one. There are many proposals and concepts for assessing the performance of companies from specialists, but there is still no consensus on this matter. In order to understand what characteristics an ideal effective work should have, how to achieve maximum effectiveness of its functioning, it is necessary to understand what, in essence, is the concept of the efficiency of the enterprise. To calculate the effectiveness of the organization, a common criterion is established, which is unified when measuring the economic results of not only the specific estimated production, but also all production industries in the country.

There is a single criterion for evaluating the results of a structure, an increase in the output of one worker per unit of time, or an increase in the results of labor of workers in the national economy. The indicators and criteria for assessing the effectiveness of the enterprise should be considered, then as a general criterion, we can consider measures to achieve maximum profit in the course of the production process at the enterprise. To quantify the success of an organization, performance measurement indicators are combined into a single coordinated system that is based on research and analysis of the main elements of the production process. This study will be based on the scientific work of other researchers, as well as on theoretical concepts on this issue. Its purpose is to identify changes that occur in the process of assessing the effectiveness of the company over time. Throughout it, changes will be discussed in assessing employees to enhance their merits and bonuses, as well as factors that affect such fluctuations, and how this affects companies’ performance. This study is of practical value, because it can be used in the future for companies to improve their own productivity, as well as to increase the motivation of their subordinates.


Research on this topic is important, as it not only provides the ground for reflection and further analysis of the productivity and effectiveness of staff (Musselwhite, 2007). The fact is that the complex procedure for assessing staff requires serious preparation. At the same time, it is a phased and prolonged process, which includes many stages. These are the analysis of the functional of the post, the definition of significant competencies and the necessary level of their development, as well as the development of a level description of competencies and so on. This is a long and painstaking process, and it also means adjusting to different types and characteristics of employees. Such issues significantly simplify the understanding of all aspects of the assessment of both simple subordinates and management.

Additionally, psychological and economic indicators are very closely related to the assessment of staff. It indicates the extent to which the employee is interested in the activities performed, what personal goals he or she pursues, performing certain professional duties, how this affects the profit that the specialist brings. In the process of assessing staff, it becomes possible to determine the reason why one or another specialist does not cope with his duties. In addition, the evaluation of personnel should be extended to newly recruited specialists. A company should develop situational-behavioral cases that predict an applicant’s behavior in the work situation; there must be tests, or prepared battery issues that diagnose the professional knowledge and skills, as well as the ability of the specialist and his learning ability. These issues are easier to solve and different ideas are easier to implement, if the pattern of correct evaluation of productivity and staff performance is already determined.

Additionally, it should be mentioned that the correct assessment systemizes the activities of any enterprise. It leads to the phenomenon that top management of companies does not spend their time on unnecessary actions, surveys and so forth. Correct methods of personnel assessment would help determine the effectiveness of performance of a particular work of the employee, allows establishing of the compliance of performance indicators with established requirements. In addition, the evaluation process helps to identify both the individual problems of the employee, and the general, characteristic of the whole team. To avoid various problems, it is important to determine when an evaluation system for an employee is based, on which criteria the evaluation will be conducted.

Evaluation criteria are key parameters for assessing the effectiveness of an employee’s activity. It determines how each function and each action should be performed to meet the requirements of the company and customers. Undoubtedly, the main criterion is the competence of personnel. The competence of the staff is a very dynamic category, developing. It can be greatly enhanced by continuing education, self-education, admission of workers from outside and especially motivation. Therefore, the tasks for personnel management are optimizing the effectiveness of its actions, which depends on competence and motivation.


Companies compete with each other in the market. While organizations are fighting for primacy, they will constantly have an incentive to improve the performance of their employees (Ali et al., 2012). The correct motivation of sellers is built primarily on the awareness of their role in the company. Employees should be aware of how their role would help the company to change in the eyes of customers. Any actions of employees are related to their motivation. For someone, this is a material need, which dictates to them a further line of behavior, for example. Therefore, the motivation of the employee should be aimed at finding out from the client his opinion, his wishes. There are many methods to guide the motivation of employees and one of them is giving feedback (Buckingham et al., 2015). An experienced leader uses feedback in order to maximize the effectiveness of interaction and performance of his subordinates: directs their efforts, identifies the causes of failures and low motivation of employees, spurs and inspires. Feedback allows employees to make necessary adjustments to the work process, and also acts as a powerful motivator, contributing to the manifestation of job satisfaction.

One can motivate employees with a common goal, for example, to protect nature and the environment as a whole (Paille et al., 2014). After all, the main goal of managing staff motivation in an organization is to create a system in which the satisfaction of the needs and interests of each employee would be identified with the achievement of the strategic tasks facing the company. In this case, each employee clearly understands that the sooner and more efficiently with his labor participation the company reaches its strategic goal, the more fully its needs and interests will be satisfied. Thus, improved performance can affect the organization's performance (Ying, 2012). To make a team work hard, a leader must create the most favorable conditions in which each employee will strive to work effectively. To do it, there are different methods of motivating staff. We will talk about them further. Motivation is a psychological process that governs the actions of a particular person. Accordingly, it is the creation of special working conditions and incentives within the company that motivate the employee to perform the duties qualitatively and achieve the set goals.


As it was mentioned before, the method of research will be a deep analysis of the categories of personnel assessment, as well as existing research. The history of the development of personnel assessment systems begins with the start of the twentieth century, where they appeared in US companies (Rotich, 2015). In the 1960s, various schemes were used in the context of strategic business tasks, which formed the basis for modern methods. Undoubtedly, setting the goals of personnel certification was in full accordance with the goals and objectives of the company, its development strategy and is determined by company’s manager. For instance, the method of assessing the performance of activities, which listed statements of very effective and very inefficient behavior of employees in the performance of work, was applied. Such statements were grouped into categories that may differ depending on the type of activity. Once the categories and components of their statements were developed, the evaluator prepares a kind of magazine for each employee.

For example, some approaches were determined. The method of accelerated choice was developed in order to prevent overestimation of points by appraisers. When using this method, the evaluator must choose from the set of descriptive statements the one that is most applicable to the employee being evaluated. Approvals are given a different weight, and they are summed according to these weights and the efficiency index. Forced distribution is an evaluation system that is close to ranking by the normal distribution curve. The assessor is asked to rank the workers according to fixed categories. One of the methods of this system is the creation of cards with the names of employees, which are ranked by the best-to-worst evaluators. A graphical rating scale is the oldest and most widely used method for evaluating performance. Experts are given graphs and asked to rank employees for each characteristic. The number of characteristics can vary from one to a hundred. Such a rating can be a matrix or a histogram.


Evaluation of the personnel is designed to study the degree of preparedness of the employee for the particular activity that he or she is engaged in, and also to identify the level of his potential capabilities in order to assess the prospects for growth, as well as the development of personnel activities necessary to achieve the objectives of personnel policy. Analysis of management practices shows that corporations use in most cases simultaneously both types of performance evaluation of employees. Thus, procedures are carried out aimed at both assessing the results of work, both the personal and business qualities of employees that affect the achievement of these results.

It should be noted that staff assessment can involve both the immediate supervisors of the evaluators and other supervisors, colleagues, subordinates, HR-specialists, external consultants, and, finally, the self-appraised self-assessment. Thus, a minimum familiarity with the methods of assessing the personnel of all employees is a guarantee that the methods used will give the expected effect. All methods of evaluation can be divided into methods of individual assessment of employees, which are based on the study of the individual qualities of the employee, and methods of group assessment, which are based on a comparison of the effectiveness of employees within. However, in the course of evolution, those methods underwent a significant transformation.

Objectives of staff assessment are the administrative goal is achieved by making a reasonable administrative decision on the basis of the results of the evaluation of personnel. The information goal is that both employees and managers have the opportunity to obtain reliable information about the activities. Such information is extremely important for an employee in terms of improving his activities, and the leaders give the opportunity to make the right decision. The motivational goal is that the evaluation itself is the most important means of motivating people's behavior, because adequately estimated labor costs will ensure a further increase in the productivity of workers, but only if the labor of a person is evaluated according to his expectations.

The method of questioning implies evaluation questionnaire is a certain set of questions and descriptions. The evaluator analyzes the presence or absence of the indicated traits in the attested and notes the appropriate option. Descriptive method of evaluation implies that evaluator must identify and describe the positive and negative features of the attester’s behavior. This method does not provide a clear fixation of the results and is therefore often used as an addition to other methods. Method of classification is based on the ranking of the certified workers according to a certain criterion from the best to the worst with the assignment of a certain serial number. The method of comparison by pairs implies that in the group of attesters, who are in the same position, is compared with each, then the number of times that the attested person is the best in his pair is counted. Based on the results obtained, a general rating for the group is built.

Since the research of personnel has become widespread, the intensified competition has led to a change in the working conditions of workers. Successful change management has become a key condition for survival in a rapidly developing market environment. In turn, understanding of the attitude of employees to changes has increasingly been recognized as an essential condition for effective change. The study is of particular value in assessing people's reactions to many changes affecting working conditions, such as new technologies, business process reorganization, and staff reduction. Additionally, there are changes due to strategic mergers, acquisitions or mergers of companies. Such transformations can take various forms and involve companies that work in the same direction, uniting their forces, or uniting organizations that operate at different parts of the production chain. In addition, organizations can seek to unite forces, retaining their individual businesses or creating one new. Depending on the strategy, it is obvious that some of these situations may have a greater impact on employees.

Nevertheless, in case of improper management, any of these situations can lead to a real possibility that the employees would stop working and even become dismissed if they do not feel that they are not strategically involved or are not sufficiently informed about the intentions of the company. The conflict of cultures can also take place when two organizations unite, and the expected synergistic effect is not fully realized. Having learned from employees how they understand and perceive unfolding events, one can manage the situation and support the involvement and dedication of employees throughout the process. In addition to the changes that occur due to commercial necessity, there are many problems included in employee surveys that reflect the general changes in the society. Attitude to the work itself is changing, and with these changes new norms and expectations come. Therefore, the balance between work and lifestyle is the problem most often addressed, as well as harassment based on gender, religious beliefs, limited physical abilities or ethnicity.

Collection of information such as gender, religious beliefs, limited physical abilities and ethnic origin by a poll under the general title of a demographic picture can be the best source of knowledge of the diversity of the workforce in the organization. This collection of information implies a high degree of responsibility, since if the survey gives too detailed a description of the respondents; they can be identified by answers, which excludes anonymity. Therefore, it is necessary to balance the collection of sufficient information to analyze and interpret, and not ask too detailed questions in order not to violate anonymity.


Managerial activity is an ongoing process of business communication, working with people. Manager constantly studies and evaluates the employees. It is due to the fact that the most important aspect of working with people is the selection and placement of personnel. There is no doubt that reliance on psychology here gives a lot. However, any leader is a person and, of course, a human factor can work here. The head is an employee of the organization with a formal status, whose purpose is to get people to fulfill their duties on time and in a quality manner. If these duties are performed by subordinates, we can talk about effective leadership.

On the manager there is a lot of responsibility and, accordingly, a person in such a position may act incorrectly, perceiving an employee subjectively. Thus, the issue of personnel assessment reveals another problem, which means if management is ineffective, serious negative changes can occur in the company, such as: decreased productivity and quality of work, increased conflict in the team, increased employee stress, and an increase in staff turnover, example. High requirements for professional and qualified top managers, top managers, make the owners of companies more seriously and responsibly approach their choice. In this regard, a comprehensive evaluation of managers, aimed at identifying both the effectiveness of their work, and the future potential, based on research data on individual characteristics and abilities, is of particular importance.

Having the support of managers for external forms of motivation, psychological features of external prestigious motivation in the formation of sustainable internal motivation are not always taken into account. Even if the head has identified the main criteria relevant for the development of the company, he himself adheres to these criteria and requires their compliance with their employees, then for the employees themselves there remains the problem of evaluating themselves and their colleagues on these criteria. That is, there is already subjectivity in the evaluative judgments of the employees themselves.

To develop sustainable internal motivation of employees, a clear understanding of themselves in the eyes of management and other employees of the company is a prerequisite. The monitoring system for a company’s top-priority criteria, singled out by management, is a tool for creating prestigious motivation in the company. Moreover, the periodic evaluation of personnel in the monitoring system activates the strong-willed personal component of employees in the relevant categories for the development of the company. That is, after monitoring today, the employee receives a generalized description of his status position in these categories. At the same time, he is informed that next time monitoring will be carried out in a month. Knowing that he has time to change his status position in the company, he pays close attention to his behavior and the behavior of his colleagues precisely in accordance with the evaluation categories.


Summing up everything said above, it should be concluding that there are many approaches to increasing staff motivation and improving the effectiveness of their work. They can be both effective and ineffective, and for there are many reasons for it. From the point of view of psychology, it is necessary to find an approach to each specific person. Nevertheless, globally for business it is of great importance. For this reason, performance evaluation is an obligatory measure for any company; otherwise it would lose its market position and would go bankrupt.


Ali, Shaemi Barzoki, Abzari Mahdi, and Javani Malihe. (2012) “The effect of employees' performance appraisal procedure on their intrinsic motivation.” International Journal of Academic Research in Business and Social Sciences 2.12 (2012): 161. From

Buckingham, Marcus, and Ashley Goodall. (2015) “Reinventing performance management.” Harvard Business Review 93.4 (2015): 40-50. From

Musslewhite, Chris. (2007). “Self Awareness and the Effective Leader”. Inc. Retrieved from Accessed on 12 December, 2017.

Paillé, Pascal, et al. (2014) “The impact of human resource management on environmental performance: An employee-level study.” Journal of Business Ethics 121.3 (2014): 451-466. From

Rotich, Kipkemboi Jacob. (2015). “History, Evolution and Development of Human Resource Management: a Contemporary Perspective”. Global Journal of Human Resource Management, v. 3(3), pp.58-73.

Ying, Z. Y. (2012). “The Impact of Performance Management System on Employee performance.” Unpublished master thesis (2012). From

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