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Developing Performance Measures

Knowing what performance dimensions should be evaluated does not necessarily translate into an effective performance management system. Rather, you have to be able to measure an employee’s level of performance on the dimensions you have identified. Effective performance evaluation systems use performance measures that are valid, have clear standards, and are specific. Let’s look more closely at each of these criteria. Performance measures must be reliable and valid. Reliability refers to how well a measure yields consistent results over time and across raters. Validity is the extent to which you are measuring what you want to measure and how well that is done.Essentially, validity means that your performance measures reflect the actual performance of your employees. Sometimes, however, performance evaluations go awry because the measures used are deficient or contaminated. A performance measure is said to be deficient when important aspects of an individual’s performance are not measured. Greater specificity affords firms two benefits. First, it makes a standard clearer, and managers are likely to be more consistent when they evaluate employees on that standard. This helps improve the reliability of the performance management process. Moreover, greater specificity means that a wider array of job tasks is likely to be evaluated rather than focusing on some overall global assessment. As a result, companies are likely to have a better idea about how different employees are performing different aspects of their jobs. Second, greater levels of specificity help employees understand how different aspects of their job should be performed.