Developing a Performance Appraisal System

A large public utility has been having difficulty with its performance evaluation system. All operating employees and clerical employees are evaluated semiannually by their supervisors. The form the organization has been using appears in Exhibit 12.A; it has been in use for 10 years.

The form is scored as follows:

excellent = 5,

above average = 4,

average = 3,

below average = 2, and

poor = 1.

The scores for each facet are entered in the right-hand column and totaled for an overall evaluation score. In the procedure used, each supervisor rates each employee on July 30 and January 30. The supervisor discusses the rating with the employee and then sends the rating to the human resource department. Each rating is placed in the employee's personnel file. If promotions come up, the cumulative ratings are considered at that time. The ratings are also supposed to be used as a check when raises are given.

The system was designed by Joanna Kyle, the human resource manager who retired two years ago. Her replacement was Eugene Meyer. Meyer graduated 15 years ago with a degree in business from the University of Texas. Since then, he's had a variety of work experience, mostly in utilities. For about five of those years, he worked in human resources. Meyer has been reviewing the evaluation system.

Employees have a mixture of indifferent and negative feelings about it. An informal survey has shown that about 60 percent of the supervisors fill the forms out, give about three minutes to each form, and send them to the human resource department without discussing them with the employees. Another 30 percent do a little better. They spend more time completing the forms but communicate about them only briefly and superficially with their employees. Only about 10 percent of the supervisors seriously try to do what was intended.