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1 Approaches of Performance Evaluation in Organizations Majid Ghanbari Shahraji 1, Mostafa Rashidipanah 2,Reza Soltaninasanb 3, Mona Pournorouz Golroudbari 4, Amir Tavakoli 5, Sorous Khorshidifard 6, Mohammad Attar 7, Ali Ghahramanpour 8 1,2,3,4,5,6,7,8 M.A. students of MBA, Science and Research Branch, Islamic Azad University, Guilan, Iran Abstract The purpose of performance evaluation is a process whereby employees in certain intervals and formally is examined. The main purpose of the performance evaluation is that Information should be gathered about the forces working in organization and available to managers so they can adopt the necessary decisions in order to improve the quantity and quality of employees. Performance effectiveness evaluation of human resources is an issue that has been encouraged think of many managers to it. They are often sought approaches or practical solutions through which they can improve their employees' performance and provide fields of growth and excellence and increase their competitive advantage. The effectiveness of performance evaluation depends on to factors such as knowledge and understanding of management to methods and models of performance evaluation, their mutual support from program of performance evaluation, employee participation in evaluation programs, objectively and fairly evaluation of employee performance, practical plan for improving performance and eliminating stressors in evaluation. Thus in this paper investigate the concept of performance evaluation, necessity, objectives, process and models related to it. Keywords: Human Resource Management, Performance Evaluation, Effectiveness, Performance Improvement 1. Introduction In today's world of changing that organizations are competing, a large part of organization energy spend attention to employees because found that people of organization are main reason staying in this competitive world and their productivity are main factor the direction of movement in organizations. Changing of environmental - social organizations to meet organization to their performance is more than the past and need to implement performance management is became a common problem of organizations. For this reason, several approaches are used for performance evaluation of individual, group, and organization use. Each organization to understand amount of utility and desirability of their activities especially in complex and dynamic environments require to evaluation system. On the other hand lack of evaluation and control system in organization is consider as lack of communication with internal and external environment of organization that its consequences is obsolescence and eventual death of organization. Possible occurring of organization death disease due to lack of occurring suddenly do not feel from the organization's top managers. However, studies show that lack of feedback system to possible to do necessary reforms for growth, development and improvement of the organization's activities makes impossible, finally, this phenomenon is caused organizational death (Adeli, 2005, p125). 2. The concept of performance evaluation: To understand the concept of performance evaluation should first understand the concept of performance. Performance refers to degree doing duties that has completed an employee job (Byars and Rue, 2008:p216) and shows how employee perform requirement of a job. In opinion of Byars and Rue (2008) performance of individual in a position can considered as a result of the interaction between: a) efforts, b) the capabilities and c) perceptions of the role. "Efforts", which comes from the excitement, refers to amount of energy (physical or mental) that uses a person in doing duty. "Capabilities" are personal characteristics used to perform a job and perceptions of the role refers to ways that people believe their efforts should be guided in order to do their jobs, Noe and et al(2008) the performance know induced personal characteristics, skills and like it. Werther & Davis believe that performance evaluation is a process that employee performance is measured with it and when done right, employees, supervisors, managers, and ultimately the organization will benefit from it (Tabarsa, 1999, p4). 3. Importance of performance evaluation: Continuously improve of organizations performance creates synergy enormous force that these forces can be supporting programs of growth and development and creating opportunities to organizational excellence. Lord Kelvin English physicist speaks about the necessity of measuring: Whenever we could measure what we talk about it and explain in terms of numbers and figures can we say that we know something about subject matter. COPY RIGHT 2012 Institute of Interdisciplinary Business Research 620

2 Otherwise, our awareness and knowledge is incomplete and will never reach mature stage (Rahimi, 2006, p36). Management science is also indicative of mentioned contents. What we cannot measure, we cannot control and everything we cannot control in result its management would not be possible. The main issue in all of organizational analysis is performance and its improvement is necessary to measure and it is not conceivable Organization without a performance evaluation system 4. Performance Evaluation Objectives: Although the concept of performance management is a new concept, however, performance evaluation in the past few decades has been the most controversial personnel services and managerial activities and can say that performance management to discuss a series of different perspectives and motivating emotion is one of the most complex activities and processes of human resource management. In many organizations, performance evaluation is considered as inseparable part of human resource management programs and very efficient tool in professional development and is used for various purposes. In Bernardin opinion (2003) Information obtained from performance measurement is used for compensation, performance improvement and documenting the extensively and also can be used in decisions concerning the personnel (such as promotion, transfer, dismissal or separation from service), training needs analysis, staff development, research and evaluation program. Ivancevich (2007) evaluation objectives of employees are identified development of employees, establishing motivation, recruitment and manpower planning and effective communication between employees and supervisors. Snell and Bohlander (2007) and Noe (2008) Also evaluation objectives of employees have divided into two categories development objectives and administrative - executive objectives: Table (1) Performance evaluation objectives (Snell and Bohlander, 2007) development objectives -providing performance feedback -identifying personal strengths and weaknesses - identify performance of individuals - helping to identify targets - evaluation of to achieve the objectives - identifying the educational needs of individual - identifying organizational educational needs -strengthening the power structure -the improvement of communication - providing a condition for managers to help employees administrative - executive objectives -documenting decisions concerning employees - determining promotion of candidates -determining the duties and responsibilities -identifying weak performance -decisions in dismissal or maintenance -validation of selection criteria -evaluation of educational programs -decision about compensation and reward -to meet legal regulations - planning personal 5. Traditional and modern views on performance evaluation Performance evaluation issues can be examined from different perspectives. There are two fundamental views of traditional and modern about it. The traditional view has been considered judgments and reminds of performance and evaluated control and has directive style.this view has been purely focused on performance of past time period and has been formed with the previous requirements. The goal of new view is training, growth and development of evaluated capacities, improvement of the performance of individuals and organizations, providing consultation and public participation of stakeholder, motivating and accountability for quality improvement and optimization activities and operations. The origin of this view has been the contemporary requirements and developed to evaluate the systematic of performance by using modern methods and techniques. Area covered by performance measurement is macro level of organization, a unit, process and staff. COPY RIGHT 2012 Institute of Interdisciplinary Business Research 621

3 6. Performance evaluation process Every process involves a series of activities with a particular sequence of logical and purposeful. In process for evaluating the performance of every model selected, procedures and observe the order and sequence of the following activities is essential. 1 - Development of indicators and dimensions and related topics and identifying measurement unit. Indicators defines path of organization to achieve goals. First look in development of indices are focused vision, mission, macro goals, long term and short term strategies and operational programs, and the main activities. Considers and adoption resources to develop performance evaluation indexes of government organizations is laws and legislation of senate, and cabinet and development program of economic, social, cultural and also vision of the country's industrial development strategy twenty years. Indicators of developed performance evaluation have been features of the system SMART & D that include: It be specific,certain. Means indicators be comprehensive and clear and simple, expressive and explicit. So that create same result. It be measurable. Their measurment be easily. Means in addition to quantitative performance is able to define quality performance of indicator in formats of quantitative variable. It be achievable. It be realistic. Means it be related to the activities and missions, and policies and actual strategies of organization and with key fields of organizational performance. It has been Time frame, means indicators of specified evaluation period. Database, means there has been data and information necessary related to indicators (Rahimi,2006,p36). 2- Determining the weight of indicators, in terms of their importance and relevant highest rates. It means that how much are important of dimensions and indicators center? Do indicators have same important or different? Which do indicators have most important and lowest important? To determine the coefficients and weights of indicators can be named including the Likert method, method of Nominal Group Technics (NGT), Borda methods, Expert choice method and Analytic Hierarchy Process (AHP) method. 3 - Standard setting and desired status determination of each indicator. Benchmarking performance and implementation of indicators as quantitative or qualitative, performance growth rate In previous years is Extracted and determined as average or moving average for two or more years, considering the specific objectives set for the period, and phenomena affect how realization of that indicator. 4 - Notification and declaration expectations and indicators to "measured". If the purpose of the evaluation be growth and development of measured, therefore it is necessary that the expectations is announced to the personnel before beginning evaluation So they can fulfill planning, organizing, good communication and other processes to the expected performance. 5 - Assessment and measuring through the comparison of actual performance period end of assessment with optimum pre-determined standards. In this stage activities and achievements of employees in relation to each indicator is examined. Also for each indicator, actual performance identify by using of presents facts and compares with favorably performance standards and is done necessary study to status to achieve the objectives of indicators. In this stage strengths and weaknesses, opportunities and threats are identified in order to achieve organizational goals. 6 - Extraction and analyzing the results. Finally, necessary analysis should be carried out and if necessary corrective actions to improve the performance of the index determine. In performance results, the approach and views usually takes on a special significance in performance evaluation. For example: if a performance evaluation of a process be considered, the results of this measurements leads to determine desirable or undesirable status of the process performance. Also, to improve COPY RIGHT 2012 Institute of Interdisciplinary Business Research 622

4 in the process is used continuous process improvement the CPI and for overall improvement and external factors need to Business Reengineering Process (BRP). 7. Models of performance evaluation system In modern method of performance evaluation is used quantitative models such as productivity criteria with value-added approach, efficiency criteria with effectiveness approach and efficiency, criteria of the profitability with performance auditing approach; and qualitative models, such as descriptive and evaluative criteria approach, organizational commitment and organizational ethics, and several other criteria. There are at least seven scales for evaluating the performance of an organization which are not necessarily distinct from each other. These scales include: Effectiveness, efficiency, profits and profitability, advantage and productivity, quality of job life, creativity and innovation and quality. In continue will express a few examples of the most common patterns and models of the performance evaluation process. 1 Model of AHP 37 process The basic principles of this model are: drawn principle of hierarchy tree, principle of developed and to determine priorities, and principles of logical compatibility judgments. Decisions based on AHP method has many advantages understandable pattern, repeat the process, consensus and integrating judgments, give and take between the constituent factors of options, combined the utility of options, systematic and analytical approach, non-insisting on linear thinking, hierarchical structure and measurement of intangible in the formulation and determining priorities. 2- Quality Management Systems ISO Quality Management Systems ISO does not introduced merely as a system of comprehensive evaluation. This system discussed how to manage of effective processes in quality and defines the requirements for this topic that to take its certification have been meet all of this requirements and needs. Measure of efficiency and effectiveness of processes is including requirements that has emphasized in the ISO (edition 2000) on it. According to this standard should systematically identify all existing processes in the organization and their effectiveness and efficiency measure and in finally analysis of these factors will lead to improving processes (Gholami & Nooralizadeh, 2002, p29). 3- System of BALANCED SCORE CARD (BSC) One of the most famous and best-known of performance evaluation system models is Balanced Score Card model By "Kaplan and Norton" created in 1992 and later expanded and improved. This model suggests that in order to evaluate the performance of each organization must be used a series of balance indicators so this way top managers have an overview of the four major aspects of organizational. Balanced score card are included in the financial indicators that show the results of past activities and in addition complete them to considering nonfinancial indicators that are as prerequisites and motivation of future financial performance. Kaplan and Norton are believe that with the acquiring information from the four aspects lost the problem increases and the accumulation of information through to limit indicators used (Kaplan, 1992, pp.9-71 & Norton). 8. System of Total Quality Management (TQM) TQM is as philosophy and a type of attitude that based on it the concept of quality and attraction of customer satisfaction is in everywhere organization. TQM has traditional tools of SPS flowchart, histograms, Pareto charts, cause and effect chart, shewhart control charts and scatter chart is Shaver while the seven new tools of TQM is based on the conceptual and logical thinking. These seven of dependence chart, communication chart, system chart, matrix chart, matrix chart of data analysis, prediction chart is a major defect in design determining process and designing chart. 37 Analytical Hierarchy Process COPY RIGHT 2012 Institute of Interdisciplinary Business Research 623

5 9. Method of Malcolm Baldrige Method of Malcolm Baldrige is method that helps to implementation of TQM concepts in organization. In this method is provided seven criteria, and the implementation of TQM. Any organization that has got high marks in audit Baldrige Foundation is award winner Molcolm Baldrige. This evaluation can be done by organizations as self-assessment. But for receiving award auditors depend on Baldrige institution should assess the organization. 10. Conclusions This article has been investigated to explore new approaches To Performance evaluation that has solved limitations of traditional methods that each of them has particular characteristics. This approach provides a general framework and help to managers in the selection of organization evaluation indexes. In all according to models and frameworks described and according to views of many experts in the field of performance evaluation, features of a appropriate performance evaluation system can be summarized as follows: _ to support strategic objectives: Performance assessment system should be derived from the strategic objectives. Otherwise, the system may to support activities that that can have an adverse effect on strategic objectives. in addition it should be noted that if strategies change during time, some performance indicators will also change. Therefore need for flexibility in these systems is felt to ensure that performance evaluation system is always consistent with organizational goals. _ it be balance:it is vital that performance evaluation system should not be seen only from a financial view. A performance evaluation system should include a variety of performance indicators so cover all the important aspects for the success of the organization. Therefore it should be exist a balance between the different indicators. Means has been focus as appropriate on short-and long-term results, a variety of functions (such as cost, quality, delivery, flexibility, and...) various aspects (eg, customers, stakeholders, competition, innovation, etc.) and different levels of organization (such as overall performance and part) - It perevent in front of part optimization: Because performance indicators influence on employee behavior, a inappropriate set of indicators may be lead to non-functional behavior by empolyees. In other words, employees who seek only to improve its own performance indicators may make decisions that is in conflict with the demands of managers and improve in performance of their department lead to damage other parts or even the overall performance of the organization and a performance evaluation system should be prevent such optimization. _ Number of performance indicators be limited: for the proper performance it is essential that be limited number of performance indicators. Increasing the number of indicators requires more analysis time. The information collected is not used is considered a loss. Therefore, it is essential that only data that can be used for a specific purpose and their collection costs are not more than their expected benefits, will be collected. It also increases the number of performance indicators will increase accumulation risk of data and this causes that there is no possibility of prioritizing. It is easy to access: The purpose of a performance evaluation system is giving important information at the right time and to the right person. Therefore important thing about this system is that should be designed so that their information is easily improved and it is available to users and for them to be understood. It be includes comprehensive performance indicators: performance indicators should have a specific purpose. In addition, it is essential that specific goal for each indicator is defined and timelines determine to achieve its goal. COPY RIGHT 2012 Institute of Interdisciplinary Business Research 624

6 References Adeli,A.(2005). "Performance evaluation of police in Iran to maintain order and security in the city of Bam, Master's thesis, University Police. Bernardin, H.J. (2003). Human Resource Management: an experiential approach. 3 th Edition. New York: Mc GrawHill. Byars, L.I & Rue, L.W. (2008). Human Resource Management: 9 th Edition. New York: Mc GrawHill. Gholami,h;nouralizadeh,h.r.(2002). "Comparison of methods for performance evaluation, Articles Collections of National Performance Management Conference, Tehran University Jihad, Tehran University Management School. Ivancevich, J. M.(2007). Human Resource Management. New York: Mc GrawHill. Kaplan, R.S. and Norton, D.P. (1992), "The Balanced scorecard: Measures that Drive performance", Harvard Business Review, January-February, pp Karimi,t.(2006). "The new model of organizational performance evaluation,",iranian journal of Tadbir,No171. Najmi,m;zarei,h.(2002). "Interaction and reciprocity, EFQM, BSC", Articles Collections of National Performance Management Conference, Tehran University Jihad, Tehran University Management School. Noe, R.A, Hollenbeck, J. R, Gerhurt, B & Wright, P.M. (2008). Human Resource Management: gaining Competitive advantage. New York: Mc GrawHill. Rahimi,gh.(2006). "Performance evaluation and continuous improvement of the organization", Journal of tadbir, No Snell, S. A & Bohlander, G. W. (2007). Managing Human Resources. Thomson Publishing Company. Tabarsa,gh.(1999). Review and explain role of strategic requirements in selecting Performance Evaluation Model of government agencies, Articles Collections of the Second Festival shahid rajaei of executive performance evaluation, Tehran: Organization, administration and state employment. COPY RIGHT 2012 Institute of Interdisciplinary Business Research 625

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