Evaluate performance and create value in your business

By Katherine Díaz, HR Remarkable Talent

In terms of talent management and given the conditions of the current work ecosystem and the generational mix, it is essential that each person is clear about what results are expected of them. A performance evaluation is an essential tool to achieve this goal.

Performance evaluations will encourage your team to achieve results in an aligned and consistent manner. The process includes a self-evaluation based on fulfilled responsibilities (results) and performance indicators that will lead them to a process of introspection, reflection, and accountability. As Puerto Rican talent management consultant Edgar Quiñones points out in his book titled “El sentido común no existe” (Common sense does not exist), successful leaders must maximize their team members’ potential, so they become winners both at a personal and professional level.

Although the term evaluation may trigger fear in some people, the Real Academia Española (Spanish Language Academy) dictionary provides a definition that is based on friendly concepts: “To value, to attribute value to something by taking different elements into account.” We could interpret this as the act of calculating the value of something, whether it be knowledge, skills, behaviors or people’s performance. Meanwhile, the term performance is defined as the act of handling, taking care of, working on or dedicating oneself to an activity. Therefore, we can say that a performance evaluation includes the act of calculating something or someone’s value for the organization based on how a given job or task is carried out.

Create your “value calculator”

In work scenarios, value is calculated according to the results generated by human talent in relation to those required by the company. Eduardo M. Arroyo, author and strategic planning consultant, explains that results themselves create a value that benefits both the organization and its employees. When that happens, a sense of well-being is generated.

But what if an employee doesn’t know which results are required by the company? According to Arroyo in his book El bueno, el malo y el problemático (The Good, the Bad, and the Troubled), having clear expectations is the basis of performance excellence. That first step is every leader’s responsibility, but it’s sometimes overlooked.

Performance evaluation processes have been evolving. Before, they focused more on what a person must achieve and left out the process and how to reach the desired result. Today, an objective tool based on responsibilities and indicators, which allows to calculate the value of the expected results and generates spaces for reflection and retrospection, becomes an exercise in learning and acquiring skills to improve overall performance. This is necessary in every organization, regardless of its size, as it provides transparency and strengthens career planning processes, succession plans, salary increases, and internal promotions, thus generating confidence among employees.

In a previous edition of My Business is Popular I wrote about the career plan as a tool for attracting and retaining human talent. Performance evaluations are very valuable mechanisms to help workers perform better, generate learning, and grow within the company. Performance evaluation results make it easier to monitor and structure career plans, and promote employees’ well-being and happiness, which will translate into growth for your business.

Some studies confirm that companies with performance evaluation processes focused on provoking reflection, retrospection, introspection, accountability (personal responsibility and attitude), as well as value conversations and generate measurable improvements. One example is a study by the University of the Cumberlands, in Kentucky, USA focusing on the role of performance evaluations in three leading United States banks: Bank of America, JPMorgan, and Wells Fargo. This research found that in 23% of cases evaluations contributed to the achievement of business goals, as reviewed by the European Journal of Business Startups and Open Society in April 2024.In addition, it was found that reviewing and communicating performance expectations fostered:

• employee commitment or engagement
• ability to identify training needs
• skills and performance development
• clearly defined expectations

Here are eight (8) recommendations to eliminate subjectivity in performance evaluation processes and make them objective and successful.

1. Clarify and document the results you expect.
2. Identify and document objective compliance indicators that are correctly aligned with expected results.
3. Establish minimum performance expectations and document them.
4. Collect data periodically and in a disciplined manner.
5. Encourage self-analysis of productivity data; use graphs to facilitate reflection.
6. Encourage each person to identify specific actions in case of noncompliance.
7. Ensure that supervised employees’ reports are handed to their supervisors within the established period.
8. Make it easier for supervisors to inspire corrective changes.

While it is true that creating an evaluation process requires effort and time, if you implement it correctly the reward will be extraordinary in terms of results, collective pride, and a satisfactory work environment. Turning this tool into a well-being mechanism can help you retain your employees.

A good tool makes it easy for you to define responsibilities and indicators by job position, view the data and the results record, and carry out action plans focused on continuous improvement. There are easy-to-use technological platforms that allow you to appropriately manage the performance evaluation process.

Points to ponder

• Do you have an effective performance evaluation process?
• What does it consist of?
• Is it objective and does it measure the necessary aspects?
• How is it received by supervisors and those under their supervision?
• Do your team members assume responsibility for their results?
• Can you quantify the return on your investment?

The author is president and CEO of the human capital consulting and headhunting firm HR Remarkable Talent; she has three decades’ worth of experience and is certified in Talent Assessments and Performance Evaluation. For additional information on this topic, please contact our organization, HR Remarkable Talent, LLC., or the local chapter of the Society for Human Resources Management (SHRM Puerto Rico).

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