Performance Evaluation Term Paper

Download this Term Paper in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from Term Paper:

Performance Evaluation

CEO

From: Non-CEO

Re: Internal Performance Evaluation System

Purpose of the Evaluation System

For the company Whole Foods, an internal performance evaluation system should be in place to ensure that the company maximizes its success and profitability. A performance evaluation system is necessary in order to implement internal control on the managers who work within the company. There are several reasons for this. It is important to remember that with a formal performance evaluation system the company insulates itself against the risks posed by wrongful termination or discrimination lawsuits, since the company can support all personnel decisions with empirical data. Landy (1978) notes that performance evaluation can also help the company to identify goals, eliminate weaknesses and provide supervisors with accurate measures of subordinate performance, not to mention improving the perception of procedural fairness in personnel decisions.

The industry is the grocery retail industry, and there are a number of measures already in place. With electronic scanning, Whole Foods already has access to a substantial amount of data that can be used to evaluate performance of managers and front-line employees alike. For established stores, there is also longitudinal data that can be used to track performance over time, during periods where the store has different managers, or just in relation to the performance of nearby stores.

Gjerde (2007) notes that the value of a performance evaluation system lies in its ability to generate information that managers can use. Thus, it is critical that this system is designed with specific objectives in mind. The improvements that the company derives as the result of this system should relate entirely to ability of the system to deliver results that help managers to save the company money on operations, or earn it more money. Managers in particular need to be motivated by these two outcomes, so the performance evaluation system will provide Whole Foods with the opportunity to measure such outputs, and make these measures a part of the way that managers are motivated and incentivized within the company.

The objectives of the system therefore are going to be to find ways to improve efficiency and other operating metrics such as sales per square foot, and in addition to find ways to deliver higher levels of customer satisfaction, since we have noted a correlation between customer satisfaction and customer loyalty. Increasing profits is a key measure, but managers will also be evaluated on sales per FTE (full-time equivalent employee), sales per square foot, contribution margin per square foot, sales per dollar spent on employees, inventory turnover, and asset turnover at their stores. These metrics will help to orient our front line managers to the financial objectives that we seek.

It is also worth considering that there should be other metrics as well. The balanced scorecard is a managerial concept that weighs the need of the company to deliver financial results with the need of the company to excel in other areas, in particular the internal learning and growth area, customer satisfaction and internal business processes (BSI, 2014). Implementing a balanced scorecard will ensure that managers are not seeking to improve financial performance or operating efficiency in the short run only, at the expense of staff or customers. For example, we know that we can increase sales per employee but cutting back on staff, but this is short-term in nature. The balanced scorecard will point out the flaw in such a strategy, because the staff and customer dimensions will suffer, and eventually that will lead to reduced sales as well.

Metrics

Mudde and Sopariwala (2008) note that many industries have their own specific metrics. In the airline industry, they note, available seat miles and revenue per seat mile are two critical metrics, relating revenue to capacity. In the retail grocery industry, same store sales and sales per square foot are two good metrics that are frequently used. Same store sales tracks the performance of the company overall, not counting new stores. Thus, growth is measured without accounting for revenue growth through capacity growth. The revenue generated per square foot is important, because square footage represents not only a large cost, but a fixed cost. With a revenue/square foot measure, the company can also gather a cost per square…[continue]

Cite This Term Paper:

"Performance Evaluation" (2014, June 14) Retrieved December 10, 2016, from http://www.paperdue.com/essay/performance-evaluation-189879

"Performance Evaluation" 14 June 2014. Web.10 December. 2016. <http://www.paperdue.com/essay/performance-evaluation-189879>

"Performance Evaluation", 14 June 2014, Accessed.10 December. 2016, http://www.paperdue.com/essay/performance-evaluation-189879

Other Documents Pertaining To This Topic

  • Performance Evaluation Critique Several Years Ago Arrow

    Performance Evaluation Critique Several years ago Arrow Electronics instituted an Employee Performance Review (EPR) system. However, the process was not providing the CEO. Steve Kaufman, the results that he had hoped for when it was instituted. The original goal of the EPR system was to help identify those individuals within the company whose performance was outstanding and whose career should be accelerated. It was also designed to pinpoint those who would

  • Performance Evaluation Methods for Instructors Similar to

    Performance Evaluation Methods for Instructors: Similar to the workplace, performance evaluation is an important aspect for the classroom environment in which the instructor is the rater and the students are the ratees. In today's classroom, instructors use basic combination of papers, tests, exams, cases, and class participation as the basis for assessment and then provide the formal appraisal in the form of a grade. Notably, a comprehensive student appraisal consists of

  • Performance Evaluation Explain Three Points

    Once this happens, is when these kinds of attitudes can begin to affect others around them. Compare and contrast at least three common performance evaluation methods used to analyze performance data after it has been gathered. Three different performance evaluation methods include: self-evaluation, the 360 degree approach and critical incident analysis. Self-evaluation is when the employees will rate their performance. This can be used with the manager's evaluation to understand what

  • Performance Evaluation Processes Each Company

    Productivity or the quantity of work is one of the most important evaluation criteria. This is because employees have work quantity objectives that must be reached. In case these objectives are not reached within the given period of time, it means the employee has certain difficulties reaching these targets or that the objectives have not been established in accordance with his possibilities. The quality of work is also an important criterion

  • Performance Evaluations in Any Sector it Is

    Performance Evaluations In any sector, it is important to conduce performance evaluations to ensure worker productivity and to assess what changes, if any, need to be made to process or administration. According to Lawrence (2004), performance evaluations are important "to monitor employees' performance, motivate staff and improve company morale," (p. 1). Ironically, though, most employees dread evaluations because they can be stressful. The best way to create stress-free performance evaluations is

  • Performance Evaluation the Experience of

    It transpired that this referred to my ability to use communications technology effectively and to the best of my ability. Besides many positive points about my working performance it was pointed out to me that I was not making adequate use of the internet and email as well as networking software to increase my contacts and sales. I was at first embarrassed by what appeared to be stern criticism of

  • Performance Apprasials Unfair Performance Evaluations Lower

    Performance Apprasials Unfair performance evaluations - lower productive employees getting good reviews because they are friends with management staff. Unfair performance evaluations can do a lot of damage to an organization. They lower morale among those employees who are disadvantaged by the favoritism will ultimately develop higher intentions to quit and this can led to increased employee turnover. Effective use of an evaluation program has been shown to be able to


Read Full Term Paper
Copyright 2016 . All Rights Reserved