Under this method, employees share in the profits of the firm both through dividends paid and through increased market values of stocks held. Employees do not participate directly in operational losses; however, declines in market values may be the result of such losses. Problems and Trends in Performance Evaluation
A major problem with personnel performance evaluation in all too many organizations is a failure on the part of managers to communicate an unfavorable performance evaluation to an individual employee out of fear of evoking hurt feelings and hostile behavior on the part of the employee. This absence of honesty is costly to the organization and to the employee being evaluated.
Another charge against the performance evaluation process as it presently exists in most organizations is that the process has outlived its usefulness because it is at best a one way avenue of communications. The negative effects of this aspect of the performance appraisal process are held to include demoralization of employees, increased competition between fellow workers, and the pursuit of short term performance gains.
Some analysts charge that the prevailing personnel performance appraisal process is flawed because the structure of the process leads to ratings of employee behavior as opposed to ratings of employee performance. In this context, managers are urged to use specific and objective language in the conduct of personnel performance evaluations, to base such evaluations strictly on results, and to assure that lines of communication between evaluators and evaluees remain open. The subjectiveness of the prevailing personnel performance evaluation system is viewed as one of the most significant faults of the process.
One suggested improvement to the personnel performance evaluation process is for managers to collaborate with employees in the conduct of performance evaluations while focusing each evaluation on a single perform...