The business environment of the mid 1990s in the United States, together with the business environment that will emerge as the North American Free Trade Agreement (NAFTA) begins to be implemented, places American business firms under tremendous competitive pressures. To survive in this dynamic era, the level of performance must be improved by all American firms. This imperative is particularly relevant in the materials handling equipment manufacturing industry where higher American wage levels demand improved productivity (Ramsay and Lehto, 1994, pp. 38 41).
High rates of personnel turnover leads to sub standard organizational performance. A high personnel turnover rate one of the most costly problems that afflict organizations. The costs of personnel turnover are not limited to those incurred directly in relation to those employees leaving the organization, such as the loss of productive workers, lost training costs, the necessity to train replacements, and so forth. Personnel turnover also exacts organizational costs through the effects it has on those employees who remain with the organization (Bailey and Davenport, 1986, pp. 105 108).
Ineffective performance evaluation has been identified as a major factor that contributes to high levels of personnel turnover (Kegel and Peters, 1988, pp. 124 128). As important to an organization as the task of personnel performance evaluation or is, however, there are indications in the literature that a significant proportion of the supervisors, managers, and administrators are either ill prepared for this task, or that they are reluctant to perform the task in an effective manner (Holmes, 1993, pp. 75 78). The literature indicates that two major factors may contribute to the development of such a situation within an organization. The first factor is an absence on the part of many supervisors, managers, and administrators of an awareness of the significance to the organization of...