Introduction to Performance Evaluation

Performance evaluation deals with the area of MA that is concerned with:

1) Holding individual managers responsible for certain aspects of the organizational performance.

2) Making them accountable by producing regular performance reports relating to matters for which they are responsible.

3) Motivating managers to achieve better results by setting targets for performance, judging actual results against targets and rewarding good performers.

4) Giving managers control information to enable them to make decisions about improving their performance.

There are two interrelated aspects involved and these are:

1) Giving managers authority to make decisions and holding them responsible for the exercise of that authority. This is termed to as decentralization.

2) Defining a system of accountability by which to judge how the authority has been used and the responsibility carried out. This is termed to as responsibility accounting.