The main factor of every business’ development is its staff. As every resource it is necessary to manage the personnel properly for sustainable business development and prosperity. However the management is impossible if the manager does not know his staff and does not possess the information needed to manage the staff. That information is provided by the evaluation of the staff. The evaluation of the staff has influence on their motivation and promotes changing the quality of their work.

For implementing the evaluation, first of all, it is necessary to decide the criteria of evaluation which are appropriate to that position and characteristics of the company. Then 5 points can be rated for each criteria (volume and quality of the work, discipline, corporate commitment, etc.) and the results can be summarized.

The criteria of the personnel’s evaluation are usually divided into 2 groups.
  1. Evaluation of competency. In this situation the employee’s knowledge and skills, the ability of using them practically are evaluated as well as behavior and personal characteristics. One of the most effective methods of evaluating the competency is solving situational problems depending on the position of the employee.
  2. Evaluation of efficiency. Here the employee’s working results are compared with the indicators for specific period and position. For that reason, prior to the start of the evaluation process, criteria should be clearly defined. The efficiency of the work can be seen, for example, in monthly sales volume, number of projects implemented, amount of revenue, signed agreements, etc.
Often the evaluation of the personnel is not considered to be objective. In order to avoid such situations the whole personnel can be included in creating evaluation system and carry out the evaluation at all levels from cleaner to manager and introduce the decisions based on the results.

For each company not only professional qualifications are important but also personal characteristics.

In prestigious and large companies, where working hierarchy, duties arising out of the position are clearly mentioned, as well as there is sustainable state of working process, the employees feel safe, as they are in a predictable situation. Such companies seek out punctual people who prefer stability to risk.

The picture is different, when a separate working group is created for solving each problem. The employees often move from one group to another and work on different projects. These companies work in a highly competitive market, and the period of the product is short (for example in the field of high technologies). They need mobile and versatile people who are not inclined to monotony.

Consulting companies work in a different way, as their structure is to support customers. Therefore here they search other staff.

In a number of companies professional internal criteria are developed, which help in matters of staff organization.

They generally describe the professional and personal requirements introduced to the candidates, as well as the evaluation criteria, ways of qualification enhancement and promotion are described. Those criteria can be changed if the company changes its functions and nature, problems and goals.

KPI (Key Performance Indicators)-is a system of indicators by which the employer evaluates his employees. The goal of the system is to regulate the work of different units so as not to interfere with the operation of the company.

In overall business every employee has its contribution, works to achieve his goals and as a result gets premium.

From the point of view of systematic approach this means that the activity’s optimization of one’s workplace should be subject to the problem of the activity’s optimization of the whole company.

It is known that the management process is impossible without feedback, however, the impulse must be measured and evaluated to match the power of management influence.

The system should show the employee, how his premium can be changed, when appropriate indicators of his work quality change. For example, sales manager should know that over- completing the sales plan by 10 % will provide him with a 5 % premium.

It is found that KPI is more effective in large companies where it is more difficult to differentiate each employee’s contribution to the overall business compared to small ones.

Besides measuring the efficiency directly, KPI have a number of other advantages;
  1. The analysis of KPI allows to identify the advantages and disadvantages of the organization, evaluate the of power of factor’s influence which prevent the achievements of goals.
  2. Clarity and simplicity of job evaluation. Every employee knows why he/she is paid. Subjectivity in the evaluation of activity results is excluded.
  3. Sustainability, absence of unpredictable fluctuations in pay rules, and accordingly, predictability of activity results for the next few years.
  4. Employee’s personal responsibility for the quality and volume of the work.
  5. The possibility of innovation influence evaluation, rationalization, work organization.
The role of evaluation in candidate selection process is difficult to overestimate. It is not accidental, that its consequences lead to the dismissal up to higher positions.