How are they doing? The Application of Data Envelopment Analysis to Develop a Strategic Performance Appraisal on Individual Level

Purpose We outline the standards for “good” performance measures and propose the Data Envelopment Analysis (DEA) as a method for performance measurement on individual level. Methodology/approach Using the example of a German cooperative bank with a cohort of 40 employees, we apply a multi-stage DEA approach to measure employee performance and report on the results. Based on those results a DEA-based approach for a strategic performance appraisal process is introduced. Findings We illustrate that DEA provides clear feedback information on an individual level, which enables management to accurately identify fields of specific improvement. Research implications The proposed approach for a strategic performance appraisal process is yet of theoretical nature. Consequently, the practical implementation of this approach is a purpose of further research.