Performance Appraisal: The Identification, Measurement, and Management of Human Performance in Organizations

Performance
Appraisal
The identification, measurement,
and management of human
performance in organizations.
8-5
Performance
Evaluation
Performance
Management: efforts to align
and
Management
employee performance with the firms goals
Performance Evaluation: efforts to determine
the extent to which an employee performs
work effectively. Also known as:
Performance review Performance appraisal
Personnel rating
Employee appraisal
Merit rating
Employee evaluation
2
9-3
Potential Purposes of
Evaluation
Development
Motivation
Communications
HR and
Employment
Planning
Legal
Compliance
HRM
Research
3
A Model of Performance
Appraisal
Identification
Measurement
Management
9-5
Performance
Evaluation:
Reliability
Criteria of
Relevance
Sensitivity
Practicality
Evaluation
Combination of criteria using activities

and results is desirable
5
9-6
Who Should Evaluate

the Employee?
MANY POSSIBILITIES
Immediate supervisor only (typical)

Committee of several supervisors
Employees peers (coworkers)
Employees subordinates
Someone outside the immediate work
situation
Self-evaluation
9-11
Management By
Objectives
Some Potential
Some Potential
(MBO)
Pitfalls
Benefits
Encourages employee
participation
Enables subordinates to
exercise self-control and
manage own performance
Useful for training and career
development purposes
May be used as an impetus
for changing organizationwide systems
Managers may not be

adequately prepared for MBO
Demands active employee
and manager involvement
Too much emphasis on the
short run and results
Failure to tie results to rewards
Too much time and paperwork
Too many and conflicting
objectives set
9-12
Potential Evaluation
Opposition to evaluation
Problems
System design and operating problems

Rater problems include:
Problems with
standards of
evaluation
Halo effects
Leniency or harshness
Central tendency errors

Recency of events errors
Contrast effects
Personal bias/stereotyping
Major problems exist more with

the rater than the technique used.
9-13
Solutions to
Evaluation Problem
AVOIDING PROBLEMS
WITH EMPLOYEES
ELIMINATING
RATER ERRORS
Train raters on how to
evaluate others well
Grant ample
opportunities to
observe behavior
Motivate raters to use
the system effectively
Train employees in
performance evaluation
methods
Simplify reporting forms
Communicate how evaluation
information is be used
Allow employees to
participate
in system development
Build equity into the system
The Benefits of
Performance Appraisal
Employer Perspective:
Despite imperfect measurement techniques, individual differences

in performance can make a difference to company performance.
Documentation of performance appraisal and feedback may be

needed for legal defense.
Appraisal provides a rational basis for constructing a bonus or

merit system.
Appraisal dimensions and standards can help to implement

strategic goals and clarify performance expectations.
Providing individual feedback is part of the performance

management process.
Despite the traditional focus on the individual, appraisal criteria

can include teamwork and the teams can be the focus of the
appraisal.
Trait Appraisal, Behavioral

Appraisal, and Outcome
Trait Appraisal
Appraisal
Instruments
An appraisal tool that asks a supervisor to make judgments
about worker characteristics that tend to be consistent and
enduring.
Behavioral Appraisal
An appraisal tool that asks managers to assess a workers
behaviors.
Outcome Appraisal
An appraisal tool that asks managers to assess the results
achieved by workers.
Sample Trait Scales

Rate each worker using the scales below.
Decisiveness:
1
2
Very low
4
Moderate
6
7
Very high
Reliability:
1
2
Very low
4
Moderate
6
7
Very high
Energy:
1
2
Very low
4
Moderate
6
7
Very high
Loyalty:
1
2
Very low
4
Moderate
6
7
Very high
Evaluation of Major
Appraisal Formats
Appraisal
Format
Administrative
Use
Legal
Developmental
Defensibility
Use
Absolute
Relative
++
Trait
--
Behavior
++
Outcome
-- Very Poor
- Poor
0 Unclear or mixed
+ Good
++ Very good
9-7
Who Should Evaluate

the Employee?
360-DEGREE FEEDBACK
Alternative to
Supervisors
traditional supervisoronly approaches
Uses multiple
Selfappraisal
appraisers
Peers
Not a panacea
Subordinates
Challenges to Effective
Performance
Measurement
Rater errors and bias
The influence of liking

Organizational politics
Whether to focus on the
individual or the group
Legal issues
Legal Issues
A recent analysis of 295 court cases involving

performance appraisal found judges decisions to be
favorably influenced by the following additional factors:
Use of job analysis
Providing written instructions
Allowing employees to review appraisal results
Agreement among multiple raters (if more than

one was used)
The presence of rater training
Skills
Communication Skills for

the Appraisal Interview
Benefit
Description
Example
Nonverbal
Attending
Suggests interest
and active listening.
Rater sits with a slight

forward, comfortable
lean of the upper body,
maintains eye contact,
and speaks in a steady
and soothing voice.
While the ratee is

speaking, the rater
looks at the person
and gently nods head
to signal interest.
Open and
Closed
Questions
Appropriate use of
open and closed
questions can
ensure an effective
flow of
communication
during an interview.
Open questions
encourage information
sharing and are most
appropriate early in an
interview or in complex,
ambiguous situations.
Open questions
start with words like
Could, Would,
How, What, or
Why.
Closed question evoke

short responses and are
useful for focusing and
clarifying.
Closed questions
start with words like
Did, Is, or Are.
Skills
Communication Skills for

the Appraisal Interview
Benefit
Description
Example
(Cont.)
Cultural
Sensitivity
Communication is more
effective when you are
sensitive to the possible
influence of cultural
differences.
Pay attention to cultural

differences that may
influence how another
person communicates
and how you might
communicate with
others.
When dealing with

employees from a
culture that is highly
formal, avoid
addressing them in the
workplace by their first
names. Doing so may
signal disrespect.
Key Steps in Implementing

360 Appraisal
Top management communicates the goals of and need for

360 appraisal.
Employees and managers are involved in the development of

the appraisal criteria and appraisal process.
Employees are trained in how to give and receive feedback.
Employees are informed of the nature of the 360 appraisal

instrument and process.
The 360 system undergoes pilot testing in one part of the

organization.
Management continuously reinforces the goals of the 360

appraisal and is ready to change the process when necessary.

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Performance

Combination of criteria using activities

Who Should Evaluate

Immediate supervisor only (typical)

Managers may not be

System design and operating problems

Central tendency errors

Major problems exist more with

Despite imperfect measurement techniques, individual differences

Documentation of performance appraisal and feedback may be

Appraisal provides a rational basis for constructing a bonus or

Appraisal dimensions and standards can help to implement

Providing individual feedback is part of the performance

Despite the traditional focus on the individual, appraisal criteria

Trait Appraisal, Behavioral

Sample Trait Scales

Who Should Evaluate

The influence of liking

A recent analysis of 295 court cases involving

Use of job analysis

Providing written instructions

Allowing employees to review appraisal results

Agreement among multiple raters (if more than

The presence of rater training

Communication Skills for

Rater sits with a slight

While the ratee is

Closed question evoke

Communication Skills for

Pay attention to cultural

When dealing with

Key Steps in Implementing

Top management communicates the goals of and need for

Employees and managers are involved in the development of

Employees are trained in how to give and receive feedback.

Employees are informed of the nature of the 360 appraisal

The 360 system undergoes pilot testing in one part of the

Management continuously reinforces the goals of the 360

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