Performance Management

and Appraisal

Dr. Feba Thomas

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Basics of Performance Appraisal

• The performance appraisal process

1. Sets work standards

2. Assesses performance
3. Provides feedback to the employee

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 Why Appraise Performance?

Five reasons:
1. Used for pay, promotion, and retention decisions
2. Links performance management to company goals
3. The manager can correct deficiencies and reinforce
strengths
4. With appraisals employees can review career plans
5. Training needs are identified

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Defining the Employee’s Goals and
Performance Standards
1. Goals
2. Job dimensions or Traits
3. Behaviors or Competencies

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 Improving Performance: HR as a Profit
Center
Setting Performance Goals at Ball Corporation

Ball Corporation supplies metal packaging to customers such as food

processors and paint manufacturers worldwide. The management team at
one Ball plant concluded that it could improve plant performance by
instituting an improved process for setting goals and for ensuring that the
plant’s employees’ behaviors were in synch with these goals. The new
program began by training plant leaders on how to improve performance,
and on setting and communicating daily performance goals. They in turn
communicated and tracked daily goal attainment by distributing team
scorecards to the plant’s work teams. Plant employees received special
coaching and training to ensure they had the skills required for achieving
the goals. According to management, within 12 months the plant increased
production by 84 million cans, reduced customer complaints by 50%, and
obtained a return on investment of more than $3 million.

Talk About it (Discussion): Explain what performance management

behaviors the Ball program included.

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Who Should Do the Appraising?

1. Peer Appraisals
• Crowd appraisals
• Virtual games
2. Rating Committees
3. Self Ratings
4. Appraisal by Subordinates
5. 360-Degree Feedback

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Traditional Tools for Appraising
Performance (1 of 2)

1. Graphic Rating Scale -is the simplest and most popular method for
appraising performance

2. Alternation Ranking Method -ranking employees from best to

worst on a particular trait, choosing highest, then lowest, until all are ranked

3. Paired Comparison Method -ranks employees by making a chart of

all possible pairs of the employees for each trait and indicating which is the better
employee of the pair.

4. Forced Distribution Method -is similar to grading on a curve;

predetermined percentages of rates are placed in various performance categories.

5. Critical Incident Method -involves keeping a record of uncommonly

good or undesirable examples of an employee’s work-related behavior and reviewing it
with the employee at predetermined times.

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Traditional Tools for Appraising
Performance (2 of 2)

6. Narrative Forms -The supervisor’s narrative assessment helps the

employee understand where his or her performance was good or bad, and how to
improve that performance.

7. Behaviorally Anchored Rating Scale (B A R S) -–

An appraisal method that aims at combining the benefits of narrative critical incidents
and quantified ratings by anchoring a quantified scale with specific narrative examples
of good and poor performance.

8. Management by Objectives (M B O) -MBO requires the

manager to set specific measurable, organizationally relevant goals with each employee,
and then periodically discuss the latter’s progress toward these goals.

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Appraisal in Practice

• Using Forms, Installed Software, or Cloud-Based

Systems
• Computerization expedites appraisals -components of talent
management systems that also include, for instance, applicant tracking systems.

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Electronic Performance Monitoring

• Electronic performance monitoring (E P M)

systems
• use computer network technology to allow
managers to monitor their employees’ computers.

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Additional Techniques

• Conversation days -When employees at Juniper Networks Inc.

expressed concerns about their annual performance reviews and the lack of
positive feedback, Juniper changed the process. Instead of once-a-year
performance reviews, there are now semiannual “conversation days.” The stress in
these manager-employee conversations is on areas for improvement and growth,
and on setting stretch goals that align with the employee’s career interests. There
are no explicit performance ratings. Whether most other companies could do
without more formal appraisals is probably doubtful.

• Using multiple methods -In practice, most use a rating form

that merges several approaches.

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Dealing with Rater Error Appraisal
Problems
• Potential rating problems
• Unclear Standards occurs when an appraisal is too open to
interpretation. The way to fix this problem is to include descriptive phrases
defining each trait.

• The Halo Effect in performance appraisal occurs when a supervisor’s

rating of a subordinate on one trait biases the rating of that person on other
traits.

• Central Tendency is a tendency to rate all employees the same way, such
as rating them all average.

• Leniency/Strictness is the problem that occurs when a supervisor has a

tendency to rate all subordinates either high or low.

• Recency Effects means letting what the employee has done recently
blind you to what his or her performance has been over the year. The main
solution is to accumulate critical incidents all year long.
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The Need for Fairness (1 of 4)

Figure 9-10: Checklist of Best Practices for Administering

Fair Performance Appraisals
• Base the performance review on duties and
standards from a job analysis.
• Try to base the performance review on
observable job behaviors or objective
performance data.
• Make it clear ahead of time what your
performance expectations are.
• Use a standardized performance review
procedure for all employees.

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The Need for Fairness (2 of 4)

• Make sure whoever conducts the reviews has

frequent opportunities to observe the employee’s
job performance.
• Either use multiple raters or have the rater’s
supervisor evaluate the appraisal results.
• Include an appeals mechanism.
• Document the appraisal review process and results.

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The Need for Fairness (3 of 4)

• Discuss the appraisal results with the employee.

• Let the employees know ahead of time how you’re going to
conduct the reviews.
• Let the employee provide input regarding your assessment
of him or her.
• Indicate what the employee needs to do to improve.

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The Need for Fairness (4 of 4)

• Train the supervisors who will be doing the appraisals. Make

sure they understand the procedure to use, how problems
(like leniency and strictness) arise, and how to deal with
them.

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Managing the Appraisal Interview
• Appraisal Interview – an interview in which the supervisor
and subordinate review the appraisal and make plans to
remedy deficiencies and reinforce strengths.

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How to Conduct the Appraisal Interview

• Preparation -means understanding the problem and the employee.

Here the manager will watch the employee to see what he or she is doing,
review productivity data, and observe the workflow.

• Planning
• Steps to Take
• Measure Success
• Date to Complete
• Coaching

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Guidelines to Conducting the Appraisal
Interview
• Objective data
• Don’t get personal
• Encouragement
• Agreement
1. Talk in terms of objective work data. Use examples such as absences, tardiness, and productivity.
2. Don’t get personal. Don’t say, “You’re too slow producing those reports.” Instead, compare the person’s
performance to a standard. (“These reports should normally be done within 10 days.”) Similarly, don’t
compare the person’s performance to that of other people. (“He’s quicker than you are.”)
3. Encourage the person to talk. Stop and listen to what the person is saying; ask open-ended questions
(such as, “What do you think we can do to improve the situation?”). Use a command such as “Go on.” Restate
the person’s last point as a question, as in, “You don’t think you can get the job done?”
4. Get agreement. Make sure the person leaves knowing specifically what he or she is doing right and
doing wrong and with agreement on how things will be improved, and has an action plan with targets and
dates.

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How to Handle a Defensive Subordinate

• Recognize behavior
• Never attack defenses
• Postpone action
• Recognize limitations

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How to Criticize a Subordinate

• Maintain his or her dignity

• Discuss in private
• Provide constructive criticism
• Provide examples
• Give feedback periodically
• Be objective and free of personal bias
• Get agreement on a plan

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How to Handle a Formal Written Warning

• Weak performance may require a formal written warning.

• Serve two purposes:
• to shake your employee out of his or her bad habits, and
• to help you defend your rating to your own boss and (if needed) to
the courts.

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Employee Engagement Guide for Managers

• Use the Appraisal Interview to Build Engagement

• Show how efforts contribute to the “big picture”
• Emphasize the meaningfulness
• Be candid and objective
• Share what he or she needs to do a good job
• Don’t unnecessarily emphasize the negatives
• Listen to their ideas
• Discuss in the context of his or her career
• Ensure interviewee views the appraisal as fair

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Performance Management

• Performance appraisal is fine in theory, but in

practice, appraisals don’t always go smoothly.
• Performance Management
• the continuous process of identifying, measuring, and
developing the performance of individuals and teams and
aligning their performance with the organization’s goals.

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Total Quality Management and
Performance Appraisal
• Maximizing customer satisfaction through
continuous improvements
• Cease Dependence
• Continuous Improvement
• Extensive Training
• Drive out Fear
• Remove Barriers
• Self Improvement

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The Manager’s Role in Performance
Management
• Having the right philosophy
• Having the right on-the-job behaviors

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