Performance Appraisal

1
Performance Appraisal
The identification, measurement, and management
of human performance in organizations.
2
8-5
Performance Evaluation and Management

• Performance Management efforts to align 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
• Personnel rating
• Merit rating

• Performance appraisal
• Employee appraisal
• Employee evaluation

3
Potential Purposes of Evaluation
9-3
Development
HR and Employment Planning
Motivation
Legal Compliance
HRM Research
Communications
4
A Model of Performance Appraisal
Identification
Measurement
Management
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Performance EvaluationCriteria of Evaluation
9-5

• Reliability
• Relevance
• Sensitivity
• Practicality

Combination of criteria using activities and
results is desirable
6
Who Should Evaluate the Employee?
9-6
MANY POSSIBILITIES

• Immediate supervisor only (typical)
• Committee of several supervisors
• Employees peers (coworkers)
• Employees subordinates
• Someone outside the immediate work situation
• Self-evaluation

7

9-11
Management By Objectives(MBO)

• Some Potential 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
  organization-wide systems

• Some Potential Pitfalls
• 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

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Potential Evaluation Problems
9-12

• Opposition to evaluation
• 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.
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Solutions to Evaluation Problem
9-13

• AVOIDING PROBLEMS
• WITH EMPLOYEES
• 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

• ELIMINATING
• RATER ERRORS
• Train raters on how to evaluate others well
• Grant ample opportunities to observe behavior
• Motivate raters to use the system effectively

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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.

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Trait Appraisal, Behavioral Appraisal, and
Outcome Appraisal Instruments
Trait Appraisal
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.
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Sample Trait Scales
Rate each worker using the scales below.
Decisiveness 1 2 3 4 5
6 7 Very low Moderate Very
high
Reliability 1 2 3 4 5
6 7 Very low Moderate Very
high
Energy 1 2 3 4 5
6 7 Very low Moderate Very high
Loyalty 1 2 3 4 5
6 7 Very low Moderate Very high
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Evaluation of Major Appraisal Formats
Legal Defensibility
Appraisal Format
Administrative Use
Developmental Use
- - 0
Absolute Relative Trait Behavior Outcome
0 0 0
0 - --
Good
Very good
-- Very Poor
- Poor
0 Unclear or mixed
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Who Should Evaluate the Employee?
9-7
360-DEGREE FEEDBACK

• Alternative to traditional supervisor-only
  approaches
• Uses multiple
• appraisers
• Not a panacea

Supervisors
Self- appraisal
Peers
Subordinates
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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

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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

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Communication Skills for the Appraisal Interview
Skills
Benefit
Description
Example
Rater sits with a slight forward, comfortable
lean of the upper body, maintains eye contact,
and speaks in a steady and soothing voice. Open
questions encourage information sharing and are
most appropriate early in an interview or in
complex, ambiguous situations. Closed question
evoke short responses and are useful for focusing
and clarifying.
Nonverbal Attending Open and Closed
Questions
Suggests interest and active listening. Appro
priate use of open and closed questions can
ensure an effective flow of communication during
an interview.
While the ratee is speaking, the rater looks at
the person and gently nods head to signal
interest. Open questions start with words
like Could, Would, How, What, or
Why. Closed questions start with words
like Did, Is, or Are.
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Communication Skills for the Appraisal Interview
(Cont.)
Skills
Benefit
Description
Example
Pay attention to cultural differences that may
influence how another person communicates and how
you might communicate with others.
Cultural Sensitivity
Communication is more effective when you are
sensitive to the possible influence of cultural
differences.
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.
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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.