This action might not be possible to undo. Are you sure you want to continue?
͞Standard performance appraisals Practices In Banks͟
Huma Hafeez Khan
MR.RAJA RUB NAWAZ
15-Banglore Town ,Off-Shahra-e-Faisal .Karachi 75530
APPROVAL SHEET /LETTER FROM COMPANY
I Huma Hafez Khan who is the student 8
semester in Preston University was
assigned in project which was basically a reaseach project titled ͞Stndard
PERFORMANCE Appraisals Practices In Banks͟ by Mr. Raja Rub Nawaz who
wasguiding me throughout my project and was supervised by the management
:the project has now been completed and for which I need your cooperation to
please except my project report that I have made after my survey with complete
results and analysis .I shall be highly thankful to you if you could approve my
Date Signature of the
I AM HIGHLY THANK FULL TO ALLAH THAT HE GAVE ME COURAGE AND STRANTH TO
COMPLETE MY PROJECT I WOULD LIKE TO THANK SIR .RAJA RUB NAWAZ WHO ASSIGNED ME
THIS PROJECT THAT HELP ME TO LEARN ABOUT DIFFERENT THING WHICH ARE RELATED TO MY
WORK PLACE AND JOB AND ALSO PROVIDE GUIIDENESS AND KNOWLEDGE ABOUT MY
PROJECT.I WOULD ALSO THANK TO MY FATHER MR.ABDUL HAFEEZ KHAN WHO HAS GIVEN ME
A LOT OF SUPPORTAND GUIDNES DURING MY PROJECT
TABLE OF CONTENTS
Figure No. Description Page No
1 Executive summary 1
2 Introduction 2
3 Theory about service quality 3-6
4 Analysis of survey 7-50
5 Hypothesis 52-59
6 Result of hypothesis 52-59
7 Questionnaire of expectation 60-61
8 Questionnaire of perception 62-63
9 References 64
PRACTICES OF STANDARD PERFORMANCE APPRAISALS IN BANKS
To achieve sustainable growth and poverty reduction, developing countries need strong
institutional capacity. The World Bank devotes significant resources to building stronger
institutions and organizations in client countries. It helps build capacity through a variety
of means, including technical assistance, studies, equipment, and training. This
evaluation focuses on the efficacy of one of the primary instruments for capacity
building²training individuals so they are better able to contribute to their country¶s
development goals .was found that most Bank-financed training resulted in individual
participant learning, but improved the capacity of client institutions and organizations to
achieve development objectives only about half the time.1 Where training did not
succeed, it was because its design was flawed or insufficient attention was paid to the
organizational and institutional context in which training took place. The Bank could
significantly improve the impact of its training investments through (i)the development of
training design guidance to enhance quality assurance and (ii) by making available
resource staff with expertise in training design to Bank project managers .Training
provided by the World Bank Institute(WBI) was found to be insufficiently targeted
toclient needs, and inadequately embedded inbroader capacity-building strategies, to
substantiallyimpact development capacity. If the WBI isexpected (as stated in its
mandate) to play acapacity-building role, its training processesneed to be substantially
reengineered.Over the past decade, the Bank has financed approximately$720
million in training annually, over 90percent through projects and the remainder
throughthe WBI. The importance of training to thachievement of development
objectives goeswell beyond these dollar terms, however.is one of the primary means by
whichthe Bank helps build the capacity of countries toreduce poverty. Moreover, it is
often fundamentalto the success of other investments. Withouttrained road maintenance
crews, highwayscrumble. Without trained teachers, schoolbuildings remain empty.
Overall, in an estimated60 percent of projects, training is either integralto the
achievement of the goals of one or morecomponents or supportive of all
The Bank supports training in two ways. First,many investment projects include
dedicatedtraining components or training activitiesembedded within project
components. Second,the Bank has a separate unit devoted to capacitybuilding²the
WBI, which aims to ³build skillsamong groups of individuals involved inperforming
tasks,and also to strengthen theorganizations in which they work, and the sociopolitical
environment within which theyoperate.´
This evaluation examined the extent to whichBank-financed training contributed to
capacitybuilding. Most Bank-financed training was foundto result in individual
participant learning, but onlyabout half resulted in substantial changes to
workplacebehavior or enhanced development capacity.
USING TRAINING TO BUILD CAPACITY FOR DEVELOPMENT
Project-based training was more successful thanWBI training in this regard. Where
learning didnot result in changed workplace performance²and thus did not have an
impact on developmentcapacity²this could be attributed to one of threereasons:
insufficient participant understanding ofhow to apply learning in the
workplace,inadequate incentives or resources for implementationof learning, or
inadequate targeting oflearning to organizational needs.For example, inadequate
incentives forimplementation of learning were found in theAdministrative Capacity
Building projectreviewed in Burkina Faso. Government humanresourcemanagers were
trained in performanceevaluationtechniques long before the decisionwas made to
implement performance-basedevaluation in government. Making the leap from
individual learning to workplace performanceoutcomes and, subsequently, to
developmentcapacity impact requires both good training designand an
appropriate organizational and institutionalcontext in which to apply the learning
from training.Training success is predicated on adequate design.
Good training design was found to involve threecharacteristics:
Use of appropriate and professional pedagogic
design, including opportunities to practice
Provision of follow-up support to trainees to
help them implement knowledge and skills
Targeting of training content, anchored in diagnosis
of institutional and/or organizational capacity
gaps, formal assessment of participant
training needs, and strategic participant
Much of the Bank-financed training reviewed wasfound to have design flaws that
affected results.While over 90 percent of survey respondentsfound their training to be
interesting and lecturersto be of high quality, half stated that courselength was too short
for the topics covered, andthat the course did not devote significant time topractical
exercises and projects. Adequate followfollowupsupport was provided to project
trainees inhalf of the 29 training programs reviewed in fieldstudies, and to WBI trainees
in only two of theeight cases reviewed. Finally, of the nearly half ofsurvey respondents
who stated that training hadless than a substantial impact on key functions of
their work, over a third said it was because
training lacked relevance to key work functions.
This last issue is indicative of inadequate targeting
of training content.
Targeting of training content was found to be the
most important design factor driving training
success. For training to be well targeted, organizational
and institutional capacity gaps need to
be correctly diagnosed, specific training needs
must be assessed, and participants should be
selected in a strategic manner. Project-based
training reviewed in field missions performed
better than WBI training in all of these targeting
processes. Projects were better targeted mainly
because they have more resources to conduct
capacity assessments and because they involve
clients more fully in the design of interventions.
The WBI does not generally mandate or finance
in-depth diagnosis of capacity gaps or assessment
of training needs and does not consistently
consult with clients on training objectives and
The organizational context for implementation of
knowledge and skills learned was a second
important determinant of successful capacity
building through training. Training builds development
capacity only when trainees have adequate
resources and incentives to implement learning
in the workplace. One-third of training participants
surveyed stated that they lacked sufficient
material resources to implement learning in the
workplace. Some trainees also lacked incentives
to implement learning. Insufficient incentives
were found to be particularly problematic in two
contexts. First, in decentralized training
programs like in-service teacher training, the
central government¶s commitment to training
goals did not necessarily translate into strong
commitment among regional government
officials, training participants, or their managers.
Second, in public sectors of countries with
weaker government capacity, low salary levels
and lack of merit-based promotion systems
reduced the incentives of staff to pursue their
own professional development.
Even where resources or incentives were initially
lacking, training succeeded as long as there was
strong client commitment to training goals and
adequate support was given to addressing related
workplace capacity gaps. For example, the WBI¶s
partnership with the Bangladesh central bank
resulted in the creation of a highly effective policy
analysis unit. Successful outcomes could be
attributed to the strong support of the governor
of the central bank for the program, as well as the
integration of training with technical assistance
and the financing of equipment and salaries
through a related World Bank±financed project.
Field studies revealed examples of successful
World Bank±financed training activities provided
by local training institutions, client governments,
international consultants and training providers,
as well as the WBI. In all cases, training succeeded
when its design was good and the organizational
and institutional capacity context was adequately
addressed in conjunction with training.
The WBI¶s training procedures and practices do not
sufficiently anchor training within comprehensive
capacity-building strategies, and are thus not
generally conducive to building sustainable
capacity. The WBI lacks systemic mechanisms for
in-depth diagnosis of organizational capacity
gaps or formal needs assessment of training
participants. It also lacks standardized
procedures for meaningful direct consultation
with clients on training needs and priorities. In
most cases, the WBI does not directly provide
follow-up support to facilitate workplace
implementation of learning. It also does not
systematically link its training programs to
complementary capacity-building support
provided by operations or other partners.
The quality of project-financed training is uneven due
to the lack of explicit design standards for all World
Bank training activities, and lack of expert support
for training activities embedded in projects. Bankfinanced
projects provide an opportunity for
effective use of training as part of an integrated
capacity-building strategy. The project model can
ensure that training is integrated into a comprehensive,
multiyear relationship with the target
organization, financing a range of complementary
capacity-building interventions. However,
the lack of expert support for training design and
defined design standards makes it difficult for
project teams to adequately supervise the design
and implementation of training. This also
prevents quality assurance mechanisms from
being applied to training activities.
The Bank does not adequately monitor or evaluate
training results. Most project-based and WBI
training reviewed in field studies did not include
sufficient monitoring and evaluation of training.
Project Implementation Completion Reports
seldom report on more than the numbers of
persons trained and include little or no information
on training results in terms of the workplace
behavior of participants and impact on development
capacity, even where training is fundamental
to the achievement of project goals. The WBI
systematically monitors at the program level only
the number of participant training days and
participant satisfaction, neither of which
provides information on the impact of training
on capacity-building objectives. Hence, clients,
project task teams, and WBI task managers
generally lack sufficient information to detect
training weaknesses and improve training
performance where necessary.
The Bank can enhance the vital contribution of
training to client capacity building by ensuring
that the training it supports
Is linked to the Bank¶s support for development
objectives in client countries,
Is embedded within broader capacity-building
strategies that provide complementary support
for the implementation of learning, and
Conforms with best practice in training design.
The following three recommendations are
intended to lead to this outcome:
1. The Bank needs to develop guidance and
quality criteria for the design and implementation
of training, to enable quality assurance
and monitoring and evaluation of all its training
support. This guidance should be applied
to all training financed by the Bank, including
training that is directly provided by units such
as the WBI. Design guidance should include
Diagnosis and training-needs assessment
requirements for training initiation;
Participant selection criteria;
Standards for the use of practical exercises
and other active-learning techniques within
Use of follow-up support; and
Provisions for monitoring and evaluation, including
specification of performance-change
objectives and key monitorable indicators.
2. The Bank could improve the quality and impact
of training by making available to its Regional
staff and borrowers, resource persons with
technical expertise in the design, implementation,
and monitoring and evaluation of
3. Management must clarify the WBI¶s mandate
on provision of training with capacity-building
goals. If the WBI is to play a capacity-building
role in client countries, its training processes
should be substantially reengineered to ensure
that training is likely to contribute to sustainable
change. New WBI training processes
should ensure that all training meets the following
Is based on a comprehensive capacity assessment
of the target organization(s)/institution(
s)²done in cooperation with
clients²identifying (i) clear and specific
capacity-building objectives; (ii) the human,
institutional, and organizational capacity
support that is necessary in order to achieve
these objectives; and (iii) measurable indicators
Is undertaken after work is done with operations
and partners to identify and confirm,
in advance, what resources for all
capacity-building support are required to
achieve the objectives, including, where
needed, (i) multiyear training programs,
(ii) follow-up technical assistance, and (iii)
organizational and institutional support
measures, such as policy support and financing
of implementation of learning; and
Is subject to external quality review and
evaluation of results.
PRACTICES OF STANDARD PERFORMANCE APPRAISALS IN BNAKS
Performance appraisal (PA) is one of the important components in the rational and systemic
process of human resource management. The information obtained through performance
appraisal provides foundations for recruiting and selecting new hires, training and development
of existing staff, and motivating and maintaining a quality work force by adequately and
properly rewarding their performance. Without a reliable performance appraisal system, a human
resource management system falls apart, resulting in the total waste of the valuable human assets
a company has.
There are two primary purposes of performance appraisal: evaluative and developmental. The
evaluative purpose is intended to inform people of their performance standing. The collected
performance data are frequently used to reward high performance and to punish poor
performance. The developmental purpose is intended to identify problems in employees
performing the assigned task. The collected performance data are used to provide necessary skill
training or professional development.
The purpose of performance appraisal must be clearly communicated both to raters and ratees,
because their reactions to the appraisal process are significantly different depending on the
intended purpose. Failure to inform about the purpose or misleading information about the
purpose may result in inaccurate and biased appraisal reports.
Critical Criteria of Developing a Pa System
In order for performance appraisal information to be useful, the PA system must be able to
consistently produce reliable and valid results. Measurement items in the performance appraisal
system must be designed in such a way that the results of rating are consistent regardless of the
raters and the timing of the assessment.
Another critical criterion in developing a PA system is the validity of the measurements. It is
important to make sure that the appraisal items are really measuring the intended performance or
target behavior. If they are not, the PA system encourages the wrong kind of work behaviors and
produces unintended, frequently negative, organizational outcomes. For instance, if the number
of traffic violation tickets issued is an item in performance appraisal of police officers, it
encourages them to sit on a corner of a street and pull over as many violators as possible during
heavy traffic hours. The true purpose of a police force, which is public safety, may become
secondary to issuing a large number of tickets for many officers.
What to Evaluate
The first important step in developing a PA system is to determine which aspects of performance
to evaluate. The most frequently used appraisal criteria are traits, behaviors, and task outcomes.
Traits. Many employees are assessed according to their traits, such as personality, aptitudes,
attitudes, skills, and abilities. Traits are relatively easy to assess once a rater gets to know ratees.
But traits are not always directly related to job per formance. Trait-based assessment lacks
validity and thus frequently raises legal questions.
Behaviors. For many jobs, performance is so broadly defined or so conceptual in nature² such
as ensuring public safety in the police de partment²that it is hard to come up with reliable
performance measures. In such cases, desirable behaviors can be identified and assessed in the
belief that such behaviors lead to successful performance. Such behavior-focused assessment
encourages employees to adopt desirable behavioral patterns in the workplace.
Task outcomes. When information about task outcomes is readily available, it is the most
appropriate factor to use in evaluating performance. When an organization has a clear and
measurable goal as in the case of a sales force, this approach is recommended. However, it has
its own pitfalls. There is a problem if employee behaviors are not directly related to the task out-
come. Too narrow a focus on measuring out-come only sometimes results in unintended negative
consequences. When sales staff narrowly focus on target sales figures to increase their
performance measure, for example, they are encouraged to help a few large-volume customers
and to ignore many smaller buyers. This may result in poor customer service on the floor.
The most common raters of performance are employees' immediate supervisors, who are usually
in the best position to know and observe the employees' job performance. They are also
responsible for employees' work. Their evaluation is a powerful tool in motivating employees to
achieve successful and timely completion of tasks. However, as a result of working together over
a long time with the same employees, the immediate supervisor may build up a fixed impression
about each employee and use it every time he or she has to evaluate performance.
Some companies find that subordinates are in an excellent position to observe and evaluate their
managers' performance, especially when it comes to measuring effective management of their
department. While there is merit in asking subordinates to evaluate how they are managed, such
evaluation may turn into a popularity contest. Accurate and objective assessment may not be
obtained if employees are fearful of possible retaliation from their supervisors. Anonymity of the
evaluators is key to the successful use of subordinates for objective evaluation.
Other raters who are frequently used in some companies include peers, customers, and the
employees themselves. Peer evaluation is particularly useful when teamwork and collegiality are
important to successful task performance. Peer pressure is sometimes a powerful motivator in
encouraging teamwork among members. Customer satisfaction is vital to a company's success
and can be used in performance appraisal. Many companies systematically collect performance
information from customers, typically through anonymous surveys and interviews. Self-
assessment is also a useful means, especially when the performance appraisal is intended to
identify the training and development needs of potential employees.
Each of these raters contributes to assessing certain aspects of performance. Since job
performance is multidimensional in nature, it is important to use different raters or a combination
of multiple raters depending on the goal of a performance appraisal system. This multirater
evaluation, or so-called 360-degree feedback system, is becoming increasingly popular among
many American corporations, including General Electric, AT&T, Warner Lambert, and Mobil
To ensure the reliability and validity of a PA system, a company must design the evaluation
process carefully and develop appropriate measuring scales. Among the many assessment
methods developed by human resource management experts, commonly used ones include the
Graphic Rating Scale, Behaviorally Anchored Rating Scale, Narrative Technique, Critical-
Incident Method, Multiperson Comparison Method, Forced Choice Method, and Forced
The Graphic Rating Scale is the simplest and most popular method for performance appraisal. As
shown on Figure 1, the Graphic Rating Scale offers a list of areas related to job performance. A
manager rates each employee on the listed areas according to a numerical score. Although this
method is relatively simple and quick to complete, some experts question its validity and
reliability. Without elaborate description, appraisal items and scores are subject to various
interpretations of raters.
In order to overcome pitfalls of the Graphic Rating Scale, numerous other methods have been
developed. The Behaviorally Anchored Rating Scale (BARS), illustrated in Figure 2, offers
rating scales for actual behaviors that exemplify various levels of performance. Because raters
check off specific behavior patterns of a ratee, PA results of BARS are more reliable and valid
than those of the Graphic Rating Scale. Human resource managers must carefully analyze each
job and develop behavior patterns pertinent to various levels of performance for the job before
they use the BARS.
The Narrative Technique is a written essay about an employee's job performance prepared by a
rater. The essay typically describes the rate's job-related behaviors and performance. Without
standard performance description, it is a cumbersome task for raters to write an essay for several
employees. For example, a rater can be asked to describe the activities, achievements, and level
of performance of the employee in a completely open-ended format (unstructured narration).
Alternatively, the rater can be pro vided with some structure to use in the evaluation; for
example, "Describe briefly the activities, achievements, and level of performance of the staff
member in the following areas: (1) work habits, (2) planning and organizing the tasks, (3)
management skills, communications, and development of others."
The performance review form at a college asks an evaluator to describe the activities,
accomplishments, and creative works of the professors in the areas of (1) teaching and (2)
research/creative activity. A dean of the college writes about the professor's teaching
performance: "Dr. Michael Johnson has been nominated by his students for the Outstanding
Teacher Award several times during his service. He introduced many teaching innovations into
his classes. His teaching record is exemplary." In the area of creative activity, the dean writes:
"Dr. Johnson has a strong and productive research record with a defined focus in organizational
leadership. His research has been recognized with several awards given by professional
organizations. His creative activity is exemplary."
Similar to the Narrative Technique is the Critical-Incident Method, which involves keeping a
running log of effective and ineffective job performance. For example, the PA log of an
employee, Mr. Campbell, contains Unsatisfactory Incidents as follows: 1/28/2000: "Refused to
try a new work procedure," and 2/15/2000: "Argued with a customer about the origin of error in
the paperwork." The log also contains Satisfactory Incidents as follows: 1/20/2000: "Volunteered
to help Charlie complete his assignment in time"; 2/19/2000: "Trained new employees in safety
The Multiperson Comparison Method asks raters to compare one person's performance with that
of one or more others. It is intended to effectively eliminate the possibility of giving the same
rating to all employees. In order to separate performance scores among multiple employees, the
Forced Choice or Forced Distribution Methods are adopted. Raters must choose one high
performer from the list of employees or distribute certain scores to employees at different ranks.
For example, only one top person will get 40 percent, two second-rank persons 20 percent, and
the bottom one person 10 percent. The Paired Comparison Method is a special case of the
Multiperson Comparison Method. Everyone in the evaluation pool is compared against everyone
else as a pair and recorded "plus" or "minus" when the target ratee is better or worse,
respectively, than his/her comparison. The final performance ranks are determined by the
number of positives. Figure 3 provides for an example.
Subjectivity and Objectivity
Accuracy is critical to performance appraisal. In order to obtain accurate performance
information, raters must provide objective and unbiased ratings of employees. But, because it is
almost impossible to develop a perfectly accurate performance checklist, managers' subjective
opinions are frequently called for. Many companies use some combination of subjective and
objective assessment for actual performance appraisal.
Yet there are numerous problems in the actual assessment of employee performance, mainly due
to rater bias. Some raters tend to rate all employees at the positive end rather than to spread them
throughout the performance scale; this is called "leniency." Alternatively, "central tendency",
which places most employees in the middle of the scale, also raises concern about possible
Another common error in performance appraisal is the halo effect. This occurs when a manager's
general impression of an employee, after observing one aspect of performance, influences his/her
judgment on other aspects of the employee's performance.
Researchers have found that personal preferences, prejudices, appearances, first impressions,
race, and gender can influence many performance appraisals. Sometimes raters' personal
opinions or political motives creep into the performance appraisal process. They intentionally
inflate or deflate performance ratings of certain employees as a way to punish them or promote
them out of the department.
Using unreliable and unvalidated performance appraisals may cause a legal problem. A number
of court cases have ruled that the performance appraisal systems used by many companies were
discriminatory and in violation of Title VII of the Civil Rights Act.
In order to avoid legal problems, companies must develop an appraisal system based on careful
job analysis and establish its reliability and validity. They must give clear written instructions to
raters for completing evaluations and provide them adequate training if necessary. The company
must allow employees to review the results of the appraisals. Human resources departments must
play a key role in the development and implementation of an effective performance appraisal
Bernardin, H. J., Kane, J. S., Ross, S., Spina, J. D., and Johnson, D. L. (1996). "Performance
Appraisal Design, Development, and Implementation." In Handbook of Human Resource
Management, Gerald R. Ferris, Sherman D. Rosen, and Darold T. Barnum ed., Cambridge,
Mass: Blackwell, 462-493.
Cascio, W. F. (1998). Applied Psychology in Human Resource Management, 5th ed. Upper
Saddle River, NJ: Prentice-Hall.
Cawley, B. D., Keeping, L. M., and Levy, P. E. (1998). "Participation in the Performance
Appraisal Process and Employee Reactions: A Meta-Analytic Review of Field Investigations,"
Journal of Applied Psychology, 83(4):615-633.
DeNisi, A. S., Robbins, T. L., and Summers, T. P. (1997). "Organization, Processing, and Use of
Performance Information: a Cognitive Role for Appraisal Instruments," Journal of Applied
Social Psychology, 27:1884-1905.
Greller, M. M. (1998). "Participation in the Performance Appraisal Review: Inflexible Manager
Behavior and Variable Worker Needs," Human Relations, vol. 51, no. 8, pp 1061-1083.
Grote, D. (1996). The Complete Guide to Performance Appraisal, New York: AMACOM Book
Illgen, Daniel R., Barnes-Farrell, Janet L., and McKellin, David B. (1993). "Performance
Appraisal Process Research in the 1980s: What Has It Contributed to Appraisals in Use?"
Organizational Behavior and Human Decision Processes, 54:321-368.
Jawahar, I. M., and Stone, T. H. (1997). "Influence of Raters' Self-Consciousness and Appraisal
Purpose on Leniency and Accuracy of Performance Ratings" Psychological Reports, 80:323-
Jourdan, J. L., and Nasis, D. B. (1992). "Preferences for Performance Appraisal Based on
Method Used, Type of Rater, and Purpose of Evaluation" Psychological Report, 70:963-969.
Kaplan, R. E. (1993). "360-Degree Feedback Plus: Boosting the Power of Co-Worker Ratings
for Executives." Human Resource Management, 32:299-314.
Kravitz, D. A., and Balzer, W. K. (1992). "Context Effects in Performance Appraisal: a
Methodological Critique and Empirical Study" Journal of Applied Psychology, 77:24-31.
Maurer, T. J., Raju, N. S., and Collins, W. C. (1998). "Peer and Subordinates Performance
Appraisal Measurement Equivalence" Journal of Applied Psychology, 83,5:693-902.
Mount, M. K., Judge, J. A., Scullen, S. E., Sytsma, M. R., and Hezlett, S. A. (1998). "Trait,
Rater, and Level Effects in 360-Degree Performance," Personnel Psychology, 51,3:557.
Peach, E. B., and Buckley, M. R. (1993). Pay for Performance. In H. J. Bernardin and J. Russell
(eds.), Human Resource Management: An Experiential Approach. New York: McGraw-Hill,
Sanches, J. I., De La Torre, P. (1996). "A Second Look at the Relationship Between Rating and
Behavioral Accuracy in Performance Appraisal," Journal of Applied Psychology, 81:3-10.
Schneier, C. E. and R. W. Beatty, "Developing Behaviorally Anchored Rating Scales (BARS)"
The Personnel Administrator, August (1979),60.
Smith, H. P. (1997). Performance Appraisal and Human Development, Reading, MA: Addison
and Wesley Longman Inc.
Wynne, B. (1996). Performance Appraisal: A Practical Guide, Philadelphia: Technical
y 1 Aims
y 2 Methods
y 3 Criticism
y 4 See also
y 5 References
y 6 Sources
y 7 External links
Generally, the aims of a performance appraisal are to:
y Give an employees feedback on performance
y Identify employee training needs
y Document criteria used to allocate organizational rewards
y Form a basis for personnel decisions: salary increases, promotions, disciplinary actions,
y Provide the opportunity for organizational diagnosis and development
y Facilitate communication between employee and administration
y Validate selection techniques and human resource policies to meet federal Equal
Employment Opportunity requirements.
A common approach to assessing performance is to use a numerical or scalar rating system
whereby managers are asked to score an individual against a number of objectives/attributes. In
some companies, employees receive assessments from their manager, peers, subordinates, and
customers, while also performing a self assessment. This is known as a 360-degree appraisal and
forms good communication patterns.
The most popular methods used in the performance appraisal process include the following:
y Management by objectives
y 360-degree appraisal
y Behavioral observation scale
y Behaviorally anchored rating scales
Trait-based systems, which rely on factors such as integrity and conscientiousness, are also
commonly used by businesses. The scientific literature on the subject provides evidence that
assessing employees on factors such as these should be avoided. The reasons for this are two-
1) Because trait-based systems are by definition based on personality traits, they make it difficult
for a manager to provide feedback that can cause positive change in employee performance. This
is caused by the fact that personality dimensions are for the most part static, and while an
employee can change a specific behavior they cannot change their personality. For example, a
person who lacks integrity may stop lying to a manager because they have been caught, but they
still have low integrity and are likely to lie again when the threat of being caught is gone.
2) Trait-based systems, because they are vague, are more easily influenced by office politics,
causing them to be less reliable as a source of information on an employee's true performance.
The vagueness of these instruments allows managers to fill them out based on who they want
to/feel should get a raise, rather than basing scores on specific behaviors employees
should/should not be engaging in. These systems are also more likely to leave a company open to
discrimination claims because a manager can make biased decisions without having to back them
up with specific behavioral information.
Performance appraisals are an instrument for social control. They are annual discussions,
avoided more often than held, in which one adult identifies for another adult three improvement
areas to work on over the next twelve months. You can soften them all you want, call them
development discussions, have them on a regular basis, have the subordinate identify the
improvement areas instead of the boss, and discuss values. None of this changes the basic
transaction... If the intent of the appraisal is learning, it is not going to happen when the context
of the dialogue is evaluation and judgment.
Need to Appraise Performance
To assess the ability of the individual in order to make the best use of his talent in the present job
y Management by Objectives (MBO) is a process in which a manager and an employee
agree upon a set of specific performance goals, or objectives, and jointly develop a plan
for reaching them. The objectives must be clear and achievable, and the plan must
include a time frame and evaluation criteria. For example, a salesperson might set a goal
of increasing customer orders by 15 percent in dollar terms over the course of a year.
y MBO is primarily used as a tool for strategic planning, employee motivation, and
performance enhancement. It is intended to improve communication between employees
and management, increase employee understanding of company goals, focus employee
efforts upon organizational objectives, and provide a concrete link between pay and
performance. An important factor in an MBO system is its emphasis on the results
achieved by employees rather than the activities performed in their jobs.
y Implementing an Mbo Program
y To be successful, an MBO program should be part of a small business's overall system of
planning and goal setting. The first step in implementing MBO is to establish long-range
company goals in such areas as sales, competitive positioning, human resource
development, etc. A small business owner may find it helpful to begin by defining the
company's current business and looking for emerging customer needs or market trends
that may require adaptation. Such long-range planning provides a framework for charting
the company's future staffing levels, marketing approaches, financing needs, product
development focus, and facility and equipment usage.
y The next step in establishing an MBO system is to use these long-range plans to
determine company-wide goals for the current year. Then the company goals can be
broken down further into goals for different departments, and eventually into goals for
individual employees. As goal-setting filters down through the organization, special care
must be taken to ensure that individual and department goals all support the long-range
objectives of the business. Ideally, a small business's managers should be involved in
formulating the company's long-range goals. This approach may increase their
commitment to achieving the goals, allow them to communicate the goals clearly to
employees, and help them to create their own short-range goals to support the company
y At a minimum, a successful MBO program requires each employee to produce five to ten
specific, measurable goals. In addition to a statement of the goal itself, each goal should
be supported with a means of measurement and a series of steps toward completion.
These goals should be proposed to the employee's manager in writing, discussed, and
approved. It is the manager's responsibility to make sure that all employee goals are
consistent with the department and company goals. The manager also must compare the
employee's performance with his or her goals on a regular basis in order to identify any
problems and take corrective action as needed.
y Formulating goals is not an easy task for employees, and most people do not master it
immediately. Small business owners may find it helpful to begin the process by asking
employees and managers to define their jobs and list their major responsibilities. Then the
employees and managers can create a goal or goals based upon each responsibility and
decide how to measure their own performance in terms of results. In the Small Business
Administration publication Planning and Goal Setting for Small Business, Raymond F.
Pelissier recommended having employees create a miniature work plan for each goal. A
work plan would include the goal itself, the measurement terms, any major problems
anticipated in meeting the goal, a series of work steps toward meeting the goal (with
completion dates), and the company goal to which the personal goal relates.
y Small business owners may also find it helpful to break down employee goal setting into
categories. The first category, regular goals, would include objectives related to the
activities that make up an employee's major responsibilities. Examples of regular goals
might include improving efficiency or the amount and quality of work produced. The
second category, problem-solving goals, should define and eliminate any major problems
the employee encounters in performing his or her job. Another category is innovation,
which should include goals that apply original ideas to company problems. The final
category is development goals, which should include those goals related to personal
growth or the development of employees. Dividing goal setting into categories often
helps employees think about their jobs in new ways and acts to release them from the
tendency to create activity-based goals.
y Another requirement for any successful MBO program is that it provide for a regular
review of employee progress toward meeting goals. This review can take place either
monthly or quarterly. When the review uncovers employee performance that is below
expectations, managers should try to identify the problem, assign responsibility for
correcting it, and make a note in the MBO files.
y Small Business Owner Involvement
y Given that MBO represents an unusual way of thinking about job performance for many
employees, small business owners may find it best to introduce MBO programs gradually
and to include a formal training component. A small business's managers can be
introduced to MBO through a classroom seminar taught by the small business owner or
by an outside consultant. Either way, it is important that the managers be allowed to
express any doubts and reservations they may have, and that the training include
preparation of an actual goal by each participant. When MBO is brought back to the
small business, it may be best to start slowly, with each employee only preparing a few
goals. This approach will allow employees to learn to prepare goals that are achievable,
develop ways to measure their own performance, and anticipate problems that will
prevent them from attaining their goals.
y Another factor determining the success of MBO programs is the direct involvement of
the small business owner. Pelissier noted that the small business owner needs to
champion the MBO system from the beginning, as well as set an example for the
company's managers, in order for it to succeed. Since managers have a natural tendency
to focus their attention upon their own functions rather than on the goals of the overall
organization, it can be difficult to educate them about MBO. It is also important for the
small business owner to remain patient during the implementation phase: in fact, Pelissier
claimed that it may take three to four years before an MBO program creates quantifiable
results in a small business. As David Dinesh and Elaine Palmer indicated in their article
for Management Decision, partial implementation is one of the major potential problems
associated with MBO programs.
y Implemented correctly, however, MBO can provide a number of benefits to a small
business. For example, MBO may help employees understand how their performance will
be evaluated and measured. In addition, by allowing them to contribute to goal setting, it
may increase the motivation and productivity of a small business's employees. MBO also
stands to provide a small business's employees with the means to prioritize their work on
a daily basis. Although employee performance evaluation is still a complex task under an
MBO system, MBO can also provide an objective basis for evaluation. However, it is
important to note that an employee's failure to meet preestablished goals can be attributed
to many things besides personal failure. For example, the failure to meet goals could
result from setting the wrong objectives, not taking into account company restrictions that
may impinge upon performance, establishing an improper measures of progress, or a
combination of all of these factors.
y Overall, establishing an MBO system in a small business may be difficult, but it is
usually worth it. The most difficult aspect of implementing MBO may be simply getting
people to think in terms of results rather than activities. Even when an MBO system is
implemented well, a small business may encounter problems. For example, employees
may set low goals to ensure attainment. Similarly, managers' objectives may focus on the
attainment of short-term rather than long-term goals. Finally, employees and managers
alike may fall victim to confusion and frustration. Some of the most common reasons for
the failure of an MBO program include a lack of involvement among the top management
of a small business, inadequate goal setting on a company-wide basis, implementation of
an MBO system that occurs too rapidly, or the failure to instruct a company's managers
and employees in the basics of MBO. But even though establishing an MBO program
may be problematic, it can also offer significant rewards to small businesses.
y Further Reading:
y Bateman, Thomas S., and Carl P. Zeithaml. Management: Function and Strategy.
Homewood, IL: Irwin, 1990.
y Dinesh, David, and Elaine Palmer. "Management by Objectives and Balanced Scorecard:
Will Rome Fall Again?" Management Decision. July-August 1998.
y Pelissier, Raymond F. Planning and Goal Setting for Small Business. Washington, D.C.:
Small Business Administration, n.d.
In human resources or industrial/organizational psychology, 360-degree feedback, also known
as "multi-rater feedback," "multisource feedback," or "multisource assessment," is feedback that
comes from all around an employee. "360" refers to the 360 degrees in a circle, with an
individual figuratively in the center of the circle. Feedback is provided by subordinates, peers,
and supervisors. It also includes a self-assessment and, in some cases, feedback from external
sources such as customers and suppliers or other interested stakeholders. It may be contrasted
with "upward feedback," where managers are given feedback by their direct reports, or a
"traditional performance appraisal," where the employees are most often reviewed only by their
The results from 360-degree feedback are often used by the person receiving the feedback to
plan training and development. Results are also used by some organizations in making
administrative decisions, such as pay or promotion. When this is the case, the 360 assessment is
for evaluation purposes, and is sometimes called a "360-degree review." However, there is a
great deal of controversy as to whether 360-degree feedback should be used exclusively for
development purposes, or should be used for appraisal purposes as well (Waldman et al., 1998).
There is also controversy regarding whether 360-degree feedback improves employee
performance, and it has even been suggested that it may decrease shareholder value (Pfau &
y 1 History
y 2 Accuracy
y 3 Results
y 4 References
The German Military first began gathering feedback from multiple sources in order to evaluate
performance during World War II (Fleenor & Prince, 1997). Also during this time period, others
explored the use of multi-rater feedback via the concept of T-groups.
One of the earliest recorded uses of surveys to gather information about employees occurred in
the 1950s at Esso Research and Engineering Company (Bracken, Dalton, Jako, McCauley, &
Pollman, 1997). From there, the idea of 360-degree feedback gained momentum, and by the
1990s most Human Resources and Organization Development professionals understood the
concept. The problem was that collecting and collating the feedback demanded a paper-based
effort including either complex manual calculations or lengthy delays. The first led to despair on
the part of practitioners; the second to a gradual erosion of commitment by recipients.
Multi-rater feedback use steadily increased in popularity, due largely to the use of the internet in
conducting web-based surveys (Atkins & Wood, 2002). Today, studies suggest that over one-
third of U.S. companies use some type of multisource feedback (Bracken, Timmereck, &
Church, 2001a). Others claim that this estimate is closer to 90% of all Fortune 500 firms
(Edwards & Ewen, 1996). In recent years, internet-based services have become the norm, with a
growing menu of useful features (e.g., multi languages, comparative reporting, and aggregate
reporting) (Bracken, Summers, & Fleenor, 1998).
A study on the patterns of rater accuracy shows that length of time that a rater has known the
person being rated has the most significant effect on the accuracy of a 360-degree review. The
study shows that subjects in the group ³known for one to three years´ are the most accurate,
followed by ³known for less than one year,´ followed by ³known for three to five years´ and the
least accurate being ³known for more than five years.´ The study concludes that the most
accurate ratings come from knowing the person long enough to get past first impressions, but not
so long as to begin to generalize favorably (Eichinger, 2004).
It has been suggested that multi-rater assessments often generate conflicting opinions, and that
there may be no way to determine whose feedback is accurate (Vinson, 1996). Studies have also
indicated that self-ratings are generally significantly higher than the ratings of others (Lublin,
1994; Yammarino & Atwater, 1993; Nowack, 1992).
Several studies (Hazucha et al., 1993; London & Wohlers, 1991; Walker & Smither, 1999)
indicate that the use of 360-degree feedback helps people improve performance. In a 5-year
Walker and Smither (1999) study, no improvement in overall ratings was found between the 1st
and 2nd year, but higher scores were noted between 2nd and 3rd and 3rd and 4th years. A study
by Reilly et al. (1996) found that performance increased between the 1st and 2nd
administrations, and sustained this improvement 2 years later. Additional studies show that 360
feedback may be predictive of future performance (Maylett & Riboldi, 2007).
Some authors maintain that 360 processes are much too complex to make blanket generalizations
about their effectiveness (Bracken, Timmreck, Fleenor, & Summers, 2001b; Smither, London, &
Reilly, 2005). Smither et al. (2005) suggest, "We therefore think that it is time for researchers
and practitioners to ask, 'Under what conditions and for whom is multisource feedback likely to
be beneficial?'(rather than asking 'Does multisource feedback work?') (p. 60)." Their meta-
analysis of 24 longitudinal studies looks at individual and organizational moderators that point to
many potential determinants of behavior change, including positive feedback orientation,
positive reactions to feedback, goal setting, and taking action.
Bracken et al. (2001b) and Bracken and Timmreck (2001) focus on process features that are
likely to also have major effects in creating behavior change and offer best practices in those
areas. Some of these factors have been researched and been shown to have significant impact.
Greguras and Robie (1998) document how the number of raters used in each rater category
(direct report, peer, manager) affects the reliability of the feedback, with direct reports being the
least reliable and therefore requiring more participation. Multiple pieces of research (Bracken &
Paul, 1993; Kaiser & Kaplan, 2006; Caputo & Roch, 2009; English, Rose, & McClellan, 2009)
have demonstrated that the response scale can have a major effect on the results, and some
response scales are indeed better than others. Goldsmith and Underhill (2001) report the
powerful influence of the participant behavior of following up with raters to discuss their results.
Other potentially powerful moderators of behavior change include how raters are selected,
manager approval, instrument quality (reliability and validity), rater training and orientation,
participant training, manager (supervisor) training, coaching, integration with HR systems, and
accountability (Bracken et al., 2001b).
Others indicate that the use of multi-rater assessment may not improve company performance. A
2001 Watson Wyatt study found that 360-degree feedback was associated with a 10.6 percent
decrease in market value. John Sullivan, professor of HR management at San Francisco State
University, states that "there is no data showing that [360-degree feedback] actually improves
productivity, increases retention, decreases grievances, or is superior to forced ranking and
standard performance appraisal systems. It sounds good, but there is no proof it works." (Pfau &
Kay, 2002) Similarly, Seifert, Yukl, and McDonald (2003) state that there is little evidence that
the multi-rater process results in change.
Additional studies (Maylett, 2005) found no correlation between an employee's multi-rater
assessment scores and his or her top-down performance appraisal scores (provided by the
person's supervisor). This research suggests that 360-degree feedback and performance
appraisals get at different outcomes, and that both 360-degree feedback and traditional
performance appraisals should be used in evaluating overall performance.
1. ^ Maylett, Tracy M., EdD, Pepperdine Univ, 2005 Abstract, Retrieved May 15 2009
y Atkins, P., & Wood, R. (2002). Self-versus others' ratings as predictors of assessment
center ratings: Validation evidence for 360-degree feedback programs. Personnel
Psychology, 55(4), 871-904.
y Bracken, D.W., and Paul, K.B. (1993). The effects of scale type and demographics on
upward feedback. Paper presented at the Society for Industrial and Organizational
Society Annual Conference, May, San Francisco, CA.
y Bracken, D.W., Dalton, M.A., Jako, R.A., McCauley, C.D., & Pollman, V.A. (1997).
Should 360-degree feedback be used only for developmental purposes? Greensboro, NC:
Center for Creative Leadership.
y Bracken, D.W., Summers, L., & Fleenor, J.W. (1998) High tech 360. Training &
y Bracken, D.W., Timmereck, C.W., & Church, A.H. (2001a). The handbook of
multisource feedback. San Francisco: Jossey-Bass.
y Bracken, D.W., Timmreck, C.W., Fleenor, J.W., & Summers, L. (2001b). 360 degree
feedback from another angle.Human Resource Management, 40 (1), 3-20.
y Bracken, D.W., and Timmreck, C.W. (2001) Guidelines for multisource feedback when
used for decision making. In Bracken, D.W., Timmreck, C.W., and Church, A.H. The
Handbook of Multisource Feedback. San Francisco: Jossey-Bass.
y Caputo, P. and Roch, S. (2009) Rating formats and perceptions of performance appraisal
fairness. Paper presented at the Society for Industrial and Organizational Psychology
Annual Conference, April, New Orleans, LA.
y Edwards, Mark R., & Ewen, Ann J. (1996). 360° Feedback: The powerful new model for
Employee Assessment & performance improvement. New York: AMACOM American
y Eichinger, Robert. (2004). Patterns of Rater Accuracy in 360-degree Feedback.
Perspectives, 27, 23-25.
y English, A.E, Rose, D.S. & McClellan (2009). Rating scale label effects on leniency bias
in 360-degree feedback.Paper presented at the Society for Industrial and Organizational
Psychology Annual Conference, April, New Orleans, LA.
y Fleenor, J. W., & Prince, J. M. (1997). Using 360-degree feedback in organizations: An
annotated bibliography. Greensboro, NC: Center for Creative Leadership.
y Goldsmith, M., & Underhill, B.O. (2001). Multisource feeedback for executive
development. In Bracken, D.W., Timmreck, C.W., and Church, A.H. The Handbook of
Multisource Feedback. San Francisco: Jossey-Bass.
y Greguras, G.J., & Robie, C. (1998). A new look at within-source interrater reliability of
360-degree feedback ratings. Journal of Applied Psychology, 83, 960-968.
y Hazucha, J. F., Hezlett, S. A., & Schneider, R. J. (1993). The impact of 360-degree
feedback on management skills development. Human Resource Management, 32(2-3),
y Kaiser, R.B., and Kaplan, R.E. (2006). Are all scales created equal? Paper presented at
the Society for Industrial and Organizational Psychology Annual Conference, May,
y Maylett, T. M., & Riboldi, J. (2007). Using 360° Feedback to Predict Performance.
Training + Development, September, 48-52.
y Maylett, Tracy (2005). The Relationship Of Multi-rater Feedback To Traditional
Performance Appraisal. Doctoral Dissertation, Pepperdine University, Los Angeles,
y Pfau, B. & Kay, I. (2002). Does 360-degree feedback negatively affect company
performance? Studies show that 360-degree feedback may do more harm than good.
What's the problem? HRMagazine, Jun 2002. 47, 6; 54-60.
y Reilly, R., Smither, J.W., & Vasilopoulos, N. (1996). A longitudinal study of upward
feedback. Personnel Psychology, 49(3), 599-612.
y Seifert, C., Yukl, G., & McDonald, R. (2003). Effects of multisource feedback and a
feedback facilitator on the influence of behavior of managers toward subordinates.
Journal of Applied Psychology, 88(3), 561-569.
y Smither, J.W., London, M., and Reilly, R.R. (2005). Does performance improve
following multisource feedback? A theoretical model, meta-analysis and review of
empirical findings. Personnel Psychology, 58, 33-66.
y Vinson, M. (1996, April). The pros and cons of 360-degree feedback: Making it work.
Training and Development, April, 11-12.
y Waldman, A. D., Atwater, L. E., & Antonioni, D. (1998). Has 360-degree feedback gone
amok? The Academy of Management Executive, 12(2), 86-94.
y Walker, A., & Smither, J.W. (1999). A five-year study of upward feedback: What
managers do with their results matters. Personnel Psychology, 52(2), 393-423.
y Yammarino, F. J., & Atwater, L. E. (1993). Self-perception accuracy: Implications for
human resource management. Human Resource Management, 32(2&3), 231-235.
In psychology research on behaviorism, Behaviorally Anchored Rating Scales (BARS) are
scales used to report performance. 'BARS are normally presented vertically with scale points
ranging from five to nine.'It is an appraisal method that aims to combine the benefits of
narratives, critical incident incidents, and quantified ratings by anchoring a quantified scale with
specific narrative examples of good or poor performance.
BARS Behaviorally Anchored Rating scales is a method that combines elements of the
traditional rating scales and critical incidents methods. In order to construct BARS seven steps
are followed as mentioned below
1. Examples of effective and ineffective behavior related to job are collected from people
with knowledge of job.
2. These behaviors are converted in to performance dimensions.
3. A group of participants will be asked to reclassify the incidents. At this stage the
incidents for which there is not 75% agreement are discarded as being too subjective.
4. Then the above mentioned incidents are rated from one to nine on a scale.
5. Finally about six to seven incidents for each performance dimensions- all meeting
retranslation and standard deviation criteria will be used as BARS.
This is by far the best method used for a performance appraisal method
This is the official Performance Appraisal method of Midas.
1. ^ Management of Human Resources, Gary Dessler
This psychology-related article is a stub. You can help Wikipedia by expanding it.
In psychology research on behaviorism, Behaviorally Anchored Rating Scales (BARS) are scales
used to report performance. BARS are normally presented vertically with scale points ranging
from five to nine.
It is an appraisal method that aims to combine the benefits of narratives, critical incident
incidents, and quantified ratings by anchoring a quantified scale with specific narrative examples
of good or poor performance. 
BARS Behaviorally Anchored Rating scales is a method that combines elements of the
traditional rating scales and critical incidents methods. In order to construct BARS seven steps
are followed as mentioned below
1. Examples of effective and ineffective behavior related to job are
collected from people with knowledge of job.
2. These behaviors are converted in to performance dimensions.
3. A group of participants will be asked to reclassify the incidents. At
this stage the incidents for which there is not 75% agreement are discarded
as being too subjective.
4. Then the above mentioned incidents are rated from one to nine on a
5. Finally about six to seven incidents for each performance dimensions-
all meeting retranslation and standard deviation criteria will be used as
This is by far the best method used for a performance appraisal method
This is the official Performance Appraisal method of Midas.
This entry is from Wikipedia, the leading user-contributed encyclopedia. It may not have been
reviewed by professional editors (see full disclaimer)
Donate to Wikimedia
Frequently asked consumer questions
about appraisers and appraising
y What is an appraisal?
y What is an appraiser?
y What's the difference between an appraiser and a real estate agent?
y Who can do appraisals?
y What do appraisers really do?
y What about appraiser licensing?
y What are appraisers' professional standards?
y What state laws are appraisers subject to?
y Who regulates appraisers?
y Appraisers and lenders - what is the appraiser's role?
y Why do some appraisers have to walk through my house? Last time, they just drove by.
y What should I have ready when the appraiser comes to my property?
y Can I use this appraisal for another lender?
y Who "owns" the appraisal?
y If I'm paying for the report, will you send me a copy?
y When do you need your own appraiser?
y What should you look for when hiring an appraiser?
y How can you find a qualified appraiser?
y What about fees?
y What are "MAI appraisers"?
y What do the letters after appraisers' names mean?
y How can you become an appraiser?
y What if you don't agree with an appraisal?
y What about appraising paintings, jewelry, machinery, etc.?
y What about appraising businesses?
What is an appraisal? An appraisal is defined as an opinion of value by professional appraisal standards
(Uniform Standards of Professional Appraisal Practice, see below). Appraisers consider appraising to be
both an art and a science. You probably have an opinion of the value of your home. Your opinion and a
professional appraiser's opinion may be the same. But appraisers are required to be objective and
impartial in their analyses and opinions. A professional appraiser has been trained in appraisal
methodology and looks at how your home compares with sales and listings of homes similar to yours,
considers many factors such as price trends and proximity to a freeway, complies with professional
standards, and usually completes a written report.
Back to top of page
What is an appraiser? An appraiser is a real estate professional who specializes in providing opinions of
value (appraisals). Most appraisers are real estate appraisers, who specialize in real property. Other
appraisers specialize in other types of property, such as gems or machinery and equipment. Professional
appraisers have taken courses and been supervised during their training period. State licensed and
certified appraisers must pass a test and have completed basic education and continuing education. Most
states also require a period of supervision, usually 2,000 hours before being able to do appraisals "on
Back to top of page
What's the difference between an appraiser and a real estate agent? Real estate agents are
salespersons. They also provide appraisals to assist buyers and sellers, and to make listing
presentations. Typically no fee is charged for these appraisals.
I frequently recommend getting "appraisals" from two or three real estate agents if a home owner is
thinking about putting their home on the market. However, some home owners want an independent
appraisal, particularly if they already have a buyer or are selling it themselves.
Some real estate agents provide appraisals for other purposes such divorce or "evaluations" for mortgage
lending purposes. A fee may or may not be charged for these appraisals. If the real estate agent is
providing an appraisal, that is not part of their role as a salesperson, and is a Realtor member of the
National Association of Realtors (NAR), NAR regulations require adhering to professional appraisal
standards of the Uniform Standards of Professional Appraisal Practice (see below).
Back to top of page
Who can do appraisals? In most states, anyone can do appraisals for non-lending purposes. However,
only state licensed and certified appraisers are subject to discipline by their state regulatory agency.
Professional appraisers have training and experience in appraisal methods and techniques.
Back to top of page
What do appraisers really do? When I inspect a home for an appraisal, the inspection is really the "tip
of the iceberg" of the work I do. Before I go to the house, I research public records information, get a plat
map, check the zoning and flood data, and printout sales and listings of similar homes. During the
inspection, I make a drawing of the home and other improvements such as a swimming pool and make
notes on physical characteristics such as floor coverings and built in appliances. I check the site
boundaries against my plat map. I look at the adjacent properties. After completing the inspection, I select
comparable sales and listings and take photos of them. Back at the office, I contact real estate agents for
more information on the sales terms, condition of the home, etc., reconcile conflicting information from
different data sources, and write up the report. Total time? About 6 to 8 hours, on average. I work in the
San Francisco Bay Area, where data is computerized and plentiful. Appraisers working in rural areas or
with less data availability will take longer to complete an appraisal.
Appraisals of income producing property are much more time consuming as more research and analysis
is required. The time can vary from a few days on a small apartment building to many weeks for a large,
For many years, the appraisal process has been seen by many as mysterious. This is partly the fault of
appraisers, as we have not informed the public of what we really do.
Back to top of page
What about appraiser licensing? Because of the savings and loan crisis in the late 1980s, appraisal
licensing was set up in every state by the mid 1990s. A few states are "mandatory" where all appraisals
must be done by licensed or certified appraisers, but most only require licensed or certified appraisers for
mortgage loans over $250,000 (an other state and federal requirements). A few states licensed
appraisers prior to that time.
State certified appraisers (residential and general) have higher requirements than state licensed
appraisers. For more information on requirements, Appraisal Foundation Web site at
www.appraisalfoundation.org Residential appraisers can appraise one to four family properties, and
sometimes small apartment or commercial properties. General appraisers can appraise all types of
Back to top of page
What are appraisers' professional standards? All state licensed and certified appraisers must adhere
to the Uniform Standards of Professional Appraisal Practice (USPAP). A copy of the current USPAP can
be found on the Appraisal Foundation Web site at www.appraisalfoundation.org. Go to the Appraisal
Standards Board section, then click on USPAP. The Appraisal Foundation is a national nonprofit
organization that determines USPAP and educational requirements for state licensed and certified
appraisers. Members of appraisal professional organizations, whether or not they are licensed or certified,
are required to adhere to USPAP.
Back to top of page
What state laws are appraisers subject to? State licensed and certified appraisers are also subject to
their state's Appraisal Regulator's requirements. When doing work for lenders, they are subject to the
lender's requirements. For links to your state's appraisal regulatory agency, try the Appraisal
Subcommittee site at www.asc.gov. Look for a link on the left side of the screen. Or, try your state's
government Web site. Search for appraisers or appraisal.
Back to top of page
Who regulates appraisers? State licensed and certified appraisers are regulated by their appraiser state
regulatory agency who enforce the Uniform Standards of Professional Appraisal Practice as well as state
and federal regulations.
Back to top of page
Appraisers and lenders - what is the appraiser's role? Most appraisals in this country are done for
mortgage lenders. Most appraisers work for lenders, particularly if they specialize in appraising homes.
The appraiser's role is to provide an objective, unbiased opinion of value to the lender. Appraisers work
for the lenders, not the owners, buyers, or sellers, even if one of them pays for the appraisal by writing a
check to the appraiser. Federal banking regulations require that the lender order the appraisal. This was a
result of regulations coming from the Savings and Loan scandals in the late 1980s.
Back to top of page
Why do some appraisers have to walk through my house? Last time, they just drove by. The type
of appraisal needed for a mortgage loan depends on many risk factors, such as loan to value, loan
amount, borrower's credit, etc. The determination is made by the lender. Some loans are made using
Automated Valuation Models, with no "human" appraiser involved.
Back to top of page
What should I have ready when the appraiser comes to my property? No one knows your property
as well as you! Make a list of all the special features, such as a remodeled kitchen or new roof, or at least
tell the appraiser about them. Let the appraiser know if a nearby home was listed and sold, as sometimes
sales don't show up on the local MLS or other data sources.
Can I use this appraisal for another lender? Sometimes appraisals can be used for another lender.
The original lender must release the appraisal for use with a new lender. Also, the appraisal must be
relatively recent, typically no more than 6 months old.
Back to top of page
Who "owns" the appraisal? The appraisal is "owned" by the client who ordered it (engaged the
appraiser). If a lender ordered it, the lender owns it, even if you paid for it. If you ordered it for nonlending
purposes, you own it.
If I'm paying for the report, will you send me a copy? By federal law, you are entitled to receive a copy
of the appraisal from your lender. Unfortunately, appraisers are not able to provide you a copy of the
Back to top of page
When do you need your own appraiser? When getting a mortgage loan, the lender selects the
appraiser. On rare occasions, an out of the area lender will as the borrower to find an appraiser.
Property owners, buyers, and sellers, or their attorneys, often hire their own appraisers for :
y Determining a fair sales price
y Property disputes (views, easements, etc.)
y Eminent domain (government agency "takes" property)
y PMI removal (private mortgage insurance)
y Partnership dissolution
Back to top of page
What should you look for when hiring an appraiser? You need to consider the purpose of the
appraisal and the type of property. Try to hire an appraiser with experience in the property type,
geographic area of the property, and for similar purposes. Most experienced appraisers are state
certified. A few very experienced appraisers are not state certified because they don't work for lenders.
If it is your home and lender-related such as PMI removal, select an appraiser who does residential
lender appraisals in your city or nearby, and is state licensed or certified.
If it is a home and for non-lending purposes, select an appraiser with experience in appraisals for that
purpose, who has appraised similar homes in that area (neighborhood or city). If it is for tax purposes, be
sure to select a well qualified appraiser to minimize hassles with the IRS. Using a state certified appraiser,
at the minimum, is a good idea, unless the appraiser is well known, with many years of experience, and
Back to top of page
How can you find a qualified appraiser? Start with a list of appraisers names. Try asking at your local
bank, asking real estate agents, looking in the Yellow Pages (paper or online such as www.bigbook.com
), or appraisal association Web sites or online appraiser directories. Some appraisers have Web sites.
Use a search engine such as www.yahoo.com and search for "appraisal and St. Louis" as an example.
For homes, look in the Employee Relocation Councils Appraiser list. Appraisers who do relocation
appraisals (when an employee is relocating to another location and is selling his or her home) take extra
time to research both listings and sales, as well as market conditions and what is needed to make your
home more marketable, if you are selling your home. If you're in a rural area with very few appraisers, try
the National Appraiser Registry, which lists all licensed and certified appraisers.
When you have your list, ask each appraiser about his or her experience with your property type and
geographic area. For example, you inherited a small house in another state. A neighbor wants to buy it.
Ask the appraiser how any homes he or se has appraised in the city in the past 3 months. Or, you need
the value on your home six months ago, for estate purposes. Ask the appraiser if he or she is familiar with
"retrospective" appraisals. If the appraiser sounds qualified, but you are uncertain, have him or her fax
you a resume with references.
What about fees? Residential appraisal fees for homes tend to fall in a narrow price range, so I advise
shopping for the most qualified appraiser who can complete the appraisal in your required time period. I
don't recommend shopping for the lowest fee. In contrast, fees for other types of properties can vary
widely, so be sure to get several bids from qualified appraisers.
What are "MAI appraisers"? The most widely known professional designation is the MAI designation
from the Appraisal Institute. MAIs typically specialize in income producing properties. Most don't appraise
homes, but some do. If an MAI doesn't appraise homes, he or she may have a residential specialist in the
company, or will refer to an appraiser specializing in homes. For more information, go to the Appraisal
Institute Web site at www.appraisalinstitute.org.The Appraisal Institute has two other designations for
commercial appraisers, the SRPA (which I have) and the SREA, but the MAI is most widely known.
What do the letters after appraisers' names mean? Prior to state appraiser licensing, there was no
easy way to tell if an appraiser had experience and education. You could look for an appraiser who had a
professional designation recognized in your geographic area. Now state licensing or certification is the
Some appraisal designations have requirements that go well beyond licensing, and some don't. The
Appraisal Institute requires a demonstration appraisal report, more education, and an experience review
before awarding its designations (MAI, SRPA, SREA, SRA, RM). Many MAIs and newer SRAs also had
to pass an examination. Designations from other organizations, such as the American Society of
Appraisers and the National Association of Fee Appraisers also have requirements beyond state
certification. For a list of appraisal organizations, including those for agricultural and assessors, go to the
list of appraisal organizations on this Web site.
How can you become an appraiser? Most new appraisers today start with a trainee license, before
being hired or soon after. Typically, 90 classroom hours and passing an exam are required. Then you
train under another appraiser (or company) for 2,000 hours, plus take more classes, to get your regular
license. Finally, after more hours and classes, you become state certified. A few states allow trainees to
set up their own businesses without working for someone else.
Getting your first appraisal job can be tough. In the past, most appraisers were trained by assessors
offices or lenders. Today, most are trained by independent appraisal companies, which are often very
small and reluctant to hire trainees.
For information on licensing and certification requirements, go to the Appraisal Foundation Web site at
www.appraisalfoundation.org. For state requirements, call your state appraisal regulatory agency.
What if you don't agree with an appraisal? Appraisers are required to be objective real estate
observers, reporters, and analysts. Ethically, appraisers cannot accept an appraisal assignment
contingent on a certain appraised value, direction in value, or minimum or maximum value.
If the appraisal was done for lending purposes and you think the appraiser has missed higher sales that
could have been used in the appraisal, or missed valuable features in your home such as a remodeled
kitchen, contact your loan officer with specific information such as the address of a sale.
If you think fraud was involved or the appraiser was very inexperienced, lazy, or just plain stupid, contact
your state appraisal licensing agency. You will need to have more than "I think the value was too low (or
too high)." You need the "why" also...didn't use nearby similar homes that sold recently, missed a
swimming pool, etc.
What about appraising paintings, jewelry, machinery, etc.? Because there is not enough work to
support many non-real-estate appraisers, most also sell what they appraise. Look in the Yellow Pages
under appraisers or the type of product, or check with the American Society of Appraisers , which is the
primary professional appraisal association for non-real-estate appraisers. It also has real estate appraiser
What about appraising businesses? There are several professional associations for appraisers
specializing in business valuation. Just as with personal property such as paintings, smaller businesses
are often appraised by business brokers, who also sell businesses. Look for a business appraiser
affiliated with the American Society of Appraisers or the Institute of Business Appraisers.
CURRENT LEGAL ISSUES IN PERFORMANCE APPRAISAL
Stanley B. Malos, J.D., Ph.D.
To say that the importance of legal issues in performance appraisal has skyrocketed in recent years
would be something of an understatement. When I began my research for this chapter by searching
various computer databases, I found almost 500 published judicial and arbitration decisions from just the
last several years that involve performance appraisals in one form or another! Many of these decisions
turned out merely to contain evidence of favorable performance, offered to show that an individual was
qualified for a particular job, and to raise an inference that the reason for refusing to hire, promote, or
retain that person must have been discriminatory (see McDonnell Douglas Corp. v. Green, 411 U.S. 792
(1973)). However, the sheer number of cases underscores a critical reality for today¶s industrial-
organizational psychologist or human resource practitioner: it is almost inevitable that one or more
elements of your organization¶s performance appraisal system will attract legal scrutiny at some point in
time. This likely scrutiny is particularly worrisome when considering the potential for jury trials,
compensatory and punitive damages, and other burdens imposed in discrimination cases under the Civil
Rights Act of 1991.
In this chapter, I offer a foundation for helping to recognize aspects of performance appraisals that are
likely to wind up in litigation, and for modifying those that have caused problems for employers in a variety
of legal disputes. I begin with an overview of performance appraisals as they relate to the nature of the
employment relationship. I then examine specific appraisal processes and potential liability under Title VII
of the Civil Rights Act of 1964 (Title VII), the Civil Rights Act of 1991 (CRA 1991), the Age Discrimination
in Employment Act (ADEA), the Americans with Disabilities Act (ADA), the Equal Pay Act, and tort
theories such as negligence (breach of duty to conduct appraisals with due care), defamation (disclosure
of untrue unfavorable performance information that damages the reputation of the employee), and
misrepresentation (disclosure of untrue favorable performance information that presents a risk of harm to
prospective employers or third parties). Next, I take a closer look at substantive and procedural aspects of
performance appraisals and the legal defensibility of employment decisions. I also examine discipline and
related performance issues that arise under union and other employment contracts. I conclude with a
discussion of emerging legal issues in performance appraisal such as those related to flexible job
designs, security and privacy, and workplace violence. Although I do not offer legal advice (knowledgable
local counsel should be consulted when specific questions arise), I do provide practical suggestions for
the design and implementation of legally sound performance appraisal systems throughout the chapter.
Performance Appraisals and the Nature of the Employment Relationship
Initial selection tests typically become involved in legal disputes because a desired employment
relationship does not emerge as a result of a given test. Performance appraisals, on the other hand,
become central to disputes that arise after an employment relationship has been established.
Performance and other ratings are used to select present employees for merit pay, promotion, training,
retention, transfer, discipline, demotion, or termination. The nature of the employment relationship, as well
as the nature of the employment decision, must be considered to determine the potential for performance
evaluations to fuel discrimination and other types of lawsuits such as those under the Fair Labor
Standards Act (FLSA) and the Family and Medical Leave Act (FMLA).
Table 1 presents a summary of selected laws and legal principles that relate to performance appraisals
and the nature of the employment relationship. Further details and examples from the cases are provided
Performance Appraisals and Employment at Will
Where there are no express contract terms that govern performance appraisals, courts have allowed
employers a good deal of latitude to determine how to evaluate their employees (Gomez-Mejia, Balkin, &
Cardy, 1995). However, even in an employment at will relationship, under which either the employer or
the employee may terminate the employment relationship at any time, an employer¶s discretion is not
entirely without limits. As Koys, Briggs, and Grenig (1987) have pointed out, courts vary by jurisdiction in
their recognition of the at will doctrine as a matter of state contract and labor law. Moreover, courts have
found employers liable under numerous exceptions to the doctrine. These exceptions include implied
contract (as where an obligation to terminate only for just cause arises based on verbal promises or those
contained in an employee handbook) and violation of public policy (as where an employee is terminated
after complaining of harassment or accusing the employer of other misconduct). Potential liability for
defamation or negligence also may restrict, in practical terms, the manner in which employers can
manage and appraise performance. As the following examples illustrate, performance appraisals also
may figure in determining the very nature of the employment relationship. This can in turn determine the
effect of laws such as the FLSA, the ADEA, Title VII, and the FLMA.
Implied Contracts and Public Policy. Mathewson v. Aloha Airlines, 152 LRRM 2986 (Haw. 1996)
provides an interesting example of both the implied contract and public policy exceptions to the at will
doctrine. In that case, Mathewson, an Aloha Airlines pilot, disputed his termination, which occurred just 2
Summary of Selected Laws and Legal Principles That Relate to Performance Appraisals and the
Nature of the Employment Relationship
Summary of Law or
Relationship to Performance Appraisals
and the Nature of the Employment
Status under which the
employer or employee may end
an employment relationship at
Allows the employer considerable latitude
in determining whether, when, and how to
Implied Contract Nonexplicit agreement that
impacts some aspect of the
May restrict manner in which employer can
use appraisal results (e.g., may prevent
termination unless for cause)
Determination that given action
is adverse to the public welfare
and is therefore prohibited
May restrict manner in which employer can
use appraisal results (e.g., may prevent
retaliation for reporting illegal conduct by
Negligence Breach of duty to conduct
performance appraisals with
Potential liability may require employer to
inform employee of poor performance and
provide opportunity to improve
Defamation Disclosure of untrue
information that damages an
Potential liability may restrict manner in
which negative performance information
can be communicated to others
Misrepresentation Disclosure of untrue favorable
performance information that
causes risk of harm to others
Potential liability may restrict willingness of
employer to provide references altogether,
even for good former employees
Fair Labor Standards
Imposes (among other things)
obligation to pay overtime to
nonexempt (supervisory or
Fact that employee conducts appraisals
may influence determination that employee
functions as supervisor or manager and is
Family and Medical
Leave Act (FMLA)
Imposes (among other things)
obligation to reinstate employee
returning from leave to similar
Subjecting employee to new or tougher
appraisal procedures upon return may
suggest that employee has not been given
similar position of employment
before a one-year at will probationary period would have expired. The termination was supposedly based
on poor performance ratings, particularly those in peer evaluations by fellow pilots. However, it turns out
that Mathewson had been "blacklisted" by the pilots¶ union for having worked as a "scab" for another
airline during a union strike. The Hawaii Supreme Court held that the employer had violated both an
implied contract to provide fair, unbiased evaluations (based on parts of the company¶s Flight Operations
Manual), and public policy against discrimination based on non-membership in a labor organization (a
right protected under state and federal labor law).
In another case that illustrates the importance of state law in this area, a California appellate court found it
necessary to overturn a lower court ruling on the at will issue in Haycock v. Hughes Aircraft, 10 IER
Cases 1612 (Cal. App. 1994). Even though California labor law creates a presumption of at will
employment, that presumption can be overcome by an implied agreement not to terminate except for just
cause. Evidence suggested that, because of such an agreement, Hughes had fraudulently altered
favorable evaluations of a 25-year employee, without his knowledge, to justify a "for cause" termination
rather than a layoff under which he would have been protected by the company¶s appraisal review
mechanisms and seniority preferences. For an analogous case in the whistleblowing context, see
Roberton v. Alabama Department of Economic and Community Affairs, 4 AD Cases 1749 (D. Ala. 1995),
which upheld, on public policy grounds, Robertson¶s claim that the employer had lowered her appraisal
results in retaliation for supporting a co-worker¶s sex discrimination complaint, and for accusing the
employer of misapplying federal funds.
Performance Appraisals and the Existence of an Employment Relationship. The very fact that
performance is evaluated can influence the determination that an employment relationship exists, as well
the nature of that relationship. In EEOC v. Johnson & Higgins, 71 FEP Cases 818 (2d. Cir. 1996),
Johnson & Higgins (J&H) appealed from a lower court ruling that its mandatory retirement policy for
directors reaching age 62 violated the ADEA. J&H argued that the ADEA did not apply because their
directors were not "employees" within the meaning of the Act, but instead maintained a "fundamentally
entrepreneurial relationship" similar to a partnership. The Court of Appeals held in favor of the Equal
Employment Opportunity Commission (EEOC), however, finding an employment relationship (and thus an
ADEA violation) based on the fact that J&H¶s senior Board members reviewed directors¶ performance
annually, and the results determined directors¶ compensation to a great extent.
In a somewhat different context, the fact that appraisals were conducted led the court in Sturm v. TOC
Retail Inc., 2 WH Cases 2d 628 (D.C. Ga 1994), to dismiss Sturm¶s claim for overtime pay under the
FLSA. Because Sturm, a convenience store employee, was responsible for evaluating the performance of
two or more employees in order to determine their raises and continued employment, the Court found that
Sturm¶s duties were primarily managerial, and that he therefore was exempt from the overtime provisions
of the Act.
Fair performance evaluations have been held to be tangible job benefits, and interference with those
benefits may give rise to liability for harassment under Title VII (see, e.g., Ton v. Information Resources
Inc., 70 FEP Cases 355 (N.D. Ill. 1996), in which Ton was issued an "indefensibly harsh" performance
evaluation in retaliation for rejecting his manager¶s sexual advances). However, an unfavorable review,
without more, is not actionable. In Smart v. Ball State University, 71 FEP Cases 495, 498 (7th. Cir. 1996),
Smart, a tree surgeon trainee, filed an EEOC complaint against the University claiming gender
discrimination under Title VII. She later claimed that the University had retaliated against her for that
complaint by applying more formal and stringent evaluation procedures, which resulted in less favorable
reviews. Nevertheless, Smart successfully completed her training, and got a job with the University as a
full-fledged tree surgeon. In upholding dismissal of Smart¶s lawsuit, the Court of Appeals noted that Smart
had failed to establish a causal connection between her negative evaluations and any sort of adverse
employment action. The Court acknowledged that "adverse employment action" has been defined
broadly, and is not limited to tangible losses such as discharge or reduction in pay. However, the Court
explained further that "not everything that makes an employee unhappy is an actionable adverse action.
Otherwise, minor and even trivial employment actions ... could form the basis of a discrimination suit."
This language illustrates that most courts are reluctant to pass judgment on the general fairness of an
organization¶s employment practices, unless discrimination or some other improper outcome can be
shown (see generally Barrett & Kernan, 1987).
Issues involving performance appraisals and the employment relationship also have arisen under the
FMLA. In Patterson v. Alltel Information Services, 3 WH Cases 2d. 406 (D. Maine 1996), Patterson
claimed that Alltel violated the FMLA when, after returning from medical leave for work-related stress, he
was relegated to "special projects," and received unfavorable evaluations that eventually led to his layoff
as part of a company-wide reduction in force (RIF). The Court, however, dismissed Patterson¶s claim that
he had suffered a post-leave change in his "position of employment" (an FMLA violation) that led to poor
performance and his eventual layoff. Alltel was able to establish that Patterson¶s performance had been
rated poorly prior to any change in position, and that he would have been laid off even had he not gone
Practical Suggestions for Limiting Performance Appraisals¶ Unwanted Effects on the Employment
Relationship. As discussed in greater detail later in this chapter, timely and consistent documentation of
performance information in accordance with established practices can be critical to the successful
defense of a variety of legal disputes. However, as the cases digested above demonstrate, performance
appraisals may be construed by courts to affect the nature and existence of employment relationships in
ways that were neither contemplated nor desired by the employer. In order to limit the extent to which this
can occur, employers should consider drafting job offers, employee handbooks, and other employment
documents to include express at will language that refers explicitly to performance appraisals (see Table
This language might state, for example, that employment is understood to be at will, that the employer
expressly reserves the right to discharge the employee at any time for any reason with or without cause
and with or without notice, and that nothing in the employer¶s policies, practices, or procedures, including
performance appraisals, should be construed to confer any right upon the employee to continued
employment. Management also could expressly reserve the right to unilaterally alter the terms and
conditions of employment, including the manner in which performance may or may not be appraised.
Further, unless limited by explicit contract language to the contrary, employment documents should make
it understood that the employer is under no obligation to appraise performance, and that neither the fact
that appraisals are or are not conducted, nor the manner in which they may be conducted, should be
construed to give rise to a "just cause" requirement for terminating the employment relationship. In
summary, employment documentation, signed by the employee, should set forth clearly the express
intention and understanding of both the employer and the employee that performance appraisals and
Practical Suggestions for Limiting Performance Appraisals¶ Unwanted Effects on the Employment
Consider drafting job offers, employee handbooks, and other employment documents, for signature by
the employee, to include express at will language that refers explicitly to performance appraisals. Such
language might state:
(1) that employment is understood to be at will;
(2) that the employer expressly reserves the right to discharge the employee at any time for any reason
with or without cause and with or without notice;
(3) that nothing in the employer¶s policies, practices, or procedures, including performance appraisals,
should be construed to confer any right upon the employee to continued employment;
(4) that the employer expressly reserves the right to unilaterally alter the terms and conditions of
employment, including the manner in which performance is or is not appraised;
(5) that the employer is under no obligation to appraise performance;
(6) that neither the fact that appraisals are or are not conducted, nor the manner in which they may be
conducted, should be construed to give rise to a "just cause" requirement for terminating the employment
(7) that performance appraisals and other evaluation procedures should in no way be considered in any
other manner in determining the existence or nature of any employment relationship that may be found to
exist between the parties.
evaluation procedures should in no way be considered in determining the existence or nature of any
employment relationship that may be found to exist between the parties. Such language should, at a
minimum, make it more difficult for disgruntled current and former employees to rely on performance
appraisals and related procedures to the detriment of the employer.
Employment Discrimination Theories and the Type of Employment Decision
Both the theory used to prove discrimination (disparate treatment or disparate impact), and the type of
employment decision (e.g., compensation, promotion, layoff, or discharge), are likely to determine when
and how performance appraisals will figure in discrimination cases. Previous reviews (Burchett & De
Meuse, 1985; Martin & Bartol, 1991; Martin, Bartol, & Levine, 1986; Veglahn, 1993) digest a good deal of
earlier caselaw and arbitration decisions that address these issues. I therefore focus on recent
Table 3 presents a summary of selected laws and legal principles that can relate to performance
appraisals and potential liability for employment discrimination. For those who may not be familiar with
this area of the law, I provide a more detailed summary of discrimination analysis under disparate
treatment and disparate impact theories, which may be applied to any of the substantive laws--e.g., Title
VII, ADEA, ADA--under which employers are often accused of discrimination. I also discuss briefly how
the employer¶s defense strategy will differ with the nature of the employment decision in question.
Examples from the cases follow.
Disparate Treatment. Most discrimination cases that involve performance appraisal allege disparate
treatment. In these cases, employees claim that they were intentionally treated differently because of their
gender, race, ethnic background, national origin, age, disability, or other status protected under State or
Federal law. An employee can establish a prima facie case
Summary of Selected Laws and Legal Principles That Relate to Performance Appraisals and
Potential Liability for Employment Discrimination
Summary of Law or
Relationship to Performance
Appraisals and Potential Liability
for Employment Discrimination
Disparate Treatment Intentional discrimination;
improper distinctions among
individudals based on protected
status (e.g., age, race, sex)
Results of invalid or subjective
performance appraisals may be used
to justify improper employment
decisions that are based on
discriminatory motive or bias
arises from employment
practices that appear neutral but
adversely affect those with
Invalid appraisal practices or absence
of safeguards can operate to exclude
qualified protected class members
from employment opportunities more
often than non-members
Title VII of the Civil Rights
Act of 1964 (Title VII)
Outlaws discrimination based on
race, color, sex, religion, or
Provides protection against use of
appraisal procedures and results to
Provides protection similar to
Title VII; varies by state
Similar to above
Equal Pay Act of 1963 Prohibits gender-based
differences in pay for equal work,
subject to limited exceptions
Appraisal results can be used to
invoke and justify exceptions (e.g.,
merit- based pay distinctions)
Civil Rights Act of 1991
Allows jury trials, compensatory
and punitive damages in
discrimination cases; alters
burden of proof and other
technical aspects of some cases
Reduces plaintiff¶s burden of proving
that particular practice of employer
(e.g. performance appraisals) caused
discrimination if practices are
incapable of separation for analysis
Age Discrimination in
Employment Act (ADEA)
discrimination based on age of
40 or over
Provides protection against use of
appraisal procedures and results to
perpetrate age-based discrimination
Disabilities Act (ADA)
discrimination based on disability
Limits appraisal criteria to essential job
functions and requires reasonable
accommodation as to how
performance is appraised
Rehabilitation Act of 1973 Similar to ADA; applies to federal
Similar to above
(raise an inference) of discrimination either by presenting direct evidence of discrimination (e.g., racist or
sexist remarks that appear to have influenced
the employment decision), or by showing that he or she was qualified and available for a position, but was
rejected under circumstances that suggest unlawful discrimination (Texas Department of Community
Affairs v. Burdine, 450 U.S. 248 (1981)). This most commonly is done according to McDonnell Douglas
Corp. v. Green, 411 U.S. 792 (1973), by showing that the employee (1) belongs to a protected class; (2)
applied for and was qualified for a job opening; (3) was rejected; and (4) the job remained open while the
employer continued to seek similarly qualified applicants or hired an individual who is not a member of the
same protected class. Under the now well-accepted burden shifting process of McDonnell Douglas, the
employer then must articulate a legitimate, non-discriminatory reason (typically a performance-related
one) for its action. If the employer can do so, the employee then must show that the employer¶s stated
reason was a "pretext" for a discriminatory decision. In so-called "mixed motive" cases (those where
decisions are based partly on discriminatory motives but also on performance), an employer still can
avoid liability for compensatory and punitive damages, reinstatement, back pay, and similar relief
otherwise available under substantive law, if it can convince the fact-finder that it would have made the
same decision even had it not taken improper factors (e.g., gender) into account (Price Waterhouse v.
Hopkins, 109 S.Ct. 1775 (1989); CRA 1991, section 107(a)). This defense is not available, however, in
cases where protected class status (e.g., age) is clearly used as a limiting criterion in the employment
decision (see, e.g., EEOC v. Johnson & Higgins, where J&H unsuccessfully tried to defend its age-based
mandatory retirement policy by claiming that it enabled the company to plan its succession in an orderly
Disparate (Adverse) Impact. Performance appraisals figure less prominently in disparate impact cases,
in which a seemingly neutral employment practice may have an unintentional but nonetheless
discriminatory effect. In such cases, employees must demonstrate a causal connection between a
specific employment practice (e.g., performance appraisals) and a discriminatory result, unless the
elements of the employer¶s decision making process are not capable of separation for purposes of
analysis (Civil Rights Act of 1991; Wards Cove Packing Co. v. Atonio, 490 U.S. 642 (1989)). Appraisal
results then can be used to rebut plaintiffs¶ (usually statistical) evidence of an improper disparity in
promotion, layoff, or other employment decisions (EEOC v. Texas Instruments, Inc., 72 FEP Cases 980
(5th. Cir. 1996); Griggs v. Duke Power Co., 401 U.S. 424 (1971); Watson v. Fort Worth Bank & Trust Co.,
108 S.Ct. 2777 (1988)). Here, the burden shifting process parallels that of disparate treatment cases; the
employer must show that the challenged practice bears a "manifest relationship" to job performance
consistent with "business necessity." A common articulation of this burden is to show that the challenged
practice "is significantly related to the legitimate goals of the employer," Wards Cove, 490 U.S. at 659.
(The Wards Cove case, while subject to attack during the legislative process, was not expressly
overturned by CRA 1991, and is still considered by leading commentators to provide viable guidance in
this context; see Cathcart & Snyderman, 1997). The employee then may establish pretext if he or she can
show that other appraisal practices would have served the employer¶s interests without such a
discriminatory effect (Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975).
Nature of the Employment Decision. The employer¶s defense strategy typically will differ depending on
the nature of the employment decision (Martin and Bartol, 1991). In failure-to-promote cases, employers
use appraisals to show that the person selected for the promotion is likely to perform in the higher
position better than the plaintiff. In layoff or discharge cases, employers use appraisals to show that the
plaintiff was already performing poorly in comparison either to peers (layoff cases) or to some minimum
standard of acceptable performance (discharge cases). In merit pay cases, employers compare the
plaintiff¶s performance with specific compensation criteria.
I now present examples of recent cases that involve Title VII, the Equal Pay Act, the ADEA, the ADA, and
other theories of recovery. Because of the rapidly growing number of cases that involve performance
appraisals, I only had room to include a limited number of cases. I therefore decided to offer a mix of
appellate, trial court, and arbitration decisions to provide the reader with a feel for both the legal and
factual issues that tend to be in dispute. I omitted cases in which favorable appraisal results were used
solely to establish a prima facie case, because these usually were not very instructive for practitioners.
Instead, I focused on cases where the employer¶s defense relied on poor performance appraisals to
demonstrate a legitimate, non-discriminatory reason for its actions, or that it would have taken the same
action irrespective of possible discrimination in a mixed motive case. I also included cases where
favorable appraisals were used to show pretext, which is often the determinative issue in contemporary
Gender, Race, National Origin, and Reverse Discrimination Cases under Title VII, State Fair
Employment Practices Laws, and the Equal Pay Act
Title VII of the Civil Rights Act of 1964 makes it unlawful to discriminate against any individual with
respect to compensation, terms, conditions, or privileges of employment, because of race, color, religion,
sex, or national origin. State Fair Employment Practices Acts, which vary by jurisdiction, contain similar
prohibitions that provide at least as much protection as federal law, and sometimes carry procedural or
strategic advantages for plaintiffs. The Equal Pay Act provides protection against wage discrimination on
the basis of gender "for equal work on jobs the performance of which requires equal skill, effort, and
responsibility, and which are performed under similar working conditions," 29 U.S.C. Section 206 (d)(1).
Violations of the Act are inferred if the employer pays different wages to an employee of the opposite sex
for substantially equal work. The employer then may defend by showing that any wage discrepancy
resulted from (1) a bona fide seniority system; (2) performance or merit-based distinctions; (3) piece-rate
or other production-based systems; or (4) some legitimate factor other than gender (Corning Glass Works
v. Brennan, 417 U.S. 188 (1974)).
Several recent cases in this area involve professionals such as college professors, attorneys, and
engineers. In Fisher v. Vassar College, 70 FEP Cases 1155 (2d. Cir. 1995), Fisher, a biology professor,
was denied tenure at Vassar and claimed discrimination based on sex, marital status, age discrimination,
and violation of the Equal Pay Act. Vassar based its decision on the biology department¶s
recommendation, outside evaluations, and student comments, all of which were reviewed by the college
dean and a college-wide faculty committee. The department¶s evaluation focused on scholarship, service,
teaching ability, and leadership (all of which were found wanting), but also noted Fisher¶s 8-to-9-year
hiatus to raise a family before returning to work and coming up for tenure review. After trial in a factually
complex case, the District Court concluded that Fisher had met the recognized qualifications for tenure,
that the department¶s evaluations were biased and pretextual, and awarded her more than $600,000 in
On appeal, a panel of the Second Circuit reversed. The Court agreed that Fisher had established a prima
facie case of discrimination, and that Vassar had articulated a legitimate, non-discriminatory reason for
denying her tenure (the department¶s negative evaluation of Fisher¶s performance). It also seemed
inclined to agree that Vassar¶s tenure review was pretextual, in that its tenure standards were unclear and
unspecified, and the tenure committee had selectively excluded favorable information about Fisher¶s
performance. However, citing St. Mary¶s Honor Ctr. v. Hicks, 113 S.Ct. 2742, 2752 (1993), the Court
pointed out that it is not enough merely to show pretext; the plaintiff must prove that the employer¶s
articulated reason is a pretext for discrimination. The Court found the evidence insufficient to establish
that Vassar¶s denial of tenure was discriminatory. It also rejected Fisher¶s Equal Pay Act claim because
the higher paid male to whom Fisher compared herself had been on the tenure track several years longer
than Fisher, which established a legitimate differential based on factors other than gender.
Jiminez v. Mary Washington College, 67 FEP Cases 1867 (4th. Cir. 1995), is another case that illustrates
judicial reluctance to second-guess the merits of promotion decisions, particularly when the performance
being evaluated lies within the decision makers¶ substantive expertise. In Jiminez, the District Court found
that the College had discriminated in denying Jiminez tenure based on race (black) and national origin
(Trinidad). As in Fisher, tenure decisions were based on evaluations of service, scholarship, and teaching
effectiveness. Although Jiminez¶ service was appraised highly, he had failed to publish adequately or
complete his doctoral dissertation in 6 years with the College. He also had received consistently low
ratings from students. However, Jiminez argued that these ratings were due to a concerted effort by a
group of white students to have him removed. The Court found that Jiminez had established a prima facie
case of discrimination, and that the College had rebutted it (based on poor performance), but that Jiminez
had shown pretext (the College¶s failure to disregard "racially tainted" teaching evaluations).
A panel of the Court of Appeals reversed. Noting that courts typically "review professional employment
decisions with great trepidation," the Court determined (as in Fisher) that, even had the College¶s reliance
on factors such as "untainted" evaluations and Jiminez¶ failure to defend his dissertation been pretextual,
he still had failed to establish discrimination.
Byrd v. Ronayne, 68 FEP Cases 769 (1st. Cir. 1995) illustrates a similar analysis in the law firm context.
Byrd, a law firm associate, was terminated after client complaints about the quality of her work. She sued,
accusing the firm of Title VII sex discrimination, an Equal Pay Act violation, and retaliatory discharge
based on her previous filing of an EEOC complaint. Byrd had received bonuses and favorable reviews
notwithstanding some acknowledged performance difficulties, but the District Court found that she had
failed to establish a prima facie case under McDonnell Douglas, because her documented poor
performance indicated she was not qualified for her job.
The Court of Appeals agreed, but went further. It ruled that, even had Byrd been able to make out a prima
facie case, she had failed to raise sufficient evidence of pretext (via the bonuses and favorable reviews)
because her performance clearly was poor at the time of her discharge. The Court also upheld dismissal
of Byrd¶s Equal Pay Act claim, because she failed to show that her duties were similar to a more highly
paid male associate, or that this associate (who also generated more billings) had a similar record of
client complaints and performance problems.
For an analogous case in which the employer also prevailed, see EEOC v. Lousiana Network, 1 WH
Cases 2d 435 (D. La 1992). In that case, the court found that a radio station did not violate Title VII or the
Equal Pay Act when it paid a female news anchor less than a male anchor who had superior experience
and on-the-air presentation skills, as documented in written performance appraisals. A note of caution is
in order here, however. Although the employers prevailed in these cases, the facts underlying the pretext
claim in Byrd illustrate the danger of trying to be "nice" to a poor performer by continuing to give good
evaluations in the face of known performance problems. This issue is discussed in greater detail in later
portions of this chapter.
Amirmokri v. Baltimore Gas & Electric Co., 68 FEP Cases 809 (4th. Cir. 1995), presents another situation
where the employer successfully defended a Title VII claim, here for failure to promote based on national
origin. In this case, the employer relied on evidence that the promoted employee had performance
evaluations superior to Amirmokri¶s. Although Amirmokri, an engineer of Iranian descent, made out a
prima facie case under McDonnell Douglas, the employer was able to show that the person promoted
was more qualified, based on objective performance evaluations and subjective factors such as
interpersonal skills and ability to lead a team. The District Court also rejected Amirmokri¶s pretext claim,
and dismissed his discrimination case altogether. However, based on evidence that Amirmokri was called
names including "the ayatollah," "the local terrorist," and "camel jockey," the Court of Appeals allowed the
case to go to trial on the issue of hostile environment harassment (EEOC and Supreme Court rulings
have interpreted Title VII to prohibit harassment based on national origin as well as gender and other
protected status). The Court also ordered a trial on Amirmokri¶s claim for constructive discharge, which
alleged that the hostility of the working environment was so intolerable that a reasonable person would
have felt compelled to leave their job. The Court focused on evidence that Amirmokri¶s supervisor had
intentionally embarrassed him by assigning him impossible tasks and telling co-workers that he was
incompetent, which may have negatively affected both his performance and its evaluation. The case
illustrates that defensible performance appraisals alone may not ensure success in court, because
conduct related to the evaluation process can give rise to liability under more than one legal theory.
Kerr-Selgas v. American Airlines, 69 FEP Cases 944 (1st. Cir. 1995) is another Title VII harassment case.
In this one, a male supervisor gave his female employee a negative performance evaluation shortly after
she rejected his sexual advances. Although the case deals primarily with procedural issues unrelated to
performance appraisals, the employer¶s failure to take proper and timely action against the supervisor led
a jury to award $1.2 million for discrimination, retaliation, and invasion of privacy (see also Ton v.
Information Resources, a same-sex harassment case in which the plaintiff¶s performance was rated
poorly after he refused his manager¶s sexual advances).
Finally, affirmative action policies were at the heart of a white male¶s complaint of reverse discrimination
in Whalen v. Rubin, 71 FEP Cases 1170, 1174 (7th. Cir. 1996). Whalen, an IRS appeals officer who was
both a lawyer and a CPA, was passed over for a promotion, which went to a woman named Price. Price
was ranked as the most qualified among seven candidates, while Whalen tied for last on the list. An IRS
panel of interviewers unanimously chose Price as the best person for the job, based on her substantial
experience as an acting supervisor and her completion of a pre-management training course. Whalen
countered that Price¶s selection was tainted, because the IRS maintained an affirmative action plan and
provided bonuses to employees based on their "success" with equal employment opportunity. The Court
of Appeals rejected this argument, and held that Whalen had failed to establish a direct causal link
between the IRS¶ affirmative action policy and his inferior performance ratings: "the mere existence of an
affirmative action policy is ... insufficient to prove that the IRS actually intentionally discriminated against
Whalen." For an analogous holding under New Jersey state law, see Wachstein v. Slocum, 67 FEP
Cases 587 (N.J. App. 1993).
Age Discrimination Cases under the ADEA
As the average age of the American worker continues to increase, so does the number of age
discrimination lawsuits, including those claiming age-related biases in performance appraisals (see Miller,
Kaspin, & Schuster, 1990; Perry, Kulik, & Bourhis, 1996). The ADEA as originally passed protected
employees between the ages of 40 and 65 against discrimination "with respect to compensation, terms,
conditions, or privileges of employment," or classification that would "tend to deprive any individual of
employment opportunities or otherwise adversely affect [their] status as an employee," 29 U.S.C. sections
623(a)(1)-(2). The Act was later amended to raise the upper limit to 70, and amended again (in 1986) to
remove the upper limit entirely. Although employers have been able to defend quite a few of these cases
successfully, employees continue to succeed where they can show that performance evaluations were
manipulated to justify age-based discrimination.
For example, in Starceski v. Westinghouse Electric Corp., 67 FEP Cases 1184 (3rd. Cir. 1995), the Court
of Appeals affirmed a jury verdict for Starceski, a 63 year old senior engineer and 36-year Westinghouse
employee, based on evidence that a supervisor had directed another employee to "doctor" Starceski¶s
evaluations to reflect poor performance. Starceski was able to show that managers were told to transfer
jobs away from older workers in anticipation of an RIF, that 5 of 6 workers laid off were over 40, that the
average age of the work group after these layoffs was under 40, and that several of those who were not
laid off had lower performance evaluations than he did. Under these circumstances, the Court rejected
Westinghouse¶s claim that it would have laid Starceski off even had it not considered his age.
A similar result often occurs where a long history of good performance is suddenly followed by the bad
evaluation of an age-protected worker just before a layoff. In Woodman v. Haemonetics Corp., 67 FEP
Cases 838, 840 (1st. Cir. 1995) the Appellate Court reversed dismissal of Woodman¶s ADEA claim, in
part because of a supervisor¶s statement that "these damn people [management]--they want younger
people here." The Court found that this statement and other evidence warranted a trial on the issue of
pretext and discriminatory intent. See also Brewer v. Quaker State Refining Corp., 69 FEP Cases 753,
759 (3rd. Cir. 1995), in which Brewer¶s receipt of a bonus shortly before his discharge, and a performance
memorandum stating that plaintiff "is 53 years old, which presents another problem," amounted to
circumstantial evidence of age discrimination that required a trial on the issue of the "corporate culture in
which the employment decision to discharge Brewer was made."
The employer fared better in Thomas v. IBM, 67 FEP Cases 270 (10th. Cir. 1995). In that case, Thomas¶
ADEA and fraudulent evaluation claims were dismissed by the District Court, a decision upheld on
appeal. Thomas claimed, but could not demonstrate, that IBM gave her undeservedly low performance
evaluations because of her age to induce her to accept early retirement or an extended leave of absence.
The case contains an interesting discussion of IBM¶s performance ranking system, through which
employees ranked low in terms of their "relative contribution to IBM¶s business" find their positions at risk.
In upholding dismissal of Thomas¶ claims, the Court noted that IBM¶s appraisal system appeared to
contain safeguards designed to minimize possible bias (these aspects of appraisals are discussed later
EEOC v. Texas Instruments, Inc., 72 FEP Cases 980 (5th. Cir. 1996) presents a case in which the
employer found itself in the unusual position of having to argue that its appraisal system was essentially
worthless for evaluating performance in determining who to lay off during an RIF. The Court ruled in favor
of Texas Instruments (TI), notwithstanding evidence of age-related comments and disregard of its own
seniority system and appraisal results. Unlike Woodman v. Haemonetics Corp., the Court in this case
found remarks to the effect that "his age got him" and that TI "had to make room for some of the younger
supervisors" to be "stray remarks" that were insufficient to rebut TI¶s stated reasons for discharging six
supervisors who were in their fifties. In an age of rapidly changing technology, the Court accepted as non-
pretextual TI¶s claim that it disregarded both seniority preferences and favorable appraisals because to
adhere to their use would have caused TI to retain highly paid supervisors whose willingness or ability to
learn new technology was questionable. TI¶s evaluations and "Key Personnel Assessment" rankings
apparently were not designed to make fine distinctions among employees; the former clustered ratings
tightly around group medians, whereas the latter merely reflected departmental pay differentials among
The Court also accepted TI¶s argument that favorable performance ratings on present jobs were not
necessarily relevant to determining ability to perform post-RIF duties that required mastery of
sophisticated computer software and other new resources in a rapidly changing technological
environment. However, it is not clear that these arguments would prevail in all jurisdictions. Practitioners
would be well advised to keep job descriptions, performance criteria, and appraisal processes updated to
the greatest extent practicably possible.
Finally, Fisher v. Vassar College, discussed earlier in the Title VII context, also contained an ADEA claim
that was dismissed without trial. Despite evidence that eight other tenured faculty at Vassar were at least
9 years younger than Fisher when they were tenured, and a colleague¶s statement that Fisher "was too
old to ever become tenured," the Court of Appeals upheld dismissal of her case because the sample of
younger tenured faculty was too small to permit meaningful inferences about discrimination, and because
Fisher¶s extended hiatus from academia prior to entering the tenure track explained any age discrepancy
without the need to infer discrimination.
Disability Discrimination Cases under the ADA and Rehabilitation Act of 1973
The ADA prohibits an employer from discriminating in employment, based on a known physical or mental
impairment, against a qualified individual with a disability. A "qualified individual with a disability" is
defined as an individual substantially limited in one or more major life activities who, with or without a
reasonable accommodation, can perform the essential functions of the position that the individual desires
or holds; 42 U.S.C. Section 12111; 29 C.F.R. Section 1630.2(m). The ADA also prohibits discrimination
based on a record of impairment or perception of impairment (so-called "regarded as" cases). The
Rehabilitation Act contains similar proscriptions for employers with federal funding or federal contracts,
and tends to be used primarily in cases where the alleged discrimination took place before the effective
date (July, 1992) of the ADA.
Growing recognition that a wide variety of conditions may be construed as disabilities (particularly in the
area of stress-related and other mental impairments) has led to a rapid increase in the number of claims
filed under these statutes, and perhaps to a judicial reluctance to expand the scope of liability in the
courts. In the context of performance appraisals, these cases usually turn on whether the employer knew
or had reason to know of the employee¶s disability, whether the employee was qualified, or whether the
employee was evaluated on something other than the job¶s essential fuctions.
For example, in Hedberg v. Indiana Bell Telephone Co., 4 AD Cases 65, 69 (7th. Cir. 1995), the employer
was undergoing an RIF based on relative performance rankings. It terminated Hedberg in part based on
low rating scores on a written evaluation form, and in part based on appraisal comments about problems
with interpersonal skills, not coming to work on time, and his "work ethic." Unknown to the company,
Hedberg suffered from a condition called primary amyloidosis, a disease that can cause chronic fatigue
symptoms. The District Court dismissed Hedberg¶s ADA claim because it concluded that the disease was
not a "known disability" within the meaning of the Act. The Court of Appeals affirmed, noting that, unlike
most discrimination claims in which the protected characteristic of the plaintiff (e.g., race or gender) is
obvious to the employer, there are situations in which an employer clearly does not know about an
employee¶s disability. The Court reasoned that an employer cannot fire an employee "because of" a
disability of which it has no knowledge. Here, the employer maintained that it fired Hedberg primarily
based on low written evaluations, but the Court offered that, even had they fired him for perceived lack of
"work ethic," they would not have violated the ADA:
Employers fire people every day. Perhaps the most common criterion for choosing whom
to fire is which employees perform a job better or worse than others. Allowing liability
when an employer indisputably had no knowledge of the disability but knew of the
disability¶s effects ... would create an enormous sphere of potential liability. Tardiness
and laziness have many causes, few of them based in illness. The ADA hardly requires
that merely because some perceived tardiness and laziness is rooted in disability, an
employer who has not been informed of the disability is bound to retain all apparently
tardy and lazy employees on the chance that they may have a disability that causes their
behavior. The ADA does not require clairvoyance. [Moreover] even when the employer
does know of an employee¶s disability ... the employer may [still] fire the employee
because he cannot perform his job adequately [with or without a reasonable
accommodation], i.e., [if] he is not a "qualified individual" within the meaning of the ADA.
For a case in which the employer did use negative appraisals to show that the employee was not qualified
for her job, see Demming v. Housing Authority, 4 AD Cases 1593 (8th. Cir. 1995), in which Demming
claimed that her discharge occurred because she had been hospitalized for thyroid cancer, but could not
establish that performance factors unrelated to her disability were not the real reason for her discharge.
Qualification for a job, essential functions of the job, and employer knowledge of the employee¶s disability
all were involved in Lewis v. Zilog, Inc., 4 AD Cases 1787 (N.D. Ga. 1995). In that case, Lewis was
diagnosed with bipolar mood disorder, a condition she claimed resulted in part from a stressful meeting
about a written performance evaluation that cited her need to improve relationships with others. Lewis
had a history of yelling at coworkers and exhibiting attitude and mood swings. During the meeting, she
jumped up and ran around the office, blamed others for various problems, and sliced a photo of her
supervisor into small pieces. Lewis later claimed to be totally disabled, took the second of two medical
leaves, filed for long-term disability benefits, and was terminated for exceeding the allowable maximum
leave under company policy. She sued Zilog under Title VII and the ADA.
Zilog moved to dismiss Lewis¶ ADA claims, conceding that Lewis had a disability within the meaning of
the Act, but denying that it had been aware of any disability during Lewis¶ employment, and denying that
she was a "qualified individual with a disability" for ADA purposes. The Court granted Zilog¶s motion,
ruling that her benefit-related assertions that she was unable to work proved that she could not perform
the essential functions of her job (Lewis¶ psychiatrist was unable to suggest a reasonable accommodation
that would have allowed her to return to work). The Court also found that Zilog¶s termination of Lewis in
accordance with its own medical leave policy was a legitimate non-discriminatory reason, and rejected
any claim of pretext. Zilog had terminated other individuals in accordance with its policy, and the Court
found no evidence that Zilog knew Lewis had bipolar mood disorder even though coworkers were aware
that she suffered from stress and took the drug Prozac.
Olson v. General Electric Astrospace, 6 AD Cases 270, 275 (3rd. Cir. 1996) further illustrates how
evidence offered to prove one element of an ADA claim (e.g., "qualified individual") can be used to negate
a different element (e.g., "individual with a disability"). Olson had been laid off during an RIF after a
history of hospitalization for depression and a possible sleep disorder. Olson¶s supervisor, in a written
performance evaluation prior to Olson¶s layoff, questioned his work habits and commitment to his
department because of "an unusual amount of time off for personal illness reasons." Olson later was
interviewed for rehire by the same supervisor, who recommended a different candidate to a superior that
was responsible for making the actual hire decision. This superior accepted the recommendation to hire
the other candidate, and Olson sued, claiming an ADA violation.
Olson¶s ADA claim initially was dismissed by the District Court, because evidence that he was able to
perform his duties despite any psychological problems (i.e., that he was qualified for the job) "ironically
establish[ed] that he was not substantially limited in a major life activity." The Court of Appeals agreed
with this analysis as far as it went, but ordered a trial on the issue of whether Olson had been "regarded
as" having a disability. Even though the hiring decision was made by a person who claimed to have no
knowledge of Olson¶s medical history, the fact that this person¶s decision was influenced by the
recommendation of a supervisor who did have such knowledge raised a factual issue that needed a trial
to resolve. This case suggests that supervisors should be better trained to recognize potential "regarded
as" liability, and that review mechanisms and other safeguards should be installed, to ensure that
potentially tainted recommendations are not involved in hiring, promotion, and related employment
Two recent cases involving Human Immunodeficiency Virus (HIV) further illustrate the nuances of ADA
actions where the disability is not obvious or clearly known to the employer. In R.G.H. v. Abbott
Laboratories, 4 AD Cases 289 (N.D. Ill. 1995), R.G.H., a research biochemist, tested positive for HIV after
accidental exposure to the virus in one of Abbott¶s labs. After a number of favorable appraisals and
raises, he was turned down for two promotions, the first because a better qualified applicant was
selected, and the second because of deficient performance evaluations. R.G.H. alleged an ADA violation,
but the Abbott employees who made these decisions established that they were ignorant of his HIV
status, and he was unable to present evidence as to the role played by any perceived or actual disability
in either outcome.
The HIV-infected plaintiff in Runnenbaum v. Nationsbank of Maryland, 5 AD Cases 1602 (4th. Cir. 1996),
faced a similar problem (dismissal) at the District Court level, and appealed. A panel of the 4th Circuit, in
a split decision, reversed and remanded for trial. The majority found accusations that Runnenbaum failed
to complete certain "training tasks" or present a "professional image" to be potentially pretextual, because
the bulk of his performance appraisals were positive or outstanding. The dissent seemed unwilling to
interfere with the professional judgment of the employer.
Finally, Borkowski v. Valley Central School District, 4 AD Cases 1264 (2d. Cir. 1995), involved a number
of performance-related ADA issues, including reasonable accommodation and essential functions, in the
context of a teacher tenure denial. Borkowski, an elementary school teacher, had sustained serious head
injuries in a motor vehicle accident. Although she recovered substantially, she continued to experience
difficulties with memory, concentration, and dealing with multiple stimuli simultaneously. These problems
led to difficulties controlling students in her classes, as noted by an observer during an unannounced
classroom visit. Overall, Borkowski received mixed performance reviews, and was denied tenure. She
unsuccessfully sought reconsideration due to her disability, and sued under the Rehabilitation Act.
On appeal, while acknowledging the School District¶s discretionary authority to make tenure decisions,
the Court ruled that the District had acted improperly in refusing to consider whether Borkowski could
have performed the essential functions of her position with a reasonable accommodation, such as
providing a teaching assistant to help her control her classes (the Court also questioned whether
classroom control really was an essential function of the job). The Court further noted that Section 504 of
the ADA requires an employer to ensure that its evaluative techniques measure the job-related skills of an
individual with a disability, not the disability itself. This raises a further issue as to whether the practice of
using unannounced classroom visits to evaluate Borkowski¶s performance might have been an ADA
violation in and of itself.
The Court¶s language in Borkowski makes clear that employers need to make reasonable
accommodations not only with respect to how jobs are to be performed, but also with respect to the
manner in which performance is to be evaluated. Employers must take care to ensure that only the
essential functions of the job are evaluated, and that only performance is used to make employment-
related decisions. In addition, although the ADA prohibits discrimination on the basis of "known"
disabilities, and it is generally the responsibility of the employee to request a reasonable accommodation,
there is a trend toward requiring the employer to initiate an interactive process with the employee to
provide an accommodation even without such a request (Fram, 1997). It therefore would seem beneficial
to establish mechanisms through which disabled individuals can make the employer aware of their
disability on a confidential basis. Such steps might help to avoid potential invasions of privacy or liability
for discrimination based on perception of a disability.
Taking such steps also might increase both the chances of indentifying problematic situations proactively,
and of defending discrimination claims in court with a showing of good faith efforts to comply with the
requirements of the ADA. For example, the employer might post a notice setting forth its intention, in
accordance with "federal law", to make necessary "modifications" to break down workplace barriers to
effective job performance, and that employees who know of any such barriers should identify them in
confidence to a designated individual. Using this sort of language would help to avoid drawing attention to
the employee¶s impairment and the disability-based nature of the notice. Supervisors also should be
trained to identify, during appraisal processes and otherwise, employees whose performance suggests
that reasonable accommodation of a physical or mental impairment might be in order. Supervisors then
should explore with the employee on an interactive basis the need for and nature of the accommodation.
Tort Liability Arising out of Performance Appraisals
Performance evaluation processes also can cause problems for employers under state tort law theories
such as infliction of emotional distress, negligence, defamation, or misrepresentation. Emotional distress
cases usually involve fact-specific disputes over the outrageousness of conduct such as harassment, and
are not discussed further here. Negligence cases have declined in frequency, so I address them only
briefly. Defamation actions have become more common, and misrepresentation is a relatively new player
in the appraisal context. Taken together, these types of cases underscore the need to perform appraisals
and communicate their results with a great deal of care.
Negligence. Negligence claims require a showing that the employer owed a duty to conduct performance
appraisals with due care, and that this duty was violated. Because of the employment at will doctrine,
such a duty, where it exists, is usually found in some form of employment contract (see, e.g., Mathewson
v. Aloha Airlines). Interestingly, cases in this area may involve complaints about favorable evaluations, as
where an employer fails to notify an employee through the appraisal process that performance is
inadequate, and terminates the employee without providing an opportunity to improve (e.g., Mann v. J.E.
Baker Co., 52 FEP Cases 1111 (D. Pa. 1990). Liability also may arise where the employer communicates
favorable but untrue information about a former employee¶s performance, and causes a substantial risk of
harm to others by doing so (see Randi W., a Minor, v. Muroc Joint Unified School District et al., 97 Cal.
Daily Op. Serv. 614 (1997), discussed more fully below).
Some courts formerly allowed cases to proceed on both negligence and breach of contract theories
simultaneously (e.g., Schipani v. Ford Motor Co., 30 FEP Cases 361 (Mich. App. 1981)). However, courts
in most jurisdictions have refused to recognize a tort claim for negligent evaluation (which might draw a
larger damage award) unless the appraisal-related conduct can be distinguished from breach of a duty
imposed by contract (e.g., Mooneyham v. Smith Kline & French Labs, 55 FEP Cases 1777 (W.D. Mich.
1990); Haas v. Montgomery Ward & Co., 43 FEP Cases 188 (6th. Cir. 1987)). For practical reasons, most
of these cases now tend to involve the employer¶s alleged failure to follow its own performance
management or progressive discipline procedures, as specified in a collective bargaining or other
employment contract. These types of cases are addressed later in this chapter in connection with the
legal defensibility of appraisal procedures. As discussed more fully later on, it is a good idea to ensure
that poorly performing employees are notified of work-related problems, so they cannot later claim that
they would have improved but for the employer¶s failure to properly manage their performance.
Defamation. To establish defamation arising out of a negative performance appraisal, an employee must
prove (1) that the appraisal contained a false assertion of fact (rather than a subjective opinion incapable
of objective verification; e.g., "Smith missed important deadlines on two occasions", rather than "Smith is
difficult to deal with"); (2) that the assertion was "published" (i.e., communicated to some third party), and
(3) that the published falsehood injured the employee¶s reputation (Isaacson v. Keck, Mahin & Cate, 61
FEP Cases 1145 (N.D. Ill. 1993). Because statements that disparage a person¶s profession or occupation
have been held to be defamatory per se (i.e., not requiring proof of actual injury), the employer¶s defense
usually relies on lack of publication or a claim of privilege. In general, there is a qualified privilege to
communicate, in good faith (without malice), accurate appraisal results, if the employer is under a duty to
do so or shares a common interest with the recipient in the subject matter.
For example, in Thompto v. Coburn¶s Inc., 10 IER Cases 263 (N.D. Iowa 1994), Thompto, a deli manager,
was fired because she failed to meet performance goals for profits, labor costs, and customer complaints.
She sued for wrongful discharge and defamation after Coburn¶s gave information about her dismissal to
Job Service, civil rights investigators, and department managers. The Court rejected Thompto¶s claims,
however, ruling that Coburn¶s had a qualified privilege because it was required to cooperate with state
agencies to establish the basis for Thompto¶s termination, and because the other recipients of the
information held a shared interest in its subject.
Misrepresentation: Walking The Tightrope Between Negligence and Defamation. A recent case
illustrates the difficult balancing act employers must perform with regard to job performance information.
In Randi W., a Minor, v. Muroc Joint Unified School District et al., the California Supreme Court held that,
although an employer is not often accountable for failing to disclose negative information about a former
employee, it may be held liable if a recommendation affirmatively misrepresents that a former employee¶s
performance was favorable when such a misrepresentation might present a substantial and foreseeable
risk of harm to a prospective employer or third party.
Randi W., a 13-year old female middle school student, accused her vice-principal, Gadams, of sexual
molestation. Gadams had obtained his position through a college placement office, which had received
letters from Gadams¶ previous employers that described him as "an upbeat, enthusiastic administrator
who relates well to the students," and contained glowing praise for Gadams¶ "genuine concern" for
students, "outstanding rapport" with everyone, and contribution to achieving "a safe, orderly, and clean
environment for students and staff." One of the former employers recommended him "without
reservation;" the other energetically concluded that it "wouldn¶t hesitate to recommend Mr. Gadams for
any position!" However, evidence indicated that both employers knew that Gadams had had previous
performance problems that included hugging female junior high school students, giving them massages,
and making sexual overtures. One of the former employers even had disciplined Gadams in connection
with sexual harassment charges that included "sexual touching" of female students, and had pressured
Gadams to resign.
Lawyers for Randi W. sued based on negligent misrepresentation and related theories. In the trial court,
defendants successfully moved to dismiss on the grounds that they owed no legal duty to Randi W. The
Court of Appeals reinstated the case, however, and the Supreme Court agreed. The Court reasoned that,
although employers have no duty to say anything about former employees¶ performance, when they
choose to communicate such information, there is a duty to use reasonable care in doing so. The Court
held that defendants should have foreseen that future prospective employers would rely on these
favorable letters and decide to hire Gadams, placing students such as Randi W. at risk. The Court was
not persuaded by the employers¶ arguments that the threat of tort liability would unduly restrict the flow of
information and impede job applicants from finding new employment, and that no reasonable person
would assume that a letter of recommendation contains the whole truth about a candidate¶s performance
background and character. However, perhaps wary of the growing number of employers who have
reluctantly adopted uniform "no comment" policies (many now refuse to provide any references
whatsoever even for stellar former employees), the Court carefully limited its ruling to situations that
present "a substantial foreseeable risk of physical injury to the prospective employer or third persons,"
and which in fact result in such harm. The potential applicability of this holding to a broader range of
workplace violence cases is discussed later on in this chapter.
Practical Suggestions for Limiting Discrimination and Related Legal Liability in the Context of
Performance Appraisals. A review of the cases digested above discloses a number of ways in which
performance appraisals can give rise to unexpected employer liability for discrimination, harassment,
constructive discharge, and related theories of liability. Some suggestions for limiting such liability are
summarized in Table 4.
Performance Appraisals and the Legal Defensibility of Employment Decisions
Performance appraisals sometimes have been treated as tests in employment litigation, and are
theoretically subject to the Uniform Guidelines on Employee Selection (41 CFR 60, et seq.; see Brito v.
Zia Co., 478 F.2d 1200 (10th. Cir. 1973); Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975)). However,
Barrett and Kernan (1987) have argued that performance appraisals are better understood as criteria
correlated with tests, given that there are usually no other performance standards whose correspondence
with appraisal results can be independently assessed. In practice, courts have appeared not to pay much
attention to formal notions of reliability or validity (Beck-Dudley & McEvoy, 1991), and these issues have
rarely been discussed explicitly in reported cases. However, they do appear implicitly in many instances.
For example, in a sample of 295 federal appellate discrimination opinions through 1995, Werner and
Bolino (1997) found support for the importance of job analysis, written instructions, employee review of
results, and triangulation among raters in predicting case outcomes. These and other notions of fairness,
accuracy, validity, and due process continue to appear in many legal opinions.
Practical Suggestions for Limiting Discrimination and Related Legal Liability in the Context of
Legal Theory Suggestion for Limiting Potential Liability in the Context of
Require employees to notify employer of any conditions related to
performance or appraisals allegedly so severe as to require quitting;
establish procedures to promptly investigate and eliminate offending
conduct by supervisors or other employees
Age Discrimination Train supervisors to avoid age-loaded comments in verbal/written
appraisals; update performance criteria as technology changes to avoid
pretext claim when older workers are laid off for lack of newer skills
Disability Discrimination Review recommendations/appraisal results for evidence of perceived
("regarded as") discrimination; ensure that only essential functions are
evaluated; train supervisors to identify reasonable accommodations in
performance criteria and appraisal procedures on an interactive basis in a
sensitive or confidential manner
Establish procedures to control/avoid providing false performance
information (favorable or unfavorable)
Negligence Keep employees advised if performance is poor so they cannot contest
discharge by claiming performance would have improved but for faulty
A number of review articles have examined performance evaluations in the caselaw, and have offered
recommendations that appear to relate favorably to the legal defensibility of employment decisions (e.g.,
Ashe & McRae, 1985; Barrett & Kernan, 1987; Beck-Dudley & McEvoy, 1991; Bernardin, Kane, Ross,
Spina, & Johnson, 1995; Burchett & De Meuse, 1985; Cascio & Bernardin, 1981; Lubben, Thompson, &
Klasson, 1980; Martin & Bartol, 1991; Martin, Bartol, & Levine, 1986; Veglahn, 1993). These reviews
represent a consensus regarding substantive and procedural recommendations for legally sound
evaluation practices that remain valuable today. Substantive recommendations are summarized in Table
5, while procedural recommendations are summarized in Table 6 a bit later on. Examples from the
Cases Involving Substantive Aspects of Performance Appraisal
Recent cases concerning the content of performance appraisals have addressed subjectivity, job-
relatedness, specificity, and consistency. These cases illustrate both good and not-so-good examples for
Subjectivity and Job-Relatedness of the Criteria. In Eldred v. Consolidated Freightways, 71 FEP
Cases 33 (D. Mass. 1995), Eldred, a female dispatcher, was denied a promotion based on her male
supervisor¶s "gut feeling" that she lacked "aggressiveness" and was too "soft" with Consolidated¶s drivers.
In ruling for Eldred on her sex discrimination claim, the Court noted that this "gut feeling" was neither
reliable nor accurate (the person selected for the promotion turned out to perform poorly), and that the
employer¶s stated reliance on subjective criteria that were not shown to be related to job performance
supported a finding of gender bias.
Similarly, in City of Indian Harbor Beach, 103 LA 634, 637 (Arb. 1994), the City denied one of its police
officers a merit pay increase despite
Substantive Recommendations for Legally Sound Performance Appraisals
(1) should be objective rather than subjective;
(2) should be job-related or based on job analysis;
(3) should be based on behaviors rather than traits;
(4) should be within the control of the ratee;
(5) should relate to specific functions, not global assessments;
(6) should be communicated to the employee.
Note: Recommendations summarized above are drawn in part from Ashe & McRae, 1985; Barrett &
Kernan, 1987; Beck-Dudley & McEvoy, 1991; Bernardin, Kane, Ross, Spina, & Johnson, 1995; Burchett
& De Meuse, 1985; Cascio & Bernardin, 1981; Lubben, Thompson, & Klasson, 1980; Martin & Bartol,
1991; Martin, Bartol, & Levine, 1986; Veglahn, 1993; and recent cases. Recommendations were
extracted, consolidated across articles, and supplemented by the author.
overall performance ratings that were high enough to warrant a raise. The City argued that it never
intended for merit increases to be based solely on performance ratings, because evaluations are
performed by the immediate supervisor, who typically belongs to the same union as the employee. The
arbitrator, however, emphatically rejected any suggestion that management should be allowed to
consider other, more subjective factors in its merit pay determinations. In sustaining the officer¶s
grievance, the arbitrator found that the City had not shown its merit pay determinations to be "based upon
evidence and standards that are reasonable, demonstrable, and objective."
On the other hand, in Thomas v. IBM, 67 FEP Cases at 276, IBM was able to successfully defend
accusations of age discrimination, in part bacause its appraisal system "contained safeguards to minimize
the possibility for unlawful bias or discrimination, such as a written performance plan, objective criteria, a
requirement that the supervisor specify in writing the reasons for each rating, and an independent review
of the supervisor¶s evaluation by the second-level manager" (emphasis added).
Interestingly, in Amirmokri, the court found it permissible to use subjective criteria such as interpersonal
skills and team leadership to justify promoting another employee over Amirmokri, and stated that it would
have reached the same conclusion even if Amirmokri¶s education and experience had been objectively
superior to the employee selected. Thus, it appears possible that courts may be more willing to accept the
favorable use of subjective criteria to justify a positive employment decision than they are to accept the
unfavorable use of such criteria to justify a negative one. Employers should take care to document both
types of decisions in any event.
Specificity and Consistency of Performance Criteria and their Application. In addition to Thomas v.
IBM, which lauded the use of specific reasons for individual facet ratings, several other cases have dealt
with the specificity of criteria and the consistency of their application across individuals or over time. For
example, in Fisher v. Vassar College, the District Court had examined Vassar¶s "unclear and unspecified"
tenure criteria (teaching, scholarship, service, and leadership), and found them to be "disingenuous" and
pretextual as applied. However, the Court of Appeals¶ reversal in favor of Vassar suggests that in
promotion cases involving academics and other professionals, such criteria may be deferred to because
these decisions are inherently subjective. Fisher had been able to point out inconsistencies in the way
performance criteria were applied to other professors ahead of her on the tenure track, but to no avail.
The Court even commented that "it is difficult to conceive of tenure standards that would be objective and
quantifiable" (70 FEP Cases at 1165).
Woodman v. Haemonetics Corp. also involved the use of general, global criteria that were inconsistently
applied. In that case, performance criteria were changed, in response to a directive from a recently
promoted executive, to emphasize "flexibility" (e.g., susceptibility to cross-training and multiple
responsibilities) and "participation" (e.g., capacity to provide suggestions for efficiency improvements).
After 10 years of good reviews, Woodman¶s performance was rated unsatisfactory, and he was
terminated in an RIF. The court focused closely on changes in Woodman¶s performance ratings after the
switch to these new criteria to find that Woodman had made a showing of pretext that was sufficient to go
to trial on his ADEA claim.
Cases Involving Procedural Aspects of Performance Appraisal
Recent cases concerning performance appraisal have addressed the presence or absence of many of the
procedural safeguards recommended by previous authors, as summarized in Table 6. The absence of
Procedural Recommendations for Legally Sound Performance Appraisals
(1) should be standardized and uniform for all employees within a job group;
(2) should be formally communicated to employees;
(3) should provide notice of performance deficiencies, and opportunities to correct them;
(4) should provide access for employees to review appraisal results;
(5) should provide formal appeal mechanisms that allow for employee input;
(6) should use multiple, diverse, and unbiased raters;
(7) should provide written instructions and training for raters;
(8) should require thorough and consistent documentation across raters that includes specific examples
of performance based on personal knowledge;
(9) should establish a system to detect potentially discriminatory effects or abuses of the system overall.
Note: Recommendations summarized above are drawn in part from Ashe & McRae, 1985; Barrett &
Kernan, 1987; Beck-Dudley & McEvoy, 1991; Bernardin, Kane, Ross, Spina, & Johnson, 1995; Burchett
& De Meuse, 1985; Cascio & Bernardin, 1981; Lubben, Thompson, & Klasson, 1980; Martin & Bartol,
1991; Martin, Bartol, & Levine, 1986; Veglahn, 1993; and recent cases. Recommendations were
extracted, consolidated across articles, and supplemented by the author.
generally has not been fatal to the employer unless some other impropriety (e.g., discrimination) or harm
to the employee can be shown. On the other hand, where such safeguards do exist, both the employer
and employee have been expected to observe and abide by them. Frankly, it is difficult to discern a
noticable pattern in this area, and it appears that the legal viability of appraisal procedures will depend on
the facts and circumstances of each case. Examples illustrating the success or failure of appraisal
Standardized Procedures and Rater Training. In Kelly v. Drexel University, 5 AD Cases 1101 (E.D. Pa.
1995), the Court rejected Kelly¶s argument that his position was eliminated because of age or disability
discrimination. Despite the employer¶s failure to systematically evaluate employees¶ performance, or to
provide equal employment opportunity training for raters, the Court could find no evidence that the
employer¶s stated reasons--lack of computer proficiency and inability to adapt to a heavier workload--
were not the real reasons for Kelly¶s dismissal.
Procedures and Performance Deficiencies Communicated to the Ratee. In Salt Lake City VA Medical
Center, 103 LA 285 (Arb. 1994), the arbitrator rejected a housekeeper¶s grievance based on the
employer¶s failure to inform him of the requirements for a higher performance rating. The grievant¶s
overall rating was "fully successful," and he had been provided with the standards for that rating under the
applicable collective bargaining agreement. On the other hand, in Peoples Natural Gas, 105 LA 37 (Arb.
1995), an employee terminated for unsatisfactory performance in a new job was reinstated, based on the
employer¶s failure to follow through on its agreed plan of action to provide adequate training and monitor
the employee¶s level of improvement.
Ratee Access/Input to Appraisal Results, and Review Mechanisms. In Demming v. Housing
Authority, Demming¶s failure to take advantage of notice and opportunity to respond to an explicit, 49-
point performance evaluation was used to support her termination and reject her ADA claim. Similarly, in
Town of Bedford, 106 LA 967 (Arb. 1996), a police sergeant¶s refusal to cooperate in his own
performance evaluation by submitting information that he wanted the employer to consider proved fatal to
his grievance to upwardly amend his appraisal results. On the other hand, in Haycock v. Hughes Aircraft,
employer¶s failure to submit a fraudulently altered performance appraisal to Haycock for his signature
pursuant to company policy supported his claim of pretext, and helped to sustain his implied contract and
Multiple Raters (Self, Peers, Clients, Others). In Whalen v. Rubin, the employer¶s use of multiple raters
who independently decided that an employee other than Whalen was most qualified for a promotion
helped to negate Whalen¶s reverse discrimination claim. In Byrd v. Ronayne, client comments and an
associate attorney¶s candid self-evaluation that acknowledged performance deficiencies helped to sustain
the firm¶s decision to terminate her. In McLee v. Chrysler Corp., 73 FEP Cases 751 (2nd. Cir. 1997), a
warehouse supervisor¶s own admissions conceding the truth of negative performance ratings also helped
to undermine any claim that his termination was racially motivated or prextual. And in Golder v. Lockheed
Sanders, Inc., 71 FEP Cases 1425 (D.N.H. 1996), peer evaluations helped to support Golder¶s
performance-based dismissal during an RIF over his unsubstantiated objections that they were unreliable,
overly subjective, generally unfair, and a pretext for age discrimination.
On the other hand, in Mathewson v. Aloha Airlines, peer evaluations were found to be pretextual and
retaliatory against a pilot who had crossed picket lines during the pilot union¶s strike against a different
airline. And in Jimenez v. Mary Washington College, potentially collusive and racially motivated student
ratings led the District Court to sustain Jimenez¶ claim of discriminatory tenure denial (although this
decision was reversed on appeal because the College¶s performance-based reasons could not be shown
to be pretextual). Conversely, in Hampton v. Tinton Falls Police Dept., 72 FEP Cases 101 (3rd. Cir.
1996), a police department¶s disregard of a black lieutenant¶s recommendation to promote a black
sergeant raised a factual issue as to whether favorable performance information was improperly ignored
because the rater and ratee were the same race.
In sum, these latter cases suggest that where peers and other untrained or potentially biased evaluators
are used, the results should be weighed with caution against more systematic criteria, so that trait-based
ratings are avoided, and objectivity, job-relatedness, and other substantive safeguards are preserved. For
example, procedures could be developed to ensure that appraisal results that lead to negative
employment decisions are reviewed systematically (or at least spot-checked) by I/O psychologists or HR
professionals for evidence that age, gender, ethnicity, national origin, union status, or other improper
factors may have influenced the outcome. Of course, where such review procedures do exist, they should
be followed; see Woodson v. Scott Paper Co., 73 FEP Cases 1237 (3rd. Cir. 1997), in which the
employer¶s failure to have its corporate review committee examine discrepancies between a black
manager¶s low RIF ranking and his favorable past evaluations supported a jury¶s determination that
Woodson was terminated in retaliation for filing a discrimination complaint with the State human rights
Documentation, Consistency, and Rater Knowledge of the Ratee¶s Performance. A supervisor¶s
failure to document in writing purported performance deficiencies to support his "gut feeling" that another
employee was better qualified for a promotion led the court in Eldred v. Consolidated Freightways to
conclude that stated deficiencies were a pretext for gender discrimination. In Woodman v. Haemonetics,
inconsistencies over time in Woodman¶s evaluations led the court to conclude that a sudden reduction in
his ratings five days before his termination during an RIF was pretextual.
Conversely, consistency over time and across raters led to conclusions that low performance ratings for
Dennis, a black transportation planner, and Plummer, a black hotel security director, were not racially
motivated; Dennis v. County of Fairfax, 67 FEP Cases 1681 (4th. Cir. 1995); Plummer v. Marriott Corp.,
71 FEP Cases 945 (La. App. 1995). And, although the arbitrator in Town of Bedford found no problem
with having a police sergeant evaluated by a lieutenant who worked a different shift and had only recently
become his supervisor, the courts in Cook v. Arrowsmith Shelburne, Inc., 69 FEP Cases 392 (2nd. Cir.
1995), Henderson & Bryan v. A.T. & T. Corp., and Woodson v. Scott Paper Co. relied partly on raters¶
lack of personal knowledge to sustain employees¶ claims that negative performance ratings came as a
result of age, race, or gender discrimination.
Seniority, Just Cause, Discipline, and Related Performance Issues under Union and other
If it is important to observe substantive and procedural safeguards in appraising performance generally,
then it is critical to do so when those safeguards are mandated by the terms of an express or implied
contract. Alleged violations of contractual appraisal provisions necessarily involve the analysis of case-
specific language, so I do not deal with them at length in this chapter. However, some issues in this
context are relevant to the overall viability of any organization¶s practices. Among these are seniority, the
"just cause" standard, and progressive or positive discipline.
The seniority issue frequently arises during an RIF that attempts to accommodate both longevity
preferences and performance criteria. For example, in Houston Lighting & Power Company, 103 LA 179
(Arb. 1993), a union contract provided that "in the event of a permanent reduction in force, where ability,
skill, and qualifications are equal, seniority shall govern." A number of laid off employees filed grievances
over individual decisions, but an arbitrator upheld the employer¶s overall system, by which supervisors
used a special performance profile to classify individuals within a particular job category as marginal,
average, or above average, and applied seniority criteria within these classifications. This system also
was upheld by the Court of Appeals in a related case, in which the Court found the system "reasonably
calculated to fairly accomplish the determination of utility, skill, and qualifications" using criteria that were
"within the scope of contractually allowed factors," 151 LRRM at 2023 (5th. Cir. 1995).
Failure to adhere to an informal seniority system during an RIF is not necessarily fatal to the employer if
legitimate reasons for departing from prior practice are credibly put forth. In EEOC v. Texas Instruments,
Inc., the Court found that the need to retain employees who could "satisfy and adapt to a rapidly changing
technological environment" justified laying off older supervisors over younger ones who possessed
college degrees, superior computer skills, and other technological expertise (72 FEP Cases at 982). As
mentioned earlier, however, it would be best to keep job descriptions and performance criteria updated to
the greatest extent practicably possible.
The "Just Cause" Standard
Express or implied agreements not to terminate an employee except for just cause are among the most
commonly litigated exceptions to the doctrine of employment at will. For example, the court¶s decision to
uphold the employee¶s reinstatement in Mathewson v. Aloha Airlines was based in large part on an
implied agreement that Mathewson would be evaluated only on his merits and qualifications, rather than
on biased peer appraisals influenced by his perceived "scab" status. And in Postville School District v.
Billmeyer, 152 LRRM 2401 (Iowa 1996), the Iowa Supreme Court refused to overturn an arbitrator¶s
decision that failed to find evidence of the just cause that would have been required to support the School
District¶s termination of an employee for alleged sexual misconduct outside the workplace. On the other
hand, the arbitrator in Linconview Local Board of Education, 103 LA 854 (Arb. 1994), found no basis to
apply a just cause standard in the Board of Education¶s decision to non-renew the limited one-year
contract of a teacher, so long as it abided by its procedural obligations with respect to its performance
appraisal processes. These obligations, with which the Board had complied, included evaluating the
teacher twice a year based on actual classroom observation, conferring with the teacher and preparing
written reports of evaluations, and providing copies of evaluations to the teacher.
Progressive or Positive Discipline
Both progressive and positive discipline procedures involve a series of steps that allow a problematic
employee to improve performance before being discharged. Progressive discipline involves warnings and
punishments of increasing severity, while positive discipline involves counseling and interventions of
increasing intensity (Gomez-Mejia et al., 1995). In general, where either system is present, adhering to
stated procedures will support the employer¶s discharge of the employee, whereas failure to do so will
support the employee¶s allegation of improper motivation on the part of the employer.
For example, in Hanchard v. Facilities Development Corp., 10 IER Cases 1004 (N.Y. App. 1995), the
Facilities Development Corp. (FDC) employee handbook set forth a disciplinary plan with both positive
and progressive features by which an employee of 5 or more years was to be provided performance
counseling and a work plan to measure and guide improvement. The handbook also provided for the right
to submit documentation and request a hearing prior to termination, and the right to be discharged only
for "materially deficient work performance." Hanchard, an architect, had declining performance
evaluations, became disruptive and insubordinate, was behind on most of his projects, and alienated both
clients and co-workers. In a split decision, the Court rejected Hanchard¶s claim that his discharge was
arbitrary and capricious, finding that the employer had "substantially complied" with its disciplinary
procedures (the Court also found that Hanchard had failed to take advantage of the protections afforded
to him). The dissent felt that FDC¶s compliance with its procedures had not been "substantial" enough.
For other cases in which the employer¶s adherence to its stated procedures led to a successful defense of
its position, see Gipson v. KAS Snacktime Co., 71 FEP Cases 1677 (E.D. Mo. 1994) (employee¶s failure
to cooperate in personal development program offered by the employer negated claim of pretext in race
discrimination case); R.G.H. v. Abbott Laboratories (employee¶s failure to respond to performance
improvement plan over six month period negated claim of pretext in disability discrimination case); and
Samaritan Health System, 106 LA 927 (Arb. 1996) (employer¶s substantial compliance with progressive
discipline and performance evaluation procedures, coupled with employee¶s failure to challenge negative
performance appraisal, supported employee¶s discharge for poor performance).
However, also see Chertkova v. Connecticut General Life Insurance, 71 FEP Cases 1006 (2nd. Cir.
1996). In that case, a supervisor¶s abuse of the "performance improvement plan" process, in which so-
called "coaching sessions" allegedly involved berating Chertkova behind closed doors and yelling
comments such as "there is no chance! You are not going to be here!" was found to warrant
reinstatement of her previously dismissed claims for constructive discharge and pretext in the context of
sex discrimination. This case further underscores that disregard of proper appraisal procedures, whether
by the employer or the employee, can cause problems in litigating discrimination and other kinds of legal
Emerging Legal Issues in Performance Appraisal: Flexible Job Designs, Security and Privacy, and
It has been estimated that almost 70% of the American populace now can claim membership in one or
more protected classes under various anti-discrimination laws. This number can be expected to grow as
increased immigration, greater longevity due to medical advances, and the widening scope of allowable
mental health disabilities modify current demographics. As global competition and technology continue to
drive RIFs and other restructuring, protected class status will continue to figure prominently in challenges
to layoffs and discharges that employers claim were based on performance but employees claim were
based on discrimination. The move toward "leaner, meaner" organizations, in which employees are
expected to work harder and take on a wider range of responsibilities, also will increase the potential for
performance appraisals to generate legal issues in emerging areas. Among these areas are flexible job
designs, security and privacy, and workplace violence.
Flexible Job Designs
In the context of innovations such as team-based designs, Mirvis and Hall (1996) have noted the growing
incidence of flexible firms, flexible jobs, and skill-based individual careers. Continuous learning, self-
management, self-designed jobs, and flexible work roles are replacing rigid job descriptions and
classification schemes. These changes carry implications for appraising performance, particularly with
respect to demonstrating the job-relatedness or essential nature of performance criteria such as
"interpersonal skills," "ability to lead a team," "flexibility," and "participation" (Amirmokri v. Baltimore Gas &
Electric; Woodman v. Haemonetics Corp.). Although such criteria sometimes pass muster (as in
Amirmokri), they also may form the basis for a claim of pretext (as in Woodman). This points out the need
for employers to further define, refine, and validate flexible performance criteria, in order to be able to
argue successfully in defense of discrimination claims that the use of such criteria serves a legitimate
Security and Privacy
In re National Archives and Records Administration, 107 LA 123 (Arb. 1996) presents a case in which the
high stakes often linked with favorable performance ratings (here, qualification for a promotion) led a
National Archives employee to falsify his ratings by fraudulently altering one of his written appraisals. The
employee, who had a top security clearance, was discharged for cause, in part because he had betrayed
his position of trust with the agency. This points out the need for employers to develop appropriate
security procedures to prevent similar occurrences, and to avoid compromising the privacy of other
employees whose performance results also may be on file.
In Sturm v. TOC, security and surveillance actually were principal parts of a convenience store manager¶s
performance appraisal duties, which perhaps takes the recommendation that evaluations should be
based on personal knowledge to the extreme. Sturm¶s appraisal duties involved different forms of ongoing
honesty testing, including "baiting" the cash register with extra cash, looking over employees¶ shoulders,
and viewing video surveillance tapes. Given the severe problem with employee theft faced by many
companies, and the increasing deference afforded to private employers in areas such as drug testing, it is
probable that alleged invasions of privacy based on conduct such as that in Sturm will arise with
increasing frequency in challenges to such practices. Plummer v. Marriot Corp., a constructive discharge
case, provides an example of such a challenge in connection with a polygraph test during an internal
investigation of employee theft.
As noted earlier in connection with the Randi W. case, employers face increasing potential liability for
non-disclosure of problematic employee performance, as when their affirmative misrepresentation that a
former employee¶s performance was favorable presents a foreseeable risk of harm to others. With
appraisal results continuing to figure prominently in layoffs and discharges, employee reactions to
appraisers and appraisal processes seem increasingly likely to lead to injury, violence, or death in and
outside the workplace. News media have reported such instances, as where an employee committed
suicide by sticking his head into a giant circular saw when told by his supervisor that his already heavy
workload standards would be increased yet again ("Firm Blamed," 1995). When an employee exhibits
signals during an evaluation that suggest the possibility that such problems might exist (e.g., symbolically
decapitating one¶s supervisor during a meeting to discuss threatening behavior toward co-workers; Lewis
v. Zilog, Inc.), it would not be surprising to see an employer held liable for related violence on the grounds
that it knew or should have known that serious harm to the employee or others might result.
Although it remains difficult at best to predict who among the many employees that exhibit stress-related
symptoms will actually resort to violence, the ADA imposes a duty on employers to provide reasonable
accommodations to employees who suffer from mental disabilities, including those that might lead to such
conduct. Opportunities for reduced stress, flexible workloads, and professional counseling might be
appropriate first steps toward such an accommodation. Of course, in extreme cases, as where an
employee poses "a direct threat to the health or safety of other individuals in the workplace," 42 U.S.C.
Section 12113(b), there may be no choice but to remove the employee from the workplace. Employers
can defend resulting discrimination claims on the grounds that the employee was not qualified under the
ADA because he or she could not perform the essential functions of their job. Employers have
successfully argued in such situations that the essential functions of any job include the ability to deal with
criticism from supervisors and coworkers in a civil manner, and to refrain from violent behavior (see Fram,
1997; Willis, 1997).
Conclusions and Further Recommendations for Practice
As our economy continues increasingly to move toward a service and information emphasis, it seems
inevitable that flexible, subjective performance criteria will remain in use, particularly at the professional
and managerial level. As global competition continues increasingly to demand a customer focus and total
quality orientation, it also seems inevitable that multiple sources of feedback (clients, subordinates, peers)
will remain in use, perhaps at all levels of employment. As we have seen, both subjective criteria and
biased or untrained raters can spawn discrimination claims that are difficult to defend. Where such criteria
or raters are used, they would be best used in conjunction with objective criteria and trained, unbiased
raters whose input is given greater (perhaps determinative) weight. This practice would preserve the
benefits of multiple criteria and information sources, while also providing defenses to discrimination claims
in the form of legitimate, nondiscriminatory reasons for adverse employment decisions or the absence of
pretext. This practice also would support the mitigating defense, in a mixed motive case, that the
employer would have made the same decision notwithstanding the use of arguably discriminatory factors.
I close by summarizing some additional recommendations from a noted practitioner in the employment
law arena that become particularly relevant in termination cases (Cathcart, 1996). Employers should
review appraisal procedures to ensure (1) that employees are provided with an oral interview and a
written statement of their appraisal, as well as the opportunity to acknowledge in writing receipt or review
of the appraisal; (2) that managers are encouraged to support candor in appraisals, to avoid central
tendency or "friendliness" errors that can make subsequent demotions or discharges difficult to defend;
and (3) that appraisers are trained and "spot checked" from time to time, to identify and correct practices
that might generate legal liability. Employers also should conduct a thorough pre-termination review of all
information on potential candidates for discharge, and determine how other employees were treated who
were subject to discretionary judgments of the same supervisor. Employers should consider the
employee¶s seniority, the importance and specificity of alleged performance deficiencies, past practices in
similar circumstances, the impartiality of evaluators, any extenuating circumstances, and compliance with
company discipline and discharge procedures. Finally, the employer should consider any potential for
defamation or invasion of employee privacy, as well as the manner in which the employee (and anyone
else) will be told about the adverse decision.
Hopefully, these recommendations will increase the chances that your appraisal practices manage to
avoid legal scrutiny. If, as has frequently become the case, however, your appraisal practices do wind up
in litigation, I offer words that Obi-Wan Kenobi might have said: "May the Courts be with you."
Ashe, R. L., & McRae, G. S. (1985). Performance evaluations go to court in the 1980¶s. Mercer Law
Review, 36, 887-905.
Barrett, G. V., & Kernan, M. C. (1987). Performance appraisal and terminations: A review of court
decisions since Brito v. Zia with implications for personnel practices. Personnel Psychology, 40, 489-503.
Bernardin, H. J., Kane, J. S., Ross, S., Spina, D.S., & Johnson, D. L.
(1995). Performance appraisal design, development, and implementation. In G. R. Ferris, S. D. Rosen, &
D. T. Barnum (Eds.), Handbook of Human Resource Management (pp. 462-493). Cambridge, Mass.:
Beck-Dudley, C. L., & McEvoy, G. M. (1991). Performance appraisals and discrimination suits: Do courts
pay attention to validity? Employee Responsibilities and Rights Journal, 4, 149-163.
Burchett, S. R., & De Meuse, K. P. (1985). Performance appraisal and the law. Personnel, 62, 29-37.
Cascio, W. F., & Bernardin, H. J. (1981). Implications of performance appraisal litigation for personnel
decisions. Personnel Psychology, 34, 211-226.
Cathcart, D. A. (1996). Employment termination litigation: Collateral tort theories and the multimillion
dollar verdict: A 1994 Update. In Employment Discrimination and Civil Rights Actions in Federal and State
Courts (pp. 675-779). Philadelphia: The American Law Institute.
Cathcart, D. A., & Snyderman, M. (1997). The Civil Rights Act of 1991. In P. M. Panken (Ed.),
Employment and Labor Law (pp. 277-361). Philadelphia: The American Law Institute.
Firm blamed for suicide. (1995, November 3). The San Jose Mercury News, p. D1.
Fram, D. K. (1997). Expanded checklists for determining "disability," "qualified," and "reasonable
accommodation" under the ADA. In National Employment Law Institute Human Resources Workbook:
Larkspur, CA: NELI.
Gomez-Mejia, L. R., Balkin, D. B., & Cardy, R. L. (1995). Managing Human Resources. Englewood Cliffs,
NJ: Prentice Hall.
Koy, D. J., Briggs, S., & Grenig, J. (1987). State court disparity on employment-at-will. Personnel
Psychology, 40, 565-577.
Lubben, G. L., Thompson, D. E., & Klassen, C. R. (1980). Performance appraisal: The legal implications
of Title VII. Personnel, May-June, 11-21.
Martin, D. C., & Bartol, K. M. (1991). The legal ramifications of performance appraisal: An update.
Employee Relations Law Journal, 17, 257-286.
Martin, D. C., Bartol, K. M., & Levine, M. J. (1986). The legal ramifications of performance appraisal.
Employee Relations Law Journal, 12, 370-395.
Miller, C. S., Kaspin, J. A., & Schuster, M. H. (1990). The impact of performance appraisal methods on
Age Discrimination in Employment Act cases. Personnel Psychology, 43, 555-578.
Mirvis, P. H., & Hall, D. T. (1996). New organizational forms and the new career. In D.T. Hall (Ed.), The
Career is Dead--Long Live the Career: A Relational Approach to Careers (pp. 72-101). San Francisco:
Perry, E. L., Kulik, C. T., & Bourhis, A. C. (1996). Moderating effects of personal and contextual factors in
age discrimination. Journal of Applied Psychology, 81, 628-647.
Veglahn, P. A. (1993). Key issues in performance appraisal challenges: Evidence from court and
arbitration decisions. Labor Law Journal, October, 595-606.
Werner, J. M., & Bolino, M. C. (1997). Explaining U.S. Courts of Appeals decisions involving performance
appraisal: Accuracy, fairness, and validation. Personnel Psychology, 50, 1-24.
Willis, S. G. (1997). Stress-related disability claims under the ADA. The Practical Lawyer, 43, 73-86.
Canadian Uniform Standards of Professional
The Canadian Uniform Standards of Professional Appraisal Practice
(CUSPAP), first introduced in January 2001, respects the expanding role of
the valuation professional within the Appraisal Institute of Canada. The
Standards meet the sponsor criteria of the Appraisal Foundation in their
international membership category, and endorse International Valuation
Standards as an authority promoting world-wide acceptance of standards for
Members of the AIC and other users of CUSPAP completing reports in
accordance with these standards as well as intended users of professional
appraisal services will also find contained herein the requirements necessary
to meet compliancy with the IVS relative to IFRS and Valuation for Financial
Four Standards have been developed:
y Ethics Standard
y Appraisal Standard
y Review Standard
y Consulting Standard
Rules provide minimum performance Standards for ethics, appraisal, review and
Comments clarify, interpret, explain and elaborate on the Rules, and form an integral
part of the Standards; for the purpose of these Standards, their application is
Practice Notes offer advice, examples and resolution; their application is not
Definitions form an integral part of the Standards; for the purpose of these Standards,
their application is compulsory.
February 22, 2010
y 2010 edition [pdf]
(Effective January 1, 2010)
y 2008 edition [pdf]
y 2007 edition [pdf]
y 2006 edition [pdf]
y 2005 edition [pdf]
y 2004 edition [pdf]
y 2003 edition [pdf]
y 2002 edition [pdf]
y 2001 edition [pdf]
H ow bank ¡mpIement standard perIormance appra¡saIs syetem
WhoIesaIe Branch oI South AIr¡ca's Largest Bank Moves SuccessIuIIy Irom
Homegrown Appra¡saI System to HaIogen
The International Wholesale side of Standard Bank replaced its homegrown employee
performance management and talent management system with a best of breed system to improve
appraisal completion rates, system reliability and security, and overall appraisal quality. The new
system enabled the organization to:
y 7ransIorm the process ¡nto one that ¡s eas¡er to use, more reI¡abIe and prov¡des comprehens¡ve report¡ng;
y 5HGucH thH t¡mH nHHGHG to compIHWH appra¡saIs; anG
y 5a¡sH WhH pHrcHQWagH oI appra¡saIs compIHWHG oQ WLmH
Standard Bank Group is a global bank with African roots. It is South Africa's largest bank,
distinguished by its extensive operations in 17 African countries. Outside the African continent,
Standard Bank's Wholesale Bank (CIB International, approx 1400 employees) spans 21
countries, with a focus on emerging markets.
For CIB International, employee performance and talent management is key to its ongoing
strategic plan and success. The Bank is committed to an effective learning and development
system, which includes developing the leadership competencies and skills of the Bank's
managers and executives, and a number of initiatives to develop performance management.
Because of this commitment, the Bank was extremely frustrated when previous performance
management solutions failed to meet expectations.
To support overall objectives related to performance management, the Bank moved from a
paper-based process to a computer-based process designed in-house in 2001. This move was
made to ensure the employee evaluation process was easier to manage and would offer complete
reporting information on appraisal data.
By implementing its in-house system, the Bank had hoped to better support regulatory
compliance, as well as the overall annual review process. However, there were issues with the
system it developed.
The Bank's head of IT, suggested seeking an outside vendor to provide an affordable, effective
performance management solution. Standard Bank's head of IT did not see the logic behind using
in-house resources when proven, best-in-class systems were available. Developing an in-house
system taxed the resources of the Bank's developers whose primary responsibility was to support
core business functions. The IT department had already been tasked with providing infrastructure
for the organization in order to grow the bank; providing an enterprise class employee
performance and talent management system could not be their top priority.
The London office of CIB International made the decision to go with Halogen very quickly. "We
got Halogen's contact information from our Wholesale colleagues in South Africa," said Frances
Haughian, HR Consultant with CIB International. "They had been exploring using the system
there and have recently decided to go with Halogen themselves."
Within two weeks of the Bank setting up a meeting with Halogen representatives and scheduling
a demonstration, they made the decision to go with Halogen. "Our team needed a solution that
would be first and foremost stable," said Haughian. "It also needed to be easy to use and flexible
enough to maintain the same look and feel as the previous process, so that our people did not see
the new system as a massive change to the way they carried out appraisals."
The Bank wanted the new solution to mirror the format of the old performance appraisal process,
which included past objectives and its own set of competencies. Even though the system was
new, the Bank wanted the form to look very similar to the one it had used the previous year in
order to increase employee acceptance. Halogen eAppraisal could accommodate all the Banks
requirements and in addition, Halogen had a solid history of supporting other companies on a
large scale. "We needed something that could easily cope with our numbers and our potential
growth," said Haughian.
After struggling to develop an in-house system for two years, Standard Bank was excited that it
was able to implement Halogen eAppraisal in under a month. A Halogen trainer spent one week
with the Bank in London training employees, developing end-user training and building the
Bank's performance appraisal forms. Within a few weeks the first appraisals were under way.
The organization took advantage of Halogen eAppraisal's flexibility and the opportunity the
solution gave the HR department to re-evaluate the appraisal process. "In the first year we used
eight forms, as there were different competencies for each level of job," said Haughian. "In the
second year, we changed the competency framework and we were able to reduce the number of
forms to two. One was for the majority of our employees and the other was for IT, as they had
their own technical competencies."
Employees have embraced the solution and their investment in the system has increased every
year. There was an element of resistance to the idea of performance appraisals in the past that
HR had to overcome initially, but, in part because of Halogen eAppraisal's ease of use, that issue
is being resolved.
To make implementation and future maintenance as simple as possible, the Bank chose to have
Halogen host the solution, taking the administrative pressure off its internal IT department.
Having Halogen host the solution assured the organization that updates would be made
automatically and that its information would be secure.
Since implementing Halogen eAppraisal, Standard Bank has benefited from:
y ,mprRvHG cRmpOHWLRQ raWHs;
y MRrH HasLO\ accHssLEOH pHrIRrmaQcH maQagHmHQW GaWa WhaW caQ EH usHG WhrRughRuW WhH \Har WR suppRrW WhH
BaQN's phLORsRSh\ RI RQgRLQg SHrIRrmaQcH maQagHmHQW; aQG
y A mRrH sWaEOH aQG sHcurH s\sWHm
Standard Bank is continuing to shorten the time it takes to complete its performance appraisals
and to further increase its on-time completion rate. "This year we are looking to have all our
appraisals completed within two months," said Haughian.
The speed of employee appraisals has increased, but perhaps more importantly the quality has
improved with Halogen eAppraisal. People are more comfortable working within the system and
using the authoring aids and links to competencies than they were writing everything out by
hand. Managers now take the time and use the comment helper to provide more constructive
feedback to employees. "In some cases, managers struggled to comment on competencies. It was
not very informative," said Haughian. "Now managers can click on a competency area on the
screen and a pop up box appears with a list of behaviors that exist within our competency
framework. The information is all there for them. As a result, it is easier for managers. They
don't need to refer to separate documents."
In addition, as the Bank has implemented the solution it has taken the time to enhance its overall
process, taking advantage of the powerful features offered as part of Halogen eAppraisal. "We
make subtle changes each year," said Haughian. "To further help managers and reduce the time it
took to complete the appraisal process we have reduced the number of workflow steps from eight
The Bank's aim was to introduce a reliable, easy-to-use employee performance appraisal system.
Halogen eAppraisal has provided the Bank with the stability and reliability it desired and has
enabled the organization to achieve dramatically improved on-time completion rates. The Bank
looks forward to watching the benefits appreciated by CIB International expand as CIB South
Africa now begins its implementation of Halogen eAppraisal.
y bowland solutions: online 360 degree feedback and ...
How to successfully implement a Performance Appraisal process in your organisation ... from
a range of sources - it creates more data than a standard performance appraisal.
y What is the average colour of a traffic light?
11 Mar 10
y How this links to 360 degree feedback will follow!Let's assume we have a basic traffic light
system. And we find out that we have the following . Visit Our Website
y 360 degree feedback
y Performance appraisals
y Contact Us
What is the average colour of a traffic light?
Thursday, March 11, 2010 by Brendan Walsh
How this links to 360 degree feedback will follow!
Let's assume we have a basic traffic light system. And we find out that we
have the following distribution
y Red 50% of the time
y Amber 10% of the time
y Green 40% of the time
And someone wants to know what colour it is on average. What to do?
Average requires numbers.
So, let's give Red the number 1, Amber the number 2, and Green the number 3. A bit of
Maths will find the average now (50% *1) + (10% * 2) + (40% *3) ... 1.9 is the answer.
So our average is 1.9 which is nearest to Amber (which we gave the number 2). So on
average the colour of the traffic light is Amber ... somewhere in the middle.
We know this is wrong - the light is on amber least of all - but it was an attractive
Even more tempting is to ask people to respond to a question with responses that can
y Strongly Agree
y Neither agree nor disagree
y Strongly Disagree
and then give people a score out of 5 for how people answered on average.
Let's say we have done that and the average is 3.1. What does that mean? We're
going to say that on average the respondents roughly "neither agree nor disagree" with
the statement. But go back to our traffic light example... the colour that the traffic light is
least often is amber, what's to say the same hasn't happened here?
Statisticians will tell you that the underlying problem here is that you are treating
categorical data as if it is numerical data; if you are very unlucky, you may find yourself
in a debate about likert scales and the Polytomouse Rasch model. What I want to
highlight is, this superficially simple concept of giving each point a number and
averaging the responses is not that simple and may lead to inaccurate conclusions.
Way's round it? Either don't use averages in your report, or make it clear that you are
using the scale to reflect a mark out of 5. That at least gives your average credibility
even if it doesn't get around the problem of the average obscuring the underlying
Note, this doesn't stop you using numbers or charts in your report - I'll discuss that in
This article forms part of the structure of a new white paper I am writing on reporting in
360 degree appraisals (I promise this is the heavily statistical bit and the rest is more
down to what we see as best practice!). If you sign up to our white papers, then you will
receive that document as it is completed. Click here to sign up.
y Transparent 360 degree feedback within Google
08 Mar 10
A brief note to highlight a recent article which had an interview with Google Europe boss
John Herlih, in which he describes, amongst other things tha
Transparent 360 degree feedback within Google
Monday, March 8, 2010 by John Rice
A brief note to highlight a recent article which had an interview with Google Europe boss
John Herlih, in which he describes, amongst other things that make Google work well,
how they take their people through 360 degree feedback every 6 months.
It is clear that they have a passion for attracting, recruiting, developing and retaining the
best people, and this comes through in most articles written about Google - what is
interesting here as well is how the 360 degree feedback results are shared with the
whole company, providing a transparent process, which presumably serves to foster a
more open culture.
Certainly not for everyone, but then when did Google ever follow the crowd...?
y 360 degree feedback; throwing the baby out with the bathwater...
05 Mar 10
Here is a recent blog post I came across recently which lambasts a few management
practices, one of these being 360 degree feedback processes.As with .
360 degree feedback; throwing the baby out with the
Friday, March 5, 2010 by John Rice
Here is a recent blog post I came across recently which lambasts a few management
practices, one of these being 360 degree feedback processes.
As with many articles of this nature, I often find myself agreeing with some of what is
said; poorly executed management practices, such as a badly implemented 360 degree
appraisal process, can do more harm than good - so if people have a 'bad experience',
it can colour their view about such practices permanently.
However, as with most things in life, this isn't a 'black & white' situation, and despite
their being poor practice in evidence, there is also (certainly in our own experience) very
good practice around which suggests that there is a danger of throwing the proverbial
'baby out with the bathwater' as one looks to kick against bad practice.
360 degree feedback should complement the whole myriad of management practices,
tools and processes out there - it isn't a complete substitute for open, honest and
regular communication between bosses and direct reports, peer to peer, etc, which
should most definitely be encouraged, but it certainly adds value as organisations seek
to create this kind of transparent culture which can take time to take root.
y Extracting wisdom from 360 degree feedback
03 Mar 10
Hal Varian, Google's chief economist, is quoted as saying that "Data are widely available, what is
scarce is the ability to extract wisdom from t.. Extracting wisdom from 360
Wednesday, March 3, 2010 by Brendan Walsh
Hal Varian, Google's chief economist, is quoted as saying that "Data are widely
available, what is scarce is the ability to extract wisdom from them". I'm focusing
heavily at the moment on debriefing 360 degree feedback and the 360 degree feedback
report. For both an upcoming seminar, and a new whitepaper, I'm looking to fine tune
our thoughts around how we make best use of a 360 feedback process.
The current line of thinking is to consider how data becomes information becomes
knowledge/wisdom. The 360 feedback questionnaire generates data. Our challenge is
to take that data and produce information from which the recipient gains knowledge.
Along the way we have to avoid the dangers of losing information or of forming unwise
The report and the conversation around the report is where the transformation happens
and where best practice can lead to the best knowledge outcomes.
You can register for our 360 feedback seminar by clicking here. If you are interested in
our white papers then subscribe here - you would then automatically receive the white
paper described above as it is produced.
y Data, data, everywhere - what to pay attention to
01 Mar 10
360 degree feedback deliberately generates data from a range of sources - it creates
more data than a standard performance appraisal. Annual per...
y Too much 360 feedback - time to be selective
26 Feb 10
I was listening to Radio 5 in the UK. There was a debate about class - a standard
fixation. Initially a couple of experts in the field dis...
y Performance related pay and the annual appraisal
25 Feb 10
One author wrote that if you want to make performance appraisals really difficult then
link the individual's pay to their numerical rating.Without jud...
y The performance appraisal meeting
24 Feb 10
The appraisal meeting strikes fear into many managers. They fear its time-consuming
nature and they fear the meeting itself. The former issue is often...
y SMARTER objectives for performance appraisals
23 Feb 10
I was reading a book on long distance cycle training. The author referred to SMARTER
objectives. The acronym was used differently, al...
y How often should you conduct a performance appraisal
22 Feb 10
This is an excerpt from our performance appraisal white paper.The common advice is
that at the annual appraisal nothing should come as a surprise. Thr...
y Union of Arab Banks : Events
Jordan Seminar: Performance Appraisal System of Human Force in Banks ... elements and
standards of performance appraisal ... To implement successful performance appraisal
and reward ...
Seminars - Details
Details Agenda Brochure Speakers Press Releases Photos Presentations Sponsors Accomodation
Jordan Seminar: Performance Appraisal System of Human Force in Banks and Financial
Amman ² Jordan 12-12 September 2007
September 10, 2007 - September 12, 2007
Participants will learn
To appreciate the linking of a performance management
system to high performance organization
To Setup goals for individuals and groups
To establish elements and standards of performance appraisal
To learn the requirements for efficient monitoring of employees'
To identify developmental needs
To implement successful performance appraisal and reward
To design performance management plans
Background: The global shift to a knowledge economy and the increase in competitive pressures in the
market place have placed the focus on intangible factors as the most critical factors in
having a competitive edge. Intangible factors include management of knowledge and the
knowledge workers and attracting, developing and retaining talent.
Effective performance management allows firms to do more with less. It includes activities
to ensure that goals are being attained through the effective and efficient execution of
business operations. It emphasizes the systematic process by which an organization
involves its employees in improving the organization's effectiveness and to create a high
Objectives: Participants will learn:
To appreciate the linking of a performance management system to high performance
To Setup goals for individuals and groups
To establish elements and standards of performance appraisal
To learn the requirements for efficient monitoring of employees' performance
To identify developmental needs
To implement successful performance appraisal and reward systems
To design performance management plans
Topics: - Performance Management- An Overview of the Basic Concepts
* Performance Management in Perspectives
* Overall Goals and Basic Steps
- The full performance Management Cycle
* Planning: Setting Performance Expectations and Goals
* Monitoring: Consistently Measuring Performance and Providing Ongoing Feedback
* Developing: Increasing the Capacity to Perform Through Training, Assignments and
Improving Work Processes
* Rating: Summarizing Employee Performance According to Elements and Standards
* Rewarding: Recognizing Employees for Their Contributions to the Organization's Mission
- Employee performance plan
* Performance Elements.
* Distinguishing activities from accomplishments.
* Performance Measurement using Balanced Score Card.
* Developing employee performance plan.
- Performance Appraisal for Individuals and Teams
* Performance Appraisal at the Individual Level
* Performance appraisal at the Team Level
* Performance Appraisal as a Development Plan
* Motivating managers to Review Performance
- Performance Management Program Design
* Secure Organizational Support
* Initial Areas to Address
* Program Design Components
Speaker Dr. Pierre Abou-Ezze
Human Resources Manager at BLOM Bank
Chairman of the Human Resources and Social Affairs Committee at the Association of
Banks in Lebanon
Currently lecturer and previously director of the school of business at the American
University of Beirut
Attendees: - Supervisors and Line Managers with human resources responsibilities.
- Human Resources Officers.
- Potential and newly appointed Human Resources Managers.
* Registration starts on the first day of the seminar from 08:00 am till 09:00 am.
* The Seminar starts daily at 09:00and ends at 15:00.
*Seminar Language: Arabic & English.
Participation Fee: 1000 USD For UAB members
1200 USD For Non-UAB members
* Including Seminar¶s material and refreshments
implement modern appraisal system
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.