PERFORMANCE APPRAISAL

Performance Appraisal Defined

System of review and evaluation of job performance Assesses accomplishments and evolves plans for development
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Performance Management
Process that significantly affects organizational success Managers and employees work together to set expectations, review results and reward performance.

Purposes of Performance Mangement

Strategic
Aligning employee performance with organizational objectives

Administrative
Making employment-related decisions

Developmental
Aiding employee growth
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Appraiser Discomfort
Performance appraisal process cuts into managers time Experience can be unpleasant when employee has not performed well
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Employee Anxiety
Creates anxiety for appraised employee

Rationale for Performance Appraisal

Provides legal and other benefits for employers
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Designing a performance management system

Conduct job analysis Set performance standards Appraise performance Feedback information to employee

Establish Performance Criteria

Traits Behaviors Competencies Goal Achievement Improvement Potential
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Responsibility for Appraisal

Immediate supervisor Subordinates Peers Rationale for evaluations conducted by team members Self-appraisal Customer appraisal
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360-Degree Valuation
Multi-rater evaluation Input from multiple levels with firm and external sources Focuses on skills needed across organizational boundaries More objective measure of performance Process more legally defensible

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Performance Measure Standards

Strategic congruence Reliability Validity Acceptability Specificity

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The Appraisal Period

Prepared at specific intervals Usually annually or semiannually Period may begin with employees date of hire All employees may be evaluated at same time
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Appraisal categories and types

Comparative
Ranking (Simple, alternation) Forced distribution Paired comparison

Attribute
Graphic rating scale

Behavioral
Critical incidents BARS BOS

Results
MBO

Quality
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Problems in Performance Appraisal

Lack of objectivity Halo error Leniency/strictness Central tendency Recent behavior bias Personal bias Manipulating the evaluation
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Reasons for Intentionally Inflating or Lowering Ratings

Inflating Ratings
Believe accurate ratings would have a damaging effect on subordinates motivation and performance. Improve employees eligibility for merit raises. Avoid airing departments dirty laundry. Avoid creating negative permanent record that might haunt employee in the future. Protect good workers whose performance suffered because of personal problems. Reward employees displaying great effort even when results were relatively low. Avoid confrontation with hard-tomanage employees. Promote a poor or dislike employee up and out of the department.

Lowering Ratings
Scare better performance out of an employee. Punish a difficult or rebellious employee. Encourage a problem employee to quit. Create a strong record to justify a planned firing. Minimize the amount of merit increase a subordinate receives. Comply with an organizational edict that discourages managers from giving high ratings.

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Characteristics of an Effective Appraisal System

Job-related criteria Performance expectations Standardization Trained appraisers Continuous open communication Performance reviews Due process
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Legal Implications
With enactment of Americans with Disabilities Act and civil rights legislation, employers must prepare for more discrimination lawsuits and jury trials related to performance appraisals
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The Appraisal Interview

Scheduling the interview Interview structure Use of praise and criticism Employees role Use of software Concluding the interview

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