4.

Performance

Performance management = a continuous process of identifying, measuring, and developing

the performance of individuals and teams and aligning performance with strategic goals of the
organization. Not a one-time event.
Performance appraisal = the systematic description of job-relevant strengths and weaknesses
within and between employees or groups.

There are technical and human issues involved. N addition, performance management needs to
be placed within the broader context of the organization’s vision, mission and strategic priorities.

Purposes for performance management

 Strategic à link employee activities with the organization’s mission and goals.
 Communication à they allow employees to know how they are doing and what the
organizational expectations are regarding their performance.
 Employment decisions à information gathered by the performance management system
can serve as predictors and as key input for administering a formal organizational reward
and punishment system, including promotional decisions.
 Criteria à in HR research (e.g., in test validation).
 Developmental à establish objectives for training programs.
 Feedback à to employees for personal development.
 Organizational diagnosis, maintenance, and development
 Records à to keep proper records to document HR decisions and legal requirements.

Realities of Performance Management Systems

1. Expected in all organizations. They need to know if individuals are performing

competently, etc.
2. Appraisal is fraught with consequences for individuals (rewards/punishments) and
organizations.
3. As job complexity increase, it becomes progressively more difficult to assign accurate,
merit-based performance ratings.
4. When sitting in judgment on coworkers, there is an ever-present danger of the parties
being influenced by the political consequences of their actions.
5. Implementation takes time and effort, and participants must be convinced the system is
useful and fair.

Barriers to implementing effective Performance Management Systems:

 Organizational à result when workers are held responsible for errors that may be the
result of built-in organizational systems.
 Political à stem from deliberate attempts by raters to enhance or to protect their self-
interests when conflicting courses of action are possible.
 Interpersonal à arise from the actual face-to-face encounter between subordinate and
superior.
Fundamental requirements of successful Performance Management Systems:

1. Congruence with Strategy

2. Thoroughness (grondigheid, doortastendheid)
3. Practicality: available, plausible, acceptable, easy to use.
4. Meaningfulness
5. Specificity
6. Discriminability
7. Reliability and Validity
8. Inclusiveness
9. Fairness and Acceptability

This 9 key requirements indicate that performance appraisal should be embedded in the broader
performance management system and that a lack of understanding of the context surrounding the
appraisal is likely to result in a failed system.

Performance appraisal à
1). Observation:  detection, perception, and recall or recognition of specific behavioral events.
2). Judgment:         categorization, integration, and evaluation of information.

In practice, observation and judgment represent the last elements of a three-part sequence:
* Job analysis (requirements for a job)
* Performance standards (translate requirements in acceptable/unacceptable)
* Performance appraisal (job-relevant strengths and weaknesses of each individual)

Our goal in performance appraisal is not to make distinctions (onderscheidingen) among jobs,
but rather to make distinctions among people, especially performing the same job.
Standards are usually constant across individuals in a given job, while goals are often determined
individually or by a group. It is often the case that charges of unequal treatment and unfair
discrimination arise in jobs where no clear performance standards exist.

Who shall rate?

In addition to being cooperative and trained in the techniques of rating, raters must have direct
experience with, or firsthand knowledge of, the individual to be rated.

 Immediate Supervisor
Responsible for managing the overall appraisal process. He/she is also responsible for
reward and punishment.
360-degree feedback = including input from peers, subordinates, and customers,
certainly increase the types and amount of information about performance that is
available. If a supervisor has recently received a positive evaluation regarding his or her
own performance, he or she is also likely to provide a positive evaluation regarding his or
her subordinates.
  Peers
Peer nominations: identifying persons with extreme high of low levels of KSAO’s.
Peer rating: providing feedback.
Peer ranking: discriminating various levels of performance on each dimension.
* One possible solution that might simultaneously increase feedback value and decrease
the perception of friendship bias is to specify clearly the performance criteria on which
peer assessments are based.
* A second problem with peer assessments is that they seem to include more common
method variance than assessments provided by other sources. Two types of remedies to
address this problem:
- Procedural remedies
- Statistical remedies
 Subordinates
Subordinates offer a somewhat different perspective on a manager’s performance.
Subordinates ratings have been found to be valid predictors of subsequent supervisory
ratings over two-, four-, and seven-year periods. Averaging has several advantages:
1. Averaged ratings are more reliable than single ratings
2. Averaging helps to ensure the anonymity of the subordinate raters.
Subordinate ratings are of significantly better quality when used for developmental
purposes rather than administrative purposes.
 Self
Positive à especially when it is combined with goal setting, improve the individual’s
motivation and reduce his or her defensiveness during an appraisal interview.
Negative à show more leniency, less variability, more bias, and less agreement with the
judgments of others.
Self- and supervisor ratings agree much more closely when both parties have a thorough
knowledge of the appraisal system or process.
To improve the validity of self-appraisals, consider four research-based suggestions:
1. Relative scale (“below average”, etc.) instead of absolute scale (“poor”)
2. Provide multiple opportunities
3. Reassurance of confidentiality (will not be publicized)
4. Focus on the future
 Clients / Consumers
In jobs that require a high degree of interaction with the public or with particular
individuals. They can provide useful information.

In practice, appraising performance is not strictly an individual task. Supervisors often use
information from outside sources in making performance judgments.
Groups can be a useful mechanism for improving the accuracy of performance appraisals under
two conditions:
1. the task needs to have a necessarily correct answer.
2. the magnitude of the performance cue should not be too large.

Table 5-1 (p. 83).

 
Multiple raters for the same individual may be drawn from different organizational levels, and
they probably observe different facets of a ratee´s job performance.
In general, it does not make sense to assess the extent of interrater agreement without first
establishing measurement equivalence (= measurement invariance) because a lack of agreement
may be due to a lack of measurement.
- Measurement equivalence needs to be established before ratings can be assumed to be directly
comparable.
- Raters must use a hybrid multitrait-multirater analysis: raters make evaluations only on those
dimensions that they are in good position to rate and that reflect measurement equivalence à
improved conceptual fit for analyzing performance ratings, the probability of obtaining
convergent and discriminant validity is probably higher that for the traditional multitrait-
multirater analysis.
- Confirmatory Factor Analysis à each performance dimension as a latent factor and the extent to
which these factors are correlated with each other.
 

Most commonly observed judgmental biases:

 Leniency (people are being extremely easy) and Severity (extremely difficult).

Can be controlled or eliminated in several ways:
1). Allocating ratings into a forced distribution;
2). Requiring supervisors to rank order their subordinates;
3). Encouraging raters to provide feedback on a regular basis, thereby reducing rater and
rate discomfort with the process;
4). Increasing raters’ motivation to be accurate by holding them accountable for their
ratings.
 
 Central Tendency
Avoid using the high and low extremes of rating scales and tend to cluster all ratings
about the center of all scales: “everybody is average”. Solution: make clear anchors.
 
 Halo
Judgment based on overall impression. Presence of a certain quality, provides the
observer suggested that a different quality is present as well.

Types of performance measures:

Correlations between objective and subjective measures are often low.

 Objective = Production data (dollar volume of sales, number of errors) as well as

employment data (accidents, turnover, absences). Theoretical and practical limitations
often make them unsuitable.
 
 Subjective = judgmental supervisor about quality of work. Relative (compared with
others) or absolute.

Rating Systems:
  Relative
1). Helpful in employment decisions,
2). Control leniency, severity and central tendency
3). No indication of relative distance between individuals
4). Less reliable for rankings in the middle

- Rank Ordening à Simple ranking (from highest to lowest) or Alternation ranking (first
choose the best and the worst, then the second best and second worst, etc).
- Paired Comparisons à to choose the better of each pair
- Forced Distribution
 

 Absolute
Describe a ratee without making direct reference to other ratees.

- (Narrative) Essay à they can provide detailed feedback and are unstructured.
- Behavioral Checklist
- Forced-Choice System àspecial type of behavioral checklist: to reduce leniency errors
and establish objective standards of comparison between individuals. (discriminability
and preference).
- Critical Incidents à things employees did were especially (in)effective.
- Graphic Rating Scale (figure 5-4, p.92) à In terms of amount of structure provided, the
scales differ in three ways: 1). The degree of which the meaning of the response
categories is defined, 2). The degree to which the individual who is interpreting the
ratings can tell clearly what response was intended, 3). The degree to which the
performance dimension being rated is defined for the rater. Anchoring = in order to
make meaningful distinctions in performance within dimensions, scale points must be
defined clearly for the rater. Graphic rating scales may not yield the depth of information 
that narrative essays or critical incidents do; but they 1). Are less time consuming to
develop and administer, 2). Permit quantitative results to be determined, 3). Promote
consideration of more than one performance dimension, 4). Are standardized and
therefore comparable across individuals.
- Behavioral Anchored Rating Scale (BARS) à help raters to rate. Retranslation. BARS
development is a long, painstaking process that may require many individuals. May not
be practical for many organizations.

1). Build in as much structure as possible in order to minimize the amount of discretion exercised
by a rater.
2). Don’t require raters to make judgments that they are not competent to make.
3). Recognize that the process of performance appraisal (not just the mechanics), determines the
overall effectiveness of this essential component of all performance management systems.

Performance of teams
Given the popularity of teams, it makes sense for performance management systems to target not
only individual performance but also an individual’s contribution to the performance of his/her
team(s), as well as the performance of teams as a whole. The assignment of team performance
does not imply that individual contributions should be ignored. Three different types of teams:
1). Work or service teams;
2). Project teams;
3). Network teams.
Interpersonal relationships among the team members play a central role in the resulting ratings. 

Rater Training
Three objectives:

1. Improve the observational skills of raters by reaching them what to attend;

2. Reduce or eliminate judgmental biases;
3. Improve the ability of raters to communicate performance information to ratees in an
objective and constructive manner.

Regarding unintentional errors, rater error training (RET) exposes raters to the different errors
and their causes.
Frame-of-Reference (FOR) Training is most effective in improving the accuracy of
performance appraisals. FOR training provides trainees with a “theory of performance” that
allows them to understand the various performance dimensions, how to match these performance
dimensions to rate behaviors, how to judge the effectiveness of various ratee behaviors, and how
to integrate these judgments into an overall rating of performance.

Recommendations regarding issues that should be explored further;

1. Social power, influence and leadership;

2. Trust;
3. Social exchange;
4. Group dynamics and close interpersonal relationships.

Feedback has a positive effect on performance, but 38% of the feedback interventions had
negative effect on performance. Information regarding performance is usually gathered from
more than one source. Ideally, a continuous feedback process should exist between superior and
subordinate so that both may be guided. In many organizations, electronic performance
monitoring (EPM) is common practice.

Several activities should engage before, during and after appraisal interviews:

 Communicate frequently
 Get training in appraisal
 Judge your own performance first
 Encourage subordinate preparation
 Use “priming” information
 Warm up and encourage participation
 Judge performance, not personality or self-concept
 Be specific
 Be an active listener
 Avoid destructive criticism and threats to the employee’s ego
 Set mutually agreeable and formal goals
 Continue to communicate and assess progress toward goals regularly
 Make organizational rewards contingent on performance