Becamex Business School

Performance Appraisal
Human Resource Management HRM 351 1
 Strategic HRM

Figure 1.1
Human Resource Management Practices
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 Learning objectives
● EXPLAIN the importance of performance appraisal
● DESCRIBE the appraisal process
● DESCRIBE options of who should conduct the appraisal
● DESCRIBE various appraisal methods and the advantages
and disadvantages of each method

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● High-performance work system – the right combination of
people, technology, and organizational structure that makes full
use of the organization’s resources and opportunities in
achieving its goals.
● A performance evaluation system is a systematic way to
examine how well an employee is performing in his or her job.
● Performance appraisal means evaluating an employee’s
current and/or past performance relative to his or her
performance standards.

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Elements of high performance work system
Reasons needing performance management
● Encourage positive performance and behavior
● Satisfy employee curiosity (how well he/she is
performing in their job?)
● A tool to develop employees
● Provide basis for pay raises, promotions.

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 Appraisal model

IDENTIFY
● What to exam? MEASURE MANAGE
● Related to ● Good or bad ● Past or future
organization performance? oriented?
success

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Who conducts performance appraisal?
Appraisal
process

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 Appraisal methods
Trait method: A category of performance evaluation in which
managers look at an employee’s specific traits in relation to the
job, such as friendliness to the customer.
● Rating Scale
● Mixed Standard Scale
● Forced Choice
● Essay

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Rating scale
Mixed
Standards
Scale
Forced
Choice
Essay
appraisal
Advantages Trait Method
● Are inexpensive to develop
● Use meaningful dimensions
● Are easy to use
Disadvantages
● Have high potential for rating errors
● Are not useful for employee counseling
● Are not useful for allocating rewards
● Are not useful for promotion decisions

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 Appraisal methods
Behavioral method: A category of performance evaluation in
which managers look at individual actions within a specific
job.
● Critical Incident
● Behavioral Checklist
● Behaviorally Anchored Rating Scale (BARS)

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Critical
Incident
Appraisals
Behavioral
Checklist
Behaviorally Anchored Rating Scale
(BARS)
Advantages Behavioral Method
● Use specific performance dimensions
● Are acceptable to employees and superiors
● Are useful for providing feedback
● Are fair for reward and promotion decisions
Disadvantages
● Can be time-consuming to develop/use
● Can be costly to develop
● Have some potential for rating error

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 Appraisal methods
Comparative method: A category of performance evaluation in
which managers compare one employee with other employees.
Results method: A category of performance evaluation in which
managers are focused on the accomplishments of the employee,
such as whether or not they met a quota.
● Management By Objectives (MBO)

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Management by Objectives (MBO)
Management by Objectives (MBO)
SMART Goals
● Specific means that the target is clearly defined
● Measurable means that the target state is defined as a number
● Attainable/ Achievable/ Appropriate
● Realistic/Relevant/result focus
● Time-bound/ Time oriented
Advantages
● Have less subjectivity bias
Results Method
● Are acceptable to employees and superiors
● Link individual to organizational performance
● Encourage mutual goal setting
● Are good for reward and promotion decisions
Disadvantages
● Are time-consuming to develop/use
● May encourage short-term perspective
● May use contaminated criteria
● May use deficient criteria
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360-Degree Feedback Systems
Watch the Video and answer the questions
https://www.youtube.com/watch?v=eT4tohLWeUw

1. What is 360 degree feedback?

2. What is it used for?
3. Who is involved?
4. How to choose the “raters” for the survey?
5. What happens after the 360 survey is completed?
6. What can the value be gained from the 360 degree survey report?
7. What are the tips for success?

Learning Activity
Avoid
rating errors
Becamex Business School

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