181 | A D M 551

182 | A D M 551
183 | A D M 551
184 | A D M 551
After studying this chapter, you should be able to:
1. Explain the purposes of performance appraisals and the reasons
they can sometimes fail.
2. Identify the characteristics of an effective appraisal program.
3. Describe the different sources of appraisal information.
4. Explain the various methods used for performance evaluation.
5. Outline the characteristics of an effective performance appraisal
interview.

185 | A D M 551
186 | A D M 551
8.0 INTRODUCTION

Performance appraisal is the process of assessing how well employees are doing
their jobs. Although, most managers and employees dislike the performance
appraisal process, many realize that periodic reviews can help employees improve
their performance over time. Performance appraisal plays many important roles in
such as a guide for employees career planning and making termination decisions.
Companies with poor performance appraisal system will face tremendous human
resource problems. Managers and employees’ acceptance and commitment towards
performance improvement are critical in order to determine the productivity increase
in the organization. Due to this problem, performance evaluation is seen as
complicated activity but is important to the organization’s competitiveness in the
market.

8.1 DEFINITIONS OF PERFORMANCE APPRAISAL

According to Snell and Bohlander (2010), performance appraisal is a process
typically performed annually by a supervisor for a subordinate, designed to help
employees understand their roles, objectives, expectations and performance
success. Meanwhile, Gary Dessler (2009) stated that performance appraisal as an
evaluating an employee’s current and or past performance relative to his or her
performance standards.

Mondy and Noe (2009) however claimed that performance appraisal is a formal
system that examines and evaluates employee performance periodically. In general,
we can conclude that performance appraisal is the measurement of specified areas
of an employees’ performance. It is a systematic evaluation of employee’s job
performance. Therefore, performance appraisal not only functions as a tool to
measure performance but also as a tool to develop employees.

8.2 WHEN TO CONDUCT PERFORMANCE APPRAISAL?

Although, most companies conduct performance appraisal on their employees

following the calendar year, which is on December, however, there are some
companies that conduct performance appraisal based on their accounting period,
which could be in March, June or September.

187 | A D M 551
8.3 PURPOSES OF PERFORMANCE APPRAISAL

Performance appraisal basically aims to increase employee and organization

productivity effectively but specifically, the roles played by performance appraisal are
much more than that. According to Snell and Bohlander (2010), performance
appraisal can be used for administrative and employee developmental purposes.

 Developmental Purposes
Development aspect focuses on feedback of employees’ strengths and
weaknesses and stresses on performance improvement. Some of the
purposes are:
• Performance feedback.
• Identify individual strengths and weaknesses.
• Goal identification.
• Identify training needs.
• Improve communication.
• Motivation.

 Administrative Purposes
From the administrative aspect, performance appraisal is an input that can be
used in human resource management activities. Amongst the purposes are:
• Document personnel decisions.
• Determine promotion.
• Decide retention or layoff.
• Personnel planning.
• Meet legal requirement.
• Reward and benefits.
• Initiate fair disciplinary proceedings.

188 | A D M 551
 Activity 1 Based on your experience, has performance evaluation helped in
your career? Explain.

8.4 COMMON CRITERIA IN PERFORMANCE APPRAISAL

The criterion used in evaluating employees performance is relatively varies among

organization. However, in general the criteria used in evaluating employees’
performance are as follows:
 Quantity of work
 Quality of work
 Knowledge of job
 Personal qualities
 Cooperation
 Initiative
 Earnestness (sincerity, honesty)
 Commitment
 Involvement
 Dependability or responsiveness

8.5 MAIN REASONS OF WHY PERFORMANCE APPRAISAL FAIL

Basically, the performance appraisal process is seen as a simple process whereby a

supervisor or manager only needs to observe the work performance of their staff and
give feedback on their performance from time to time. In reality, this process is not
simple. The supervisor or manager as well as the staff often have different opinions
on performance evaluation. The disagreement that exists and the misunderstanding
of performance evaluation have caused the performance evaluation process to fail.

189 | A D M 551
 Snell and Bohlander (2010) stated some of the factors that lead to the failure of the
performance evaluation process are shown in Table 8.1

There are many reasons why performance appraisal system might not be effective. Some of
the most common problems include the following:

 The supervisor or manager does not have enough information on employees’ real work
performance.
 The standard of measuring performance is not clear.
 The supervisor or manager does not have the skills to evaluate employee performance.
 The supervisor or manager is not prepared to evaluate employee performance, as he or
she does not want to be seen as a judge who is giving out an unfair sentence.
 Employee does not receive constant performance feedback.
 The supervisor or manager is not sincere during the performance evaluation process.
 Performance evaluation is not focused on employee development.
 The supervisor or manager uses language that is unclear to the employees during the
performance evaluation process.
 Subjective and vague language in written appraisals.
 Employees feel that the organization does not allocate enough resources for
performance feedback.
 Lack of top management information and support.
 Unclear performance standards.
 There is little face-to-face discussion between the manager and the employee being
appraised.
 The relationship between the employee’s job description and the criteria on the appraisal
form is not clear.
 Managers feel that little or no benefit will be derived from the time and energy they spend
on the process, or they are concerned only with bad performance.
 Managers dislike the face-to-face confrontation of appraisal interviews.
 Managers are not sufficiently adept at rating employees or providing them with appraisal
feedback.
 The judgmental role of appraisal conflicts with the helping role of developing employees.
 The appraisal is just a once-a-year event, and there is little follow-up afterward.
 Employee is not given clear objectives at the beginning of performance period.

Table 8.1: Main Reasons of Why Performance Appraisal

190 | A D M 551
 Source: Snell and Bohlander (2010)

Activity 2 : Try the following exercise so that you will become much clearer on
the topic that has been covered so far.
1. What is meant by performance appraisal?
2. State the six uses of performance evaluation from the administrative
aspect.
3. State five causes on why the performance evaluation process fails to be
implemented successfully.

8.6 ERRORS IN PERFORMANCE APPRAISAL

Performance appraisal is subjected to numerous errors done by the appraiser. Some

of the errors are:
• Halo Error (Halo effect).
• Rater bias and prejudice.
• Central Tendency.
• Leniency or Strictness.
• Stereotyping.
• Recent effect.
• Contrast error.
• Similar-to-me error.

191 | A D M 551
 Activity 3 : Now that you have come across many terms with regard to errors
in performance appraisal. Surf the internet to find the meaning of all these
terms.

8.7 DEVELOPING AN EFFECTIVE PERFORMANCE APPRAISAL PROGRAM

The HR department has the primary responsibility for overseeing and coordinating a
firm’s appraisal process or program. However the other line managers must also be
actively involved, particularly when it comes to helping establish the objectives for the
performance appraisal process. Below are the elements that must be taken into
consideration in order to develop an effective performance appraisal program.

Developing Performance Standards

Before any appraisal is conducted, the standards used in which performance is to be
evaluated should be clearly defined and communicated to the employee.
Organization need to determine what are the performance standard. These
standards should be based on the job related requirements derived from job analysis.
There are four (4) basic considerations in establishing performance standards as
shown in Figure 8.1.

192 | A D M 551
 Figure 8.1: Basic Considerations in Establishing Performance Standards
Source: Snell and Bohlander (2010)

 Strategic Relevance
The standards that are developed must be related to the organization’s
strategic objectives. Indirectly, the organization’s strategic objectives need to
be translated into the standards. For example, “95% of customer complaints
must be solved on the same day”. With this in mind, employees who are in
contact with the customers must take into account these strategic objectives
when they are evaluated. Managers who develop employee performance
standard must also take this into account these strategic objectives.

 Criterion Deficiency
The development of employee performance standards must take into account
all the responsibilities of the employees. If the standard that is developed only
takes one aspect of the job, then criterion deficiency will occur. In other
words, performance standard must capture the full range of a person’s job.
When standards focus on only one element of the job, they may leave out
some important area. For example, a salesperson’s performance evaluation
is only measured through his or her sales volume without taking into account
other aspect such as customer satisfaction.

 Criterion Contamination
Performance standards should not be influenced by factor outside or beyond
the employee’s control in which can influence his or her performance.
Criterion contamination happens when factors that are out of the employees’
control influence their performance. It is elements that affect the employees’
appraisal that are not part of the actual performance. For example, a typist
needs a computer to type and produce quality output. If the organization only
has a typewriter then the quality produces may not be as good as the output
quality produced by a computer. Therefore, the computer becomes a factor
that contaminates the typist’s performance. Another example is, if bad
materials or poor equipment affects an employee’s performance, his or her
performance standard may be contaminated.

 Reliability

193 | A D M 551
 Reliability refers to the consistency or stability of the standards that are
developed. In other words, it means how far an employee tends to maintain a
certain level of performance over time. Measurement standard must be
consistent across raters and over time. For example, the evaluation made by
two managers for employee promotion will determine the reliability of the
employee’s performance.

Legal Compliance
Since performance appraisals are used as one basis for HRM actions, therefore they
must meet certain legal requirements as follows:
• Performance ratings must be job related in which it must be developed based
on job analysis.
• Employees must be given a written copy of their job standards in advance of
their appraisals.
• Managers who conduct the appraisals must be able to observe the behavior
they are rating.
• Supervisors should be trained to use the appraisal form correctly. They
should be instructed as to how to apply the appraisal standards when making
judgments.
• The appraisal should be discussed openly with employees and counseling or
corrective guidance offered to help poor performers improve their
performance.
• An appeals procedure should be established to enable employees to express
their disagreement with the appraisals.

To comply with the legal requirements, employers must ensure that managers and
supervisors document appraisals and reasons. This information may prove decisive if
an employee takes legal action. An employer’s credibility is strengthened when it can
support performance appraisal ratings by documenting instances of poor
performance.

Determine Qualified Appraisers

Usually, the line managers unit will evaluate their employees’ work performance. The
work difficulties today have caused the managers to be unable to monitor or evaluate
their employees’ work performance. If the department or unit has a small number of

194 | A D M 551
employees then there is a possibility that only one manager is needed to evaluate his
or her employees’ performance. However, if the unit has a large number of
employees’, perhaps organization must determine who will be responsible and
should appraise the performance of the employees’. The responsibility to evaluate
can be assigned to other appraisers such as:

 Manager or Supervisor Appraisal

Since managers and supervisors traditionally work directly with their
employees, therefore, they are the logical choice to appraise the performance
of their employees. Performance of an employee is evaluated by their
manager or superior & often reviewed by a manager one level higher.
Managers can use daily work records and the direct observation of
employees to complete the appraisal review.

 Self-Appraisal
Performance appraisal is done by the employee itself, generally on an
appraisal form completed by the employee prior to the performance interview.
The employees will rate their own performance, their strength and
weaknesses before discuss it with their managers or superior. Self appraisal
is used when managers seek to increase employee’s involvement in the
appraisal process. However, one problem exist is that the employee may
evaluate their performance higher than the supervisor would.

 Subordinate Appraisal
Performance evaluation is done by the subordinate towards their superior.
Appraisal by subordinates has been used when supervisors seek feedback
on how subordinates view them because employees are in a good position to
evaluate the leadership, communications, planning and delegation of
authority of their managers. This appraisal is more appropriate for
developmental of the managers than for administrative purposes.

 Peer Appraisal
Individuals of equal rank that works together are increasingly asked to
evaluate each other since they have been working together. Performance
appraisal is done by fellow employees, generally on forms that are compiled
into a single profile for use in the performance interview conducted by the

195 | A D M 551
 employee’s manager. A peer appraisal provides information that differs to
some degree since employees’ peers often sees different dimensions of their
performance. Peer appraisal is believed able to provide more accurate and
valid information than appraisals by superiors. However, peer appraisal
should not be used for administrative decision such as salary and bonuses.

 Team Appraisal
Team appraisal is designed to evaluate the performance of the team as a
whole not individual performance. Performance appraisal is based on TQM a
concept, which recognizes team accomplishment rather than individual
performance.

 Customer Appraisal
Customer satisfaction determines the successfulness of an organization.
Based on this idea, many organizations feel that they should obtain their
employees’ performance input from the customers. Employee performance
appraisal is done by the customers that deal directly with the employees
through their feedback. Driven by TQM concerns, internal and external
customers are increasingly used as sources of performance appraisal
information. Internal customers may include anyone within the organization
who depends on employee’s work output.

 360°-degree Appraisal
Apart from the sources stated before, an organization may also use the 360-
degree appraisal to assess their employees. It is a combination of various
raters to evaluate the performance of the employees. The use of 360-degree
is to create multi-rater appraisal and feedback system whereby organization
getting input from all angles (customer, manager, peer, self appraisal,
subordinates) to get feedback and comments about the employees given by
those responsible for appraisal. However, 360-degree appraisal has its own
pros and cons as shown in Table 8.2.

196 | A D M 551
Pros

 The system is more comprehensive in that responses are gathered from

multiple perspectives.
 Quality of information is better. (Quality of respondents is more important than
quantity.)
 It complements TQM initiatives by emphasizing internal/external customers
and teams.
 It may lessen bias/prejudice since feedback comes from more people, not one
individual.
 Feedback from peers and others may increase employee self-development.

Cons

 The system is complex in combining all the responses.

 Feedback can be intimidating and cause resentment if employee feels the
respondents have “ganged up.”
 There may be conflicting opinions, though they may all be accurate from the
respective standpoints.
 The system requires training to work effectively.
 Employees may collude or “game” the system by giving invalid evaluations to
one another.
 Appraisers may not be accountable if their evaluations are anonymous.

Table 8.2: Pros and Cons of 360-Degree Appraisal

Source: Snell and Bohlander (2010)

Training for Appraisers

A weakness of many performance appraisal programs is that managers and
supervisors are not adequately trained to conduct performance appraisal.
Organizations are expected to provide the appraiser training about performance
appraisal. Supervisors should be properly and adequately trained in the appraisal
process. There are three (3) aspects to be taken into account namely:

a. Comprehensive performance appraisal plan training

A training program for appraisers is more effective when it covers various
aspects such as:
 Information about the performance appraisal. (Why? How? Who?
What?).

197 | A D M 551
  Alert the raters to the weaknesses and problems of performance
appraisal.
 Objectives of the performance appraisal systems.
 The mechanics of the rating systems.

b. Feedback training
A training program for appraisers should cover some important points to
consider for planning and providing feedback during the appraisal interview.
Feedback not only provides employees with knowledge of results, but it also
allows the manager and employee to discuss current problem and set future
goals. Feedback training should cover there (3) basic areas such as:
 Communicate effectively.
 Diagnose the root cause of performance problems.
 Set the goals and objectives to overcome.

c. Eliminating rater error training

Appraisal training should focus on eliminating the subjective error made by
managers in the rating process such as:
 Halo Error (Halo effect).
 Rater bias and prejudice.
 Central Tendency.
 Leniency or Strictness.
 Stereotyping.
 Recency error.
 Contrast error.
 Similar-to-me error.

8.8 PERFORMANCE APPRAISAL METHODS

There are few methods or approaches to evaluate employee performance. The

selection of certain methods depends on the purpose of the performance evaluation
system of an organization. If emphasize is placed on promotions, training and
rewards, then a method like rating scale is more appropriate. In fact, a combination of
a few methods is more appropriate to develop employee performance. There are

198 | A D M 551
three (3) main methods that can be used to appraise employee performance. The
methods are traits, behaviors and results.

Trait Methods
Trait method is designed to measure how far an employee is able to acquire certain
characteristics such as creativity, innovation, leadership and dependency that are
seen as important in carrying out job. Among the methods categorized under trait
methods are:

 Graphic Rating Scales

The graphic rating scale focuses on employee evaluation that is based on
scale or on certain characteristics that have been developed and each
employee is rated according to a scale of characteristics such as
unsatisfactory, below average, average, good and exceptional. The scale
chosen are typically job related and personal characteristics as shown in
Figure 8.2. The best employee is ranked highest and the poorest is ranked
lowest.

Figure 8.2: Graphic Rating Scale with provision for comments

Source: Snell and Bohlander (2010)

199 | A D M 551
  Mixed-Standard Scales
Similar to graphic rating scale but using comparison with better than, equal to,
or worse than standard for each behavior as shown in Figure 8.3. The
performance of employee is compared with every other employee.

Figure 8.3: Mixed Standard Scale

Source: Snell and Bohlander (2010)

 Essay Method
This method requires the rater to compose a brief statement describing
employee behavior or performance. It is the easiest method where the
appraiser will write the strengths and weaknesses of employee behaviors and
give recommendations to improve their weaknesses.

 Forced-Choice Method
Requires the rater to choose a description from series of statements designed
that best illustrate the employees to distinguish between successful and

200 | A D M 551
 unsuccessful performance. In other words, appraiser can choose a few
statements which are provided to differentiate good and bad performances as
shown in Table 8.3.

Rate these statements from 1 to 4 to illustrate employee

performance.
1 - good
4 - not good
Employee name: ----------------------------------------------------

……………………. Difficult to accept change

……………………. Understands explanations quickly
……………………. Seldom wastes time
……………………. Easily approachable for interaction
……………………. Becomes the leader in group activities
…………………….A hard working employee
…………………… Always meet deadline
…………………… Produces low quality output
…………………… An employee committed to his/her tasks

Table 8.3: Forced-choice method

Source: Ivancevich (2006)

Behavioral Methods
This method focuses on behavior aspects based on a scale that illustrates certain
behavioral descriptions. These descriptions enable appraisers to identify employee
performance based on certain behaviors from weak to excellent. Some of the
methods included in behavior method are:

 Critical incident method

A critical incident occur when employee behavior results in unusual event that
denotes superior (positive) or inferior (negative) employee performance in
some part of the job. This method needs the appraiser to keep records or log
books on employee’ behavior no matter if the behavior is positive or negative.
Indirectly, the supervisor has to record workers behavior that is seen as

201 | A D M 551
 critical and influences the department’s effectiveness. Examples of the critical
incident method which are positive and negative in nature are as follows:

i) First critical incident

4 January 2010 – Minah patiently listened to a complaint from the
customer, answered each of the customer’s questions, took back the
product and refunded the customer. Minah was very polite to the
customer, prompt and showed interest in listening to the customer’s
problems.

ii) Second critical incident

20 April 2010 – Today was a very busy day due to product inventory.
Even though it was hectic day, Minah went to the canteen for 15
minutes. Throughout the time he was at the canteen, the store
manager had called him three times asking about the inventory in the
store.

 Behavioral Checklist Method

The rater checks several statements on a list of the performance of behavior
that he believes the employees posses as shown in Table 8.4. The appraiser
only has to mark the statements which describe the working behavior
demonstrated by the employees. If the statements given do not show
employees’ working behavior, then the supervisor need not mark the
allocated space.

………………………… Is able to explain equipment clearly

……………………….. Keeps abreast of new developments in
………………………. technology
………………………. Tends to be a steady worker
………………………. Reacts quickly to customers’ needs
Processes orders correctly

202 | A D M 551
 Table 8.4: Behavioral Checklist Method
Source: Snell and Bohlander (2010)

 Behaviorally Anchored Rating Scale

BARS is a behavioral approach to performance appraisal that consists of a
series of vertical scales, one for each important dimension of job
performance. Evaluation is done based on scale and each scale has a
description of certain behavior, be it positive or negative. An example of
BARS is shown in Figure 8.4.

Figure 8.4: BARS for Municipal Fire Companies

Source: Snell and Bohlander (2010)

 Behavior Observation Scales

BOS is a behavioral approach to performance appraisal that measures the
frequency of observed behavior. BOS is quite similar to BARS but designed

203 | A D M 551
 to measure how frequently each of the behaviors has been observed. An
example of BOS is shown in Figure 8.5.

Figure 8.5: Sample Items from BOS

Source: Snell and Bohlander (2010)

Results Methods
Organization can also utilize the result method to evaluate their employees’
performance. This method enables the appraisers to evaluate the results achieved by
employees. Therefore, it is quantitative in nature, objective and will lessen bias.
Some of the methods included in results method are:

 Productivity measures
There are many measurement techniques to evaluate the performance of an
employee such as sales volume (in unit or RM). This method will align the
employee’s goals and organizational goals but may be affected by external
factors. Furthermore measurement by results may be suitable only for short
term basis.

 Management by Objectives

204 | A D M 551
 MBO is a method that believed in philosophy of management that rates
performance on the basis of employee achievement of goals set by mutual
agreement of employee and manager. Employees jointly establish objectives
with their superior, who then gives them freedom in how to achieve the
objectives. MBO stresses that each employee form his or her performance
objectives at the beginning of the year through discussion with the supervisor
or manager. The objectives act as a standard which will be used to evaluate
the employee’s performance at the end of the year as shown in Figure 8.6. At
the end of the appraisal period, the employee and the appraiser meet for an
appraisal interview to review the extent to which the objectives have been
achieved and the appropriate actions needed to solve the remaining
problems.

Figure 8.6: Performance Appraisal under MBO program

Source: Snell and Bohlander (2010)

 The balance scorecard

The balanced scorecard takes into account four (4) related categories which
are financial, customer, processes and learning. The processes involved in
the organization activities are very critical for creating customer satisfaction
and loyalty and in turn, creating value for customers in which drives an
organization financial performance and profitability. The balance scorecard
translates strategic goals into operational objectives as shown in Figure 8.7.

205 | A D M 551
 Figure 8.7: The Balanced Scorecard
Source: Snell and Bohlander (2010)

Activity 4 : Find out what is the appraisal methods used in your organization.
What is your comment about the method used? Is it good?

206 | A D M 551
8.9 SUMMARY OF PERFORMANCE APPRAISAL METHODS

Below is the summary of various appraisal methods as shown in Figure 8.8.

Figure 8.8: Summary of Various Appraisal Methods

Source: Snell and Bohlander (2010)

8.10 PERFORMANCE APPRAISAL INTERVIEW

A performance appraisal interview is an important process in the performance
evaluation system as appraisers need to give an effective feedback on the
employees’ achievement. Performance appraisal interview provides an opportunity to
discuss employees’ performance record and to explore areas for possible
improvement and growth.

An effective performance appraisal interview has to be planned and structured well in

order for the appraiser and employees to view the appraisal interview as a problem
solving session and not as a ‘fault finding’ session (Mondy and Noe (2009). There
are three (3) types of performance appraisal interview.

207 | A D M 551
 Tell and sell interview
During tell and sell appraisal interview, it requires that the supervisor use persuasion
to change an employee in a desired behavior. This can be accomplished by having
the employees see how the changed behavior will benefit him or her.

Tell and Listen Interview

At tell and listen appraisal interview, the supervisor discusses the employee’s strong
and weak points during the first half of the interview. During the second half of the
interview, the employee’s feelings about the interview are thoroughly explored and
supervisor shall deal with the objections of the employee through non defensive
behavior.

Problem Solving Interview

At problem solving appraisal interview, the supervisor should use nondirective
interviewing procedures that seeks to develop a growth and development of the
employees’ by discussing the problem, needs, innovations, satisfaction and
dissatisfactions that employee has encountered on the job since the last appraisal
interview. It is like tell and listen appraisal interview but go beyond an interest of
employee’s feelings:

8.11 CONDUCTING THE PERFORMANCE APPRAISAL INTERVIEW

There are some guidelines that should be considered to be used in order to increase
an employee’s willingness to discuss his or her performance and improve it, accept
feedback from his or her supervisors and increase overall satisfaction with the
interview.

Ask for a self assessment

Self assessment gets employees thinking about their performance and assures that
they know the standards against which they will be evaluated thus eliminating any
potential surprises.

Invite participation

208 | A D M 551
Participation helps bring out some of the root causes of performance problems will be
uncovered and may increase an employee’s satisfaction with the process.

Express appreciation
Praise is a powerful motivator and in an appraisal interview, employees are seeking
positive feedback. By doing this also, employees may be less defensive and more
likely to talk about aspects of the job that are not going so well.

Minimize criticism
Criticism leads to defensiveness, and this may hurt the chances of solving the
problem.

Change the behavior not the person

Instead of focusing on traits that are personal characteristics (and difficult to change),
appraiser should focus on behaviors that can be corrected or improved. Suggest
more acceptable ways of performing.

Focus on solving problems

Rather than blaming, focus on remedying the situation by analyzing the causes.

Be supportive
Some of the best leaders are those who focus on finding ways to help employees
eliminate obstacles to successful performers.

Establish goals
Try to focus the employee on the future rather than the past. Managers should
emphasize strengths rather than weaknesses as well as concentrate on opportunities
for growth of the employees.

Follow up day to day

Feedback is more powerful when it occurs frequently. Informal talks reinforce the
goals and objectives laid out in the formal appraisal interview. Feedback is most
useful when it is immediate and specific to a particular situation.

209 | A D M 551
 Activity 5 : Surf this address http://www.performance_appraisal,com/intro.htm
and get four performance evaluation methods which are listed and surf also
this address http://www.opm.perform/articles/pdf8.htm and elaborate the
method used in evaluating group performance.

8.12 IMPROVING EMPLOYEE PERFORMANCE

Sometimes underperformers do not understand exactly what is expected of them.

However, once their responsibilities are clarified, they are in a position to take
corrective action needed to improve their performance. Therefore, some of the
actions that can be taken to improve the employee performance are:

Identifying sources of ineffective performance

There are three (3) primary factors which are motivation, environment and ability that
influence performance. Figure 8.9 provides a better picture of how these factors can
influence people’s performance.

Figure 8.9: Factors that Influence Performance

Source: Snell and Bohlander (2010)

210 | A D M 551
Performance diagnosis
If someone exhibits the behaviors but doesn’t achieve the results, it may be due to
external constraints. If someone has the competency but doesn’t exhibit the
behaviors, there may be a motivational problem. By comparing different performance
measures, managers can begin to get an idea of the underlying causes of
performance problems as shown in Figure 8.10.

Figure 8.10: Performance Diagnosis

Source: Snell and Bohlander (2010)

Managing ineffective performance

Once the source of poor performance has been identified, managers need to develop
a course of action to improve performance. It can be done by motivate the employee
to correct undesirable job behavior.

211 | A D M 551
8.13 SUMMARY

The performance evaluation process does not end after the performance interview
session. In fact, a supervisor need to ensure that all the alternatives which were
proposed are carried out effectively and monitors employees’ performance from time
to time by giving feedback on time. By this, an effective performance evaluation
system is able to ensure that all parties, be it management or employees, are bale to
be benefited from it.

212 | A D M 551
1. Define Performance Appraisal and the importance of Performance
Appraisal.
2. Elaborate 4 basic purposes of Performance Appraisal.
3. Explain common errors in Performance appraisal.
4. Explain ways to overcome the errors.
5. Specify characteristics of effective Performance Appraisal.
6. Identify methods used to carry out Performance Appraisal.
7. Identify elements to be evaluated in Performance Appraisal.
8. Explain the purposes of performance appraisals and the reasons they can
sometimes fail.
9. Identify the characteristics of an effective appraisal program.
10. Describe the different sources of appraisal information.
11. Explain the various methods used for performance evaluation.

213 | A D M 551
 Study Notes

214 | A D M 551