CHAPTER 7
EVALUATING EMPLOYEE PERFORMANCE
Step 1: Determine the Reason for Evaluating
Employee Performance
Forced-choice rating scale
- excellent determining compensation/ terrible
training purposes
- supervisor, behaviors, forced choose most
typical
360-degree feedback
- excellent source improving employee
performance, NOT - salary increases
Providing Employee Training and Feedback
Performance appraisal review
- excellent time meet employees/ discuss
strengths & weaknesses
- meeting from supervisor/subordinate
performance appraisal results
Determining Salary Increases
Difference compensation (two individuals within
the same job) - function (tenure/job performance)
Making Promotion Decisions
1. senior = unions
Peter Principle
- the promotion of employees reaches highest
level of incompetence
2. performance evaluation = care
Making Termination Decisions
Performance management techniques NOT
successful, results of a performance = terminate
employee
Conducting Personnel Research
- organizations, union contracts forbid =
performance evaluations
Step 2: Identify Environmental and Cultural
Limitations
1. Supervisors = overworked - elaborate,
time-consuming performance appraisal
system NOT SUCCESSFUL
2. No money available merit pay, =
numerically complex system become
frustrating = evaluation NOT seriously
3. Environment employees = cohesive, -
peer ratings reduce cohesiveness
Step 3: Determine Who Will Evaluate Performance
360-degree feedback - feedback obtained multiple
sources (supervisors, subordinates, & peers)
- source of training & employee development
- seldom used in appraisal process
Multiple-source feedback - employee receives
feedback from sources (e.g., clients, subordinates,
peers)
Supervisors - common source of performance
appraisal
1. Direct supervisor - sole source
employee’s evaluation
Peers – actual behavior
- come from employees who work directly with
an employee
- certain employees = lenient in their peer
ratings
Subordinates
1. Subordinate feedback (upward feedback)
important component of 360-degree
feedback (subordinates provide different
view supervisor’s behavior)
o supervisors open to employee
comment
o ratings made anonymously
o ratings developmental purposes
o feels competent make the rating
2. Subordinate ratings - difficult obtain
employees fear backlash unfavorably rate
 their supervisor (supervisor has only one or
two subordinates)
3. “called on the carpet” – audacity rate boss
poorly
Customers - filing complaints/complimenting
manager about one of her employees
secret shoppers - current customers who
enlisted by company to periodically evaluate
service they receive
Self-Appraisal - evaluate her own behavior &
performance
o suffer from leniency
o correlate only moderately with
actual performance
o poorly w/ subordinate –
management ratings
Note:
a. accurate when self-appraisal not used
(administrative purposes - raises or
promotion)
b. employees understand performance
appraisal system
c. employees believe objective record of
performance = available supervisor can
compare self-appraisal
Step 4: Select the Best Appraisal Methods to
Accomplish Your Goals
Criteria - ways describing employee success
Decision 1: Focus of the Appraisal Dimensions
A. Trait-Focused Performance Dimensions
✓ employee attributes, dependability,
honesty, and courtesy
o not good idea provide poor feedback
o not result in employee development growth
o “be more responsible and friendly”
B. Competency-Focused Performance
Dimensions
✓ employee’s knowledge, skills, and
abilities
o writing skills, oral presentation skills, and
driving skills
o easy provide feedback/ suggest steps
necessary correct deficiencies
C. Task-Focused Performance Dimensions
✓ similarity of tasks performed
✓ POLICE - following radio
procedures/court testimony
o ADVANTAGE - easier to evaluate
performance
o DISADVANTAGE - more difficult offer
suggestions
D. Goal-Focused Performance Dimensions
✓ preventing crimes from occurring,
finishing shift without personal
injury, and minimizing number of
citizen complaints
o ADVANTAGE - easier for employee
understand certain behaviors expected
Contextual Performance
- effort an employee makes get along with
peers, improve the organization, and
perform tasks needed but not necessarily
official part
- Prosocial organizational behaviors
- (integrity tests, personality inventories)
Decision 2: Should Dimensions Be Weighted?
Decision 3: Use of Employee Comparisons,
Objective Measures, or Ratings
1. Employee Comparisons
➢ Rank order - ranked in order
by their judged performance for
each relevant dimension (best
to worst)
• only a few
employees to
rank
➢ Paired Comparison - only few
employees to rank
• ranked are
compared one
pair at a time
 ➢ Forced distribution method - predetermined
percentage of employees placed in each of five
categories
• “rank and yank,” - Jack Welch
• Increased, levels of organizational
productivity
• least fair method performance
appraisal
• assume employee performance is
normally distributed (poor,
average, excellent)

2. Objective Measures
a. Quantity - counting number of relevant job
behaviors occur
b. Quality - comparing a job behavior with a
standard
Errors - deviations from standard
▪ response communication
overload involves
processing all information
but processing some of it
incorrectly