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Performance Appraisals

Overview Performance appraisal is a formal program in which employees are told the employer's expectations for their performance and rated on how well they have met those expectations. Performance appraisals are used to support HR decisions, including promotions, terminations, training, and merit pay increases. This chapter discusses the traditional appraisal method—where a supervisor reviews an employee's performance during a set period—and several other methods, including self-appraisals, multisource assessments, upward appraisals, peer reviews, and computer-based appraisals. Rating techniques, implementation, and legal considerations also are discussed. For a model annual performance review policy, see “Model Performance Appraisal Policy.” For a model performance evaluation form, see “Model Performance Appraisal Form.” Performance Appraisal Uses and Steps What Are Performance Appraisals? Performance appraisals are an employer's way of telling employees what is expected of them in their jobs and how well they are meeting those expectations. A typical performance appraisal entails the supervisor: • monitoring the employee's performance, • completing a performance appraisal form about the employee, and • conducting a performance appraisal interview with the employee to discuss his or her performance. Performance appraisals are conducted over a specific rating period—typically three months, six months, or a year. Performance Appraisal Steps The performance appraisal process should begin before the employee's performance is appraised. In an effective performance appraisal system, employees know what is expected of them and against what standards they will be judged. The following is an outline of performance appraisal steps, including those leading up to the actual appraisal: • Define the job and performance standards. The job should be well defined so that the employee knows what tasks are critical. Standards of acceptable performance also should be determined for each task—for example, quantity produced, quality of work, and timeliness of task completion. Standards should be the same for all employees in that particular job. • Plan for performance. In this stage, the supervisor and employee develop a plan for the rating period that guides the subordinate's work. During planning, the employee must understand the key tasks of the job, the results and conduct required in the job, and the standards of performance. • Monitor performance. Both the employee and the employer should be actively involved in monitoring the employee's performance during the rating period. Throughout the rating, the supervisor should provide feedback to the employee, reinforcing good performance and correcting poor performance. The employee should be encouraged to discuss both performance successes and problems throughout the rating period. • Appraise performance and conduct performance interview. The supervisor completes a performance appraisal form and conducts a performance appraisal interview with each employee. Employees should be told how well they are doing, why they are doing well or poorly, and what they can do to improve or maintain their performance. • Reward performance. During this final stage, good performance often is reinforced with a reward. The reward system should be capable of differentiating among various levels of employee performance—for

To choose the right performance appraisal method. Performance appraisals frequently are used to support HR decisions involving merit increases. • facilitate employee growth and development. Is the method useful as a tool to improve productivity and manage performance? • Ease of use. completing a performance appraisal form. and • identify current and future training needs. promotions. Employers that plan to use a merit pay plan must have a performance appraisal system that effectively and accurately assesses employee performance that the employer wants to reward and is capable of differentiating among different levels of performance. as well as employee dissatisfaction with the pay system. many employers find that relying an immediate supervisor as the sole evaluator is insufficient. Does the method measure the aspects of performance that the employer wants to reward? • Minimization of biases and errors. the highest performers would get the greatest reward and the lowest performers would get the smallest reward or no reward. with a supervisor monitoring an employee's performance. What types of jobs are involved? Will one method work equally well in all or most cases? • Nature of work relationships. top-down appraisal method often is supplemented by other appraisal methods. employees and peers or subordinates. However. Does the method provide an employee with reliable scores.example. employer should consider the following factors: • Management or nonmanagement application. What is the nature of the relationship between employees and supervisors. regardless of who does the appraisal? Or does the same individual receive such widely varying scores from different raters that providing meaningful feedback is impossible? • Validity or relevance of method. Why Appraise Performance? Employers appraise performance for a number of reasons. especially in less hierarchical workplaces that encourage employee involvement and teamwork. the traditional. and discussing the appraisal with the employee. but not all performance appraisal methods work equally well for every employer. Is the method understood and accepted by both raters and employees? Is it easy to use? Appraisals traditionally have been top-down. As a result. termination. Appraisal Methods Choosing the Right Method Employers use a number of methods to appraise and record employee performance. and employees and customers? • Reliability of method. Does the method reduce the chances of raters making errors or acting on biases? • Usefulness in productivity improvement. including: . Merit pay decisions not based on an accurate and fair performance appraisal system can lead to charges of discrimination. Performance appraisals also can be used to: • motivate employee performance and improve productivity. and layoffs. Does the performance appraisal method provide a way to measure supervisors' and managers' ability to direct and motivate employees? Does it measure individual work behaviors and output of nonmanagers? • Types of jobs employees perform.

the supervisor should raise them. the discussion should focus on just two or three critical weaknesses since most individuals have difficulty improving more than a few shortcomings at a time. If the employee fails to mention important weaknesses. the purpose of the appraisal should be reiterated.• self-appraisals. • Set follow-up meetings. The supervisor and employee should set performance objectives for the next appraisal period and identify steps to improve any performance deficiencies. the supervisor tells the employee the types of behaviors that contribute to overall effectiveness. For the appraisal to have value. During these meetings. • multisource assessments. In many cases. Employees should be given sufficient notice of the performance appraisal interview and encouraged to conduct a self-appraisal so that they come to the interview prepared to discuss their performance. • upward appraisals or subordinate appraisal of managers. prepare the employee to meet the performance objectives in the next period. or ready the employee for new duties or advancement. During this discussion. the performance appraisal interview has little to no motivational effect. top-down performance appraisal. the supervisor uses some rating technique to make a performance assessment and meets with the employee to discuss the assessment. ensure that the employee is on track. disadvantages of one system can be minimized by combining it with elements of another system. However. Supervisors should follow up by asking how they can assist the employee in addressing these weaknesses. and address any problems that might have arisen. If appropriate. By itself. and • computer-based appraisals. At the end of the designated period. it must be part of an ongoing process rather than a one-time event. At the beginning of the interview. • Describe good performance. By being specific. • peer reviews. the plan should include specific types of training that could improve performance deficiencies. Follow-up meetings should be conducted throughout the rating period to monitor employee performance. the supervisor monitors employee performance and progress throughout the appraisal period. Asking employees to describe their weaknesses can defuse some of the defensiveness that accompanies a performance appraisal. The supervisor should describe specific examples of the employee's good performance and explain why it deserves recognition. the supervisor should ask the employee to provide other examples of good performance that the supervisor might have missed. Suggestions for improvement should focus on specific employee behaviors rather than personality aspects. Self-Appraisal . • Plan for future performance. Top-Down Appraisals In a traditional. A suggested outline for the performance appraisal process follows: • Schedule interview. the employee's progress toward specific goals and impediments to performance can be discussed. • Ask about problems. Each of these performance appraisal methods has advantages and disadvantages that employers must carefully weigh before selecting a plan.

but achieving its intended outcome requires some preparation. • listen carefully and note what the employee considers performance strengths or weaknesses. Employees usually like self-appraisal because they can articulate their interests and goals and explain how they think they have performed. Employees should understand that supervisors still have the responsibility to write thoughtful. without being encumbered by their supervisor's judgments or conclusions. Self-appraisal works especially well with highly motivated. such as the employee's contributions to the department or division. Supervisors like self-appraisal because it: • requires employees' participation. supplemented by memos or notes about the employee based on personally observed behaviors or information from other sources. supervisors should: • provide the employee with a copy of the evaluation form at least two weeks in advance of the review interview. To facilitate the process. and not a substitute for. • list projects they would like to work on. • provides common grounds for discussion. Self-assessment simply offers a means to obtain additional information that can result in a better evaluation and more responsible supervision and direction. Most employers treat self-appraisals as a supplement to. and . Self-appraisal forms often include space in which employees can: • note any difficulties they might have had or are having performing their jobs. • prepare a list of additional questions for the employee's consideration. • describe their career goals or skills and abilities they believe are not being used fully. self-directed. some employers ask employees and supervisors to complete identical work sheets so that they can compare responses. and • suggest training they think they need. orally or in writing. • ask the employee to review his or her job description for performance criteria and then complete the appraisal form. career aspirations. • compare the completed review forms and try to reach agreement. A self-appraisal can be conducted formally or informally. and career-focused workers. top-down appraisals. To prepare for formal discussions. • provide constructive comments about any shortcomings while focusing on potential for improvement. • look over the employee's job description and complete the same form using the same rating factors. such as peers and other supervisors. and • can produce additional information that helps all parties view individual jobs more objectively in the context of the entire organization.Self-appraisal gives employees an opportunity to evaluate their own performance. • fosters more direct interaction between supervisors and employees. or training needs. making evaluation a two-way process. balanced reviews. especially where profound disparities in ratings exist. which can aid agreement on workable goals. Implementation Guidelines Self-appraisal is a simple method.

Raters should be able to complete a questionnaire in no more than 15 or 20 minutes. Developing a questionnaire. Employers need to create a response scale that provides quantifiable. MSA is an integral part of management and leadership development programs. possible bias in scoring. MSA can be used with self-directed. the employer should develop questions related to the behaviors and outcomes to include in the rating questionnaire. and internal and/or external customers. For some employers. The first step in designing an MSA rating form is to identify the behaviors and outcomes the employer values and wants to measure. Raters can include the appraised employee's subordinates. individuals selected as raters should have worked directly with the ratee. Whatever scale is used. Next. objective. Raters. with the goal of more accurately assessing how an employee is doing. accurately capture raters' opinions. . MSA primarily relies on information gleaned from written forms that contain a series of statements or questions to which raters respond. peers. which elicit responses ranging from “always” to “never. rather than replaces. standardized responses to questions. Selecting raters. or qualify their ratings.” or an agreement scale with responses ranging from “strongly agree” to “strongly disagree. distributing MSA forms. Multisource Assessment Multisource assessment is known by a variety of names. candid feedback. team-based work groups or with traditionally hierarchical relationships. Most questionnaires use either a satisfaction scale with responses ranging from “very satisfied” to “very dissatisfied. and providing feedback to the individual appraised once all MSA ratings are analyzed. supervisors. clarify. creating a response scale. Questions should focus on behaviors that are observable and can be changed. MSA elicits specific. and three-dimensional or full-circle appraisal. Without confidentiality assurances. including 360-degree feedback. serving to open up a dialogue between raters and ratees that enhances career growth. MSA supports. and other issues that might require clarification. selecting and training raters. raters might fear that honest responses will damage relationships with co-workers or result in repercussions by managers. While raters remain anonymous to the person undergoing appraisal. The MSA process must protect raters' identities to guard against inflated rankings and ensure truthful. raters should have the option of indicating “not applicable” or “don't know” when appropriate.• devise solutions to any problems and commit to a developmental action plan and follow-up. multirater assessment. especially those participating in the process for the first time. the existing performance appraisal system. particularly if raters will have a large number of employees to evaluate using the questionnaire. Employers also need to consider how many questions to include. direct reports. they do not have total anonymity— the person(s) responsible for reviewing and compiling MSA forms must be able to contact raters about illegible responses. To provide a complete and accurate assessment.” are not considered as helpful.” Frequency scales. Establishing a rating scale. not on personality traits or characteristics. should undergo training that covers these key points: • Assurance of anonymity. Implementation Guidelines Successful implementation of MSA involves developing a questionnaire. For other employers. Some questionnaires include an open-ended section so raters can provide written comments to support. and measure subtle behavioral changes over time. Six choices generally are considered sufficient to eliminate ambiguity. The employer should identify the individuals will complete rating forms and one or more reviewers who will analyze and compile ratings into a feedback report. constructive feedback from a variety of knowledgeable sources. Self-appraisal also is a common part of MSAs.

All questionnaires should be accompanied by a labeled. code their responses. and detect systemic biases against a particular employee or all employees in a protected-status group. coaching. commonly referred to as SAM or upward appraisal. Raters should receive an overview of the MSA process and its purposes. and teamwork. The MSA process should incorporate scoring and review procedures that eliminate clearly invalid responses. Employers that use SAM generally conduct a traditional topdown appraisal as well. delegates responsibility. Staggering the distribution of forms helps to ensure more reliable and complete feedback and makes the tasks of compiling. analyzing. it can be an efficient approach to evaluate certain aspects of the supervisor's performance. in the form of coaching and counseling. Although upward appraisal is not a particularly popular with supervisors. along with information on how ratings will be collected and used. The reports should be presented to the ratee in a timely fashion. and submit completed forms. Upward appraisal involves gathering information on specific. Implementation Guidelines To ensure that upward appraisal works as intended. Questionnaires should be coded with each ratee's name or employee number and the rating source. and reporting the information less daunting. supplies resources. Once all forms have been collected. For example. subordinate feedback might indicate that a supervisor is not keeping employees apprised of progress toward performance goals or delegating assignments in a way that fosters teamwork.• Rater accountability. communication. employers should take care not to delete or misinterpret crucial information or create the impression that information has been censored. To ensure the validity of feedback. is essential to ensure that the MSA process continues to produce meaningful information for personnel decisions. The training should instruct raters on how to complete the questionnaire. Subordinate Appraisal of Managers In subordinate appraisal of managers. When summarizing written responses to open-ended questions. communicates policies or work procedures. peer or direct report. fosters teamwork. upward appraisals are particularly valuable for assessing how well a supervisor provides direction. Follow-up. Raters should understand that they likely will be asked by HR or the person in charge of compiling MSA forms to explain ratings that are consistently at the top or bottom of the scale or significantly different from other respondents' scores. return envelope and instructions that clearly specify the deadline for completion. Raters should understand that the anonymity safeguard does not give them license to act on personal grudges or biases that have little to do with work. • Fairness safeguards. avoid common errors. Providing feedback. Distributing MSA forms. For example. for example. observable. . guard against collusion among respondents. evaluators should know that the MSA process includes a review of all response forms to detect anomalous ratings. leadership skills. Reports ideally should reflect the views of three to five raters and present information in a format corresponding to the appraisal categories and questions. or coaches employees. makes timely decisions. supervisors are reviewed by the employees they supervise. employers can: • publicize the potential advantages and benefits—better employee involvement. the data must be analyzed and compiled into reports for the person evaluated. job-related qualities and skills to uncover behaviors that need to be changed. • Instructions on the MSA process. NOTE: Some experts warn against using MSA on too many employees at one time.

One advantage of peer appraisal is that it can generate regular. to review each ratee's distribution list. skills. • ensure that subordinates' evaluations are not used to make decisions about compensation. • require another party. candid assessments without fear of reprisal. Employers often are reluctant to adopt peer review. • encourage each employee—when employees. pick raters—to select peers who have the most knowledge about the employee's job. and control. and aptitudes. employers should: • specify a minimum and maximum number of evaluation forms to distribute for each ratee. pointing out that all ratings. Other issues to address when implementing peer review include: • managing the administrative aspects—for example. However. this process can backfire if it raises employees' expectations. are familiar with the worker's activities. and • easing supervisors' fears that employees' direct participation will undermine their authority. are influenced to some extent by the evaluator's feelings about the person assessed. whether the supervisor invites employees' input on how to improve quality—instead of personality traits. collecting and interpreting data. whatever the source. Some experts also have found that peer ratings tend to focus on results achieved rather than effort invested. thereby serving as strong predictors of future job performance. experts discount this concern. When supervisors' behaviors do not change as a result of employees' feedback. Peer Review The peer review method rests on the concept that individuals who perform similar work are in the best position to judge an employee's performance. • ask questions that target specific. Peer review often is used by employers that support self-directed work teams. and • follow up assessments with meetings to discuss results and devise a plan for further action. • consider having supervisors designate raters and distribute forms to ensure anonymity. employee confidence in the method can be eroded. promotions.• explain how such evaluations can reveal opportunities for further development of managerial strengths. Upward appraisal is an employee-empowering strategy that invites employee participation and gives them a say in how they are managed. • describe how confidentiality will be maintained so employees feel free to offer honest. and morale and productivity can decline. such as a higher-level supervisor or an HR representative. or demotions. and valid feedback from a consistent number of sources. However. only to dash them. share common concerns. . not supervisors. observable skills—for example. reliable. fearing that employees will be too lenient in their evaluations or overrate their friends while downgrading co-workers they dislike. but it can be adapted to almost any work setting. • overcoming employee resistance to being judged by co-workers who might have less experience or time on the job. distributing large numbers of forms. and taking time to share results with ratees. Peers understand the nature of the job. dominance. Implementation Guidelines To minimize potential problems with peer appraisals. and are relatively unencumbered by issues of power.

• behaviorally anchored rating scales. • management by objectives. two levels are inadequate for merit pay purposes because average performance and truly meritorious performance cannot be differentiated. Graphic Rating Scales Graphic rating scales—also known as continuous score scales—are the most widely used technique to evaluate performance. Computer-based appraisal also has extremely limited or no use in rating the qualitative aspects of any position—such as communication skills. and other characteristics. Rating Techniques Types of Techniques Besides selecting an appraisal method. judgment. employers must decide on an appropriate rating technique. leadership. how peer review relates to individual performance goals and company objectives. such as amount of time spent on various tasks. Common rating techniques include: • graphic rating scales. Each of these techniques is discussed below. initiative. • comparison rankings. responsibility. quality of work.• allow raters to opt out of the rating process once they have received a certain number of forms to complete. Computer appraisals tend to be objective because they are not subject to human biases. Computer-based appraisal can improve employee accountability because outputs are measured directly. leadership. • forced choices. and • train supervisors and employees about objective observation techniques. . the purpose and uses of peer review. cooperation. with descriptors ranging from unsatisfactory to outstanding. data entry. appearance. making it difficult for employees to cover up errors or blame others for work not done. • make it clear to employees that peer ratings are only one source of feedback used to assess performance. dependability. • insist on confidentiality and discipline employees who share and compare ratings. It also can provide ongoing feedback on performance problems and improvements. This method is used mostly for judging performance in jobs involving repetitive. Some companies use only two levels—satisfactory and unsatisfactory. • narrative essays. The principal disadvantage of computer-based appraisal is that relatively few positions involve only quantifiable tasks that are readily monitored and evaluated by computer. and • critical incidents. quantity of work. • periodically review evaluation forms to make sure performance criteria are objective and current. quantifiable tasks—for example. However. teamwork. and how to complete evaluation forms without making common rating errors. The scoring system typically offers a continuum of three to five possible ratings. decision-making ability. Computer-Based Appraisal Computer-based appraisal involves using a computer to monitor and evaluate employee performance. and creativity—and the rather is required to evaluate the employee on each trait. A rating technique is the instrument the appraiser uses to assess the employee's performance. Rating scales provide a list of traits or characteristics—for example.

Rankings can be based on overall performance or on specific traits. such as “excellent” or “unsatisfactory” are not used. and accuracy. The main advantage of this technique is also its key disadvantage: Comparison ranking forces distinctions between employees and ensures that no employee can receive the same rating as a coworker. The choices should describe clear differing levels of performance. for example. comparison rankings can be helpful when training supervisors to recognize differences among employees or when deciding how to allot bonuses or merit pay among staff. 40 percent as average performers. For example. For example. if four statements are used. and costly to develop. “quality of work” can be clarified by adding “thoroughness. • Forced distribution ranking. the numbers correspond to more detailed statements about performance. they assume that every rater has the same perception of a given trait and particular rating. A positive score is assigned to the better performer. but not as well for large groups or employees who perform different jobs. Rating scales can present several drawbacks. no score is assigned to the poorer performer. if an evaluation covers certain subjective personality traits—such as leadership ability—rather than objective job performance data. The chief drawback of BARS is that it is complex.The main advantages of rating scales are that they are easy to construct and use in a wide range of jobs. Forced Choices The forced-choice technique generally presents several—typically two or four—statements for each job characteristic or activity and requires the appraiser to select the one statement most or least applicable to the employee. and 10 percent as unsatisfactory performers. categorizing 10 percent as top performers. 20 percent as below-average performers. • Paired comparison ranking. and each employee is ranked according to his or her score in relation to the other employees.” Even so. This can be done in several ways: • Individual ranking. with each one requiring a separate rating scale. Comparison Rankings Comparison rankings evaluate a given employee's performance against the performance of other employees. The rater compares each employee against every other employee. Behaviorally Anchored Rating Scales Behaviorally anchored rating scales are rating scales with examples of behaviors used to define points on the scale. Using the same performance benchmarks also helps ensure consistency among raters. However. instead. The rater must distribute employees along a set scale. comparison rankings provide little useful information on individual strengths and weaknesses. this type of system is vulnerable to rater errors. selecting the better or more valuable of the pair. First. two usually describe different degrees of favorable performance while the other two . 20 percent as above-average performers. As a result. This technique also is ill-suited to jobs that emphasize teamwork and cross-training to ensure all employees are equally skilled and capable of filling in for each other. This problem can be mitigated somewhat if the traits are well-defined and examples are given to illustrate different ratings. The rater reads each statement and then places an “x” beside the appropriate numeric rating. Exhaustive job analysis is necessary to create rating scales appropriate to different aspects of different job functions. time-consuming. In addition. The advantage of the BARS technique is that it correlates performance to key elements of a job. so these evaluations are not helpful in setting objective performance goals. Feedback is more meaningful to employees because of the use of job-related critical statements. Scores are totaled. The rater is given a list of employees' names and asked to rank them from best to worst. rating scales are easy to quantify for merit pay purposes if enough descriptive levels are in the scoring system. Comparison rankings work best for small groups of employees who perform the same or similar jobs. which describes the level of effectiveness. a typical job might have eight to 10 such aspects. neatness. Qualifiers.

At the end of the rating period. Like rating scales. As a result. Because CIT requires extensive documentation and identification of successful and unsuccessful job performance behaviors. the rater usually is not privy to the actual numbers assigned each statement. the employee writes a report explaining his or her progress toward meeting the objectives. negative actions tend to garner more attention than do positive behaviors. It also attempts to eliminate bias by forcing raters to select a descriptive statement without knowing the exact weight or score given that statement. or interpersonal skills—are not evaluated. Essays The essay technique requires appraisers to write a report or answer a series of questions designed to elicit information about an employee's past performance. promotion potential. employees generally find written appraisals easy to understand and helpful. and they can have difficulty interpreting and explaining rankings to workers. On the plus side. At the beginning of the rating period. and their views need to be incorporated in the record. which can result in a lopsided view of performance. On the downside. Each statement has a weight or number that later is used to score responses. Another drawback is that CIT demands continuous and close observation of the employee and extensive recordkeeping. CIT is almost always used in conjunction with another rating technique to support documented actions or inactions. However. the essay has an advantage over rating scales because its format is open-ended. Management by Objectives Management by objectives is a rating technique mainly used for managerial and professional employees. or innovation. The supervisor then observes employees and records their performance of these critical job behaviors. creativity. it generally is valid and reliable. however. comparisons of employee performance are difficult because the contents of one essay are not likely to correspond to points emphasized in another appraiser's review. In addition. MBO encourages a good relationship between supervisor and employee. . The main disadvantage of the essay method is that an employee's evaluation can be helped or harmed by the appraiser's writing ability and style.capture unfavorable aspects of performance. cooperation. A disadvantage is that MBO requires more time and communication—from employees and supervisors alike—than other evaluation techniques. and the appraiser can expand on areas that cannot be completely explained by a simple rating. objective. so work behaviors—such as teamwork. strengths and weaknesses. Employees are rated on how often they display successful performance behaviors. as are the evaluative measures. Critical Incidents The critical incident technique is a behaviorally based system that requires job incumbents and supervisors to identify performance incidents—that is. job-relevant observations might record biased information that could create legal problems for employers. supervisors who have not been trained to make factual. The supervisor then appraises the employee's performance based on his or her progress. and the employee knows what performance is expected. MBO evaluations focus only on goal achievement. unknown factors and unanticipated events can make the objectives too easy or even impossible to achieve. supervisors might resist using forced choice because they do not know the scoring system. Setting appropriate goals and deadlines in advance can be difficult. In addition. the employee and supervisor set objectives—usually ones tied to the company's or department's strategic plan—to achieve during the rating period and develop an action plan outlining specific steps with target dates for accomplishing the objectives. essays generally are based on certain traits or characteristics. Expectations are defined in advance. not on how goals are accomplished. In-depth job analysis is not required to tailor objectives to individual positions. However. Essays also are time-consuming for raters to prepare. In addition. In addition. Workers should have an opportunity to offer their explanations of recorded incidents. behaviors—that distinguish successful and unsuccessful performance. and training or development needs. An advantage of this technique is that it describes specific types of performance instead of assuming that all raters define a performance characteristic in the same way. this technique enjoys widespread acceptance because it allows employees to participate actively in setting goals. This focus on outcomes makes it difficult to use MBO as the only evaluation method for jobs requiring a significant degree of experimentation.

and • conducting the appraisal interview. • avoiding rater errors. pay levels and increases. or ethnic group are considered discriminatory—and therefore illegal—unless the . In particular. promotions. followed by a video of a performance appraisal interview. Legal Considerations Nondiscrimination Requirements U. sex. statistics should be kept on average performance appraisal results by race. trainees could discuss mistakes the supervisor made during the appraisal and ways the appraisal could have been improved. such as videos and discussions.Implementation Considerations Scheduling Appraisals Most employers conduct performance appraisals on an annual basis. to illustrate and reinforce the subject matter. However.R. color. The HR department also has an important role in the appraisal process. and discharges—appraisals must be based on job-related factors and not on discriminatory factors. national origin. employers must show that a selection device is valid for the particular job. Appraisals should be reviewed to determine whether rater biases or errors are taking place. Role-playing is another effective tool for training purposes.F. The Equal Employment Opportunity Commission's Uniform Guidelines on Employee Selection Procedures provide guidance to employers subject to Title VII of the Civil Rights Act of 1964 on the proper use of tests and other policies or practices (29 C. Those procedures that have an “adverse impact” on the employment opportunities of any race. raters must be trained in the skills necessary to evaluate employee performance effectively. Role-playing allows trainees to practice what they have learned. Training should include sessions on: • setting goals. • completing the rating form. The effectiveness of performance appraisals can be improved if informal. see. and other factors to determine whether illegal discrimination is occurring (for more information. Rater Training For a performance appraisal program to be effective. Employers also must determine if appraisals for all employees will be conducted at the same time of the year or if they will be conducted on the employee's anniversary date. For example.S. a training session on how to conduct the appraisal interview could begin with a lecture on the topic. Such an approach encourages communication between the employee and supervisor and allows the supervisor to provide regular feedback. Monitoring Raters Performance appraisals should be monitored by the rater's supervisor to ensure that all appraisals have been completed when required and conducted in a fair and consistent manner. In addition. age. religion. • providing feedback. civil rights laws protect an employee from discrimination based on race. This decision depends to a great extent on the number of employees. At the end of the video. For new supervisors or those who feel uncomfortable in making judgments. sex. all selection procedures—including performance appraisals when they are used in making promotion decisions—must be valid for the job for which they are used. • coaching employees. abbreviated appraisals are scheduled throughout the year. Because a negative performance appraisal can affect an employee's employment status—for example. and disability. Under the guidelines. § 1607). such a schedule requires employees and supervisors to focus on performance only once a year. The department should maintain documentation of all performance appraisals and corrective action taken. sex. Training sessions should use other techniques. Training that includes only lectures generally is not effective. Larger employers might find it an administrative burden for both the supervisors conducting the appraisal and the HR department processing the appraisals if all reviews take place at the same time. roleplaying allows them to practice and improve their appraisal skills.

The rater makes an initial favorable or unfavorable judgment about an employee and then ignores or distorts the employee's actual performance based on this impression. Showing a definitive relationship between past appraisal scores and current performance scores is difficult if only a small sample of people is used. For example. Predictive validity is difficult to prove because large numbers of people are required at one time to conduct such an analysis. Errors are inherent in performance appraisal because subjective judgments always are made.employer can show that the procedure measures a trait related to successful performance on the job or if the employer eliminates the features that cause the adverse impact. • central tendency errors. The important aspect is the reasonableness of the behavior or trait for the particular job. the performance appraisal should have predictive validity—that is. for promotional purposes. color. Such a system has a high degree of inter-rater reliability—that is. • contrast errors. or interests. Data are used to show that the performance appraisal measures the degree to which employees have identifiable characteristics that are important for successful job performance. One way to judge inter-rater reliability is to evaluate how susceptible an appraisal plan is to rater errors— that is. . A procedure has an adverse impact if the final selection rate for any race. Reliability and Rater Errors A performance appraisal system is reliable if it provides consistent data regardless of who conducts it. and • leniency or strictness errors. Content validity refers to the relevance of the appraisal factors to the job. a strong likelihood that two separate raters appraising the same employee will give identical or nearly identical scores. However. religion. Both are representative of the job and relevant to the job. Bias Errors Bias errors occur when the rater evaluates an employee based on a negative or positive opinion of the employee rather than on the employee's actual performance. • Predictive validity. such as leadership qualities for a manager. Employers should review their performance appraisal methods to ensure that they adequately reflect the key behaviors necessary for effective job performance. The rater favorably judges an employee perceived as similar in terms of attitude. When employee promotions are based on past performance appraisals. errors can be minimized by carefully choosing a rating technique and training raters to recognize and avoid certain common errors. errors in judgment made by those performing the appraisal. the leadership dimension might be valid if such a trait is required in the new position. sex. background. Different methods for determining validity include: • Content validity. • Positive or negative halo bias. typing speed and error rates would be content-valid factors on which to appraise a typist's performance. However. those with poor appraisals in the past currently are poor performers and those with high appraisals are top performers. The rater generalizes the good or bad behavior shown in one aspect of the job to all aspects of the job. Each of these errors is discussed below. values. The major types of rater errors are: • bias errors. or national origin is less than four-fifths or 80 percent of the rate for the group that has the highest selection rate. • Similar-to-me bias. For example. The most common types of bias errors include: • First-impression bias. • Construct validity. Determining Validity Validity refers to the extent to which the performance appraisal measures actual job performance. evaluating an entry-level employee on leadership ability would not be valid for compensation purposes if the employee never is required to display leadership qualities in his or her position.

religion. This is often the case when raters are forced to justify only high or low ratings with a written explanation. Central Tendency Errors Central tendency errors occur when the rater rates all employees average or close to the midpoint of the scale.• Illegal discriminatory bias. 12/08) . regardless of actual performance. One way of eliminating this type of error is to require justification at every level of the scale and not just the extremes. national origin. The rater discriminates against an employee because of race. or disability. Contrast Errors Contrast errors occur when the rater compares the employee to other employees rather than to the job's performance standards. respectively. color. even if every other employee in the job category is performing at outstanding or above-average levels. Leniency or Strictness Errors Leniency or strictness errors occur when the rater rates everyone at the high or low end of the scale. (BNA. age. they should receive satisfactory ratings. sex. As long as employees perform at minimum acceptable levels.