Performance Measurement

Basic Concepts in Performance Measurement

 Uses for performance Information.
In work settings, performance measurement often goes beyond the annual review
and can be used for many purposes. Some of the most common are the following:
● Criterion data.
● Employee development.
● Motivation/satisfaction.
● Rewards.
● Transfer.
● Promotion.
● Layoff.
Types of Performance Measures

 Objective performance measure: Usually a quantitative count of the results of

work, such as sales volume, complaint letters, and output.

 Judgmental measure: Evaluation made of the effectiveness of an individual’s

work behavior; judgment most often made by supervisors in the context of a
performance evaluation.

 Personnel measure: Measure typically kept in a personnel file, including

absences, accidents, tardiness, rate of advancement, disciplinary actions, and
commendations of meritorious behavior.
 Hand-on Performance Measures.
Type of measurement that requires an employee to engage in work-related tasks;
usually includes carefully constructed simulations of central or critical pieces of
work that involve single workers.
Walk-through testing. Type of measurement that requires an employee to describe
to an interviewer in detail how to complete a task or job-related behavior;
employee may literally walk through the facility (e.g., a nuclear power plant),
answering questions as he or she actually sees the displays or controls in question.

 Electronic Performance Monitoring

On the positive side, because electronic performance monitoring is clearly
objective and job related, some claim it is more “fair” than other forms of
performance measurement. But opponents argue that it is “an invasion of privacy
and disregards human rights, undermines trust, reduces autonomy and emphasizes
quantity at the exclusion of quality . . . causes stress . . . and leads to declines in
employee morale and productivity” (Hedge & Borman, 1995, p. 460).
Performance Management
 System that emphasizes the link between individual behavior and
organizational strategies and goals by defining performance in the context of
those goals; jointly developed by managers and the people who report to
them.
 They combine traditional task analysis with strategic job analysis, thus
including goals and organizational strategies in the process.
 Performance management has three distinct components.
The first component consists of the definition of performance, which includes
organizational objectives and strategies. The second component is the actual
measurement process itself. The third component is the communication between
supervisor and subordinate about the extent to which individual behavior fits
with organizational expectations (Banks & May, 1999
Performance Rating - Substance
 Theories of Performance Rating
Focus on Performance Ratings

 Overall Performance Ratings

Overall ratings of performance were influenced by three factors: task
performance, organizational citizenship behavior (OCB), and counterproductive
work behavior (CWB).
Task performance: Proficiency with which job incumbents perform activities that
are formally recognized as a part of their job.
Organizational citizenship behavior (OCB): Behavior that goes beyond what is
expected.
Counterproductive work behavior (CWB): Voluntary behavior that violates
significant organizational norms and threatens the well-being of the
organization, its members, or both.
 Trait Ratings
The only reason we discuss trait ratings is to warn you against them.
The modern view of performance evaluation is that the rater should be
describing actions or behaviors (Campbell, 1990a) rather than broad and
amorphous “traits” that may or may not be of value in a job.
Traits are habits or tendencies that can be used as predictors of performance but
not as measures of performance
 Task-Based Rating
Task-based performance rating systems are usually a direct extension of job
analysis (Harvey, 1991).
The rater is asked to indicate the effectiveness of an employee on individual
critical tasks or on groups of similar tasks, often called duties, to distinguish task
groups from individual tasks.
 Critical Incidents Method
Examples of behavior that appear “critical” in determining whether performance
would be good, average, or poor in specific performance areas.
 OCB and Adaptive Performance Ratings
The research on the identification of OCB dimensions suggests that these are
valuable additions to task-based performance rating
 Structural Chracteristics of a Performance Rating Scale
Regardless of which technique you use to gather performance information, the
characteristics of the scale you use can also affect the validity of the resulting
ratings.
Rating Formats
 Graphic Ratings Scales
Graphic display of performance scores that runs from high on one end to low on
the other end.

 Checlists
List of behaviors presented to a rater, who places a check next to each of the
items that best (or least) describe the ratee.
Weighted checklist: A checklist that includes items that have values or weights
assigned to them that are derived from the expert judgments of incumbents and
supervisors of the position in question.
Forced-choice format. Format that requires the rater to choose two statements
out of four that could describe the ratee.
Behavioral Rating

 Behaviorally anchored rating scale (BARS). Rating format that includes

behavioral anchors describing what a worker has done, or might be expected
to do, in a particular duty area.
 Behavioral observation scale (BOS). Format that asks the rater to consider
how frequently an employee has been seen to act in a particular way.
Employee Comparison Methods
 Employee comparison methods. Form of evaluation that involves the direct
comparison of one person with another.
 Simple ranking, Ranking of employees from top to bottom according to their
assessed proficiency on some dimension, duty area, or standard.
 Paired comparison. Technique in which each employee in a work group or a
collection of individuals with the same job title is compared with every other
individual in the group on the various dimensions being considered.
 A New Variation on the Paired Comparison Method: CARS.
The paired comparison method has two major drawbacks: It is time consuming, and it
does not provide any clear standard for judging performance, instead simply
indicating that one individual is better or worse than another on some particular
dimension.
Borman and his colleagues have introduced a computer-based technology called
computer adaptive rating scales (CARS) that eliminates both of those drawbacks.
CARS presents two statements that might characterize a given ratee, and the rater is
asked to choose the statement that is more descriptive of the individual. So this
technique is actually a variation on the behavioral checklist/forced-choice format
described above. Along with behavioral statements that have scale values attached to
them
Performance Rating - Process

 Rating Sources.
- Supervisor
- Peers
- Self-Ratings
- Subordinate Ratings
- Customer and supplier Ratings
- 360-Degree Systems
Process of collecting and providing a manager or executive with feedback from
many sources, including supervisors, peers, subordinates, customers, and
suppliers
 Rating Distortions
Rating errors. Inaccuracies in ratings that may be actual errors or intentional or
systematic distortions.
Central tendency error. Error in which raters choose a middle point on the scale to
describe performance, even though a more extreme point might better describe the
employee.
Leniency error. Error that occurs with raters who are unusually easy in their ratings.
Severity error. Error that occurs with raters who are unusually harsh in their ratings.
Halo error. Error that occurs when a rater assigns the same rating to an employee on a
series of dimensions, creating a halo or aura that surrounds all of the ratings, causing
them to be similar.
Rater Training
 Administrative Training
 Psychometric Training
Training that makes raters aware of common rating errors (central tendency,
leniency/severity, and halo) in the hope that this will reduce the likelihood of
errors.
 Frame-of-reference Training
Training based on the assumption that a rater needs a context or “frame” for
providing a rating; includes (1) providing information on the multidimensional
nature of performance, (2) ensuring that raters understand the meaning of
anchors on the scale, (3) engaging in practice rating exercises, and (4) providing
feedback on practice exercises.
The Reliability and Validity of Ratings

 Reliability
Some researchers have demonstrated that the inter-rater reliability of
performance ratings may be in the range of +.50 to +.60, values usually
considered to represent “poor” reliability.
Those values should not be surprising, however. When we examined sources of
performance information, we saw that each of these sources (e.g., supervisors,
subordinates, peers, self) brought a different perspective to the process.
 Validity
The validity of performance ratings depends foremost on the manner by which
the rating scales were conceived and developed.
The scales should represent important aspects of work behavior.
The Social and Legal Context of Performance
Evaluation

 The Motivation to Rate

Rater Goals
● Task performance: using appraisal to maintain or enhance the ratee’s
performance goals or levels
● Interpersonal: using appraisal to maintain or improve interpersonal relations
with the ratee
● Strategic: using appraisal to enhance the standing of the supervisor or work
group in the organization
● Internalized: using appraisal to confirm the rater’s view of himself or herself
as a person of high standards
Ratee Goals
● Information gathering: to determine the ratee’s relative standing in the work
group; to determine future performance directions; to determine organizational
performance standards or expectations
● Information dissemination: to convey information to the rater regarding
constraints on performance; to convey to the rater a willingness to improve
performance

Organizational Goals
● Between-person uses: salary administration, promotion, retention/termination,
layoffs, identification of poor performers
● Within-person uses: identification of training needs, performance feedback,
transfers/ assignments, identification of individual strengths and weaknesses
● Systems-maintenance uses: manpower planning, organizational development,
evaluation of the personnel system, identification of organizational training
needs
 Goal Conflict

The problem with having multiple stakeholders with differing goals is that they
often conflict when a single system is used for performance evaluation.

When a single system is used to satisfy multiple goals from different

stakeholders, the rater must choose which goal to satisfy before assigning a
rating.

There are no easy solutions to these problems. One solution is to have multiple
performance evaluation systems, each used for a different purpose. For example,
one system might be used for performance planning and feedback (a within-
person use), and another, completely different, system might be used to make
salary or promotion decisions (a between-person use)
 Performance feedback
Individual workers seek feedback because it reduces uncertainty and provides
external information about levels of performance to balance internal (self)
perceptions.
Most workers prefer to receive positive feedback, and most supervisors prefer to
give positive feedback.
But there is always room for improvement, so most workers get mixed feedback,
some positive and some directed toward improving skills or eliminating
weaknesses.
This becomes particularly problematic when the same information is used for
multiple purposes. When the purpose of evaluation is performance improvement,
it is best to keep administrative issues off the table, and the best way to do that
is to have a separate system for making administrative decisions.

Destructive criticism. Negative feedback that is cruel, sarcastic, and offensive;

usually general rather than specific and often directed toward personal
characteristics of the employee rather than job-relevant behaviors.

360-degree feedback
 Performance evaluation and culture
Davis suggested that Hofstede’s five dimensions of culture might affect
performance evaluations as follows:
● Individualist cultures will be more amenable to traditional performance
evaluation; collectivist cultures will be more amenable to the evaluations of
groups or teams.
● Cultures characterized as high in power distance will be more resistant to 360-
degree systems than those low in power distance.
● Cultures with low tolerance for uncertainty will tend to be characterized by
blunt and direct performance feedback.
● Masculine cultures will emphasize achievement and accomplishments, whereas
feminine cultures will emphasize relationships.
● Short-term-orientation cultures will emphasize relationships rather than
performance; long-term-orientation cultures will emphasize behavioral change
based on performance feedback.
 Performance Evaluation and the Law
Perceptions of fairness, as well as the technical, psychometric, and procedural
characteristics of performance evaluation systems.

Recommendations Regarding the Substance of Legally Sound Performance

Appraisals
Appraisal criteria:
● Should be objective rather than subjective
● Should be job related or based on job analysis
● Should be based on behaviors rather than traits
● Should be within the control of the ratee
● Should relate to specific functions, not global assessments
● Should be communicated to the employee
Procedural Recommendations for Legally Sound Performance Appraisals
Appraisal procedures
● Should be standardized and uniform for all employees within a job group
● Should be formally communicated to employees
● Should provide notice of performance deficiencies and of opportunities to
correct them
● Should provide access for employees to review appraisal results
● Should provide formal appeal mechanisms that allow for employee input
● Should use multiple, diverse, and unbiased raters
● Should provide written instructions and training for raters
● Should require thorough and consistent documentation across raters that
includes specific examples of performance based on personal knowledge
● Should establish a system to detect potentially discriminatory effects or abuses
of the system overall