Performance Appraisal

Identifying and Measuring Employee Performance

• Performance Management System

• Processes used to identify, encourage, measure, evaluate, improve, and reward
employee performance.

• Performance
• What an employee does and does not do.
• Quantity of output • Quality of output
• Timeliness of output • Presence at work
Traditional Performance
Appraisal  Between an employee and
Overall Objectives
his/her immediate supervisor
 Leads to decisions and
Review Objectives judgments
 Common approach across
levels and functions
 Supervisor is in the leading
position
 It‘s a system – not an event
 Central system-owner (usually
HR)

Mid-year Review
Interfaces to other HR-related
Processes
Learning

Talent- Balanced
management Scorecard

Performance
Appraisal
Employee
Compensation
Retention

Promotion/
transfer
Focus on Tool versus Results
??

Tool Design Conditions Results

Results Conditions Tool Design

Intended Results
Reward high-
performers
Retain Treat low-
employees performers

Motivate
Identify
through
potential
objectives
Judgements &
Decisions
Management by Track
objectives suitability

Develop Offer
employees perspectives
Learn through
feedback
Principal, Customer, and the Role
of HR
Ex

Ex Ex
HR Ex

M
M M HR M HR

E E E E HR

A B C D

Executive Board (Ex), Manager (M), Employees (E)

The man who gives Flowers to
his Wife

Intrinsically Attribution to
Behavior not
motivated Policy Behavior extrinsic
valued
behavior motivation
Relevant Conditions
 Employee-Organization-
Relationship

 Employee-Supervisor-
Relationship

 Employee-Work-
Relationship
Certainty of Work Results and
Processes
low

D
E

certainty
of results B

A
high
high certainty low
of process
Task Interdependance and
Dynamic
C

D E

B strong effect
weak effect
Task Dynamics (Sensitivity
Model)
strong
reactive critical

B A

Reaction neutral

E D

buffering active
weak

weak Influence strong

The role of judge
and the role of
counselor are
incompatible.
-- Douglas McGregor

Source: McGregor, D. (1960). The human side of

enterprise. New York: McGraw-Hill.
Roles of supervisors
Boss

Partner Employee Coach

Enabler
Social Judgement Process
Criterion
interpretation

no
Recall relevant
memory content

Judgement
available?

Initial
judgement
yes

Anticipation of
consequences

Judgement
communication
Employee-Organization-
Relationship Autonomy/
self-control

Professional Social
independence collaboration
Employee-Organization-
Relationship Autonomy/ Autonomy/
self-control self-control

Professional Social Professional Social

independence collaboration independence collaboration

A B
 Two extreme Worlds
Hierarchy Agility

Task uncertainty low high

Dynamic low high

Supervisor role Boss Partner/Coach

Autonomy/self-control low (top-down) high (bottom-up)

Social collaboration individual linked teams

Professional independence low high

Traditional Performance Appraisal in both
Worlds Hierarchy Agility

Reward high-performers

Tread low-performers

Identify potential

Track suitability

Offer perspectives

Learn through feedback

Develop employees

Management by objectives

Motivate through objectives

Retain employees
Agile Design
• Focussed and Separated
• Team-setting (Not individual)
• Employee Driven
• Short Cycles
• Qualitative and Open
Performance Distribution
C B A

Frequency

Performance
Learning
Hierarchy Agility

individual learning social learning

from managers & trainers from and with others
off-the-Job on-the-Job
planned on demand
formal informal
ordered employee driven
long cycles short cycle
requirements curiosity & uncertainty
learning transfer work = learning
Talent Identification
Decider Decider
Talent Manager

Target Position Target Position

Supervisor

Employee Employee
Feedback in Hierarchies

Client

...
Agile Feedback

Customer Teams Enabler

Agile Design
• Think in terms of teams and networks
• Put employees and teams at the center
• Act on demand with relevant responsibilities
• Allow openess, simplicity and diversity
• Let things go - rely on natural dynamics
Summary
• It‘s a system – not a one-time incident
• First, think about results – not about the tool
• Consider internal conditions: organization, supervision and work
• Even under hierarchical conditions performance appraisal does not fully
work
• In an agile environment traditional performance appraisal does not work
• Agility requires focused, social, open approaches, driven by employees
and customers