Performance

Appraisal

Spring 2008 1
Performance Appraisal
 Performance appraisal vs. performance
management
 Why it doesn’t happen
 PA formats
 Problems with PA
 360º feedback

Spring 2008 2
Why Performance Appraisal ?
 Why?
 Reward good performance
 Feedback to employees
 Employee development
 Documentation for future managers, legal
purposes

Spring 2008 3
What Makes Good Performance
Appraisal?
 PA should be based on job performance alone
 PA also should be an ongoing process, not a once-a-
year ritual
 6 characteristics of effective PA
 Subordinate participation
 Subordinate acceptance
 Goal setting
 Discussing problems with performance
 Minimal criticism (defensiveness)
 Subordinate voice

Spring 2008 4
Defining Performance
 Objective vs. subjective
 What can the individual control?
 Job related vs. organization related behaviors
 Dimensions to rate on

Spring 2008 5
Who Evaluates Performance?
 Supervisor
 Self
 Subordinate
 Peers
 Customers

Spring 2008 6
Appraisal Formats
 Trait ratings
 Rankings
 Outcome measures
 Dimensional scales
 BARS
 MBO

Spring 2008 7
Trait Ratings
 Traits (i.e., “industrious”) mean different things to
different people
 Lack of reliability
 Not specific enough for useful feedback
 What, specifically, does the employee need to do to
be “industrious”?
 Still used, though...... It’s quick and easy, and
appealing to managers (“looks” good)

Spring 2008 8
Rankings and Forced
Distribution
 Currently popular
 Managers required to rate a certain proportion of employees in each
category
 General Electric (“Rank-and-Yank”)
 However….
 All employees may be equally good or bad, so forced distribution isn't
the answer
 May be comparing apples and oranges, if employees in different jobs
 No anchor points (The employee on the bottom of the list may be
satisfactory, but all of the others are simply better)
 Not specific enough, in terms of areas and specific behavior, for useful
feedback

Spring 2008 9
Outcome Measures
 Nothing wrong with measuring outcomes..
…
 Need to chose correct outcomes
 Focus on results not always helpful in
showing employees what to do to get
results
 Outcomes may not be under employee’s
control

Spring 2008 10
Behaviorally Anchored Rating
Scales (BARS)
 Format:
 Scales for different areas or dimensions (usually 8-10 scales per
job)
 Each scale has 9 points or levels
 At least three levels are anchored or defined with representative
behaviors, describing superior, average, and below average
levels of performance
 The supervisor:
 Responds to the question “This is the type of employee who
would...”
 Rates the employee from 9 (best) to 1 (worst), for each scale

Spring 2008 11
Management by Objectives (MBO)
 About goals
 Goals must be challenging, yet reachable
 Must have meaningful employee participation

 Three steps in process:

 Employee and manager agree on goals
 Progress toward goals monitored during appraisal
period
 At end of period, employee and supervisor meet again
to determine if goals met

Spring 2008 12
Systematic Problems With
Performance Appraisal
 No performance appraisal or performance
appraisal as a ritual only
 Lack of top management support for
performance appraisal or for meaningful
appraisal
 Appraisal should be (but too often isn’t) an
ongoing process of feedback

Spring 2008 13
Problems in the Appraisal
Interview
 Disagreement (between employee and
manager)
 Defensiveness (when employee is given bad
news in a non-constructive manner)
 Manager’s unwillingness to confront problem
employees
 One-way communication (top-down only;
employee has no opportunity to respond)

Spring 2008 14
Rater Errors (I)
 Systematic errors/biases; normally, rater is
unaware of these
 Errors in rating process
 Irrelevant information
 Errors in observation
 Stereotypes
 Employee similar/not similar to rater
 Pattern of performance (improve/decline)
 Variability of performance

Spring 2008 15
Rater Errors (II)
 Errors in storage and recall
 Trait
recall
 Memory decay
 Errors in actual evaluation
 Politicalgoals
 Forced distribution/limited pot of money
 Fear of confronting problem employees
 Desire to look good

Spring 2008 16
 Contrast Error
 First and Last Impressions
 Halo Effect
 Stereotyping
 “Similar-to-Me Effect”
 Central Tendency Error
 Negative and Positive Leniency
360º Appraisal
 Also called “multisource feedback”
 Gather information on performance from
multiple sources
 Supervisor
 Peers
 Subordinates
 Self
 Customers

Spring 2008 18