Performance

Management &
Appraisal
Chapter 9
Presented by: FSZ
 Learning Objectives

 Define performance management and discuss how it differs from performance appraisal

 Describe the appraisal process

 Set effective performance appraisal standards

 Develop, evaluate, and administer performance appraisal tools

 Explain and illustrate the problems to avoid in appraising performance

 Discuss the pros and cons of using different raters to appraise a person’s performance

 Perform an effective appraisal interview

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 The Performance Appraisal Process
 Performance appraisal means evaluating an employee’s current and/or past performance relative to
his/her performance standards

 supervisor set performance standards in case of effective appraisal; also requires that the employee
receives the training, feedback, and incentives required to eliminate performance deficiencies

 effective appraisals begin before the actual appraisal, with the supervisor defining the employee’s jobs
and performance criteria

 defining job means making sure that the supervisor and subordinate agree on the job duties, job
standards, and appraisal method to be used

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 The Performance Appraisal Process

 involves the 3-step performance appraisal process

 (i)setting work standards

 (ii)assessing the employee’s actual job performance relative to those standards

 (iii)providing feedback to the employee with the aim of helping in order to eliminate
performance deficiencies or continue to perform similarly

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 Why Appraise Performance?
 make the decisions regarding pay, promotion, retention

 play an important role in the performance management process

 lets to plan for correcting any deficiencies and to reinforce the noteworthy performances

 facilitates career planning while exhibiting strengths and weaknesses of the employees

 identify the employees’ training and development needs

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 Defining Employee Goals & Performance
Standards
 performance appraisal should compare “what should be” with “what it is”

 managers use one of these 3 bases to establish performance standards for employees:

goals, job dimensions (team work/communication), competencies/behaviors (skills)

 what extent the employee is attaining his/her numerical goals (derived from company goals)

 ex: a companywide goal of reducing costs by 10% should translate into goals for how

individual employees and/or teams will cut costs

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 Defining Employee Goals &
Performance Standards

 Effective goals are SMART

 Specific- clearly state the desired results

 Measurable-“how much?”

 Attainable

 Relevant- derived from company goals

 Timely- reflect deadlines and milestones

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 Who Should do the Appraising?
 Supervisor Appraisals

- straight forward and makes sense

- in best position to observe and evaluate the subordinates

 Peer Appraisals

- one supervisor and three to four peers for appraisal are chosen

- immediate positive impact on improving perception of open communication, task

motivation, social loafing, group viability, cohesion, & satisfaction

- use of social media


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 Who Should do the Appraising?
 Rating Committees

- composed of the employee’s immediate supervisor and 3-4 other supervisors

- help cancelling out problems, such as individual raters’ bias

- include different facets of an employee’s performance by different appraisers

 Self-Ratings

- in conjunction with supervisor’s ratings

- employees usually rate themselves higher than do their supervisors or peers

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 Who Should do the Appraising?
 Subordinate Appraisals

- used usually for developmental purpose rather than pay

- subordinates prefer giving anonymous responses; otherwise the rating is inflated

- evidence suggests that upward feedback can improve performance

 360-Degree Feedback

- collects performance information all around an employee- supervisors, subordinates,

peers, internal and external customers

- used usually for developmental purpose rather than pay

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 Traditional Tools for Appraising Performance

 Graphic Rating Scale Method

- the simplest and most popular method

- lists traits or performance dimensions (communication/teamwork) and a range of

performance values (from “unsatisfactory” to “outstanding”)

- supervisor rates subordinate by checking the score that best describes the subordinate’s
performance for each trait

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 Traditional Tools for Appraising
Performance
 Alternation Ranking Method
- lists all subordinates to be rated

- crosses out the names of any not well known enough to rank

- indicates the employee who is the highest on the performance dimension being measured
and the lowest one

- then chooses the next highest and next lowest, and goes on till all have been ranked

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 Traditional Tools for Appraising
Performance
 Paired Comparison Method
- makes the ranking method more precise

- ranking employees by making a chart of all possible pairs of the employees for each trait
and indicating which is the better employee of the pair

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 Traditional Tools for Appraising
Performance
 Forced Distribution Method
- similar to grading on a curve

- predetermined percentages of ratees are placed into several categories

- proportions in each category are not necessarily symmetrical

- top 20%, middle 70%, bottom 10%

- some call it “Rank & Yank”

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 Traditional Tools for Appraising
Performance
 Critical Incident Method
- supervisor keeps a log of positive and negative examples of a subordinate’s work-related
behavior
- supervisor and subordinate meet to discuss the latter’s performance
- provides good and poor performance examples
- rating just not reflect the employee’s most recent performance
- how the subordinate can eliminate deficiencies
- not useful for comparing employees or for salary decisions as there is no numerical rating

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 Traditional Tools for Appraising
Performance
 Narrative Forms
- supervisor assesses the employee’s past performance and required areas of improvement

- narrative assessment helps the employee understand his/her performance

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 Traditional Tools for Appraising
Performance
 Behaviorally Anchored Rating Scales (BARS)

- appraisal method that aims at combining the benefits of narrative critical

incidents and quantified ratings by anchoring a quantified scale with specific
narrative examples of good and poor performance

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 Traditional Tools for Appraising
Performance

 Management By Objectives (MBO)

- multistep companywide goal-setting and appraisal program

- required the manager to set specific, measurable, organizationally relevant goals

with each employee, and then periodically discuss the latter’s progress toward
these goals

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 Electronic Performance Monitoring
(EPM)
- use computer network technology to allow
managers to monitor their employees’ computers

- allows to monitor employees’ rate, accuracy, and

time spent working online

- can improve productivity, but can also backfire by

increasing stress

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 Appraisal in Practice
 the best appraisal forms merge several approaches

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 Potential Appraisal Errors
 Unclear Standards

- appraisal that is too open to interpretation

- traits and degrees of merit are ambiguous

 Halo Effect

- the problem that occurs when a supervisor’s rating of a subordinate on one trait biases the
rating of that person on other traits

 Central tendency

- rating almost all the employees average

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 Potential Appraisal Errors
 Strictness or Leniency

- supervisors tendency to rate all subordinates either low or high

 Recency Effects

- letting the recent performance blind the supervisor to what his/her performance has been
over the year

 Bias

- tendency to allow personal differences to affect the appraisal ratings

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 Types of Appraisal Interview Situations

 Satisfactory-Promotable: easiest interview; objective is to discuss employee’s career plans

and to develop a specific professional developmental plan

 Satisfactory-Not promotable: objective is to maintain satisfactory performance; need to find

best incentives that are important to the employee (small bonus, extra time off,
acknowledgement)

 Unsatisfactory-correctable: objective is to lay out an action plan for correcting performance

 Unsatisfactory-uncorrectable: the most difficult one; dismissal is often the usual option

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 Conducting Appraisal Interview
 Talk in terms of objectives work data (absence, quality records, orders processed,
productivity records)

 Don’t get personal (you’re too slow)

 Encourage the person to talk (open-ended questions)

 Get agreement (getting to know what has been done in right or wrong way)

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 Criticizing a Subordinate
 let the employee maintain his/her dignity

 criticize in private and constructively

 provide examples of critical incidents and specific suggestions of what to do and why

 avoid once-a-year critical broadsides; rather give periodical feedback

 never say the employee is always wrong

 should be objective and bias-free

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 Handling Formal Written Warning
 serves two purposes

 may serve to shake employee out of his/her bad habits

 may help to defend rating (to boss and court)

 should identify the employee’s standards, making it clear that the employee was aware of
the standard

 also specify any deficiencies related to the standard, showing the employee had an
opportunity to correct performance

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 Performance Management

 Performance management is the process of identifying, measuring, and

developing the performance of individuals and teams and aligning their
performance with the organization’s goals

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 Basic Elements of Performance
Management
 Direction sharing – communicating the company’s goals throughout the company and then
translating these into doable departmental, team, and individual goals

 Goal alignment – having a method that enables managers and employees see the link
between employees’ goals and those of their department and company

 Ongoing performance monitoring – includes using computerized systems that measure and
then email progress and exception reports based on the person’s progress toward meeting
his/her performance goals

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 Basic Elements of Performance
Management

 Ongoing feedback – both face-to-face and computerized feedback regarding progress

towards goals

 Coaching and developmental support should be an integral part of the feedback process

 Recognition and rewards provide the consequences needed to keep the employee’s goal-
directed performance on track

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 Thanks!
Any questions?
You can find me at
faseeha.zabir@northsouth.edu

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 Reference
Dessler, G. (2012). Human Resource Management (13th Edition).
New York: Pearson.

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