Performance Appraisal & Management

Definitions

 Performance:
 the results accomplished by an employee in meeting specific
objectives
 Performance appraisal: evaluating an employee’s current and/or
past performance relative to his or her performance standards
 Performance Management: continuous process of:
 identifying, measuring and developing the performance of individuals
and teams and
 aligning performance with the strategic goals of the organization
 Performance Appraisal process

 Performance appraisal involves 3-steps:

1. setting work standards
2. assessing the employee’s actual performance relative to those
standards
3. providing feedback to the employee
 Performance Standards/Targets

 Written statements describing how well a job should be done

 provide a benchmark against which to evaluate work performance
 Attributes of Performance Standards
 Clear & understandable
 Specific
 Measurable
 Realistic
 Challenging
 Consistent with organizational goals
 Dynamic
 Performance Appraisals Benefits to Employees

 Direction: what’s expected of them and of their role in the

organization’s overall goals
 Feedback: A regular outlet in which to receive feedback on
performance and expectations
 Motivation: to perform their best because they know they will be
recognized and/or rewarded
 Performance Appraisals Benefits to organization:
Administrative & development Purposes

 Compensation
 Performance improvement
 Feedback
 Documentation for decisions
 Promotion
 Identify training needs
 Goal Setting - Set new performance
goals, including additional
responsibilities
 Transfer
 Discharge
 Personnel research
 Layoff
 Legal protection
 Motivation system
 Manpower planning
 career development
 Who Should Do the Appraising?

1. Supervisor: usually in the best position to observe and evaluate his

or her subordinate’s performance.
 The supervisor is also responsible for that persons performance

2. Peer appraisals: popular in organizations using self-managing

teams
3. Rating committees: usually composed of the employee’s
immediate supervisor and three or four other supervisors
 help cancel out problems such as bias on the part of individual raters
 Multiple raters often see different facets of an employee’s performance
 Who Should Do the Appraising?

4. Self-ratings:
 the basic problem is that employees usually rate themselves higher
than do their supervisors or peers
5. Appraisal by subordinates:
 usually for developmental rather than for pay purposes
6. 360-degree feedback:
 collects performance information all around from supervisors,
subordinates, peers, and internal or external customers
 generally for developmental rather than pay purposes
 Methods of performance appraisal

1. Trait Methods of Appraisal:

 Graphic Rating Scale
 Paired Comparison Method
 Forced-distribution
 Essay
2. Behavioral Appraisal Methods:
 Behaviorally Anchored Rating Scale (BARS)
 Critical Incidents
 Behavioral Checklist
3. Contemporary PA Concepts
 Management by objectives (MBO)
 360-degree feedback
 Self-managed teams
 Graphic Rating Scale

 the simplest and most popular method. It lists:

 traits or performance dimensions
 a range of performance values (from below expectations to role model
or unsatisfactory to outstanding, ) for each trait
 The rater evaluate performance by circling or checking the
score that best describes the subordinate’s performance for
each trait
 The manager then totals the assigned ratings for the traits
 Graphic Rating Scale cont’d

 What to rate?
 generic job dimensions such as communications, teamwork, know-
how, and quantity
 Employee’s performance on the job’s actual duties
 how well the employee did with respect to achieving specific
performance expectations or objectives
 Competency-based appraisal forms
 focus on the extent to which the employee exhibits the competencies
(generally the skills and/or knowledge) needed to perform the job.
 Paired Comparison Method

 For every trait (quantity of work, quality of work, and so

on), you pair and compare every subordinate with every
other subordinate
 Forced Distribution Method

 similar to grading on a curve

 With this method, you place predetermined percentages of
ratees into several performance categories.
 Essay/Narrative Forms

 the person’s supervisor assesses the employee’s past

performance and required areas of improvement.
 The supervisor’s narrative assessment helps the employee:
 understand where his or her performance was good or bad, and
 how to improve that performance
 Critical Incident Method

 involves keeping an ongoing log throughout the performance period

 used to identify and describe specific incidents where employees did
something really well or that needs improving during their
performance period.
Ex: A fire, sudden breakdown, accident

Workers Reactions Scale

A Informed the supervisor 5
immediately
B Become anxious on loss of output 4
C Tried to repair the machine 3
D Complained for poor performance 2
E Was happy to forced test 1
 Weighted Checklist
 performance appraisal is based on descriptive statements about
effective and ineffective behavior on jobs

Item Scale Value Individual Performance

Interprets institutional Accurate (3);
culture to staff 4 Mostly Accurate (2)
Mostly Inaccurate (1)
Inaccurate (0)
Work results are Accurate (4)
high quality Mostly Accurate (3)
5 Average (2)
Mostly Inaccurate (1)
Inaccurate (0)
Holds high Accurate (4)
expectations for Mostly Accurate (3)
staff members 5 Average (2)
Mostly Inaccurate (1)
Inaccurate (0)
 Behaviorally Anchored Rating Scales
 based on making rates on behaviors or sets of indicators to determine
the effectiveness or ineffectiveness of working performance.
 This form is a mix of the rating scale and critical incident techniques
to assess performance of the staff
 360-Degree Feedback

 also known as multi-rater feedback, multi-source feedback,

or multi-source assessment.
 Management by Objectives

 refers to a comprehensive and formal organization-wide goal setting

and appraisal program.
 goals cascade down by level and department, from company-wide
strategic goals to tactical day-to-day goals.
 MBO consisting of six steps, which include:
1. Set organizational goals
2. Set departmental goals
3. Discuss the goals with the workers
4. Define expected results
5. Performance review
6. provide feedback
 Potential Problems in performance appraisal
 Unclear standards of evaluation:
 arise because of perceptual differences in the meanings of the words
used to evaluate employees
 good, adequate, satisfactory and excellent may mean different things to
different evaluators.
 This difficulty arises most often in graphic rating scales
 ways to minimize this problem:
 develop and include descriptive phrases that define the meaning of each
dimension or factor
 training raters to apply all ratings consistently
 Potential Problems Cont’d

 Personal bias error:

 A supervisor may be motivated to inflate ratings because he or she
may want to:
 encourage employees
 avoid confrontation with employees
 avoid creating a written record
 make the supervisor look good to his/her manager
 Supervisor may be motivated to deflate ratings because he/she may
want to:
 shock an employee
 teach a rebellious employee a lesson
 send a message to the employee that he or she should consider leaving
 build a strongly documented, written record of poor performance
 Unintentional rater errors

 Contrast effect: performance is rated based on the ratings that are given to
someone else
 Leniency/harshness error: a tendency to rate all subordinates either high or
low
 Some raters see everything as good- lenient raters
 Others-raters see everything as bad - harsh raters
 Central tendency: rating all employees on average
 Halo effect: ratings on one trait bias the ratings of the person on other traits
 Recency: occurs when a manager evaluates employees on work performance
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