PERFORMANCE APPRAISAL PROCESS

1. Determine the Reason for Evaluating Employee Performance

Forced-choice rating scale - a method of performance appraisal in which a

supervisor is given several behaviors and is forced to choose which of them is
most typical of the employee.

• Common uses and goals for performance appraisal: (1) providing

employee feedback and training; (2) determining salary increases; (3) making
promotion decisions; (4) making termination decisions; and (4) conducting
personnel research.

Performance appraisal review – a meeting between a supervisor and a

subordinate for the purpose of discussing performance appraisal results.
2. Identify Environmental and Cultural Limitations
• In an environment in which there is no money available for merit pay,
developing a numerically complex system will become frustrating, and the
results of the evaluation may not be taken seriously.

• In an environment in which employees are very cohesive, the use of peer

ratings might reduce the cohesiveness.

3. Determine Who Will Evaluate Performance

360-degree feedback - a performance appraisal system in which feedback is
obtained from multiple sources such as supervisors, subordinates, and peers.

Multiple-source feedback - a performance appraisal strategy in which an

employee receives feedback from sources (e.g., clients, subordinates, peers)
other than just his or her supervisor. Common: Supervisors , Peers,
Subordinates, Customers , Self-Appraisal.
4. Select the Best Appraisal Methods to Accomplish Your Goals

Decision 1: Focus of the Appraisal Dimensions

A. Trait-Focused Performance Dimensions

B. Competency-Focused Performance Dimensions
C. Task-Focused Performance Dimensions
D. Goal-Focused Performance Dimensions
E. Contextual Performance

Decision 2: Should Dimensions Be Weighted?

Decision 3: Use of Employee Comparisons, Objective Measures, or

Ratings
• Employee Comparisons: (1) Rank order – a method of performance
appraisal in which employees are ranked from best to worst;
(2) Paired comparison – a form of ranking in which a group of employees to
be ranked are compared one pair at a time; (3) Forced distribution method –
a performance appraisal method in which a predetermined percentage of
employees are placed into a number of performance categories.

• Objective Measures: (1) Quantity – it is used to measure job performance

by counting the number of relevant job behaviors that occur; (2) Quality –
used to measure job performance by comparing a job behavior with a
standard; (3) Error - deviation from a standard of quality; also a type of
response to communication overload that involves processing all information
but processing some of it incorrect; (4) Attendance can be separated into
three distinct criteria: absenteeism, tardiness, and tenure; and (5) Safety -
employees who follow safety rules and who have no occupational accidents do
not cost an organization as much money as those who break rules,
equipment, and possibly their own bodies.
• Ratings of Performance: (1) Graphic rating scale – a method of
performance appraisal that involves rating employee performance on an
interval or ratio scale; (2) Behavioral checklists consist of a list of
behaviors, expectations, or results for each dimension. This list is used to
force the supervisor to concentrate on the relevant behaviors that fall under a
dimension. Common rating scale: Comparison with Other Employees,
Frequency of Desired Behaviors, Extent to which organizational are met.
5. Train Raters
Frame-of-reference training - a method of training raters in which the rater
is provided with job-related information, a chance to practice ratings, examples
of ratings made by experts, and the rationale behind the expert ratings.

6. Observe and Document Performance

Critical incidents – a method of performance appraisal in which the supervisor
records employee behaviors that were observed on the job and rates the
employee on the basis of that record.

Employee Performance Record – a standardized use of the critical-incident

technique.
7. Evaluate Performance

A. Obtaining and Reviewing Objective Data

B. Reading Critical-Incident Logs
C. Completing the Rating Form (distribution errors, leniency error, central
tendency error, strictness error, halo errors, proximity errors, contrast errors,
assimilation, recency effect, infrequency observation, cognitive processing of
observed behavior – emotional state, bias, affect)

8. Communicate Appraisal Results to Employees

Prior to the Interview: (1) Allocate Time; (2) Schedule the Interview ; and
(3) Prepare for the Interview
9. Terminate Employees
Employment-at-will doctrine - the opinion of courts in most states that
employers have the right to hire and fire an employee at will and without any
specific cause.

Employment-at-will statements - statements in employment applications

and company manuals reaffirming an organization’s right to hire and fire at will.

Legal Reasons for Terminating Employees

A. Probationary Period
B. Violation of Company Rules Ex.: progressive discipline
C. Inability to Perform
D. Reduction in Force (Layoff)

10. Monitor the Legality and Fairness of the Appraisal System