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Performance Management and

Performance Appraisal
by Gary Dessler- Chapter 9
Decenzo- Chapter 10
 Performance
Performance Appraisal Management

Evaluating an employee’s The process employers use to

current and/or past make sure employees are
performance relative to his or working toward organizational
her performance standards. goals.
 Why Appraise Performance

- Plays an integral
role in the
Helps in planning Helps in employer’s
for correcting identifying performance
deficiencies and employee management
reinforce things process.
strengths and - Can affect the
done correctly weaknesses, are employer’s salary
useful for raise decisions.
career planning
 Realistic Appraisals
4

Motivations for soft (less-than- candid) appraisals

 The fear of having to hire and train someone new
 The unpleasant reaction of the appraisee
 A company appraisal process that’s not conducive to candor
Hazards of giving soft appraisals
 Employee loses the chance to improve before being forced to
change jobs.
 Lawsuits arising from dismissals involving inaccurate
performance appraisals.
 Performance Appraisal Roles
5

Supervisors
 Usually do the actual appraising.
 Must be familiar with basic appraisal techniques.
 Must understand and avoid problems that can cripple
appraisals.
 Must know how to conduct appraisals fairly.
 Performance Appraisal Roles (cont’d)
6

HR department
 Serves a policy-making and advisory role.
 Provides advice and assistance regarding the appraisal tool
to use.
 Prepares forms and procedures and insists that all
departments use them.
 Responsible for training supervisors to improve their
appraisal skills.
 Responsible for monitoring the system to ensure that
appraisal formats and criteria comply with EEO laws and are
up to date.
 Steps in Appraising Performance

1
Defining the job
Making sure that
2 3
Appraising performance
Providing feedback
Comparing your
you and your Discussing the
subordinate’s actual
subordinate agree subordinate’s
performance to the
on his or her duties performance and
standards that have
and job standards. progress, and
been set; this usually
making plans for
involves some type of
any development
rating form.
required.
 Designing the Appraisal Tool
8

What to measure?
 Work output (quality and quantity)
 Personal competencies
 Goal (objective) achievement
How to measure?
 Graphic rating scales
 Alternation ranking method
 Paired Comparison
 MBO
 Forced Distribution
 Critical Incidents Method
Performance Appraisal Methods

1. Graphic Rating Scale

A scale that lists a number of traits and a

range of performance for each that is
used to identify the score that best
describes an employee’s level of
performance for each trait.
 Graphic
Rating Scale
10
with Space
for
Comments

Figure 9–3
 Portion of an Administrative Secretary’s Sample Performance
Appraisal Form
11

Source: James Buford Jr., Bettye Burkhalter, and Grover Jacobs, “Link Job
Description to Performance Appraisals,” Personnel Journal, June 1988, pp. 135–136.
Figure 9–4
 12

Performance
Performance
Management
ManagementOutline
Outline

Source: www.cwru.edu.
Figure 9–5a
 13

Performance
Performance
Management
Management
Outline
Outline
(cont’d)
(cont’d)

Source: www.cwru.edu.
Figure 9–5b
 Graphic Rating Scale

Advantages Disadvantages

Simple to use Standards may be unclear

provides quantitative Ambiguity can lead to biasness
ranking for each Halo effect, central tendency and
employee leniency
Performance Appraisal Methods

2. Alternation Ranking Method

Ranking employees from best to worst on a

particular trait, choosing highest, then
lowest, until all are ranked.
Alternation Ranking Scale
16

Figure 9–6
Alternation Ranking Method

Advantages Disadvantages

Allows for no ties More manageable for small

Avoids central employees
tendency and other Only one employee can be rated
problems of rating best
scales
Performance Appraisal Methods

3. Paired Comparison Method

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.
 Ranking Employees by the
Paired Comparison Method
19

Note: + means “better than.” − means “worse than.” For each chart,
add up the number of 1’s in each column to get the highest-ranked
employee. Figure 9–7
Paired Comparison Method

Advantages Disadvantages

Ensures that each Can become difficult when

employee is compared comparing large number of
against every other employees
Performance Appraisal Methods

4. Forced Distribution Method

Similar to grading on a curve; predetermined percentages

of ratees are placed in various performance categories.
Example:
15% high performers
20% high-average performers
30% average performers
20% low-average performers
15% low performers
Forced Ranking Method

Advantages Disadvantages

Prevents raters from E.g. if assessing only four employees,

inflating their all may be excellent yet the evaluator is
evaluations so forced to rank them into top quarter,
everyone looks good second quarter, third quarter and low
or from rating quarter
everyone average Because comparisons are relative a
mediocre employee may score high only
because he/she is “best of the worst”
Performance Appraisal Methods

5. Management By Objectives

Involves setting specific measurable goals with each

employee and then periodically reviewing the progress
made.
1. Set the organization’s goals.
2. Set departmental goals.
3. Discuss departmental goals.
4. Define expected results (set individual goals).
5. Performance reviews.
6. Provide feedback.
 MBO

Advantages Disadvantages

Jointly agreed on Time consuming

performance
objectives
Greater employee
commitment and
feedback towards goal
achievement
Performance Appraisal Methods

6. Critical Incidents Method

Focuses on key behaviors that make the difference

between doing a job effectively and ineffectively
Appraiser writes down anecdotes describing
employee actions that are that were especially
effective or ineffective
Specific behaviors are cited not vaguely defined
traits
E.g. a police sergeant might write a critical incident
about one of the officers as “brought order to a
volatile situation by calmly discussing options with
an armed suspect during a hostage situation which
resulted in all hostages being released
 Critical Incidents Method

Advantages Disadvantages

More job specific Difficult to rate or

Identifies which rank employees
behaviors are relative to one another
desirable and which as quantification is
call for improvement difficult
Time consuming
Potential Rating Scale Appraisal Problems

Unclear Standards

Halo Effect

Central Tendency

Strictness/Leniency and Biasness

 Potential Rating Scale Appraisal Problems
28

Unclear standards
 An appraisal that is too open to interpretation.
Halo effect
 Occurs when a supervisor’s rating of a subordinate on one trait
biases the rating of that person on other traits.
Central tendency
 A tendency to rate all employees the same way, such as rating
them all average.
Graphic Rating Scale with
29
Unclear Standards

Note: For example, what exactly is meant by

“good,” “quantity of work,” and so forth?

Table 9–2
 Potential Rating Scale Appraisal
30
Problems (cont’d)

Strictness/leniency
 The problem that occurs when a supervisor has a tendency
to rate all subordinates either high or low.
Bias
 The tendency to allow individual differences such as age,
race, and gender to affect the appraisal ratings employees
receive.
 Who Should Do the Appraising?
31

The immediate supervisor

Peers
Rating committees
Self-ratings
Subordinates
360-Degree feedback
 The Appraisal Interview
32

Types of appraisal interviews

 Satisfactory—Promotable
 Satisfactory—Not promotable
 Unsatisfactory—Correctable
 Unsatisfactory—Uncorrectable
How to conduct the appraisal interview
 Talk in terms of objective work data.

 Don’t get personal.

 Encourage the person to talk.

 Don’t tiptoe around.

 Performance
Contract
33

Source: David Antonion, “Improving the

Performance Management Process Before
Discontinuing Performance Appraisals,”
Compensation and Benefits Review May–
June 1994, p. 33, 34.
Figure 9–10
34

Checklist
During the
Appraisal
Interview

Source: Reprinted with permission of

the publisher, HRnext.com. Copyright
HRnext.com, 2003.
Figure 9–11
 Creating Effective Performance
Cha
Management Systems
pte
r
10,
slid
e 35
Success
=
Train appraisers
+
Rate selectively
+
Have multiple raters
+
Provide ongoing feedback
+
Combine absolute and relative standards
+
Use behavior-based measures

Fundamentals of Human Resource Management,

10/e, DeCenzo/Robbins