Ch 07 performance appraisal

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PERFORMANCE APPRAISAL

 Uses of performances appraisal
 Who conducts appraisals
 Common appraisals methods
 Rater error or biases
 The appraisals interviews

Definitions

 PERFORMANCE APPRAISAL is a process
of evaluating how well employees
perform their jobs when compared to
as et of standard and then
communicating that information to
those employees
 PERFORMANCE APPRAISAL is a formal
system of periodic review and
evaluation of an individual’s or team’s
job performances
 PERFORMANCE APPRAISAL is the
process by which organization evaluate
employee job performance

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Different between PM and PA

 Performance  Performance
Management Appraisal
 Processes used to identify,  The process of evaluating
encourage, measure, how well employees
evaluate, improve, and perform their jobs and then
reward employee communicating that
performance. information to the
employees.

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 Performance management should do the following:
a) Provide information to employees about their performances
b) Clarify what the organization expects
c) Identify development needs
d) Document performance for personnel records

 Elements of employee performance:
a) Quantity of output d) Presence of work
b) Quality of output e) Cooperativeness
c) Timeliness of output

 Types of Performance Information:
a) Trait-based (character/attitude) c) Result-based (accomplishment)
b) Behavior-based (behavior)

 Potential performances criteria problems:
a) Deficient c) Objective/Subjective
b) Contaminates

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Uses of Performance Appraisals

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Criticisms of Performance Appraisal:
a) focus on the individual
b) receive generally rate
c) inconsistent, short-term oriented,
subjective & valuable

Two ways of Performance Appraisal:
a) informal appraisal
b) systematic appraisal

Timing of appraisal:
a) once/twice a year/annually
b) new employees
c) probationary employees
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Who Conduct Appraisals?

 Supervisory rating of
subordinates
 Employee rating of managers
 Team/Peer ratings
 Self-ratings
 Outside raters
 Multisource rating/360 feedback
a) manager
b) co-workers/peers
c) subordinates
d) self-evaluation
e) customers

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Who Advantages Disadvantages
conduct

Employee Helps in identifying competent Negative reactions by managers
rating of managers to employee ratings
managers Serves to make managers more Subordinates’ fear of reprisals
responsive to employees may inhibit them from giving
Can contribute to the career realistic (negative) ratings
development of managers Ratings are useful only for self-
improvement purposes

Team/Peer Helps improve the Can negatively affect working
rating performance of lower-rated relationships.
individuals Can create difficulties for
Peers have opportunity to managers in determining
observe other peers. individual performance.
Peer appraisals focus on Organizational use of individual
individual contributions to performance appraisals can
teamwork and team hinder the development of
performance. teamwork

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Performances Appraisals Process

1. Determining specific performances appraisals goals
2. Choose appropriate appraisal method
3. Train supervisors
4. Discuss the method used with employees
5. Appraise according to the goals set earlier
6. Discuss appraisals with employees
7. Determine future performance goals

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Method of Appraising Performance

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1. Category Scaling Methods

 Graphic Rating Scale
 A scale that allows the rater to indicate an employee’s
performance on a continuum of job behaviors.
 Aspects of performance measured:
• Descriptive categories, job duties, and behavioral dimensions
• Behavioral rating scales (e.g., BARS)
 Drawbacks
• Restrictions on the range of possible rater responses
• Differences in the interpretations of the meanings of scale items and
scale ranges by raters
• Poorly designed scales that encourage rater errors
• Rating form deficiencies limit effectiveness of the appraisal
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Category Rating Methods (cont’d)

 Checklists
 A performance appraisal tool that uses a list of statements or
work behaviors that are checked by raters.
• Can be quantified by applying weights to individual checklist items.
 Drawbacks
• Interpretation of item meanings by raters
• Weighting creates problems in appraisal interpretation
• Assignment of weights to items by persons other than the raters

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2. Comparative Methods
 Ranking
 A listing of all employees from highest to lowest in
performance.
 Drawbacks
• Does not show size of differences in performance between
employees
• Implies that lowest-ranked employees are unsatisfactory
performers.
• Becomes an unwieldy process if the group to be ranked is large.

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Comparative Methods (cont’d)

 Forced Distribution
 Performance appraisal method in which ratings of
employees are distributed along a bell-shaped curve.
 Drawbacks
• Assumes a normal distribution of performance.
• Resistance by managers to placing individuals in the lowest or
highest groups.
• Providing explanation for placement in a higher or lower
grouping can be difficult.
• Is not readily applicable to small groups of employees.

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Forced Distribution on a Bell-Shaped Curve

Figure 11–11

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3. Narrative Methods
 Critical Incident
 Manager keeps a written record of highly favorable and unfavorable
employee actions.
 Drawbacks
• Variations in how managers define a “critical incident”
• Time involved in documenting employee actions
• Most employee actions are not observed and may become different if
observed
• Employee concerns about manager’s “black books”
 Essay
 Manager writes a short essay describing an employee’s performance.
 Drawback
• Depends on the managers’ writing skills and their ability to express
themselves.

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4. Behavioral/Objective Methods

 Behavioral Rating Approach
 Assesses employees’ behaviors instead of other
characteristics
 Consists of a series of scales created by:
• Identifying important job dimensions
• Creating statements describing a range of desired and
undesirable behaviors (anchors)
 Types of behavioral scales
• Behaviorally anchored rating scales (BARS)
• Behavioral observation scales (BOS)
• Behavioral expectation scales (BES)

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Behaviorally-Anchored Rating Scale for Customer Service Skills

Figure 11–10

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Management by Objectives (MBO)

 Management by Objectives
 Specifying the performance goals that an individual and
his or her manager agree the employee will to try to
attain within an appropriate length of time.
 Key MBO Ideas
 Employee involvement creates higher levels of
commitment and performance.
 Encourages employees to work effectively toward
achieving desired results.
 Performance measures should be measurable and should
define results.
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The MBO Process

Job Review and Agreement
Job Review and Agreement

Development of Performance Standards
Development of Performance Standards

Objective Setting
Objective Setting

Continuing Performance Discussions
Continuing Performance Discussions

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Sample
Performance
Appraisal Form

Figure 11–8

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Problems in PA (Rater Error)
Recency/Primary Effect
- Recency effect – the rater gives greater weight to recent events
when appraising an individual’s performance.
- Primary effect – info. received first gets the most weight.
Central tendency
- rating all employees in a narrow range in the middle of the rating
scale
Leniency/Strictness
- Leniency – rating all employees fall at the high end of the scale.
- Strictness – a manager uses only the lower part of the scale to rate
employees.
Rater Bias
- when a rater’s values or prejudices distort the rating.
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Halo Effect
- rating a person high on all items because of
performance in one area.
Contrast Error
- tendency to rate people relative to others rather than
against performance standards.
Similar to/Different from Me Error
- raters are influenced by whether people show the
same or different characteristics from the rater.

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Common Rater Biases

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Appraisal Interview Hints

Figure 11–12
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Characteristics of An Effective PA
Performance
expectations

Job related criteria Standardization

Effective PA
Employee access
Qualified
to results
appraisals

Open
communication

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Effective of Performances Appraisals

 Consistent with the  Performance expectations
strategic of mission of the  Standardization
organization  Qualified appraisers
 Beneficial as a  Open communication
development tool
 Useful as an administrative
 Employee access to results
tool  Unbiased
 Legal & job related  Acceptable &
 Viewed as generally fair by understandable
employee  Regularity
 Effective in documenting  Feedback
employee performance

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Ch 07 performance appraisal

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