Performance Appraisal

What is performance appraisal? Uses of performance reviews; Types of performance appraisals; performing performance appraisal.

Performance Appraisal Programs

Performance Appraisal– The process of evaluating how well employees

perform their jobs when compared to a set of standards, and then communicating the information to employees.

– A process, typically performed annually by a supervisor for a subordinate, designed to help employees understand their roles, objectives, expectations, and performance success.

Performance Appraisal and Other HRM Functions

Performance appraisal Performance appraisal validates selection functionvalidates selection function

Performance appraisal Performance appraisal validates selection functionvalidates selection function SelectionSelectionSelectionSelection

Selection should produce Selection should produce workers best able to meet workers best able to meet job requirementsjob requirements

Selection should produce Selection should produce workers best able to meet workers best able to meet job requirementsjob requirements

Performance appraisal Performance appraisal determines training needsdetermines training needs

Performance appraisal Performance appraisal determines training needsdetermines training needs

Training and Training and DevelopmentDevelopment

Training and Training and DevelopmentDevelopment

Training and development Training and development aids achievement of aids achievement of performance standardsperformance standards

Training and development Training and development aids achievement of aids achievement of performance standardsperformance standards

Performance appraisal is a Performance appraisal is a factor in determining payfactor in determining pay

Performance appraisal is a Performance appraisal is a factor in determining payfactor in determining pay

Compensation Compensation ManagementManagement

Compensation Compensation ManagementManagement

Compensation can affect Compensation can affect appraisal of performanceappraisal of performance

Compensation can affect Compensation can affect appraisal of performanceappraisal of performance

Performance appraisal judges Performance appraisal judges effectiveness of recruitment effectiveness of recruitment effortsefforts

Performance appraisal judges Performance appraisal judges effectiveness of recruitment effectiveness of recruitment effortsefforts

RecruitmentRecruitmentRecruitmentRecruitmentQuality of applicants Quality of applicants determines feasible determines feasible performance standardsperformance standards

Quality of applicants Quality of applicants determines feasible determines feasible performance standardsperformance standards

Performance appraisal justifies Performance appraisal justifies personnel actionspersonnel actions

Performance appraisal justifies Performance appraisal justifies personnel actionspersonnel actions Labor RelationsLabor RelationsLabor RelationsLabor Relations

Appraisal standards and Appraisal standards and methods may be subject to methods may be subject to negotiationnegotiation

Appraisal standards and Appraisal standards and methods may be subject to methods may be subject to negotiationnegotiation

Performance management– The process of creating a work environment in

which people can perform to the best of their abilities.

Uses of Performance Appraisal

PerformancePerformanceAppraisalAppraisal

PerformancePerformanceAppraisalAppraisal

Giving Performance Giving Performance FeedbackFeedback

Giving Performance Giving Performance FeedbackFeedback

Administering Wages Administering Wages and Salariesand Salaries

Administering Wages Administering Wages and Salariesand Salaries

Identifying Strengths Identifying Strengths and Weaknessesand Weaknesses

Identifying Strengths Identifying Strengths and Weaknessesand Weaknesses

Performance AppraisalAppraisal ProgramsAppraisal ProgramsAppraisal ProgramsAppraisal Programs

AdministrativeAdministrativeAdministrativeAdministrative DevelopmentalDevelopmentalDevelopmentalDevelopmental

CompensationCompensationCompensationCompensation Ind. EvaluationInd. EvaluationInd. EvaluationInd. Evaluation

Job EvaluationJob EvaluationJob EvaluationJob Evaluation

EEO/AA SupportEEO/AA SupportEEO/AA SupportEEO/AA Support

Training Training Training Training

Career PlanningCareer PlanningCareer PlanningCareer Planning

Purposes for Performance AppraisalPurposes for Performance Appraisal

Who Conducts Appraisals

Supervisors who rate their subordinates Employees who rate their supervisors Team members who rate each other Outside sources Employees’ self-appraisal Multisource (360° feedback) appraisal

Performance Appraisal Process

Establish performance standards Communicate the standards Measure actual performance Compare actual performance with standards

and discuss the appraisal Taking corrective action, if necessary

Traditional Performance Appraisal:Logic and Process

Figure 11–5

Reasons Appraisal Programs Sometimes Fail

Lack of top-management information and support

Unclear performance standards Rater bias Too many forms to complete Use of the appraisal program

for conflicting (political) purposes.

Figure 8Figure 8–2 –2 Let Me Count the Ways . . .Let Me Count the Ways . . .

There are many reasons why performance appraisal systems might not be effective. Some of the most common problems include the following:

Sources: Patricia Evres, “Problems to Avoid during Performance Evaluations,” Air Conditioning, Heating & Refrigeration News 216, no. 16 (August 19, 2002): 24–26; Clinton Longnecker and Dennis Gioia, “The Politics of Executive Appraisals,” Journal of Compensation and Benefits 10, no. 2 (1994): 5–11; “Seven Deadly Sins of Performance Appraisals,” Supervisory Management 39, no. 1 (1994): 7–8.

• Inadequate preparation on the part of the manager.

• Employee is not given clear objectives at the beginning of performance period.

• Manager may not be able to observe performance or have all the information.

• Performance standards may not be clear.

• Inconsistency in ratings among supervisors or other raters.

• Rating personality rather than performance.

• The halo effect, contrast effect, or some other perceptual bias.

Figure 8Figure 8–2 –2 Let Me Count the Ways Let Me Count the Ways (cont’d) . . .(cont’d) . . .

• Inappropriate time span (either too short or too long).

• Overemphasis on uncharacteristic performance.

• Inflated ratings because managers do not want to deal with “bad news.”

• Subjective or vague language in written appraisals.

• Organizational politics or personal relationships cloud judgments.

• No thorough discussion of causes of performance problems.

• Manager may not be trained at evaluation or giving feedback.

• No follow-up and coaching after the evaluation.Sources: Patricia Evres, “Problems to Avoid during Performance Evaluations,” Air Conditioning, Heating & Refrigeration News 216, no. 16 (August 19, 2002): 24–26; Clinton Longnecker and Dennis Gioia, “The Politics of Executive Appraisals,” Journal of Compensation and Benefits 10, no. 2 (1994): 5–11; “Seven Deadly Sins of Performance Appraisals,” Supervisory Management 39, no. 1 (1994): 7–8.

There are many reasons why performance appraisal systems might not be effective. Some of the most common problems include the following:

Performance Appraisal Methods

Performance Appraisal Methods

Trait Trait MethodsMethods

Trait Trait MethodsMethods

Graphic Rating Graphic Rating ScaleScale

Graphic Rating Graphic Rating ScaleScale

Mixed Standard Mixed Standard ScaleScale

Mixed Standard Mixed Standard ScaleScale

Forced-ChoiceForced-ChoiceForced-ChoiceForced-Choice

EssayEssayEssayEssay

Trait Methods

Graphic Rating-Scale Method– A trait approach to performance appraisal

whereby each employee is rated according to a scale of individual characteristics.

Mixed-Standard Scale Method– An approach to performance appraisal similar to

other scale methods but based on comparison with (better than, equal to, or worse than) a standard.

Highlights in HRM 2

Graphic Rating Scale with Provision for Comments

Highlights in HRM 3

Example of a Mixed-Standard Scale

Trait Methods

Forced-Choice Method– Requires the rater to choose from statements designed to

distinguish between successful and unsuccessful performance.

– 1. ______ a) Works hard _____ b) Works quickly– 2. ______ a) Shows initiative _____ b) Is responsive to

customers– 3. ______ a) Produces poor quality _____ b) Lacks good work habits

Essay Method– Requires the rater to compose a statement describing

employee behavior.

Behavioral Methods

Behavioral Behavioral MethodsMethods

Behavioral Behavioral MethodsMethods

Critical IncidentCritical IncidentCritical IncidentCritical Incident

Behavioral ChecklistBehavioral ChecklistBehavioral ChecklistBehavioral Checklist

Behaviorally Anchored Behaviorally Anchored Rating Scale (BARS)Rating Scale (BARS)

Behaviorally Anchored Behaviorally Anchored Rating Scale (BARS)Rating Scale (BARS)

Behavior Observation Behavior Observation Scale (BOS)Scale (BOS)

Behavior Observation Behavior Observation Scale (BOS)Scale (BOS)

Behavioral Methods

Critical Incident Method– Critical incident

An unusual event that denotes superior or inferior employee performance in some part of the job

– The manager keeps a log or diary for each employee throughout the appraisal period and notes specific critical incidents related to how well they perform.

Behavioral Checklist Method– The rater checks statements on a list that the rater believes

are characteristic of the employee’s performance or behavior.

Behavioral Methods

Behaviorally Anchored Rating Scale (BARS)– Consists of a series of vertical scales, one for

each dimension of job performance; typically developed by a committee that includes both subordinates and managers.

Highlights in HRM 4

Example of a BARS for Municipal Fire Companies

FIREFIGHTING STRATEGY: Knowledge of Fire Characteristics.

Source: Adapted from Landy, Jacobs, and Associates. Reprinted with permission.

Summary of Appraisal Methods

Trait Methods– Advantages

Are inexpensive to develop Use meaningful dimensions Are easy to use

– Disadvantages Have high potential for rating errors Are not useful for employee counseling Are not useful for allocating rewards Are not useful for promotion decisions

Summary of Appraisal Methods (cont’d)

Behavioral Methods– Advantages

Use specific performance dimensions Are acceptable to employees and superiors Are useful for providing feedback Are fair for reward and promotion decisions

– Disadvantages Can be time-consuming to develop/use Can be costly to develop Have some potential for rating error

Figure 8Figure 8–8 –8 Factors That Influence Factors That Influence PerformancePerformance

Highlights in HRM 9

Performance Diagnosis

Source: Scott Snell, Cornell University.