Problems in performance appraisal

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I. Contents of getting problems in performance appraisal

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No one likes to give them or get them. But you can conduct performance reviews that actually
assess performance. Here's how
Some years ago a human resources manager at a Silicon Valley computer company offered
managers free tickets to San Francisco Giants games if they completed their subordinates'
performance reviews on time. When David Russo headed up human resources for software
maker SAS Institute, he earned employee cheers for a bonfire celebration that burned appraisal
forms and ended annual reviews.
These two examples reflect a broader reality: Managers don't like giving appraisals, and
employees don't like getting them. Perhaps they're not liked because both parties suspect what
the evidence has proved for decades: Traditional performance appraisals don't work. But as my
colleague and fellow Stanford professor Bob Sutton and I pointed out in our book, Hard Facts,
Dangerous Half-Truths, and Total Nonsense: Profiting from Evidence-Based Management, belief
and conventional wisdom often trump the facts. And when it comes to performance evaluations,
companies ranging from HR consulting firms to providers of software that automate the process
have a big stake in their continued use.
The most basic problem is that performance appraisals often don't accurately assess performance.
More than two decades ago research done by professor David Schoorman showed that whether
or not the supervisor had hired or inherited her employees was a better predictor of evaluation
results than actual job performance. Employees hired by people doing the reviews got higher
scores because of the greater psychological commitment managers have to the people they put

themselves on the line to hire. That there is rater bias in performance reviews is consistent with
the evidence showing gender and race effects on reviews. Similarity is an important basis of
interpersonal attraction, and so people who are "different" get lower ratings, other things being
equal.
Involve More People
When work is difficult to assess objectively, performance reviews mostly reflect how well
employees can ingratiate themselves with the boss. One straightforward recommendation is to
reduce managerial discretion in doing ratings. Make criteria more explicit and objective and have
more people involved in the ratings process, so that one person's perceptions and biases don't
matter so much.
A second issue is that reviews occur too infrequently to provide meaningful feedback. In return
for getting rid of the appraisal form, Russo told SAS managers to provide more regular, ongoing
feedback through frequent conversations with their people. Once-a-year reviews suffer from
short-term memory loss: Managers remember more recent events and forget things that happened
longer ago. If you are serious about feedback and helping people improve, do it all the time.
Next problem: Those receiving the reviews invariably believe they are above averageand
defensively resist being told that they aren't. This "above average" effect has been widely
replicated in numerous studies considering everything from sense of humor to appearance.
"Forced rankings" require half of the people be rated below average. And that poses a threat to
employees' self-esteem. As a result, people discount the ratings, making performance appraisals
unlikely to improve performance.
Forget Colleague Comparisons
A fourth hurdle to productive reviews is the peer comparisons often required. Ranking someone
against their colleagues creates competition and, consequently, a reluctance to offer help or
collaboratea big problem when so much of the way we work is interdependent. As lots of
research in educational settings shows, the best assessments compare people with their own past
performance. The assessments ask whether people are getting better or worse, not forcing
comparisons with others that can cause people to give up (because they can't hope to exceed their
peers) or to coast (because they know they don't need to improve given the competition). The
lesson? If you're going to do performance assessments, at least don't force comparisons among
people on some curve.
Possibly the biggest issue, however, is that performance appraisals focus managers' attention on
precisely the wrong thing: individual people. As W. Edwards Deming, the father of the quality
movement, taught a long time ago, company performance often results more from variations in

systems than from the individuals doing the work. One of the reasons Toyota Motor (TM) has
been so successful for decadeseven as leaders have come and gone and the automobile market
has changedis that the fundamentals of the Toyota management system, which emphasizes
quality, continuous improvement, and standardized tasks, provide the advantage. By focusing on
the presumed deficiencies or strengths of people, individual performance reviews divert attention
from the important task of eliminating the systemic causes, such as inferior technology, behind
poor performance.
Even as companies and employees complain about performance appraisals, they do them
because "everyone else is," and because they believe in the importance of individuals in boosting
company performance. It is time for management to focus more on facts and evidence and less
on benchmarking and unexamined conventional wisdom.

==================

III. Performance appraisal methods

1. Essay Method
In this method the rater writes down the employee
description in detail within a number of broad categories
like, overall impression of performance, promoteability
of employee, existing capabilities and qualifications of
performing jobs, strengths and weaknesses and training
needs of the employee. Advantage It is extremely
useful in filing information gaps about the employees
that often occur in a better-structured checklist.
Disadvantages It its highly dependent upon the writing
skills of rater and most of them are not good writers.
They may get confused success depends on the memory
power of raters.

2. Behaviorally Anchored Rating Scales

statements of effective and ineffective behaviors

determine the points. They are said to be
behaviorally anchored. The rater is supposed to
say, which behavior describes the employee
performance. Advantages helps overcome rating
errors. Disadvantages Suffers from distortions
inherent in most rating techniques.

3. Rating Scale
Rating scales consists of several numerical scales
representing job related performance criterions such as
dependability, initiative, output, attendance, attitude etc.
Each scales ranges from excellent to poor. The total
numerical scores are computed and final conclusions are
derived. Advantages Adaptability, easy to use, low cost,
every type of job can be evaluated, large number of
employees covered, no formal training required.
Disadvantages Raters biases

4. Checklist method
Under this method, checklist of statements of traits of
employee in the form of Yes or No based questions is
prepared. Here the rater only does the reporting or
checking and HR department does the actual evaluation.
Advantages economy, ease of administration, limited
training required, standardization. Disadvantages Raters
biases, use of improper weighs by HR, does not allow
rater to give relative ratings

5.Ranking Method
The ranking system requires the rater to rank his
subordinates on overall performance. This consists in
simply putting a man in a rank order. Under this method,
the ranking of an employee in a work group is done
against that of another employee. The relative position of
each employee is tested in terms of his numerical rank. It
may also be done by ranking a person on his job
performance against another member of the competitive
group.
Advantages of Ranking Method
Employees are ranked according to their
performance levels.
It is easier to rank the best and the worst
employee.
Limitations of Ranking Method
The whole man is compared with another
whole man in this method. In practice, it is very difficult
to compare individuals possessing various individual
traits.
This method speaks only of the position where an
employee stands in his group. It does not test anything
about how much better or how much worse an employee
is when compared to another employee.
When a large number of employees are working,
ranking of individuals become a difficult issue.
There is no systematic procedure for ranking
individuals in the organization. The ranking system does
not eliminate the possibility of snap judgements.

6. Critical Incidents Method

The approach is focused on certain critical behaviors of

employee that makes all the difference in the
performance. Supervisors as and when they occur record
such incidents. Advantages Evaluations are based on
actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases,
chances of subordinate improvement are high.
Disadvantages Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback
may be too much and may appear to be punishment.

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