Performance Appraisal

The identification, measurement, and management of human performance in organizations.

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Performance Evaluation and Management

Performance Management: efforts to align employee performance with the firms goals Performance Evaluation: efforts to determine the extent to which an employee performs work effectively. Also known as:
Performance review Performance appraisal Personnel rating Employee appraisal Merit rating Employee evaluation
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Potential Purposes of Evaluation

Development HR and Employment Planning HRM Research
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Motivation

Communications

Legal Compliance

A Model of Performance Appraisal

Identification

Measurement

Management

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Performance Evaluation:
Reliability Relevance Sensitivity Practicality

Criteria of Evaluation

Combination of criteria using activities and results is desirable

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Who Should Evaluate the Employee?

MANY POSSIBILITIES

Immediate supervisor only (typical) Committee of several supervisors Employees peers (coworkers) Employees subordinates Someone outside the immediate work situation Self-evaluation

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Management By Objectives (MBO) Some Potential

Benefits

Some Potential Pitfalls

Managers may not be adequately prepared for MBO Demands active employee and manager involvement Too much emphasis on the short run and

Encourages employee participation Enables subordinates to exercise self-control and manage own performance Useful for training and career development

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Potential Evaluation Problems

Opposition to evaluation System design and operating problems Problems with Central tendency Rater problems include: standards

errors of evaluation Recency of events Halo effects errors Leniency or Contrast effects Major problems exist more with harshness Personal the rater than the technique used. bias/stereotyping

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Solutions to Evaluation Problem

AVOIDING ELIMINATING PROBLEMS RATER WITH EMPLOYEES ERRORS
Train raters on Train employees in performance evaluation how to evaluate methods others well Simplify reporting forms Grant ample Communicate how opportunities to evaluation information is

The Benefits of Performance Appraisal

Employer Perspective:

Despite imperfect measurement techniques, individual differences in performance can make a difference to company performance. Documentation of performance appraisal and feedback may be needed for legal defense.

Appraisal provides a rational basis for constructing a bonus or merit system.

Appraisal dimensions and standards can help to implement strategic goals and clarify performance expectations.

Providing individual feedback is part of the performance management process.

Despite the traditional focus on the individual, appraisal criteria can include teamwork and the teams can be the focus of the appraisal.

Trait Appraisal, Behavioral Appraisal, and Outcome Appraisal Instruments

Trait Appraisal
An appraisal tool that asks a supervisor to make judgments about worker characteristics that tend to be consistent and enduring.

Behavioral Appraisal
An appraisal tool that asks managers to assess a workers behaviors.

Outcome Appraisal
An appraisal tool that asks managers to assess the results achieved by workers.

Sample Trait Scales

Rate each worker using the scales below. Decisiveness: 1 2 Very low 3 4 Moderate 4 Moderate 4 Moderate 4 Moderate 5 6 7 Very high 6 7 Very high 6 7 Very high 6 7 Very high

Reliability: 1 2 Very low

Energy: 1 2 Very low Loyalty: 1 2 Very low

Evaluation of Major Appraisal Formats

Appraisal Format Absolute Relative Administrative Use 0 ++ + Legal Developmental Defensibility Use + + 0
0 Unclear or mixed

0 --

Trait
Behavior Outcome
-- Very Poor - Poor

0
0

++
+
+ Good
++ Very good

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Who Should Evaluate the Employee?

360-DEGREE FEEDBACK

Alternative to traditional supervisor-only approaches Peers Uses multiple appraisers Not a panacea

Supervisors

Selfappraisal

Subordinates

Challenges to Effective Performance Measurement

Rater errors and bias The influence of liking Organizational politics Whether to focus on the individual or the group Legal issues

Legal Issues

A recent analysis of 295 court cases involving performance appraisal found judges decisions to be favorably influenced by the following additional factors:

Use of job analysis Providing written instructions

Allowing employees to review appraisal results

Agreement among multiple raters (if more than one was used) The presence of rater training

Communication Skills for the Appraisal Interview

Skills
Nonverbal Attending

Benefit
Suggests interest and active listening.

Description
Rater sits with a slight forward, comfortable lean of the upper body, maintains eye contact, and speaks in a steady and soothing voice. Open questions encourage information sharing and are most appropriate early in an interview or in complex, ambiguous situations.

Example
While the ratee is speaking, the rater looks at the person and gently nods head to signal interest. Open questions start with words like Could, Would, How, What, or Why. Closed questions start with words like Did, Is, or Are.

Open and Closed Questions

Appropriate use of open and closed questions can ensure an effective flow of communication during an interview.

Closed question evoke short responses and are useful for focusing and clarifying.

Communication Skills for the Appraisal Interview (Cont.)

Skills
Cultural Sensitivity

Benefit
Communication is more effective when you are sensitive to the possible influence of cultural differences.

Description
Pay attention to cultural differences that may influence how another person communicates and how you might communicate with others.

Example
When dealing with employees from a culture that is highly formal, avoid addressing them in the workplace by their first names. Doing so may signal disrespect.

Key Steps in Implementing 360 Appraisal

Top management communicates the goals of and need for 360 appraisal. Employees and managers are involved in the development of the appraisal criteria and appraisal process. Employees are trained in how to give and receive feedback. Employees are informed of the nature of the 360 appraisal instrument and process. The 360 system undergoes pilot testing in one part of the organization.

Management continuously reinforces the goals of the 360 appraisal and is ready to change the process when necessary.