Chapter 10: Performance Appraisal
The Strategic Importance of Performance Management
Performance Management is a process encompassing all activities related to improving employee performance,
productivity, and effectiveness. It includes goal setting, pay for performance, training and development, career
management, and disciplinary action. The foundation to performance management is performance appraisal.
The Performance Appraisal Process
The Performance appraisal process should also link performance criteria to current strategic objectives and
implementation plans. Appraisal results provide information with which promotions and salary decisions can be made.
Allows the opportunity to review each employees work-related behavior, reinforce the good things.
Appraisals sometimes fail because employees are not told ahead of time exactly what is expected of them in terms of good
performance, irrelevant, subjective, unrealistic, bad judgment on ratings.
Step 1: Defining Performance Expectations
most employees require much more clarification of their performance expectation and how these contribute to the
organization's overall results. Be specific like, no more then 10 complaints a year.
Step 2: Appraising Performance – Common Methods
Graphic Rating Scale Method
graphic rating scale is the simplest and most popular technique for appraising performance. It list traits and a range of
performance values for each. Some companies specify the duties rather then traits.
Alternation Ranking Method
First list all employees to be rated, and then cross out the names of any not known well enough to rank. Then start
ranking, start by highest, then lowest, second highest, second lowest.....
Pair Comparison Method
Make a two dimensional chart and employees and +/- who is better then each other on a set of traits.
Forced Distribution Method
predetermined percentages of rates are placed in various performance categories. (bell curving). This method has been
criticized as being motivating for the portion that is below average.
Critical Incident Method
keep a log of desirable or undesirable examples or incidents of each employees work-related behavior. Then every six
months or so, discuss the latter's performance by using the specific incident examples. This methods is used to
supplement another technique.
I seriously don't know what the fuck this paragraph just said, page 255 read that shit yourself.
Behaviorally Anchored Rating Scales.
Aka (BARS), combines the benefits of narratives, critical incidents, and quantified rating by anchoring a serious of
quantified scales, one for each performance dimension, with specific behavioral examples of good or poor performance.
There is five steps
1. Generate critical incidents, what are effective and ineffective performance to specific incidents
2. Develop performance dimensions, get all types of incidents and group them into 5 or 10
3. Reallocate incidents, get different people to group the incidents to the scale, and more then 50% must assign it to
the same cluster.
4. Scale the incidents, rate the incidents on a scale
5. Develop final instrument, a subset of incidents is used as behavioral anchors for each dimension.
“What the fuck...10 Chapters between HR and Marketing.....really annoyed ATM” Advantages and Disadvantages
1. Amore accurate measure. People who know the job and its requirements better then anyone else does
2. Clearer Standards, clarify what is meant by extremely good performance
3. Feedback, critical incidents may be more useful then just informing them of their performance.
4. Independent dimensions. Having incidents matched with the scale will help make each dimension more
5. Consistency. BARS evaluations seem to be relatively consistent and reliable in that different raters appraisals of the
same person tend to be similar.
Management By Objectives (MBO)
MBO almost always refers to six main steps:
1. set the organization's goals, organization wide plan
2. Set department goals, department heads set goals for departments
3. discuss department goals, with employees and let them make individual goals
4. define expected results, set short term performance targets
5. performance reviews, measure the results and compare with expected results
6. provide feedback, hold periodic performance review meetings with employees to discuss and evaluate progress.
Problems to Avoid
using mbo has three problems.
1. Setting unclear, unmeasurable objectives is the main one.
2. Time-consuming, set objectives, measure, and provide feedback takes time.
3. Tug of war, manager pushing for higher goals and employee is pushing for lower goals.
Mixing the Methods
example given is, a graphically rating scale with descriptive phrases included to define the traits being measured, but
there is also a section for comments below each trait.
Performance Appraisal Problems and Solutions
Honest appraisals have a emotional component, which is particularly difficult when managers are not trained in
appraisal interview skills. The result is often dishonest appraisals or avoidance of appraisals.
Research shows that action by management to implement a more acceptable performance appraisal system can increase
employee trust in management.
Validity and Reliability
must produce consistent ratings for the same performance. The data must be relevant for the job, board enough to
cover all aspects of the job requirements, and specific.
Rating Scale Problems
Unclear performance standards, where the scale is open to interpretation of trains and standards.
Central Tendency, supervisors tend to avoid the highest and lowest numbers on the scale.
Strictness / leniency occurs when a supervisor has a tendency to rate all employees either high or low.
Appraisal bias is the tendency to allow individual differences such as age, race, and sex to affect the appraisal rating
that these employees receive
recency effect occurs when ratings are based on the employee's most recent performance, whether good or bad.
Simular tome bias, give higher performance ratings to employees who are perceived to be similar to the rater.
How to avoid Appraisal Problems
1. be familiar with the problems
2. choose the right appraisal tool
“What the fuck...10 Chapters between HR and Marketing.....really annoyed ATM” 3. training supervisors to eliminate rating errors
Legal and Ethical Issues in Performance Appraisal
accurate well documented performance records and performance appraisal feedback are necessary to avoid legal
penalties and to defend against charges of bias based on groups prohibited under human rights legis