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Chapter 008

MGHB12H3 Chapter Notes - Chapter 008: Performance Appraisal, Negative Feedback, Job Performance

Management (MGH)
Course Code
Joanna Heathcote

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STEP 1: Goals set to
align with higher
level goals
STEP 2: Behavioural
expectations and
standards set and
then aligned with
employee and
STEP 3: Ongoing
feedback porvided
during cycle
appraised by
STEP 5: Formal
review session
STEP 6: HR decision
making (pay,
promotion, etc)
13 November 2013
PERFORMANCE MANAGEMENT is the process of creating a work environment in which people can perform
to the best of their abilities.
PERFORMANCE APPRAISALS is the result of an annual or biannual process in which a manager evaluates an
employee’s performance relative to the requirements of his or her job and uses the information to show
the person where improvements are needed and why.

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Administrative Purposes
Document personnel decisions
Promote employees
Determine transfers and assignments
Identify performance problems and develop
ways to correct them
Make retention, termination, and layoff
Validate selection criteria
Meet legal requirements
Evaluate training programs or progress
Assist with human resources planning
Make reward and compensation decisions
Developmental Purposes
Provide performance feedback
Identify individual strengths and weaknesses
Recognize indiivdidual performance
Help employees identify goals
Evaluate goal achievement of employees
Identify individual training needs
Determine organizational training needs
Reinforce authority structure
Allow employees to discuss concerns
Improve communciation
Provide a forum for leaders to help
Because feedback is most useful when it is immediate and specific to a particular situation, it should be a
regularly occurring activity. Managers need to constantly engage in a dialogue with their subordinates.
Once the manager and employees have a series of discussions, there is an ebb and flow of ideas, some
with the potential to serve as catalysts for improvement within the company. The ultimate purpose is to
better both parties. Providing employees with feedback on a continual basis also helps them know where
they stand when they receive formal appraisals. Anxiety they experience during formal appraisals is often
alleviated, and a more meaningful conversation with them and their supervisors can take place. Seven key
points to address during feedback sessions:
Give specific examples of desirable and undesirable behaviors
Focus feedback on behavior, not the person
Frame the feedback in turns of helping the employee be successful
Direct the feedback toward behavior the employee can control
The feedback should be timely
Limit feedback to the amount the employee can process
Use active communication skills and confirm that the employee is engaged in the conversation
FOCAL PERFORMANCE APPRAISAL is an appraisal system in which all of an organization’s employees are
reviewed at the same time of the year rather than on the anniversaries of the individual hire dates.
Advantages: Helpful if a company is experiencing change and must quickly alter its strategy, after goals of
firm established, they can be translated to individual goals employees receive all at the same time. It also
enables managers to compare performance of different employees simultaneously.
Good appraisal systems have the capability to influence employee behavior and improve an organization’s
performance. Strong performance management systems are 40-50% more likely to outperform their
competitors in areas of revenue growth, productivity, profitability, and market value. Formal appraisals
ensure employees receive at least some feedback from their supervisors. Negative feedback at least lets
people know that they matter. Two most common purposes of performance appraisals: administrative
and developmental.

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Administrative purposes are appraisal programs (promotions, transfers, layoffs, pay decisions) that pay
for performance. Employees who earn performance based pay are more satisfied. It also provides a paper
trail for documenting HRM actions that can result in legal action. Performance appraisals are used to
develop training and development plans for employees.
Developmental purposes, appraisal provides feedback essential for discussing employee and
organizational goal alignment. It provides an opportunity to build strengths, eliminate potential
weaknesses, identify problems, and set new goals for achieving high performance. Development approach
helps employees understand that appraisals are being conducted to improve their future competencies
and further careers and not just to judge them on past performance.
Some people believed performance appraisals discourage teamwork because they focus on
individual achievements versus what firms accomplish
Others contend appraisals are only useful at extremes, for highly effective or highly ineffective
employees, and are not useful for the majority of employees in the middle
Others point out appraisals focus on short term achievements rather than long term improvement
and learning
Why performance appraisal systems might not be effective, common problems:
Inadequate preparation on the part of the manager
Employee 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 not clear
Inconsistency in ratings among supervisors or other raters
Manager rating personality rather than performance
The halo effect, contrast effect, or other perceptual bias
Inappropriate time span
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 not trained at evaluation or giving feedback no follow-up and coaching after the
SUMMARY OF PROBLEMS: Lack of top-management information and support, unclear performance
standards, biased ratings because managers lack training, too many time-consuming forms to complete,
use of program for conflicting purposes.
A main concern employees have relates to the fairness of performance appraisal systems. The managers
may sometimes inflate evaluations to get better ratings, to get rid of troublesome employees, to get
higher salaries for employees. Employees who believe system as unfair will find appraisal a waste of time
and leave interview. By addressing this issue, it is more likely to be successful.
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