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Performance Management
and Appraisal
92
Comparing Performance Appraisal and
Performance Management
Performance appraisal
Evaluating an employees current and/or past
performance relative to his or her performance
standards.
Performance management
The process employers use to make sure
employees are working toward organizational
goals.
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93
Why Performance Management?
Increasing use by employers of performance
management reflects:
The popularity of the total quality management
(TQM) concepts.
The belief that traditional performance appraisals
are often not just useless but counterproductive.
The necessity in todays globally competitive
industrial environment for every employees
efforts to focus on helping the company to achieve
its strategic goals.
94
An Introduction to Appraising
Performance
Why appraise performance?
Appraisals play an integral role in the employers
performance management process.
Appraisals help in planning for correcting
deficiencies and reinforce things done correctly.
Appraisals, in identifying employee strengths and
weaknesses, are useful for career planning
Appraisals affect the employers salary raise
decisions.
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95
Classroom
Teaching
Appraisal By
Students
Figure 91
Source: Richard I. Miller, Evaluating Faculty
for Promotional and Tenure (San Francisco:
Jossey-Bass Publishers, 1987), pp. 164165.
Copyright 1987, Jossey-Bass Inc.,
Publishers. All rights reserved. Reprinted with
permission.
96
Realistic Appraisals
Motivations for soft (less-than-candid)
appraisals
The fear of having to hire and train someone new
The unpleasant reaction of the appraisee
A company appraisal process thats not conducive
to candor
Hazards of giving soft appraisals
Employee loses the chance to improve before
being forced to change jobs.
Lawsuits arising from dismissals involving
inaccurate performance appraisals.
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97
Continuous improvement
A management philosophy that requires
employers to continuously set and
relentlessly meet ever-higher quality, cost,
delivery, and availability goals by:
Eradicating the seven wastes:
overproduction, defective products, and unnecessary
downtime, transportation, processing costs, motion, and
inventory.
Requiring each employee to continuously improve
his or her own personal performance, from one
appraisal period to the next.
98
The Components of an Effective
Performance Management Process
Direction sharing
Role clarification
Goal alignment
Developmental goal setting
Ongoing performance monitoring
Ongoing feedback
Coaching and support
Performance assessment (appraisal)
Rewards, recognition, and compensation
Workflow and process control and return
Figure 92
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99
Defining Goals and Work Efforts
Guidelines for effective goals
Assign specific goals
Assign measurable goals
Assign challenging but doable goals
Encourage participation
SMART goals are:
Specific, and clearly state the desired results.
Measurable in answering how much.
Attainable, and not too tough or too easy.
Relevant to whats to be achieved.
Timely in reflecting deadlines and milestones.
910
Performance Appraisal Roles
Supervisors
Usually do the actual appraising.
Must be familiar with basic appraisal techniques.
Must understand and avoid problems that can
cripple appraisals.
Must know how to conduct appraisals fairly.
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911
Performance Appraisal Roles (contd)
HR department
Serves a policy-making and advisory role.
Provides advice and assistance regarding the
appraisal tool to use.
Prepares forms and procedures and insists that all
departments use them.
Responsible for training supervisors to improve
their appraisal skills.
Responsible for monitoring the system to ensure
that appraisal formats and criteria comply with
EEO laws and are up to date.
912
Steps in Appraising Performance
Defining the job
Making sure that you and your subordinate agree
on his or her duties and job standards.
Appraising performance
Comparing your subordinates actual performance
to the standards that have been set; this usually
involves some type of rating form.
Providing feedback
Discussing the subordinates performance and
progress, and making plans for any development
required.
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913
Designing the Appraisal Tool
What to measure?
Work output (quality and quantity)
Personal competencies
Goal (objective) achievement
How to measure?
Graphic rating scales
Alternation ranking method
MBO
914
Performance Appraisal Methods
Graphic rating scale
A scale that lists a number of traits and a range of
performance for each that is used to identify the
score that best describes an employees level of
performance for each trait.
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915
Graphic
Rating Scale
with Space
for
Comments
Figure 93
916
Performance
Management Outline
Figure 95a
Source: www.cwru.edu.
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917
Figure 95b
Performance
Management
Outline
(contd)
Source: www.cwru.edu.
918
Performance
Management
Outline
(contd)
Figure 95c
Source: www.cwru.edu.
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919
Performance Appraisal Methods (contd)
Alternation ranking method
Ranking employees from best to worst on a
particular trait, choosing highest, then lowest,
until all are ranked.
Paired comparison method
Ranking employees by making a chart of all
possible pairs of the employees for each trait and
indicating which is the better employee of the
pair.
920
Alternation Ranking Scale
Figure 96
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921
Ranking Employees by the
Paired Comparison Method
Figure 97
Note: + means better than. means worse than. For each chart, add up
the number of 1s in each column to get the highest-ranked employee.
922
Performance Appraisal Methods (contd)
Forced distribution method
Similar to grading on a curve; predetermined
percentages of ratees are placed in various
performance categories.
Example:
15% high performers
20% high-average performers
30% average performers
20% low-average performers
15% low performers
Narrative Forms
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923
Performance Appraisal Methods (contd)
Behaviorally anchored rating scale (BARS)
An appraisal method that uses quantified scale
with specific narrative examples of good and poor
performance.
Developing a BARS:
Generate critical incidents
Develop performance dimensions
Reallocate incidents
Scale the incidents
Develop a final instrument
924
Performance Appraisal Methods (contd)
Advantages of using a BARS
A more accurate gauge
Clearer standards
Feedback
Independent dimensions
Consistency
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925
Management by Objectives (MBO)
Involves setting specific measurable goals
with each employee and then periodically
reviewing the progress made.
1. Set the organizations goals.
2. Set departmental goals.
3. Discuss departmental goals.
4. Define expected results (set individual goals).
5. Performance reviews.
6. Provide feedback.
926
Computerized and Web-Based
Performance Appraisal
Performance appraisal software programs
Keep notes on subordinates during the year.
Electronically rate employees on a series of
performance traits.
Generate written text to support each part of the
appraisal.
Electronic performance monitoring (EPM)
Having supervisors electronically monitor the
amount of computerized data an employee is
processing per day, and thereby his or her
performance.
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927
Potential Rating Scale Appraisal Problems
Unclear standards
An appraisal that is too open to interpretation.
Halo effect
Occurs when a supervisors rating of a subordinate
on one trait biases the rating of that person on
other traits.
Central tendency
A tendency to rate all employees the same way,
such as rating them all average.
928
A Graphic Rating Scale with Unclear Standards
Table 92
Note: For example, what exactly is meant by
good, quantity of work, and so forth?
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929
Potential Rating Scale Appraisal Problems
(contd)
Strictness/leniency
The problem that occurs when a supervisor has a
tendency to rate all subordinates either high or
low.
Bias
The tendency to allow individual differences such
as age, race, and sex to affect the appraisal
ratings employees receive.
930
How to Avoid Appraisal Problems
Learn and understand the potential problems,
and the solutions for each.
Use the right appraisal tool. Each tool has its
own pros and cons.
Train supervisors to reduce rating errors such
as halo, leniency, and central tendency.
Have raters compile positive and negative
critical incidents as they occur.
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931
Who Should Do the Appraising?
The immediate supervisor
Peers
Rating committees
Self-ratings
Subordinates
360-Degree feedback
932
Advantages and Disadvantages of Appraisal Tools
Table 93
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933
The Appraisal Interview
Types of appraisal interviews
SatisfactoryPromotable
SatisfactoryNot promotable
UnsatisfactoryCorrectable
UnsatisfactoryUncorrectable
How to conduct the appraisal interview
Talk in terms of objective work data.
Dont get personal.
Encourage the person to talk.
Dont tiptoe around.
934
Checklist
During the
Appraisal
Interview
Figure 911
Source: Reprinted with permission of
the publisher, HRnext.com. Copyright
HRnext.com, 2003.
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935
The Appraisal Interview (contd)
How to handle a defensive subordinate
Recognize that defensive behavior is normal.
Never attack a persons defenses.
Postpone action.
Recognize your own limitations.
936
The Appraisal Interview (contd)
How to criticize a subordinate
Do it in a manner that lets the person maintain his
or her dignity and sense of worth.
Criticize in private, and do it constructively.
Avoid once-a-year critical broadsides by giving
feedback on a daily basis, so that the formal
review contains no surprises.
Never say the person is always wrong
Criticism should be objective and free of any
personal biases on your part.
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937
The Appraisal Interview (contd)
How to ensure the interview leads to
improved performance
Dont make the subordinate feel threatened during
the interview.
Give the subordinate the opportunity to present
his or her ideas and feelings and to influence the
course of the interview.
Have a helpful and constructive supervisor
conduct the interview.
Offer the subordinate the necessary support for
development and change.
938
The Appraisal Interview (contd)
How to handle a formal written warning
Purposes of the written warning
To shake your employee out of bad habits.
Help you defend your rating, both to your own boss and
(if needed) to the courts.
Written warnings should:
Identify standards by which employee is judged.
Make clear that employee was aware of the standard.
Specify deficiencies relative to the standard.
Indicates employees prior opportunity for correction.