Gary

tenth edition Dessler

Chapter 9 Part 3 Training and Development

Performance Management
and Appraisal
© 2005 Prentice Hall Inc. PowerPoint Presentation by Charlie Cook
All rights reserved. The University of West Alabama
 Comparing Performance Appraisal
and Performance Management
 Performance appraisal
– Evaluating an employee’s 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.

© 2005 Prentice Hall Inc. All rights reserved. 9–2

 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 that’s 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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 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.

© 2005 Prentice Hall Inc. All rights reserved. 9–4

 Performance Appraisal Roles
(cont’d)
 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.

© 2005 Prentice Hall Inc. All rights reserved. 9–5

 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 subordinate’s actual
performance to the standards that have
been set; this usually involves some type of
rating form.
 Providing feedback
– Discussing the subordinate’s performance
and progress, and making plans for any
development required.
© 2005 Prentice Hall Inc. All rights reserved. 9–6
 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

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 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
employee’s level of performance for each
trait.

© 2005 Prentice Hall Inc. All rights reserved. 9–8

 Graphic
Rating
Scale with
Space for
Comments

Figure 9–3
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 Performance
Performance
Management
Management
Outline
Outline

Source: www.cwru.edu.
Figure 9–5a
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 Performance
Performance
Management
Management
Outline
Outline
(cont’d)
(cont’d)

Source: www.cwru.edu.
Figure 9–5b
© 2005 Prentice Hall Inc. All rights reserved. 9–11
 Performance
Performance
Management
Management
Outline
Outline
(cont’d)
(cont’d)

Source: www.cwru.edu.
Figure 9–5c
© 2005 Prentice Hall Inc. All rights reserved. 9–12
 Performance Appraisal Methods
(cont’d)
 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.

© 2005 Prentice Hall Inc. All rights reserved. 9–13

 Alternation Ranking Scale

Figure 9–6
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 Ranking Employees by the
Paired Comparison Method

Note: + means “better than.” − means “worse than.” For each chart, add up
the number of 1’s in each column to get the highest-ranked employee.
Figure 9–7
© 2005 Prentice Hall Inc. All rights reserved. 9–15
 Performance Appraisal Methods
(cont’d)
 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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 Performance Appraisal Methods
(cont’d)
 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

© 2005 Prentice Hall Inc. All rights reserved. 9–17

 Performance Appraisal Methods
(cont’d)
 Advantages of using a BARS
– A more accurate gauge
– Clearer standards
– Feedback
– Independent dimensions
– Consistency

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 Examples of Critical Incidents for
an Assistant Plant Manager

Table 9–1
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 Example of a
Behaviorally
Anchored Rating
Scale for the
Dimension
Salesmanship
Skill

Source:Walter C. Borman, “Behavior

Based Rating,” in Ronald A. Berk (ed.),
Performance Assessment: Methods and
Applications (Baltimore, MD: Johns
Hopkins University Press, 1986), p. 103.
Figure 9–9
© 2005 Prentice Hall Inc. All rights reserved. 9–20
 Management by Objectives (MBO)
 Involves setting specific measurable goals
with each employee and then periodically
reviewing the progress made.
1. Set the organization’s goals.
2. Set departmental goals.
3. Discuss departmental goals.
4. Define expected results (set individual
goals).
5. Performance reviews.
6. Provide feedback.

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No. Appraisal Method Description
1 Rating Scale •Typical numerical rating ranging
from poor to excellent of job
related performance criteria such
as initiative, honesty, attendance,
cooperation etc.
•The rater rate each statement
and then sum up numbers.
2 Check List •The rater has to tick Yes or No
against the statements defining
personality characteristics. Then
HR department calculate the
numbers of only Yes statement
 Performance Appraisal Methods
No. Appraisal Method Description
3 Forced Distribution •Compel raters to evaluate performance and
Method distribute ratees on all points given in rating
scale
•For example: Excellent 20 %, Good 20 %,
Average 15 Below average 25 % and
Unsatisfactory performance 20 %

4 Critical Incident •All critical behaviors that contributed to job

Technique success are recorded by supervisor. These
behaviors actually differentiate between effectiv
an ineffective employee
Behaviorally Anchored •Also called behavioral expectation scale. It
Rating contains descriptive statements of behavior from
least to most effective
Performance Test •With few jobs for evaluation performance test t
check the knowledge and skills of employee can
be conducted
Cost Accounting Method •Performance is evaluated on monetary benefits
employee has given to organization. Cost
benefit analysis of employee
 Performance Appraisal Methods

No. Appraisal Method Description

Comparative •Supervisor rate his subordinates on
Evaluation Method ranking from best to worst
a) Ranking Method: The rater rank
employees from best to worst
b) Paired Comparison: Each employee is
compared and ranked with every employee
in a group or team
N (N-1)/2
MBO •The goals/outcomes are established for
each employee and then performance is
evaluated based on attainment of these
goals
Appraisal MethodPerformance
Advantages Appraisal Methods
Disadvantages
Rating Scale •Easy to use, time effective, •Biases of raters
and low cost
•All types of job can evaluated
•No training required to raters
Check List •Easy to administer •Use of personality indicat
•No specific training required to •Less flexibility to assign
raters relative ratings

Forced Distribution •Avoid leniency error •What if organization is

Method performing well and all
employees contributing
outstandingly
Critical Incident •Evaluation is based on •In general negative incide
Technique behaviors that actually are more highlighted
contribute to effective job
performance
•Recency error can be
overcome
•Chance of learning for
subordinate is greater

Behaviorally •Actual observable job •Problems of rating scale

 Performance Appraisal Methods
Appraisal Method Advantages Disadvantages
Performance Test •Test can be validated •Test potential instead of
actual performance
Cost Accounting •Useful to make •Difficult to establish profit
Method training/investment decision contribution
on employee
Comparative •Comparative ranking based •Recency, Hallo or
Evaluation Method on performance perceptual biases
•Can be used to decide
merit based pay and
promotion

MBO •Not fit for assembly line •Employee may not set
workers challenging and high goals if
•Good for management jobs achievement of goals is
•Increase employee basis for reward
involvement and motivation •Set short term goals
 Potential Rating Scale Appraisal
Problems
 Unclear standards
– An appraisal that is too open to
interpretation.
 Halo effect
– Occurs when a supervisor’s 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.

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 A Graphic Rating Scale with Unclear
Standards

Note: For example, what exactly is meant by

“good,” “quantity of work,” and so forth?

Table 9–2
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 Potential Rating Scale Appraisal
Problems (cont’d)
 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.

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 S. Performance Appraisal Description
4 No. Error Performance Appraisal Errors
1 Leniency Error Extreme rating either on high
or low side
2 Similarity Error Bias appraisal because of
personal affiliation
3 Recency Error Recent behavior evaluation
instead of entire performance
appraisal period
4 Contrast Error Rating in comparison to other
members
5 Central Tendency Average rating for all
Error employees
6 Spill-Over Effect Past performance or standing
dominate recent evaluation
7 Hallo Error One characteristic or aspect of
performance dominate entire
performance appraisal rating
8 Perceptual Error The previous held believe of
 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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 Who Should Do the Appraising?
 The immediate supervisor
 Peers
 Rating committees
 Self-ratings
 Subordinates
 360-Degree feedback

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 Advantages and Disadvantages of Appraisal
Tools

Table 9–3
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 The Appraisal Interview
 Types of appraisal interviews
– Satisfactory—Promotable
– Satisfactory—Not promotable
– Unsatisfactory—Correctable
– Unsatisfactory—Uncorrectable
 How to conduct the appraisal interview
– Talk in terms of objective work data.
– Don’t get personal.
– Encourage the person to talk.
– Don’t tiptoe around.

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 Performance
Contract

Source: David Antonion, “Improving the

Performance Management Process Before
Discontinuing Performance Appraisals,”
Compensation and Benefits Review May–
June 1994, p. 33, 34.
Figure 9–10
© 2005 Prentice Hall Inc. All rights reserved. 9–35
 Checklist
During the
Appraisal
Interview

Source: Reprinted with permission of

the publisher, HRnext.com. Copyright
HRnext.com, 2003.
Figure 9–11
© 2005 Prentice Hall Inc. All rights reserved. 9–36
 The Appraisal Interview (cont’d)
 How to handle a defensive subordinate
– Recognize that defensive behavior is
normal.
– Never attack a person’s defenses.
– Postpone action.
– Recognize your own limitations.

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 The Appraisal Interview (cont’d)
 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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 The Appraisal Interview (cont’d)
 How to ensure the interview leads to
improved performance
– Don’t 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.

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 The Appraisal Interview (cont’d)
 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 employee’s prior opportunity for correction.

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