PERFORMANCE APPRAISAL

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CONTENTS

1. Performance and its Evaluation in Organisations 04

1.1. Performance Appraisal Approaches 07

1.2. Appraisal Officers for Work Performance 10

1.3. Methods for Performance Appraisal 11

1.3.1. Graphic Rating Scale 11

1.3.2. Forced Choice Method 13

1.3.3. Checklist Method 14

1.3.4. Field Review Method 15

1.3.5. Critical Incidents Method 16

1.3.6. Overlapping of Profiles Method 16

1.3.7. Paired Comparisons Method 16

1.3.8. Ranking Method 17

1.3.9. Forced Ranking Method 17

1.3.10. Self-assessment Method 18

1.3.11. Appraisal of Results Method 18

1.3.12. Simulation Method 18

1.3.13. 360º Feedback Method 19

1.3.14. Methods Based on IT Applications: Expert Systems 22

2. The Performance Management System 24

2.1. Pre-planning 24

2.2. Appraisal: Orientation and Review 26

2.3. Post Planning 27

3. Performance Appraisal Abilities 28

3.1. Identify Critical Incidents 28

 CONTENTS

3.2. Complete Formal Appraisal Interviews 29

3.3. Give and Receive Feedback 32

3.4. Coaching 34

3.5. Planning for Improvement of Poor Performance 35

3.6. Planning Objectives for the Following Period 37

3.7. Planning for Professional Development 39

3.8. Meta-evaluation and Self-assessment 40

3.9. Biases and Distortions of the Evaluator 41

4. Bibliographical References 43

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Performance Appraisal

1 Performance and its Evaluation in Organisations

Although achievement and performance are commonly used as synonyms in everyday language
as both imply a “product”, “result”, or “implementation”, when referring to the human resources
environment the term performance relates directly to personal commitment to a certain task while
achievement is related mostly to corporate finances or business.

In other words, performance refers to a person fulfill-

ing the work that they are obligated to complete (per-
“Performance appraisal is a function sonal index) and achievement refers to the product or
that, whether formally or informally usefulness that something provides (corporate index).
is always carried out at all levels of
the organisational hierarchy.” Although the first uses of performance appraisal
were focused on “disciplining” all of those that did
not live up to the expected achievement of the or-
ganisation, the current concept is tied to improvement of knowledge, abilities, and attitudes (com-
petencies) that work towards optimising the development of human resources of any organisation.

Performance appraisal, also called performance evaluation or performance review, is a function

that, whether formally or informally is always carried out at all levels of the organisational hierarchy
and is found closely tied to the responsibilities of those that have the power to manage others.

Frequently, appraisals (evaluations) have been based on objective elements like absences, amount
of work completed, overtime, mistakes made, etc. In other words, they are separate from personal
traits of an employee that definitively influence their achievement such as: initiative, feeling of re-
sponsibility, involvement or adherence to business objectives, etc.

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Although any designed appraisal system can measure a variety of factors from personality traits to
results obtained or the extent to which objectives were achieved, logically, it can be assumed that a
practical appraisal system should previously select the factors to be evaluated. Two tendencies are
involved for deciding those factors: a focus on achievement (results) whose assessment revolves
around the amount of a product or service produced and the quality level without focusing on people.
Another tendency for determining performance, in addition to achievement (merits and behaviours),
is based on standards for describing knowledge, experience and development capabilities, etc.

From a human resources perspective, where personnel are considered basic resources for an or-
ganisation and where productivity should be managed, personnel appraisal is aimed toward evalu-
ating their performance. In addition to offering an assessment of employees, it provides opportuni-
ties for growth for all personnel within the organisation through the analysis of what the person has
done in their position and the results obtained, keeping in mind the organisational objectives as well
as individual objectives. Performance appraisal should be seen within an organised cultural
framework to encourage management towards accomplishment.

In fact, the performance appraisal process is considered by various authors to be an essential

responsibility within managerial tasks as it provides the consultation basis regarding different stra-
tegic decisions: definition of objectives, delegation, formal and informal compensation, justification
of salary revisions, identifying key strengths and weaknesses, work planning, etc.

Performance appraisal is defined as the systematic process through which the results of each em-
ployee’s performance and potential for future development are determined. All this has the purpose
of revealing the ways in which employees are productive and if their future achievements can be
improved, which allows for the implementation of new compensation policies, making decisions
regarding promotions or positions, determining any needs to be reviewed, detecting mistakes in job
design and becoming aware of any possible personal problems that affect performance.

Performance appraisal is not a goal in itself, but rather an instrument or tool to improve results for hu-
man resources of a business and so, the results of performance appraisal should serve as a basis for
assigning new challenges for improving, recognising employee efforts, and taking necessary cor-
rective measures. In the same way, performance appraisal creates a basis for evaluating the impact
that human resources policies have on personnel, determining reformulation or design if necessary.

Performance Appraisal: The process that works to determine employee attitudes, results, and
work behaviour based on the performance of their tasks.
Organisations usually make an assessment of achievements for two reasons: administrative
(decisions about work conditions for employees, considering promotions and compensation)
and development (decisions about strengthening employee capabilities like monitoring, coun-
selling, and training).

In any organisation, performance appraisal is important because it allows:

»» To design improvements for the purpose of maintaining and/or elevating the quality and pro-
ductivity levels within an organisation, providing individual or group productivity for employees.

»» Planning and developing corrective actions that can be interpreted as the implementation
of learning or training programs needed and decisions about turnover of responsibilities. It
also helps to discover any individual or collective training inadequacies that are necessary
for better performance of a current position and future career.

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»» Establish and reformulate the inadequate management policies for personnel: motivation,
communication, compensation and employee incentives, etc. because they provide infor-
mation about the working environment.

»» Ensure that employees understand the functions of their responsibilities and the tasks as-
signed as well as understanding deficiencies and limitations, all this for the purpose of un-
derstanding if they have the skills for successful performance and spotting any training
needs. In this sense, performance appraisal is a basic function because it provides employ-
ees with feedback about how the organisation judges their accomplishments.
The main objective of performance appraisal is to assess a person’s performance within a
certain context or position. This means that performance appraisal is obligated to check
and see if a mutual understanding exists between the boss and employee about the basic
responsibilities of the position, where the accomplishments achieved will be reviewed with
the previously set objectives in mind.

If the objectives that an employee should achieve are not clear, or if an employee does not have
the assurance that their efforts will be valued or compensated adequately, it can be assumed
that they will work below their true potential.

»» Lead and control personnel fairly, as it es-

tablishes equal compensation systems and
adopts decisions regarding individual work
careers and succession plans.

»» Check the efficiency of personnel selection

processes. When we select a candidate we are
making a prediction about their future achieve-
ments and using performance appraisal we
can test if that prediction has been met.

»» It serves as a legal defence mechanism. Per-

Performance Reviews |
formance appraisal can also be used for le- Evaluations & Appraisal
gal defence, acting as a basis before judicial
Source: Turn Key Doc
authorities regarding certain human resources
decisions. For example, a persistently awful
performance can be a motive for dismissal,
but in those cases the business should provide a formal and objective evaluation system,
otherwise the judges can determine the dismissal to be inappropriate.

While different studies about productivity and financial indicators have demonstrated that in situa-
tions where performance appraisal has been utilised (systematic, objective, and procedural) better
results are obtained than in those that do not use1 it. It is important to remember that the mistakes
made when implementing performance appraisal policies (for example, not identifying critical abil-
ities or not providing feedback), are very costly for the organisation in terms of opportunity loss,
activities without a focus, loss of personnel motivation and involvement.

1 Organisations with high achievement levels are characterised by a performance appraisal based on: clarity
of objectives for appraisal, appraisal systems, constant feedback of performance, and systems of perfor-
mance recognition.

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Generally the weak points of performance appraisal are:

• When the people involved in the appraisal process see it as unfair or biased. The lack of
equality can deeply harm the appraisal process and because of this, it is necessary to use
objectives and standards of the appraisal process that prevent subjective judgements that
downgrade credibility and create advantageous or disadvantageous situations.

• When the appraisal is vague, meaning it is based on evaluation factors that are not aimed
at anything and do not add value to anyone. Processes that put more emphasis on reports
or formal aspects rather than critical and objective performance appraisals. It is essential to
inform the employee of the objectives and results that performance appraisal carries with it.

1.1 Performance Appraisal Approaches

Whether more attention is focused on results (the what) or personal behaviour (the how), we can
distinguish three approaches for performance appraisal: appraisal of results, appraisal of be-
haviour, and mixed systems.

The appraisal of results can be integrated with systems of appraisal of accomplishments, appraisal of
behaviour with assessment of actions systems and mixed systems with performance appraisal systems.

Appraisal of results: This process centres its attention on results obtained and not on personality traits. It
is usually associated with management by objectives. It basically consists of:

• Boss and subordinate agree on the tasks and basic

responsibilities of the position.

• Employees set their own objectives for short-term

accomplishments under the supervision/guide of
the boss, in a way that the fixed objectives refer to
work realities and the needs of the organisation.

• A mutual establishment of the criteria for mea-

suring and evaluating performance and, peri-
odically holding meetings to evaluate the prog-
ress made for obtaining goals.

• The boss plays a helping and advising role for the

employee in their daily activity.

As advantages, this type of appraisal achieves greater employee

involvement and minimises defensive feelings while centring on results
and not on personal or behavioural factors.

As a disadvantage, it is important to keep in mind that results are not easily seen in many positions.
For example, positions where an employee possesses little control or when results correspond to
the objectives of a work group. Also, this type of evaluation does not indicate what is necessary for
maintaining or increasing efficiency.

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Appraisal of behaviour: This approach is directed at the evaluation of a person, their personality,
their behaviour, and their potential which are evaluated using a combination of things like knowl-
edge, experiences, attitude, capabilities for leading and making decisions, etc.

As a limitation of this system, it is important to keep in mind that an appraisal based exclusively on
behavioural factors rewards “correct” actions regardless of results, which is inconsistent with the
business perspective.

Mixed systems appraisal: This is a combination of the previous two, its advantage is that it is not cen-
tred exclusively on personality characteristics, attitudes, or results of a position, but rather it creates a
combination of systems to highlight both factors. In this way appraisals can be more objective. Logi-
cally, mixed evaluations try to maximise the benefits of both types and minimise their disadvantages.

When faced with both perspectives, appraisal of results and appraisal of behaviour, usually results
are assessed whenever possible, with appraisal of behaviour being used only when the given cir-
cumstances make it difficult to use the first. The efficiency of a system for performance appraisal
should be based on the results of an individual and not only on their personality traits.

So, in those tasks where there are no methods for measuring results or the results do not depend
directly on one employee, it is appropriate to evaluate personal traits and behaviour. For example,
in teaching tasks, the abilities to explain, knowledge, dedication, and interest are commonly con-
sidered. It is more efficient to base situations directly related with production on appraisal of results.
However, this rule has exceptions and so, a commercial job, while not being closely tied with the
production process should be evaluated based on results.

Thus, the decision for one type or other depends on the type of activity that an organisation devel-
ops in general, on the position, on the level of responsibility assumed, on the business culture, etc.
Knowing with clarity and precision what is to be measured and what factors should considered,
drawing from an analysis of the location and work tasks that should be developed.

It is important to keep in mind that, from a practical level, appraisal of behaviour usually produces
more denial.

WHAT IS TO BE MEASURED? WHAT TO CONSIDER WHEN DETERMINING FACTORS:

The selection of performance factors is the part of performance appraisal most related with
the organisational culture and strategies. For this reason, before determining factors it is
necessary to think about the group of explicit and implicit values that characterise or are
desired for the organisation: quality, customer service, innovation, team work, honesty, etc.
Another way to select factors is to adapt them to the professional profile using values that
are critical for the success of each profile. For example, if it deals with evaluating manage-
rial performance, factors will be included that reference team management or leadership.

The factors should fulfil these requirements:

Observable: without needing to use technical procedures that are excessively sophisticated.

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Measurable: that allow for comparison with predetermined criteria or between one in-
dividual and another. Similar to observation, being measurable should not mean using
complicated or difficult formulas.

Common: for all work tasks being considered.

Independent: so that each area covered is not related to another.

Appraisal factors should be described, so that they mean the same for all of those being
evaluated and can be clearly identified by employees and supervisors.
It is not necessary to include an excessive number of factors and sub factors in appraisal
systems, so they are reduced in practice to four or five key factors:

»» Skills and abilities

»» Knowledge of tasks
»» Quantity and quality of work
»» Adaptability to work
»» Attitude and behaviour

From the multitude of factors considered for performance appraisal, the most common are:

Quality of work: this refers to the development of activities without mistakes, in agree-
ment with the standards required by the client.
Amount of work: this can be measured according to area and type of activity, for
example number of products, time employed, closed sales, level of profitability or pro-
ductivity, etc.
Knowledge of position: this evaluates the levels of knowledge and understanding of the
position: principles, techniques, and tools associated as well as the skills to perform it.
Initiative: acting without being told to. Efficiency when faced with uncommon situations
and problems. Level of independence within the position.
Innovation and creativity: this is related with proposals and/or new ideas relating to
work activity that can include improvements in productivity and effectiveness.
Interpersonal relations: sustaining appropriate relations with subordinates, superiors,
and co-workers and/or internal and external clients.
Leadership: considering the type of authority enforced and the objectives that are
achieved with the work team, the way in which tasks are assigned, personal motivation
for responsibilities, etc.
Responsibilities: assessment of commitment to the company or level met for task
achievement.
Punctuality: it evaluates the timeliness for completing deadlines, arrival and leaving
times within the work schedule, as well as rates of attendance and absence.

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1.2 Appraisal Officers for Work Performance

In order to designate an officer responsible for performance appraisal, two differing positions can
be taken: a first position where responsibility falls on the manager or person directly responsible for
the people being evaluated, and a second position where the responsibility of appraisal can fall on
different officers within an organisation.

Thus, there are authors that prefer an officer that is in close and continual contact with the employ-
ee (usually the person directly responsible for the employee) that has the ability and willingness to
give a judgement about the employee in order to later be able to bring in the other departments
involved according to the performance appraisal objectives. In other words the immediate boss is
responsible for performance appraisal.

The other position delegates the responsibility of the appraisal to different officers, while being able
to adopt any of these six alternatives:

• Line manager or director: within the majority of organisations the immediate boss, line man-
ager, or director is the one to take on both the responsibility of his subordinate’s performance
appraisal as well as his own appraisal. For performance appraisal of personnel, the evalua-
tor normally receives guidance from the human resources area in charge, which establishes
the methods and criteria for the appraisal. This deals with a method that while requiring train-
ing and follow-up for evaluators, it also provides sufficient flexibility so that the performance
appraisal fulfils the efficient organisational objectives.

• The individual employee: the employee is responsible for his performance and of his own
appraisal. It is based on systems of self-assessment of performance, in the way that each
person evaluates their own fulfilment of their position, efficiency and effectiveness, keeping
in mind certain indicators that should be provided by the manager or the organisation.

• The line manager and employee: this is related with management by objectives but still con-
sidering the existing principles like personnel participation and involvement in the business
objectives to increase their motivation and accomplishments. The performance objectives
are not mandated but rather established through a consensus where the business and the
employee obtain benefits that ensure higher commitment to achieve objectives decided
jointly. This performance appraisal is based on a continual evaluation (although there are
periodical measures taken of the results and comparison with the formulated objectives) and
characterised by intensive feedback.

• Task force: in this alternative, it is the team itself that evaluates the performance of its mem-
bers, feedback is given in order to take corrective or improvement measures and it defines
its own objectives based on organisational goals.

• Human resources area: the evaluations that are completed by the human resources area are
done using the information offered by managers. Their role being to interpret the information
of everyone in the organisation based on percentages or averages and not on criteria for
individual performance. It deals with a performance appraisal with a general but not specific
objective, and so, focused on coordinating programs for action organised by the area in
charge of administration of human resources.

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• The evaluating committee: this deals with a collective evaluation made by a group of people
that generally pertain to various areas or departments (they are usually managers of the differ-
ent people evaluated). All the members of the commission participate in all of the evaluations
and their role consists in maintaining the balance of judgements and compliance to the rules.

• 360º evaluation: in this alternative method for performance appraisal everything in the con-
text surrounding the employee is an appraisal officer, evaluting from all areas (external as
well as internal to the company). All of the people that are related to the employee being
evaluated such as directors, the employee himself, supervisors, subordinates, colleagues,
team members, as well as internal and external clients, assign a score.

1.3 Methods for Performance Appraisal

The majority of authors that address the subject agree that there are numerous appraisal methods
and each one presents its own advantages and disadvantages. There is also no ideal or universal
system that exists, applicable to everyone, all positions, all businesses, and all situations. Depend-
ing on the organisational culture each business uses one method or another for performance ap-
praisal. Equally, within the same business different methods can be used to adapt to different hier-
archical levels or groups of workers, for example one for sales, others for customer service, others
for administrators, etc. When choosing between one method or another, one must look to the indi-
cators or objectives to be measured or appraised.

1.3.1. Graphic Rating Scale

This method is used the most. It consists of a series of
factors arranged in a linear scale where the evaluator
has to indicate what level the person being evaluated
has for each of their characteristics. The factors are
previously selected and defined, and the levels and
sublevels of each factor should be defined with a con-
cise explanation and be objective to avoid skewing re-
sults and to obtain clear information for each factor.

A dual input form is used, where the rows (horizontals)

represent the performance appraisal factors, and the col-
umns (verticals) represent the varying levels of the factors.
The factors are previously selected to determine the intended
qualities to be evaluated in each employee. The factors are previously
selected in order to identify and evaluate them for each employee.

Although in appearance it is the simplest method, in its use various precautions must be taken, to avoid
subjectivity and biases of the evaluator that can cause significant indifference. From a practical level it is
advisable that the appraisal factors are summarised (one or two pages maximum per form).

One of the disadvantages of the graphic scales is its inflexibility because the evaluator should ad-
just their ideas to the scale, and not to the characteristics of the person being evaluated. Another
disadvantage is that the performance appraisal results tend to be mundane.

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There are various methods for a graphic rating scale, for giving points:

»» Continuous, where there are two points at the extremes of a line and performance is situated
on any point on the line.

»» Semi-continuous, the same as the previous but interval points are included to identify the
different points on the scale.

»» Discontinuous, the position of the marks is previously set and the evaluator has to choose
one of the marks. Many times these scales are represented by squares that contain the char-
acteristics of each appraisal factor defined at each level.

Examples of graphic rating scale for performance appraisal:

Level 5 Level 4 Level 3 Level 2 Level 1

Factors
Excellent Good Fairly Good Fairly Poor Poor

Production
Sometimes
(amount Always exceeds Satisfies Sometimes Always below
exceeds
of work standards standards below standards standards
standards
completed)

Exceptionally
Accurate and
accurate Occasionally
Quality generally Accustomed to
and skilled makes mistakes Always makes
(dedication does not being correct
performance and and requires mistakes
to work) make and acceptable
does not make supervision
mistakes
mistakes
Complete
Knows the
confidence Their work Should be
Practical job well but
in their work. can be trusted guided Incapable of
ability to needs some
Knows their job but with frequently and performing
complete suggestions
well and does adequate continuously assigned tasks
work and adequate
not require supervision supervised
supervision
supervision
Good
Always willing to Does not avoid Does not eagerly Resists
Collaboration attitude for
collaborate collaboration collaborate collaboration
collaboration
Does not relate
Good Presents com- with hardly
Relates Acceptable
Personal relationship plaints and mis- anyone. Rejected
excellently with relationship
Interaction with co- understandings by others
co-workers with co-workers
workers with co-workers because of their
personality.
Creativity Often suggests Occasionally Has average Rarely shows Zero initiative.
(innovation excellent ideas has good ideas for normal initiative or Never presents
abilities) ideas performance ideas. ideas

As with previous examples, this model should be carried out in accordance with the needs of each
organisation, and as a result there are no inferior or superior limits.

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Tick the box that fits best. The sub levels can be considered low, average, and high.

Knowledge of work

Very poor Bad Acceptable Normal Excellent

Attendance, punctuality
Many absences Frequent absences Few absences Punctual and rarely Very punctual
and late arrivals and late arrivals and late arrivals absent and never absent

Capability to adapt. Versatility

Difficulties Adapts well in
Adapts without Adapts quickly
adapting and very Slow and hesitant non-difficult
problems and easily
inflexible positions

Leadership qualities
Has little Has considerable
Completely Occasionally acts Always acts like
tendencies for tendencies to lead
subdued as a leader a leader
leading a group a group

1.3.2. Forced Choice Method

This method makes it possible to offset the effects of “central tendency”2. It consists in appraising
the performance of individuals through descriptive sentences of certain characteristics. These sen-
tences are not chosen randomly, but rather are selected through statistical procedures that tend to
verify the appropriateness to the existing criteria within a company.

In each set (groups of two, four, or more sentences), the evaluator should make a forced choice of
one or two (which is best matched and least matched) that apply to the performance of the evalu-
ated employee. So, although they can vary, the two most common structures are:

»» Two sets of sentences are given with positive and negative characteristics. Judging the
employee, the supervisor or evaluator chooses the sentences that best fit and after, the sen-
tences that least fit with the performance of the employee being evaluated.

It is important to be aware that in this type of negative and positive structure, the evaluator is
able to distinguish the sentences that could possibly add points, making them susceptible
to including personal influences on the performance appraisal.

2 Central tendency: the tendency to assess a person in the middle of the scale. It can be a reflection of the
evaluator’s fear to involve themselves with something or someone.

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»» Sets of sentences are made that only have positive characteristics. When judging the em-
ployee, the evaluator chooses the sentences that best fit the performance of the person
evaluated. In this structure, personal influences are avoided because the evaluator does
not have references that affect the appraisal and because of that, the sentences that best
describe the performance of the employee are chosen. (Experience shows that between the
two structures, the set with only positive choices yields better results.)

An advantage to this type of model is its easy implementation (it does not require special prepara-
tion by evaluators) in addition to minimising the effects of central tendency or the effects of “gen-
erosity” or “harshness”. Its main disadvantage is its complex elaboration, in addition to being a
method that is only comparative and discriminatory that does not offer information about training
needs or potential for development needs.

Example of the Forced Choice Method

The following sentences related to work performance are found combined in sets of 4. Write an X below
the “+” sign to indicate the sentence that best defines the employee’s performance and an X below the
“-“sign that least defines their performance.

No. + - No. + -

They only do what is asked 01 Never offers good suggestions ...

Exemplary behaviour 02 It is clear they like what they do ...

Accepts constructive
03 Has good memory ...
criticism

Does not work well under They like to demand their work
04 ...
pressure rights

1.3.3. Checklist Method

This method is called a checklist to verify if the descriptive sentences are based on the appraisal
factors that should be considered for every employee.

It consists in presenting the evaluator with a group of sentences from which he should choose those
that best describe the employee’s performance and characteristics. The evaluator is not forced to
select sentences but rather mark the sentences that characterise the employee’s performance.
There are a variety of methods for marking, the use of the signs “+” or “y” or “x” for yes, or the use
of yes-no-sometimes. Each of the sentences can have a weighted factor assigned, which creates a
score for the employee based on a predetermined chart.

One of the disadvantages that this presents is related to the weighted factor assigned because if
it is not correct, the appraisal will be inaccurate. Another disadvantage relates to the impossibility

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to put the descriptive sentences into context and the possibility that they are misinterpreted by the
evaluator. To avoid these risks in the best way possible, the descriptive sentences included should
not be general and should refer to specific jobs, in addition to representing the positive and nega-
tive aspects that are being appraised.

Example of the checklist method

Mark the sentences that best describe the employee at work with an (X) and leave the corresponding
lines blank that do not accurately reflect the employee’s performance.

1. Arrives late ... Cannot be trusted

2. Learns quickly ... Is an organised person

3. Correctly completes tasks ... Is the first to leave work

4. Prefers difficult tasks ... Has an untidy personal aspect

5. Has an unpleasant manner ... Relates well

1.3.4. Field Review Method

This is developed based on interviews by an appraisal specialist with the immediate supervisor.
This appraisal method is more complex than the previous methods because in addition to giving an
analysis of employee’s performance it analyses facts and situations to look for causes, origins, or
motives of performance and plan the development of responsibilities and development within the
organisation together with the immediate supervisor.

In this method, first an initial appraisal is taken of each employee based on satisfactory and less
satisfactory performance, and then a complementary analysis is completed where each employee
is evaluated more thoroughly. Both the initial appraisal and previous or complementary appraisals
are based on a list of questions that work as a guide. Examples of some questions are: Does this
person possess the qualities that allow him to take on the assigned responsibilities during the
appraisal period?, Were other responsibilities given during the period?, What type of help was re-
ceived?, Have they tried more complex tasks?, etc.

This method makes it possible to plan actions following the appraisal (training, orientation, pro-
motions, etc.) as well as places emphasis on performance improvement and achieving results.
However, it also presents the main disadvantage of an elevated operational and temporary cost, in
addition to low involvement of the person being evaluated.

One example of the use of this method is called due diligence, a term usually used in the business
acquisitions area to refer to the process of searching for information about a company prior to its
acquisition or signing agreements. Applied to performance appraisals, it is done for those employ-
ees who have worked or collaborated on different projects throughout the evaluation period and

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therefore have had various bosses that can evaluate their performance. In this case the employee
usually has a virtual counsellor assigned to them, responsible for speaking with the different bosses
of the project before formalising an annual appraisal.

1.3.5. Critical Incidents Method

In this method each immediate supervisor observes and registers negative and positive actions
that stand out within the performance of each employee in their tasks. It is based on the fact that
human behaviour has certain extreme characteristics capable of driving towards positive (success)
or negative (failures) results and because of that, this method is not based on normal character-
istics but rather on both positive and negative exceptions. As a technique, it is complementary to
functional analysis or curricula analysis, and so the critical incidents are analysed to determine
knowledge, abilities and attitudes that intervened or should have intervened on these. One of the
main advantages is that when making an analysis or writing feedback, the evaluator bases it on
specific behaviour and not on personal traits.

The Critical incident method for work performance consists of three phases:

1. Observation of behaviour
2. Recording significant events or critical incidents. The superior usually makes notes in stan-
dardised reports.

3. Study of aptitude and behaviour through interviews between the immediate supervisor and
the employee being evaluated where they both make notes in the evaluation report of the
observations, events and changes.

1.3.6. Overlapping of Profiles method

This is the predecessor to 360 degree appraisals and it consists of making two or three profiles
based on a self-assessment, an assessment done by the boss, and on occasion a profile with the
average of the appraisals done by co-workers. The overlap of those three profiles not only gives a
definitive profile, but it also uncovers areas of discrepancy.

1.3.7. Paired Comparison Example of the Paired Comparison Method

Method
Comparison of... A B C D
As its name indicates, this method
consists in comparing the employ- AyB x
ees two by two with respect to an
appraisal factor or trying to identify AyD x
who is better at a certain activity.
CyD x
This enables a comparison between
pairs and within a group of more
AyC x
employees the scores are used to
make a final classification. ByC x

This is a very simple system but not ByD x

very efficient.
Score 2 3 1 0

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1.3.8. Ranking Method

This consists in ordering the employees on a scale from best to worst. The classifications are done
informally according to individual qualities or the overall aptitude for a given position.

One way to carry out the classification entails placing the name of the employee that possesses
more of an attribute in the higher part of the column and the worker that possesses less at the bot-
tom of the second column. The evaluator follows this same method for the other employees.

Another variation is to assign the employees to a high level, medium

level, and low level group or simply by number.

The comparative methods, where the establishment of cat-

egories, forced distribution and paired comparison are
set apart, are usually complementary to performance
appraisal and utilised for decisions about increases in
salaries.

One of the disadvantages of this type of procedure is

related to the fact that, although in general it is known
that some employees surpass others, it is difficult to
measure, so it is possible that the employee who re-
ceives a two to be almost equal to a one or much lower.
In the same way, personal inclinations and recent events
can distort this method, and as a result it is common for two
or more evaluators to determine a score in order to reduce
subjectivity. Among the advantages, this method is easy to admin-
ister and explain.

1.3.9. Forced Ranking Method

In the forced ranking or distribution method each evaluator is asked to place their employees in
different classifications. As a general rule, a certain proportion should be placed in each category.
For example, 10% of employees in the highest category, 20% in the next, 40% in the average zone,
20% below average, and 10% in the lowest level.

This method avoids the tendency to evaluate in the centre of the scale, or be very demanding or
too generous. It highlights the talented employees and treats them as such for the purpose of rec-
ognition, development, etc. At the same time it identifies cases of low results and gives adequate
methods for training or supervision to get their performance back to an acceptable level or if they
have consistently low results, consider the dismissal of those employees from the organisation.

A disadvantage of this method is that in those groups where there is not a normal or common dis-
tribution (which corresponds with the Gauss Bell curve shape where the data is grouped around a
central tendency) and, for example, there is a group tendency toward excellence, the employees
who are least effective are penalised. However, if it is an inferior performance group the least bad
are rewarded unnecessarily. This system is often used because it is considered to internally rep-
licate current competition conditions (for example in the sports field the three best are rewarded
despite their overall results). Among employees it is not a well-received method and appraisals are
considered unfair. Competitiveness is developed when dealing with group collaboration.

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Example of Forced ranking method

Parameter of classification: overall performance

HIGH INTERMEDIATE LOW

10% 20% 40% 20% 10%

Employee XXX
Employee XXX
Employee XXX
Employee XXX Employee XXX
Employee XXX Employee XXX Employee XXX
Employee XXX Employee XXX
Employee XXX
Employee XXX
Employee XXX

This case is an example of the parameter of “overall performance”, classifying itself in accordance with diffe-
rent factors like sales figures, cost control, etc.

1.3.10. Self-assessment Method

In this method the employee is asked for a sincere analysis of their own performance characteris-
tics in line with the indicators and parameters established that facilitate previous comparisons. This
method is usually complementary or prior to the appraisal by superiors. In some systems its use
is recommended but not necessary. It is an integral part of the 360 degree appraisal systems and
used mainly for those positions that are not directly linked to the productive process.

The methodology of self-assessment proves useful when the objective of performance appraisal
is to encourage individual development because when individuals are evaluating themselves they
have less defensive attitudes towards determining objectives and areas of personal improvement.

One of the biggest disadvantages of self-assessment is the tendency to reflect average or extreme
values which make the appraisal seem less effective.

1.3.11. Appraisal of Results Method

More than a method this is an integral part of a type of mixed development appraisal, where results
and performance factors are evaluated. If this method were the only one being used, we would be
talking about a pure system for evaluating results that are typical of management by objectives,
where performance is assessed only based on quantitative measurements of work, on the achieve-
ments obtained in terms of work content, or business.

1.3.12. Simulation Method

These are simulated situations created ad-hoc to evaluate employee performance, where employ-
ees are subject to a series of tests and exercises (typically in-basket, individual interviews and
group dynamic) close to actual work, and their behaviour is systematically observed, with their
performance scored in line with charts for criteria and scoring. This methodology is normally used
for identification and evaluation of potential more so than with performance.

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1.3.13. 360º Feedback Method

This is an appraisal system that understands the importance of appraisal from diverse sources,
collecting information about the performance of an employee not only from an immediate boss, but
from below and from the sides. This means it includes assessments of pairs (co-workers), subordi-
nates, internal/external clients and providers, in addition to a self-assessment.

The description of this technique comes from the expression of covering 360 degrees symbolically
representing all of the relevant links a person has with their work environment, it can also be called:
multi-rater feedback, multisource feedback, or 360º feedback.

360º appraisal is the use of a confidential questionnaire given to the people who are most related
to the employee being evaluated, these people can be internal and external to an organisation,
with the internal people being the superior, co-workers and subordinates, while the external peo-
ple being anyone else that is directly related to the employee (Oltra Comorera et al. 2005).

This is a form of appraisal that breaks the paradigm that “the boss is the only person that can eval-
uate the competencies of subordinates”. Therefore opinions of others that know them and see
them in action are also taken into account, such as co-workers, subordinates, internal clients or
providers. (Parra, M. 2002).

This method tries to reduce subjectivity or arbitrariness of one person, assessing the employee
from diverse sources (it is also used to get systemised opinions regarding the performance of
groups, departments, or even organisations). It is based on a series of previously defined factors
that are observable behaviours within daily development of the practice of a position.

Although in the 360º method many sources can be included, these generally appear:

»» Clients: appraisal systems used by 360º techniques consider making improvements the final
objective of performance. These can be individual and in a group, as well as organisational
improvements, which in turn improve client satisfaction. For this motive, it is understood that
one of the basic sources for performance appraisal are the recipient work clients (products/
services), whether they are internal or external clients3.
In practice, brief questionnaires are usually made (confidentiality ensured), which are sent to
the important clients of the employee. Normally, it is the evaluating boss or sometimes the em-
ployee himself who is in charge of submitting the questionnaires with appropriate explanations.
Example questions: How do you as a client perceive the services given by (person X)? What
three qualities would you highlight about this person?, etc.
The questionnaire is a basic element of 360º appraisals and the effectiveness of the results
obtained depends on the level of sample representativeness (adequacy and size of the sample
of subjects that complete the questionnaire) and of the representativeness of what they want
to find out (the need and interest of the information that will be collected with respect to the
organisational objectives).

3 Internal client: a person within the company, that because of their placement in the position, whether it be op-
erative, administrative, or executive, receives a product or service to be used in their work from others. From this
perspective, they are perceived by the company to be included in the internal network of clients and providers.
External clients: a person that does not pertain to the company or organisation and requests a service or buys
a product.

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The selection of a questionnaire can take two paths:

1. Use of standardised questionnaires, for example of client satisfaction within the systems
of quality certification. In those cases it is important to make sure the questionnaires are
adapted to the organisational culture and strategy.

2. Elaboration of a questionnaire made by the organisation. To design a questionnaire it should

first be based on a list of critical factors for efficient work performance. Once the list is made
it is necessary to provide a description or specific example of each one, to avoid misun-
derstandings and redundancy as well as facilitate the following stages for the design of the
questionnaire. For example, some of the critical factors for the success of a service organi-
sation are: focus on the client, team work, speed/quickness, reliability, punctuality, etc.

The questionnaires should not include more than 3-5 factors. For each success factor 4 to 5
specific descriptions are made of the expected behaviour that will be incorporated into the ques-
tionnaire. In addition to the specific questions about factors, the questionnaire should include a
question about overall achievement and it is recommended to put this question at the end.

Once the questionnaire is designed, and before starting the appraisal, it is recommended to do
a pilot test and from the results, make the necessary adjustments, taking out the questions that
were not understood and correcting those that denote any kind of discrimination.

When redacting the questionnaires it is important to keep in mind:

• Do not include ambiguous words.

• Do not use twofold questions because if the adjectives are similar one should be eliminated
and if they are different there should be two different questions (for example, is the service
provided quick and efficient?)
• Avoid questions that suggest an answer. For example, what was the level of satisfaction?
This implies a satisfactory result. It should be posed as, what was the level of satisfaction
or dissatisfaction?
• When establishing scales (for example values from 0-5) one must keep in mind that an uneven
number of categories could imply a neutral response. On the other hand, with an even number
of categories it forces the person being interviewed to decide on something.
• In rating scales when a verbal description is used, one should pay special attention to the
adjectives used because statements with round adjectives (awful, destructive, optimal,
etc.) usually lead the people being interviewed to give an average response, with it being
more advisable to use not such forceful adjectives (good, bad, etc.).
• Questionnaires for clients should have an introduction that includes the objectives of the
survey, placing special emphasis on the organisation’s willingness to improve and high-
lighting the importance of knowing its clients’ opinions on the matter. It explicitly states
that the information supplied will be kept confidential and it is also important to gather the
observations or commentary that the user decides to make in a final section.

»» Subordinates: including subordinates in methods of 360 degree appraisal comes from man-
agement development programs and of the practice of upward feedback that is included in
those management development programs. So, at first when the human resources consultants
and professionals detected areas for improvement of management they found themselves at a

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disadvantage: these areas were not accepted by the managers and without the necessary
recognition of areas for improvement it would be difficult to provide employees with an attitude
for improvement and professional development. As a measure for this situation, it was thought
of that it would be the recipients of the management activity that were the ones to reveal areas
for improvement of the management.
The following method is used: the boss evaluates
himself following a questionnaire that reflects the
“When upward feedback is used as an theoretical factors for an efficient performance
integral part of a 360 degree system of his professional profile. After, the employees/
its use is usually limited to the purpose subordinates are invited to answer the same
of development of potential.” questionnaire. The report of the results is usually
presented in the form of a comparative graph be-
tween self-assessment, appraisal done by sub-
ordinates and the theoretical model or profile. From this result, the manager draws conclusions
about strengths and areas for improvement. On occasion, the director is invited to share the
results with their team and debate the most efficient methods of work performance.
When “upward feedback” is used as an integral part of a 360 degree system its use is usually
limited to the purpose of development of potential separating it from other aims of performance
appraisal like making decisions about promotions and compensation, etc.
This is usually used to evaluate performance referring to managing people (it is usually consid-
ered that subordinates should not judge strategic capabilities or techniques of managers and
only those related with managing people such as: planning individual objectives, how to give
feedback, how to carry out performance appraisals, how to support the development of work-
ers, etc.). In the same way it is usually centred on qualities or competencies, in other words on
qualitative dimensions in the way of moving forward, more than on quantitative results.
A variant of upward feedback is called “skip-level management”, a practice that consists in
sharing the feedback offered about a superior in a meeting between the subordinates and the
boss of that superior, but without the superior being present (although naturally, with the con-
sent and conviction that it is done with the sole objective of professional development). This
is done so that afterwards, the boss of the person evaluated, returns the information and they
analyse it together addressing improvement plans in areas of managing people or leadership.

»» The team co-workers: similarly with the source of information from subordinates, the objective
is to gather information among team co-workers to improve work performance mainly in factors
related with capability to relate, collaboration, team work, creativity, conflict resolution, etc.
Using opinions among peers for distinct objectives for performance improvement is not useful
and on occasions it is harmful, because inhibitions or distortions are normal when gathering
opinions about co-workers.
360 degree appraisal regarding co-workers in teams for practical outcomes is usually carried
out with direct conversations between the boss and the co-workers of the person being eval-
uated and by completing questionnaires, such as a list of adjectives where the most notable
qualities are marked with a “+” and the areas to be improved with a “-“, or open questions like
highlight two achievements of this person during the appraisal period, three strengths,
three areas for improvement, something that you would like to add, etc. Before requesting
the appraisal of a co-worker there should be sufficient information supplied for its purpose (al-
ways related to performance improvement) in order to avoid the halo effect (all the high assess-
ments) and effects of central tendency (all of the factors placed in the middle).

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»» Providers or partners: in the cases where work functions are related with providers or partners
(associates), a basic method for evaluating overall performance of the employee is the feed-
back offered by these sources. This complements self-assessments of key factors for work
performance in these areas like negotiating capabilities, abilities to generate and maintain
long-term relationships, communication abilities, etc. These factors being what will form a part
of the questionnaires that providers or partners will complete about the employee.

Once the feedback is collected by the different sources, the method of 360 degree appraisal re-
quires a process of synthesis to offer an assessment together with individual performance. Although
in some cases the information offered tends to be deliberated by the different sources giving them
a different weight in the final appraisal, it is not usually effective, because normally each source
comes into play in different labour sections. Also, it is important to keep in mind that it is a method
that does not offer quantitative assessments but rather it focuses on detecting tendencies, mean-
ing, what traits are highlighted as positive and negative for performance.

Highlighted as advantages of this appraisal system are:

• This is a more extensive appraisal system because of its variety of sources, which implies a
higher quality of information and reduces biases and prejudices.

• This is a system that stimulates employee development. It is considered so that the feedback
received by the person evaluated helps to identify growth opportunities and professional im-
provement, it is essential to generate a climate of complete confidentiality of information and
that the person considers that the information obtained is con-
vincing and clear. Although the natural tendency is to re-
ject the results at first, the analysis of the causes that
can create the differences between their own per-
ceptions and those of others helps to create a plan
of action focused on improving performance.

As disadvantages:

• It is a system that requires adequate training and

previous experience in performance appraisal. It
is expensive to implement and maintain because
it is only adequate for levels of higher management.

• It cannot be connected to systems of compensa-

tion or salary.

1.3.14. Methods Based on IT Applications: Expert Systems

These are information technology (IT) applications that aim to help performance appraisals be-
cause they simulate the behaviour that a human expert would have. One of the most well-known is
Employee Appraiser.

These applications rely on an organised database in the form of competencies and an electronic
form of performance appraisal. The manager that acts as evaluator chooses which competency the
observations will be completed with. Subsequently, he points out the performance level of this com-
petency on a common scale (usually five levels). The application provides a list of sentences as

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models that can be changed to add personal adaptations, including specific examples of actions
of the employee in the level of performance chosen. Certain sentences are chosen and the appli-
cation automatically includes them in the electronic appraisal form in the correct place. When fin-
ished choosing the sentences for the given competency, the evaluator has the opportunity to revise
what is written by the application, being able to eliminate, add and modify, with the intent to adapt
it to the most specific situation of the employee.

The expert systems, in addition to being guides for perfor-

mance appraisal, are used to prepare individual develop-
ment plans because their data bases include options of
learning resources with certain abilities (skill-learning
resource matching). The process consists in choos-
ing an ability to be developed and selecting the type
of learning resources best suited to the learning style
of the person that wants to create a development
plan. This type of learning resource can be a tradi-
tional course, an activity to do with others, lectures,
projects, multi-media, etc. The application returns as a
search result, the relationship of developmental activities
and progress objectives that can be included in the devel-
opment plan.

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2 The Performance Management System

Performance appraisal is a management tool based on its systemisation and its procedural char-
acter. Generally, it can be distinguished by the following phases:

1. Pre-planning or rather contextualising the appraisal and fixing objectives.

2. Appraisal or Orientation and Review phase.
3. Post-planning (projection on improvement actions) which is work and personal development.

2.1 Pre-Planning

The objective of this phase is to identify the results to be achieved during the appraisal period
(normally yearly) and/or desirable behaviours/traits for the attainment of those results with the aim
of giving a long-term approximation for performance improvement.

When pre-planning the appraisal process, the two basic starting elements must be considered:

• The objectives of the company or work department which the person being evaluated per-
tains to and which are, ultimately, the ones that must be contributed to any process that is
carried out in the organisation.

• Description of the professional profile or more specifically, the description of the job post and
even on a higher level of specification, the profile of the position or plan of the position, mean-

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ing, the work to be completed by a specific person in a specific position. The objective in any
case is to clarify the responsibilities of personnel and as a result define performance objectives.

Although in some companies the process for defining the position profile and position is
carried out within the performance appraisal process, in others it is a separate process.
Similarly, it is easier to define the positions characterised by their tangible content rather
than those where the content of the position is more intangible like investigators, marketing
specialists, personal assistants, etc.

These two elements establish the reason behind the job and what work needs to be done. A third
element to keep in mind is individual objectives where their definition establishes in more detail
what one must do and how much. The individual objectives should be consistent with the objectives
of the unit or department to which they pertain and so, on occasion it draws from those objectives
of the unit to later “distribute them” individually and in others, group objectives are given.

Some matters to keep in mind about individual objectives:

• Fixing objectives ensures that it is done jointly between the evaluator and the employee.
Jointly fixing objectives proves to be the best method for achieving individual commitment
to obtaining objectives.

• The objectives defined should be specific and measureable, achievable, results-oriented and
limited in time (known as the SMART rule, Specific, Measurable, Achievable, Result-oriented,
Time-limited). It is also recommended that they are challenging and jointly agreed upon.

S. Specific results should be outlined

M. Measurable in terms of quantity, quality, impact, etc.
A. Achievable and realistic
R. Relevant for the work unit, career, etc.
T. Time-limited and should establish when results are expected

On a practical level it is recommended that once the objectives are defined they are exam-
ined based on a checklist and redefined in such a way that they are adapted to it.

• Fixing efficient objectives that follow a structured focus in their design based on a start, a
middle section, and an end.

At the start a verb in the infinitive is used

In the middle the objective of the verb is stated

At the end there is a measurement of quality, time, amount or cost

For example:

Start: reduce, delegate, increase, revise, expand

Middle: production costs, report analysis, developmental needs, market participation, etc.

End: 15% of the same period of the previous year, before the end of the first trimester, etc.

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2.2 Appraisal: Orientation and Review

This phase is the supervision of the employee that takes place during the course of the appraisal
period. Generally two basic tendencies are differentiated in systems of performance appraisal:

»» Review: a tendency that finalises the performance appraisal system with a timely action to
conclude a determined appraisal period (generally yearly) for the purpose of verifying the
final results of work performance and determine an assessment for it in line with the level of
achievement and quality regarding objectives and planned criteria.

»» Orientation and Review: the tendency wherein the strategic guidelines that the company
follows view performance appraisal as a continual exercise aimed towards improvement,
rather than a simple temporary measure that appears at the end of the appraisal period. This
is when the phase is most important. In this case, reviewing performance is no more than a
summary or formalisation of what is already known.

In some organisations this tendency is formalised having to make partial revisions of per-
formance (usually trimesters or semesters), where a test is given related with the marked
objectives at the beginning of the period. In many organisations these partial revisions are
optional. In any case, they are highly recommended, especially when dealing with the su-
pervision of employees with little experience, remote supervision (when there is little direct
contact between the employee and supervisor, for example, they work in different locations,
at the client’s location, etc.), or employees with low performance or identified problems pro-
ducing results.

For these interval revisions to be effec-

“For these interval revisions to be
tive, it is beneficial to prepare the in- effective, it is beneficial to prepare the
terview beforehand for both the person interview beforehand for both the person
being evaluated and for the supervisor. being evaluated and for the supervisor”
It should contain questions to encour-
age participation, discover needs and
motivations as well as reward involvement. They should be questions like: How is the prog-
ress coming along for achieving each objective? What is going well, and why? Should ad-
justments be made to performance or objectives? What are those adjustments? etc. Open
questions should be used, and closed questions (yes or no answers) should only be used
to verify and check.

During this follow-up phase, the evaluator will analyse what objectives have been achieved and in the case
that there are variances, inspection measures will be suggested for achieving the planned objectives.

Some of the actions carried out are:

• Give Feedback: related both to performance as well as achieving objectives. One of the de-
sired characteristics of feedback is the need for it to be immediate or not long after observing
behaviour, whether to change poor performance, or to positively reinforce good performance.

• Training in the position: whether through coaching, mentoring, job shadowing or whatever
other means for skill development.

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Coaching. The process by which a professional (coach) helps to evaluate what they are
doing in line with personal objectives and agree on plans of action based on needs and
possibilities. This process is more personalised and confidential.
Mentoring. A process, where a member of the company with better professional perfor-
mance and/or more experience (a mentor) teaches, advises, guides, and helps others.
Job shadowing. This is a period of professional observation and a learning technique by
observation that involves passing a brief period of time with an
expert in the position to observe and follow them during
their daily work.

Once the appraisal time period has elapsed the perfor-

mance appraisal is carried out as such (a review). The
method most used for carrying out the evaluation is
an appraisal interview that has been previously sum-
marised and formalised based on reports.

»» Appraisal interviews: the interview should be

prepared carefully if it is to be effective. It is rec-
ommended to not be exclusively based on the
report (which is used as a guide) but rather on the
interaction between evaluator and the person eval-
uated, so it is important for the evaluator to develop
effective interviewing abilities. A good practice related
with appraisal interviews consists in providing the employ-
ee, some days before the interview, with a form with the factors
that help to write a self-assessment.

»» The form: its use in appraisal interviews is two-fold because it allows the conversation to be guided
towards the discussion points and to collect a summary of what was talked about in the interview.

2.3 Post-Planning

This phase closes the performance management cycle and aims to plan the following period from
both work content and personal development.

• Planning of work objectives: in other words referring to work content. It deals with revis-
ing the new objectives of the unit and making an analysis of overall rather than individual
performance. The strategic business objectives and professional positions and profiles are
redefined and individual objectives are set for the following appraisal period.

• Planning of professional development: drawing from the areas for improvement identified
in the performance appraisal, two or three are selected and prioritised for development.
Other areas of development can also be included that do not come from appraisal, but rath-
er new work needs or simply the interest in facing new challenges of a professional career.

Once the areas to be improved are identified, both the individual development goals and the
specific development actions to achieve them are established and scheduled on a timeline.

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3 Performance Appraisal Abilities

Considering the phases for the performance appraisal system, the valued abilities (considered
practices) that guarantee an effective process are:

»» Abilities to identify critical incidents.

»» Abilities for carrying out appraisal interviews.

»» Abilities to give and receive feedback.

»» Abilities necessary for carrying out a coaching process.

»» Abilities for planning: for improvement in cases of low performance and for planning objec-
tives for the following period, for professional development, and for training activities.

»» Abilities for self-assessment and knowledge of implied biases within an appraisal.

3.1 Indentify Critical Incidents

To give judgements about work performance, in addition to collecting data about results, it is nec-
essary to use a method for observing and identifying the behaviour of the person being evaluated.
So, behavioural analysis requires observing actions, or lack of action, keeping the context or situa-
tion in mind where the action/inaction took place, and evaluating the result of the action.

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The critical incidents used for making judgements can be obtained in various ways: through direct
observation, written material, reports done by a third person, reports done by the person evaluated,
etc. It is important to obtain examples of behaviour that are comprehensive and exact, meaning a
person’s actions within a situation or specific task and with an observable result. With this in mind,
one important concept that facilitates the process of describing and identifying behaviours goes by
the acronym STAR: Situation, Task, Action, and Result.

• Situation. These are the circumstances in which the task or tasks should be completed
for obtaining results. It can include people, resources, technology, etc. What happened?
Where? How? When? With whom?

• Task. All that has to be done to obtain results. What was your role? What was supposed to
be done? For what reason? What were you supposed to do?

• Action. The behaviour of the individual, how the task is carried out, including why it was
done or not done, what was said or not said. What did you do? How? What happened? Why?

• Result. The consequences of the actions for carrying out the task. What was the effect?
What indicators did you see? How did you know? What happened after?

3.2 Complete Formal Appraisal Interviews

Formal appraisal interviews refer to the interviews that take place at the end of the process to orga-
nise all of the data that has been collected. It is usually the moment when the results from the ap-
praisal are commented on and through which the evaluated person is offered some specific tips for
improvements in their performance. Its formal nature differentiates it from other types of interviews
or exchanges of information that take place throughout the performance appraisal process; it also
requires time and prior planning.

It has a fundamental objective to transmit to the employee the key aspects of their performance
which are related to the previously established expectations. Other specific objectives of the perfor-
mance appraisal interviews are to agree on conclusions that let the employee assess their perfor-
mance compared with patterns, rules or expected behaviours, and define steps for improvement.

The performance appraisal interviews are usually carried out between managers and subordinates, for
around 45- 60 minutes, and it is essential that both boss and employee make preparations beforehand.

Things to keep in mind for preparing the interview:

»» Physical preparation: ensure an agreeable climate for communication during the interview:
avoid noises that can interfere or cause distractions, make adjustments for a comfortable
temperature and ensure adequate ventilation as well as good lighting, good hygiene and a
clean location, comfortable seating, and appropriate privacy.

»» Preparation of the person evaluated: the employee should always know that they are being
evaluated and preparation is not only necessary for the evaluator but also for the person
being evaluated. This preparation is essential for their involvement in the interview.

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The employee should be informed of the time, date, and place of the meeting as well as
urged to review their performance compared with the previously set objectives. For that,
they can be given a draft or preliminary appraisal, or asked to complete a self-assessment.
Disadvantages of a performance interview are the reluctant or defensive attitudes of the em-
ployee, thus informative sessions can be organised (usually in groups but can also be individ-
ual) explaining the importance of the appraisal process as a tool for improving performance.

»» Performance within the position: for this purpose, the maximum amount of information or
data will be obtained relating to the previously set objectives for the employee, in particular
during the appraisal period. Sufficient information should be prepared to respond to questions
like: Have the marked objectives been achieved? To what degree? If not, were the reasons out
of your control? What specific behaviours made it difficult or helped to achieve the objectives?

It is essential to not only collect data but also support grades with specific examples of be-
haviour and performance so the employee can understand the judgement process and help
to determine the steps that should be taken to maintain or improve performance.

»» The structure of the con- “It is important to establish rapport, or rather create
versation: in other words
a trusting atmosphere and mutual cooperation, for
keeping track of how the
which it is advisable to pay attention to non-verbal
time will be divided up in
the interview according to
communication, and maintain eye contact without
the topic to be covered. being aggressive or intrusive.”
The customary structure
corresponds to three phases: opening, development, and close.

At first, the opening deals with creating a trusting atmosphere based on the explicit knowl-
edge of the appraisal process being carried out, putting emphasis on the need for it to be
a collective exercise. So, once the appropriate climate has been established, talking about
a neutral subject and stating explicitly that the objective of the appraisal is for performance
improvement, the evaluator will then explain the principle sections to be discussed (the
agenda). Afterwards, the employee is asked their opinion about their general performance.
In this first phase it is important to establish a rapport, or rather create a trusting atmosphere
and mutual cooperation, for which it is advisable to pay attention to non-verbal communica-
tion, and maintain eye contact without being aggressive or intrusive.

The development section starts with questions that analyse the obtained results according to
individual objectives (within each key responsibility area). The questions should be prepared
previously and follow along the lines of: how was it achieved, can the improvement be main-
tained, what was the cost, what plans can be put into place to achieve it, how can team work
be improved, what corrective actions would make sense, etc. After analysing the individual
objectives, the performance factors will be covered that were collected and organised during
the appraisal period, highlighted from a quantitative, qualitative, and sometimes comparative
level. The last part of development within the interview will be dedicated to planning the follow-
ing appraisal period and the individual development plan together with the employee.

Some considerations to keep in mind for the development part of appraisal interviews:

• It is advisable to start by recognising the factors that have been fulfilled or where ex-
pectations have been exceeded because it creates a positive climate to later be able
to speak about possible problems with performance and their probable causes.

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• When finalising each objective or performance factor evaluated, it is advisable to sum-

marise everything said up until then, which confirms the consensus about how to pass
to another factor or objective.

• When analysing factors, the time dedicated to each positive/negative factor should
be planned according to the desired emotional state of the person being evaluated.
For example, if the time to be dedicated to each of the factors is not planned within
the development phase, too much time may be dedicated to one or two negative as-
pects of a generally positive performance, this could
lead the employee to a negative emotional/mental
vision or state, which was not the intention of
the evaluator.

• Negative criticisms should be communi-

cated and well managed, having been
planned in relation with the interview so
they appear harmful. To achieve this it is
important to ensure that:
Negative aspects do not monopolise
the entire length of time.
The concentration of time during conver-
sations should mainly be reinforcement,
highlighting positive behaviour.
Plan the conversation so that factors to be covered
start and finish with positive observations.

In the last phase of the interview, the close, an overall summary will be completed, and the person
evaluated will be asked to offer suggestions that can be carried out for improving performance
and of the appraisal process. Finally, the employee should be thanked for their collaboration.

Both during the development and the close, one of the basic abilities that the evaluator
should demonstrate is for the person evaluated to generate their own conclusions about dif-
ferent behaviour for the future based on their own conviction and not only based on external
advice. Simply put, the evaluator helps the employee to create their own conclusions about
improvements. The first step is to look for suggestions, asking the employee how it can be
done better: the causes and solutions are discussed and an agreement is made about their
actions and follow-up dates. If the employee thinks of suggestions, the evaluator will use
those to finalise the idea or to develop more related with it. Also, if the evaluator sees that
nothing occurs to the employee, he can actively make suggestions.

Communication abilities that should be present in the previous stages are:

• Reformulation or Checks for understanding: repeat what is said by the speaker using dif-
ferent words, this helps to confirm the central idea of their reasoning or ask questions to
determine if the interpretation of what has been said is correct. Verification questions should
start with: “Is it true that...?”, “Are you saying...?”, “Do you mean to say...?”, “I don’t know if
I’m understanding you correctly...?” An example: “Do you mean to say that we would need
to hire more staff?” In addition to confirmation, this type of question should show the speaker
they are being listening to, increase confidence and openness, and encourage dialogue.

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• Abilities for reorienting the interview: this deals with proposing how the interaction should
be carried out and reorienting it in case it takes the wrong direction. For example, “Can we
discuss this subject a little later, when we have seen more information?”, “Let’s start talking
about...and after you can share your opinion on the matter”.

• Recognition: this is an ability that helps to gain the understanding, agreement, and com-
mitment of the employee. It deals with the responses that indicate for the speaker that they
are being listened to and that we understand what they are telling us or what they have
done. So, these responses can recognise a situation, person, or concerns. For example,
recognising situations shows the speaker an understanding of their situation, showing that
it is recognised and that it is a serious problem, at times this is all that is needed to help
someone confront a problem. i.e. “I know you have spent a lot of extra time on this””It isn’t
easy supervising employees that are so inexperienced”. Other forms of recognition are less
subtle and recognise specific efforts or contributions directly, meaning personal recognition:
i.e. “good observation”, lastly, recognising concerns serves to encourage dialogue because
ignoring fears or expectations creates anger and resentment from the speaker. i.e. “I agree
that all of these checks can be very overwhelming”, “if that is what is happening, it doesn’t
surprise me that you are unhappy with it.”

Similarly, one word or head movement is enough to show interest in the conversation and
show that they should continue. Expressions like “ahh...yes” are called minimal responses
and should be used frequently, mainly with people that show little expression.

3.3 Give and Receive Feedback

Feedback (to be given and received) can be understood as a communication technique and as a
counselling technique.

As a communication technique it is defined as the information that the issuer gathers about com-
munication regarding the effects it has on the person that receives it. This information gathered
allows the issuer to know if the message was correctly received and what repercussions it had on
the employee that received it, so they can modify the next messages that they give.

As a counselling technique and within the context of performance appraisal, feedback is defined
as the group of observations and opinions that the evaluator makes about the performance of an
employee in a certain situation. Well transmitted feedback should help an employee to realise how
they have done their work regarding a specific skill or situation and should encourage them to de-
sire to do it better the next time.

Some of the rules to ensure that the evaluator receives feedback during the process of performance
appraisal are:

• Request feedback, or rather ask the opinion of the speaker directly.

• Be specific about what type of skills or behaviours are desired in the feedback.

• Verify that the feedback received is understood, for the objective of both clarifying it (al-
though without the intention to justify behaviour) and paying attention.

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• Express gratitude for the feedback given.

• Do not defend yourself or rationalise behaviour, or argue with the person that provides the
feedback. Although this is a human tendency, this type of behaviour compromises future
feedback and creates resentment.

To give feedback, it is important to first distinguish that it can be positive or negative but in any
case, giving feedback in the practice of performance appraisal is a method for analysing perfor-
mance, which is always preferable (even if negative) to the absence of feedback. Feedback should
be offered based on the previously established objectives and being oriented toward the future.
Some of the issues to keep in mind for offering corrective feedback are:

• Focusing on behaviour and not on the qualities that a person cannot or are very unlikely able
to change which only creates growing frustration, i.e. not “You have to be more creative...”
but rather “you have to participate more in group meetings...”

• Direct and specific, describing behaviour based on observed examples in a given situation.
Avoid generalisations or accusations related to the person. Also, mention the consequences
for the employee and for others.

• Balanced, ensuring that negative aspects are not overemphasised. The objective is to avoid
defensive attitudes that make it difficult to learn from negative feedback. To counteract the
negative effects of criticisms, the sandwich technique can be used (positive comment, neg-
ative comment, positive comment) because,
for any person it is easier to pay attention and
understand one negative comment when there
are two positives with it. However, it is import-
ant that for this technique to be effective, one
must be clear and direct with the negative crit-
icism, making sure it is not lost between the
two positive comments.

• Mentioning some examples of alternative be-

haviour because the employee does not always
know what to do to avoid negative criticism.
For example, “why don’t you try...?” “Have you
thought of...?” Give Feedback with
Situation-Behavior-Impact (SBI)
In any case, negative feedback can elicit various re- Source: Annie E. Casey Foundation
actions and it is important to know how to neutralise
them. Some examples are:

»» Denial: it appears when the employee rejects what the evaluator says. When faced with this sit-
uation it is necessary to mention facts, figures, specific examples, etc. Listen and if necessary
repeat feedback, as the objective is for the employee to comprehend the negative criticism.

»» Disagreement: when the facts are recognised but there is disagreement over the impor-
tance of them. Action in this case passes as reformulating the arguments of the employee,
using their feedback to show them a different aspect of the situation at the same time.

»» Confusion: this appears after giving negative feedback when the employee experiences a
difficult emotional state feeling anxiety, impatience, etc. The action in this case passes as

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highlighting what is perceived as “I have the feeling it is difficult to hear what I just said”,
allowing the employee to express how they feel. Suggest alternative behaviours or positive
thoughts that encourage the aspect of improvement over the aspect of appraisal.

»» Opposition or disappointment: the employee is disappointed because they believed they

were doing well. When the employee is disappointed the evaluator should show their under-
standing, recognise their part of eventual responsibility and request that the employee look
at the feedback as an opportunity for growth and improvement.

»» Surprise: this is the “slap in the face” feeling. When confronting this situation, the evaluator
should highlight what is perceived as “I have the feeling that what I just told you is surprising
for you” and encourage the employee to explain their way of seeing things, finding a time to
incorporate feedback.

3.4 Coaching

This refers to the function of counselling, guidance, tutoring, or advice for the purpose of helping to
achieve the previously marked objectives that are carried out during the appraisal period.

Two types of coaching are usually defined: support coaching (for developing positive behaviour)
and corrective coaching (for improving negative behaviour). Usually, the coaching tasks that are
carried out in performance appraisal processes are of the first type, because the objective of
coaching is to develop individual’s skills so that they can contribute effectively to achieving the
desired results and reaching their maximum potential.

Coaching, for the most part, is necessary when

“Coaching offered in performance monitoring performance abilities that are recently
appraisal opts for two basic methods: learned or for new employees at a company. On
a practical level, coaching offered in performance
direct training or supportive training.”
appraisal opts for two basic methods: direct train-
ing or supportive training.

In direct training, the evaluator (boss or superior) shows or indicates to the employee what they
should do. It is usually used with people that are not familiar with the process and need immediate
results. In supportive training (the most common for employees that are familiar with the process
and the company) the evaluator appears as a tutor and the learning techniques are less directive,
basically only feedback, because it allows the employee to find their own solutions to problems or
doubts. The coaching process (in both cases) can be structured into the following steps:

1. Establish the objectives and the importance of what is intended to be instructed

2. Explain the process or subject matter to be guided on (what to do)
3. Demonstrate how to do it
4. Observe while the person practices
5. Give immediate and specific feedback (train again or encourage success)
6. Show trust in the capabilities of the person to be successful

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The techniques that are generally used are:

• Instructions: transmit information clearly and concisely during the entire process, although es-
pecially at the beginning. So that the instructions are effective, give specific information, using
short sentences, using examples if necessary, and lastly give reasons that justify the importance.

• Modelling or vicarious learning: this can be defined as learning by observation. Modelling

is most effective when the situation shows the behaviours to be imitated clearly and precise-
ly, gradually, from lesser to greater difficulty and complexity, with sufficient repetition that
encourages over-learning, and avoid unnecessary details when possible. The employee has
to clearly know that they should imitate the model.

• Behavioural testing or supervised practice: during which it is essential to give positive feed-
back (encouragement) and training in badly executed behaviours (re-training), while sug-
gesting alternative methods.

3.5 Planning for Improvement of Poor Performance

An employee is considered to have poor performance when they do not achieve the expected ob-
jectives, they do not finish their given tasks, or they finish after the deadline. Making mistakes and
not recognising them or taking responsibility for them is also considered to be poor performance.

First of all it is necessary to determine the possible reasons causing poor performance, for example
check if the person has reached the limit of their capabilities, if they do not realise their performance
is poor, if the objectives are too high for them or even if there are additional personal problems:
family problems, personality or health problems, etc. Generally we can say that when noticing poor
performance not only should the symptoms be addressed (what is normally done) but the sources
should also be taken care of.

For planning in situations of poor performance, the first step is to clarify what is expected of the
person, in what way are they performing their position in comparison to the expectations, identify
specifically in what areas they are failing and why. Next, agreements should be made about what
is needed to be done, what help is necessary and a deadline should be established. It is essential
to draw up written agreements in an “individual performance improvement plan”, give the agreed
upon support (courses, resources, coaching, etc.), and monitor performance after implementing
the corresponding decisions.

On occasions work performance can be acceptable but the attitude of the employee is not aligned
with a good work climate. These are difficult employees: people that are against almost everything,
they do not cooperate, they do the minimum work required, they blame others for their mistakes, etc.
The reasons for these behaviours can lie within personality problems, problems outside of work, they
dislike the position they are in, they can have conflicting values with the organisation, etc. The inter-
vention will depend on the reasons that are causing the situation. Generally, dealing with these types
of people requires abilities that engage in effective social relationships, called social intelligence.

Abilities of social intelligence make it possible to sense what people feel in each moment, what
they need, how they act, and what they expect. For the evaluator, social intelligence optimises the
interaction to the max with the employee, taking the best from him, resulting in the minimal level of
refusal and getting the best results from them.

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Some tools for social intelligence are:

• Emotional self-awareness: recognition of one’s own emotions and feelings. Control of one’s
own emotions (self-control) for which an emotional self-appraisal is necessary (understand-
ing personal strong points and limitations). A fundamental aspect of this is perceiving and
knowing how to express emotions and control responses.

• Social awareness and social abilities, among the most important is empathy as the capabil-
ity to understand the employee and actively show interest for their concerns.

Thus, some basic considerations for dealing with difficult employees are:

»» Accept that what is difficult is the behaviour and not the person.

»» Consider in which situations these behaviours are shown, for how long, what provokes them,
and what happens after.

»» Recognise how we react when that behaviour happens (irritation, annoyance, fury, etc.) and
in any case, make an effort to show behaviour that indicates that the situation is under con-
trol. In this case assertive communication is useful: to be able to tell the person how they are
acting, how they are affecting others and themselves, tell them how the situation is affecting
us and what we want the person to do and not do in the future. One must centre on what is
happening currently, without stirring up past events because when this happens it interferes
in the current communication process with feelings that can be negative for both.

»» Consider the options with this type of employee: do not do anything, learn to live with the
situation, look for a compromise, use position of power, ask for help, etc.

Some situations that require social intelligence abilities are:

»» The employee consistently arrives late without justification: after noting the events, the situ-
ation should be addressed in private to explain what was ob-
served (the situation), explain what is desired (arriving on
time according to the schedule) and why (positive
consequences of the change and reminder of the
negative consequences). Propose help if neces-
sary and inform them how and when the situa-
tion will be monitored.

»» The employee that opposes the performance

appraisal (explicitly or implicitly). Firstly, it is
important to figure out what the specific dis-
agreement is and why, also figure out how the
employee thinks it should be. During the ap-
praisal remember to comment only on specif-
ic performance facts and during the interaction
look for situations of compromise for both people
that can offer an advantage for both and improve in-
volvement and acknowledgement of the process. If the
employee continues to oppose the appraisal process it would
be useful to offer a second opinion.

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»» Difficult or non-ethical situations, dealing with alcohol, drugs, harassment, etc. To tackle
these problems, the employee should always be observed during a period of time, try to
understand the causes, clarify with the person in private that the problem is identified, look
for guidance solutions together, outside help, etc. Always establish follow-up methods. In
these circumstances the SNAP technique is suggested:

Specify: specify the situation.

Name: name the reaction, feelings that resulted from the situation or behaviours.
Ask: ask or request information about the issue.
Payoff: or anticipated result, which can be positive (resolving a problem) or negative
(consequences of not resolving it).

In light of this type of situation, one of the most common considerations is whether it is appro-
priate or not to use confrontation procedures in a formal or informal area. In its assessment, it
is important to keep in mind that the informal processes are quicker, easier to access, more
flexible and applicable to all kinds of problems, the official records are not recorded and
the whole process is carried out confidentially. However, using official procedures in the first
stage can further aggravate the situation transforming an approachable problem in the work
dynamic into a situation that requires unique actions.

3.6 Planning Objectives for the Following Period

Consider performance appraisal as a cycle, once the appraisal interview is finished regarding per-
formance for the previously fixed period, the objectives of the following period should be planned
jointly with the employee. Although on occasion this part of the process takes place following the
appraisal interview, it is usually done at the end of the interview. The possibility for it to be complet-
ed as a continuation of performance appraisal is considered the more desirable option because in
this way it makes sense as a tool for improvement.

Planning objectives for the following appraisal period will start a new cycle of appraisal to be
agreed upon together with the employee, and the individual objectives are made clear. It is consid-
ered planning the work content.

For this planning of individual objectives or work content, the strategic objectives of the company
and unit or team that the employee pertains to will be kept in mind, as well as the job description
with the areas for key results. This information, together with the analysis completed during the ap-
praisal period concluded allows for the individual objectives and their measures to be set, which
will form the basis for the following appraisal.

The interview is essential for planning objectives because an agreement can be made between the
supervisor and employee within that time. If the objectives are imposed, the psychological contract4
of the employee with the company will not be very strong and their motivation and effort for achiev-

4 The psychological contract refers to the group of agreements that the employee expects of the company and
that are not written explicitly in the work contract.

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ing good results will be much lower. Also, the control and follow-up activities of the supervisors
require greater dedication when objectives have not been agreed upon.

When planning the results, it is also helpful that the employee knows the outcomes for compensa-
tion or of any other nature that he will have when the set objectives are achieved. Once the interview
is finalised, a final statement should be made, preferably written, stating what objectives were set-
tled on as well as establishing the dates for monitoring and the methods to be used for it.

Planning results tends to be fixed for a period of twelve months, however it will be only for those ac-
tivities that are not found linked to projects because, in this case, revising objectives and planning
will be done regarding the shorter or longer deadlines made. Following a generic timeline for the
development of appraisal of results by objectives:

»» Before the appraisal of objectives planning:

• The objectives are defined according to strategic planning and budgets.

»» During the performance appraisal interview the objectives that can be achieved are analysed,
the individual objectives are defined and the development actions are jointly agreed upon.

»» From the following month to the annual performance revision (cycle of performance apprais-
al) the periodic monitoring of objectives should be carried out.

• Review the progress of objectives

• Modify, when necessary, the initially expected actions

• Modify, increasing or decreasing the initial objectives if, as a consequence of the prior
objectives, it is necessary

»» Performance appraisal

• Leader and employee analyse and reflect on, previously and separately, the results achieved.

• Interview leader-employee to understand the annual appraisal, the percentages of in-

centives according to the results achieved and planning new individual objectives.

Model for setting objectives for an appraisal period

Proposed by:.........
Acceptance date
Accepted by.........

Proposed objectives Completion date Consequences/results

1. Reduce the delivery time by 50% off all of the orders.

2. Establish a reliable verification system that eliminates

client returns.

3. Reduce the accident rate at work 20% above the

average of the year before.

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3.7 Planning for Professional Development

Planning for professional development appears as a parallel to planning objectives, with the basic
objective to provide the people being evaluated with the essential skills necessary for achieving the
objectives of the following period.

For planning for professional development there are four principle sources of information:

»» Areas for improvement identified in the appraisal. Those areas where the objectives have
not been fulfilled or factors for performance where the level was below what was expected.
In this case, these factors should be analysed to determine if the problems in performance
are due to a lack of knowledge or abilities. In the case of an affirmative response, and pro-
vided that they continue making sense for the individual objectives of the following appraisal
period, three or four areas for critical improvement are emphasised.

»» Planning objectives for the following period. In addition to the identified areas according
to performance appraisal, the individual objectives that have been planned for the following
period can contain new areas where the employee lacks experience or knowledge. In this
case, planning professional development is aimed at the preparation of that knowledge and
adequate abilities to be successful in the achievement of those objectives.

»» Revising the development plan from the previous period. This deals with revising the level
of achievement of what was planned regarding the individual development training of the
previous period: what development courses or actions were completed and which were not,
why, what were the results. This revision gives rise to placing emphasis on other areas for
development or change if they have already surpassed the expected advance.

»» Evaluation of potential. Or rather the planning of a long-term professional career. It is related

with the essential qualifications that are required in a company to either cover vacant positions
or fill newly created ones. So, it deals with strategic planning that, although will not be used
immediately in the following appraisal period (what is identified as operative planning) will be
necessary facing future needs. For example, a technician that should be preparing himself to
be a supervisor, a new employee with higher training that is identified with talent, etc.

From a practical level, some considerations to keep in mind for the planning of professional devel-
opment are:

• Development plans, to be efficient, should be centred on few areas, no more than three.

• To obtain the two or three areas for improvement it is necessary to synthesise the information
received based on the four sources identified previously. The current tendency is to focus
on strengths, which is called professional development, in contrast to the more conventional
focus of supplying the training inadequacies, which are called training plans.

• The areas of development should be defined by objectives for professional development.

On occasion those objectives are related to exceeding level tests or certifications, such as
languages or technical knowledge but in other abilities such as leadership or communica-
tion, the developmental objectives are tied to performance appraisals.

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• Depending on the objectives of the professional development plan the strategies will be
planned (the how) that allow them to be achieved. Normally it deals with training actions,
understood as the attendance to structured courses, individual or group, with an instructor
or facilitator, educative material, etc. whether it be in person or e-learning, although currently
there are many more resources.

Among them: job shadowing (period of professional observation), mentoring (assigning a

mentor with experience), coaching (support of an outside expert), etc. Just like in all plan-
ning it is necessary to set some deadline limits for each action of the proposed development.
Similarly, it is useful to program intermediate revisions before arriving at the end of the peri-
od, where possible deviations or adjustments to the process can be made.

• In the planning of professional development strategies it is useful that they carry with them
some type of commitment to other people. This fact makes the creation of those plans easier
because experience shows that, although professional development is considered to be an
important subject, it is not considered an urgent issue, which is usually postponed when
faced with day-to-day emergencies. For that, it is beneficial to make agreements or be in
accordance with other people, which increase the level of personal involvement.

3.8 Meta-evaluation and Self-assessment

Meta-evaluation. If performance appraisal is oriented towards the improvement and efficiency of

human resources it is important that the process of appraisal is evaluated as well, asking ourselves
how it can be enhanced. The evaluation of the appraisal process itself is called the “meta-evaluation”.

In general, it can be said that meta-evaluation is linked to a critical perspective from which no eval-
uation can be considered definitive. It should be thought of that meta-evaluation contributes to it
being possible to ensure quality for the users of evaluation, the employees, while at the same time
identifying the biases in the appraisal process. These biases or mistakes can affect the way in which
the information is interpreted, for the selection of the methodology, the analysis of the results, etc.

From the theoretical approaches there are four basic conditions for positively assessing the evalu-
ation processes: utility, viability, propriety, and precision.

• The utility approach assesses if the process has satisfied the practical need for information
for strategic planning and operation of the business.

• The viability approach refers to evaluation being realistic, cautious, and economic. Meaning, they
are worried about whether the planned evaluation process can be carried out in the real context
in which it should be applied, consuming only the material and temporary resources necessary.

• The propriety approach is related to ethical standards and tries to assure that the evaluation
processes have been completed legally and ethically, for example with sufficient preparation
from the people involved in such a way that they protect the rights of the workers evaluated
about confidentiality, work rights, etc.

• The precision approach insists on assuring that the information produced from the evalua-
tion is adequate and the conclusions are adjusted to the information.

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Self-assessment is considered a key ability within the performance appraisal process because it
refers to the evaluation that the evaluator makes about their own work activity within the appraisal
process for the purpose of detecting the strong and weak points. In this way we have a realistic and
adjusted vision to the quality as well as limitations.

It is important that this self-assessment is completed objectively and unbiased and that it places
emphasis on efficiency of work completed as evaluators and not on personal work performance as
a professional.

In this way, the boss/evaluator should carry out the self-assessment sincerely, realistically, and with
strong capabilities for self-analysis. It is important to analyse the roles and functions performed in
each of the phases of the process: register, follow-up interviews, coaching, tutoring, planning of
objectives, etc. For that, some of the evaluation questions that can be proposed for the self-assess-
ment are:

Did the performance appraisal process begin with a balance between evaluator and person
evaluated (knowledge of the process, objectives, and factors of the person evaluated)?

What is our attitude towards the person evaluated?

What has been our behaviour and style with the workers evaluated?

What climate have we been able to maintain: collaborative, aggressive, fearful, passive, reluc-
tant, etc.?

Has the person evaluated been able to intervene in all phases of the process?

What aspects can we consider as positives that have facilitated the evaluation process?

What aspects have been obstacles in the process and have prevented its optimisation?

3.9 Biases or Distortions of the Evaluator

The biases or distortions of the evaluator are judgement errors that frequently occur when an indi-
vidual observes and evaluates another. A difficulty added when correcting these errors is that, gen-
erally, the observers are oblivious to it. Although becoming aware of these errors does not eliminate
them completely, it does minimise them.

The most frequent biases are:

»» Halo effect: this is the tendency to generalise the appraisal of a person based on one factor
or dimension for all aspects of achievement of that person. The halo is accentuated when
evaluations of various factors tend to correlate highly among each other.

To reduce this distortion, equal attention and/or time should be paid to the factors to be
evaluated.

»» Central tendency: this is the tendency to evaluate in the middle of the scale, when perfor-
mance is clearly higher or lower.

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Sometimes the use of all of the points of the scale is forced with specific evaluation systems
like forced distribution.

»» Positive or negative leniency: this is the tendency to concentrate the evaluations on the
higher or lower part of the scale. There are evaluators that tend to be too tough or demand-
ing and others who are too soft or mild. In both cases, the practical consequences are:
demotivation and diminished productivity. This tendency is manifested when there are sig-
nificant differences between the average evaluations from different evaluators.
There are two ways to reduce these distortions: revision by the boss of the evaluator and
the agreement meetings between the evaluators of people that do the same or similar work.

»» Contrast: this is the tendency to evaluate a person in com-

parison with another person or group, instead of be-
ing based on the set expectations for that person.
In performance appraisal there are systems that
contemplate these types of comparisons and
because of that it would not be a bias (i.e. rank-
ing or relative rating).

»» First impression: this is a variant of the halo ef-

fect. It consists in making an initial judgement
of a person, favourable or unfavourable, and
then ignoring or distorting information in a way
that confirms that first impression.

»» Similarity: this is the tendency to make more favour-

able judgements for those people that the evaluator
perceives as more similar because, generally, we tend to
like people more when they are similar to us and consider them
as better. The mistake of contagious bias is related, where it is based on generalised biases
of motives like religion, politics, culture, regions, etc.

»» Recency or latency: this consists in focusing more on the more recent facts that the evalua-
tor remembers best, ignoring or paying less attention to the facts that occurred at the begin-
ning or in the middle of the appraisal period. Or on the other hand, fixating on the facts that
occurred at the beginning of the period where the evaluator created an objective to focus
more on the behaviour of the collaborator with this effort losing intensity later on throughout
the rest of the period.

»» Memory effect: This tendency is to maintain the first opinion in the successive evaluations
Without contemplating or analysing the information sufficiently as it tends to consider certain
inflexibility in the way individuals are or act.

»» Indulgence: also known as inflation, this is the tendency of evaluators to give higher marks to
employees than what they generally deserve, usually due to this desire of avoiding conflict.

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4 Bibliographical References

»» Alles, M. (2002) Desempeño por competencias. Evaluación de 360º

»» Ayala Villegas, S. (2004). Proceso de evaluación del recurso humano.

»» Fernandez de Tejada Muñoz, V. (2010). Dirección de recursos humanos.

»» Martinez Nuñez, T. (2006). Competencias laborales y evaluación del desempeño.

»» Moldes Farelo, R. (2012). De la gestión de recursos humanos a la dirección de personas.

»» Porret Gelabert, M. (2006). Gestión de personas. Manual para la gestión del capital humano en
las organizaciones.

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