Performance
Management and
Appraisal
PM is NOT performance appraisal
Performance Performance appraisal
Management Assesses employee
Strategic business Strengths &
considerations Weaknesses
Ongoing feedback So Once a year
employee can improve Lacks ongoing
performance feedback
Driven by line Driven by HR
manager
.
Herman Aguinis, University of Colorado at Denver
Contributions of PM
Systems
For Managers
For Organization
For Employees
Supervisors’ views of
performance are
Organizational goals are
The definitions of job and communicated more clearly
made clear
success are clarified Managers gain insight about Organizational change
Motivation to perform is subordinates
is
increased There is better and more facilitated
Self-esteem is increased timely differentiation
between good and poor Administrative actions are
Self-insight and development more fair and
and enhanced performers
appropriate
Employees become more
There is better protection
competent
from lawsuits
Increased turnover
Lowered self-esteem
Decreased motivation Wasted time and
Employee burnout and money
to perform
job dissatisfaction
Unjustified demands Unclear ratings system
Damaged relationships
on managers’ Emerging biases
Use of false or resources Increased risk of
misleading
Varying and unfair litigation
information
standards and ratings
Components of Performance Management Systems
Performance Planning.
Performance Appraisal and Reviewing
Feedback on the Performance followed by personal
counseling and performance facilitation
Rewarding good performance
Performance Improvement Plans
.
9–2
Comparing Performance
Appraisal and Performance
•Management
Performance appraisal
• Evaluating an employee’s current and/or past
performance relative to his or her performance
standards.
• Performance management
• The process employers use to make sure
employees are working toward organizational
goals.
9–3
An Introduction to
Appraising Performance
• Why appraise performance?
• Appraisals play an integral role in the employer’s
performance management process.
• Appraisals help in planning for correcting
deficiencies and reinforce things done correctly.
• Appraisals, in identifying employee strengths and
weaknesses, are useful for career planning
• Appraisals affect the employer’s salary raise decisions.
9–4
Continuous improvement
• A management philosophy that requires
employers to continuously set and relentlessly
meet ever-higher quality, cost, delivery, and
availability goals.
• Requiring each employee to continuously improve his or
her own personal performance, from one appraisal
period to the next.
9–6
Defining Goals and Work
•Efforts
Guidelines for effective goals
• Assign specific goals
• Assign measurable goals
• Assign challenging but doable goals
• Encourage participation
• SMART goals are:
• Specific, and clearly state the desired
results.
• Measurable in answering “how much.”
• Attainable, and not too tough or too
easy.
• Relevant to what’s to be achieved.
• Timely in reflecting deadlines and
milestones.
9–7
Performance Appraisal
Roles
• Supervisors
• Usually do the actual appraising.
• Must be familiar with basic appraisal techniques.
• Must understand and avoid problems that can cripple
appraisals.
• Must know how to conduct appraisals fairly.
9–8
Performance Appraisal
Roles (cont’d)
• HR department
• Serves a policy-making and advisory role.
• Provides advice and assistance regarding the appraisal tool
to use.
• Prepares forms and procedures and insists that all
departments use them.
• Responsible for training supervisors to improve their
appraisal skills.
• Responsible for monitoring the system to ensure that
appraisal formats and criteria comply with EEO laws
and are up to date.
9–9
Steps in Appraising
Performance
1. Defining the job= Making sure that you and your
subordinate agree on his or her duties and job standards.
2. Appraising performance = Comparing your
subordinate’s actual performance to the standards that
have been set; this usually involves some type of rating
form.
3. Providing feedback = Discussing the subordinate’s
performance and progress, and making plans for any
development required.
9–10
Designing the
•Appraisal Tool
What to measure?
• Work output (quality and
quantity)
• Personal competencies
• Goal (objective) achievement
9–11
How to
measure?
• Graphic rating scales
• Alternation ranking method
• Paired comparison method
• Forced distribution method
• Critical Incident method
• Narrative forms
• Behaviorally Anchored rating
scales
• MBO
9–27
Advantages and Disadvantages of Appraisal
Tools
Table 9–3
9–19
9–23
Potential Rating Scale
Appraisal Problems
1. Unclear standards = An appraisal that is too open
to interpretation.
2. Halo effect = Occurs when a supervisor’s rating of a
subordinate on one trait biases the rating of that
person on other traits.
3. Central tendency = A tendency to rate all
employees the same way, such as rating them all
average.
4. Strictness/leniency = The problem that occurs when a
supervisor has a tendency to rate all subordinates
either high or low.
5. Bias = The tendency to allow individual differences
such as age, race, and sex to affect the appraisal
ratings employees receive.
9–25
How to Avoid Appraisal
•Problems
Learn and understand the potential problems,
and the solutions for each.
• Use the right appraisal tool. Each tool has its
own pros and cons.
• Train supervisors to reduce rating errors such
as halo, leniency, and central tendency.
• Have raters compile positive and negative
critical incidents as they occur.
9–26
Who Should Do the
Appraising?
• The immediate
supervisor
• Peers
• Rating committees
• Self-ratings
• Subordinates
• 360-Degree feedback
