Chapter 09 - Performance Management

MODULE 7: LECTURE NOTES

LEARNING OBJECTIVES FOR MODULE 7 CHAPTER 9.
NOTE: With regards to the material in Module 7 - Chapter 9, the multiple choice and
True/False questions on the Midterm Exam and Comprehensive Final Exam will be based on
the questions immediately below, the lecture notes that follow, and the online quiz questions
that accompany each module.
After reading and completing Module 7, you will be able to answer the following questions:
CHAPTER LEARNING OBJECTIVES (SECTION)
Questions this chapter will help managers answer:
1.
2.
3.
4.
5.

What steps can I, as a manager, take to make the performance management process
more relevant and more acceptable to those who will be affected by it?
How can we best fit our approach to performance management with the strategic
direction of our department and business?
Should managers and nonmanagers be appraised from multiple perspectivesfor
example, by those above, by those below, by coequals, and by customers?
What strategy should we use to train raters at all levels in the mechanics of
performance management and in the art of giving feedback?
What would an effective performance management process look like?
MANAGING FOR MAXIMUM PERFORMANCE

Performance management is likened to a compassone that indicates actual

direction as well as desired direction.
The job of the manager is to indicate where the individual or team is now, and to help
focus attention and effort on the desired direction.
Many managers incorrectly equate it with performance appraisal.
There are solid organizational payoffs for implementing strong performance
management systems.
Organizations with strong performance management systems are 51 percent more
likely to outperform their competitors on financial measures, and 41 percent are more
likely to outperform their competitors on nonfinancial measures.
Performance appraisal is a necessary, but far from sufficient, part of performance
management.
Performance management requires willingness and a commitment to focus on
improving performance at the level of the individual or team every day.
At a general level, the broad process of performance management requires that you
do three things well:
Define performance
Facilitate performance
Encourage performance

9-1

Chapter 09 - Performance Management

Define Performance
A manager who defines performance ensures that individual employees or teams
know what is expected of them, and that they stay focused on effective performance.
A manager does this by paying attention to three key elements:
Goals
Measures
Assessment
Setting a goal:
Directs attention to the specific performance in question
Mobilizes efforts to accomplish higher levels of performance
Fosters persistence for higher levels of performance.
Specific and challenging goals clarify precisely what is expected and leads to high
levels of performance.
On average, productivity improves by 10 percent when goal setting is used.
The mere presence of goals is not sufficient. Managers must also be able to measure
the extent to which goals have been accomplished.
In defining performance, the third requirement is assessment.
Regular assessment of progress toward goals focuses the attention and efforts of
an employee or a team.
There should be no surprises in the performance management processand regular
appraisals help ensure that there wont be.
Facilitate Performance
Managers who are committed to managing for maximum performance have three
major responsibilities:
Eliminate roadblocks to successful performance.
Roadblocks can include:
Outdated or poorly maintained equipment
Delays in receiving supplies
Inefficient design of work spaces
Inefficient work methods
Provide adequate resources to get a job done right and on time; capital resources,
material resources, or human resources.
A final aspect of performance facilitation is the careful selection of employees.
Having people who are ill suited to their jobs (e.g., by temperament or
training) often leads to overstaffing, excessive labor costs, and reduced
productivity.

In leading companies, even top managers often get involved in selecting new
employees

If youre truly committed to managing for maximum performance, you pay attention
to all of the factors that might affect performance, and leave nothing to chance.

9-2

Chapter 09 - Performance Management

Encourage Performance

To encourage performance, especially repeated good performance, it is important to

provide a sufficient amount of rewards that employees really value in a timely and
fair manner.
Ask your people whats most important to them, then tailor your awards program
so that employees or teams can choose from a menu of similarly valued options.

Provide rewards in a timely manner, soon after major accomplishments.

If there is excessive delay between effective performance and receipt of the
reward, then the reward loses its potential to motivate subsequent high
performance.

Provide rewards in a manner that employees consider fair. Fairness is a subjective

concept, but it can be enhanced by adhering to four important practices:
Voice. Collect employee input through surveys or interviews.
Consistency. Ensure that all employees are treated consistently when seeking
input and communicating about the process for administering rewards.
Relevance. As noted earlier, include rewards that employees really care about.
Communication. Explain clearly the rules and logic of the rewards process.

Performance Management in Practice

A 2004 study by Rainmaker Thinking of more than 500 managers found that few of
them consistently provide their direct reports with the five management basics:
Clear statements of whats expected of each employee
Explicit and measurable goals and deadlines
Detailed evaluation of each persons work
Clear feedback
Rewards distributed fairly

PURPOSES OF PERFORMANCE APPRAISAL SYSTEMS

In general, appraisal serves a twofold purpose:

To improve employees work performance by helping them realize and use their
full potential in carrying out their firms missions, and
To provide information to employees and managers for use in making workrelated decisions.

REQUIREMENTS OF EFFECTIVE APPRAISAL SYSTEMS

Legally and scientifically, the key requirements of any appraisal system are:
Relevance

9-3

Chapter 09 - Performance Management

Sensitivity
Reliability
Relevance

Relevance implies that there are:

Clear links between the performance standards for a particular job and
organizational objectives and
Clear links between the critical job elements identified through a job analysis and
the dimensions to be rated on an appraisal form.

Relevance is determined by answering the question What really makes the

difference between success and failure on a particular job, and according to whom?
The answer to this question is simple: the customer.

Customers may be internal or external.

In all cases, it is important to pay attention to the things that the customer believes
are important.

Performance standards translate job requirements into levels of acceptable or

unacceptable employee behavior.

Job analysis identifies what is to be done. Performance standards specify how well
work is to be done.
Such standards may be quantitative or qualitative.

Relevance also implies the periodic maintenance and updating of job analyses,
performance standards, and appraisal systems.

Sensitivity

Sensitivity implies that a performance appraisal system is capable of distinguishing

effective from ineffective performers.

A major concern here is the purpose of the rating.

Raters process identical sets of performance appraisal information differently,
depending on whether a merit pay raise, a recommendation for further
development, or the retention of a probationary employee is involved.
Appraisal systems designed for administrative purposes demand performance
information about differences between individuals.
Systems designed to promote employee growth demand information about
differences within individuals.
The two different types of information are not interchangeable in terms of
purposes, and that is why performance management systems designed to meet
both purposes are more complex and costly.

9-4

Chapter 09 - Performance Management

Reliability

A third requirement of sound appraisal systems is reliability (consistency of

judgment).
For any given employee, appraisals made by raters working independently of one
another should agree closely. In practice, ratings made by supervisors tend to be
more reliable than those made by peers.
To provide reliable data, each rater must observe what the employee has done and
the conditions under which he/she has done it.

By making appraisal systems relevant, sensitive, and reliable, we can assume that the
resulting judgments are valid.

Acceptability

In practice, acceptability is the most important requirement of all.

HR programs must have the support of those who will use them.

Evidence indicates that appraisal systems that are acceptable to those who will be
affected by them lead to more favorable reactions to the process, increased motivation
to improve performance, and increased trust for top management.

Smart managers enlist the active support and cooperation of subordinates or teams by
making explicit exactly what aspects of job performance they will be evaluated on.

Practicality

Practicality implies that appraisal instruments are easy for managers and employees
to understand and use.

Those that are not easy, or that impose inordinate time demands, are not practical;
managers will resist using them.

Managers need as much encouragement and organizational support as possible if

thoughtful performance management is to take place.

The crucial question to be answered in regard to each appraisal system is whether its
use results in fewer (and less costly) human, social, and organizational errors.

PERFORMANCE APPRAISAL

To avoid legal difficulties, consider taking the following steps:

Conduct a job analysis to determine the characteristics necessary for successful
job performance.
Incorporate these characteristics into a rating instrument.
Provide written instructions and train supervisors to use the rating instrument
properly.

9-5

Chapter 09 - Performance Management

Establish a system to detect potentially discriminatory effects or abuses of the

appraisal process.
Include formal appeal mechanisms, coupled with higher-level review of
appraisals.
Document the appraisals and the reason for any termination decisions.
Provide some form of performance counseling or corrective guidance to assist
poor performers.

The type of evidence required to defend performance ratings is linked to the purposes
for which the ratings are made.

To assess adverse impact, organizations should keep accurate records of who is

eligible for and interested in promotion.

Eligibility and interest, define the applicant group.

Implementing scientifically sound, court-proof appraisal systems requires diligent

attention by organizations, plus a commitment to making them work.

In developing a performance appraisal system, the most basic requirement is to

determine what you want the system to accomplish.

ALTERNATIVE METHODS OF APPRAISING EMPLOYEE PERFORMANCE

Many regard rating methods or formats as the central issue in performance appraisal.
However, broader issues must also be considered, such as:
Trust in the appraisal system
The attitudes of managers and employees
The purpose, frequency, and source of appraisal data
Rater training

Behavior-oriented rating methods focus on employee behaviors, either by

comparing the performance of employees to that of other employees (relative rating
systems) or by evaluating each employee in terms of performance standards without
reference to others (absolute rating systems).

Results-oriented rating systems place primary emphasis on what an employee

produces.
Ratings are not strongly related to results.
Because these processes are complex, there may be errors of judgment in the
ratings.
Results depend heavily on conditions that may be outside the control of the
individual worker.
Most measures of results provide only partial coverage of the overall domain of
job performance.

9-6

Chapter 09 - Performance Management

Paired Comparisons

Use of paired comparisons is a more systematic method for comparing employees to

one another.

Each employee is compared with every other employee, usually in terms of an overall
category such as present value to the organization. The raters task is simply to
choose the better of each pair, and each employees rank is determined by counting
the number of times he/she was rated superior.

The number of comparisons becomes quite large as the number of employees

increases.

Methods that compare employees to one another are useful for generating initial
rankings for purposes of employment decisions.
Forced Distribution

Forced distribution is another method of comparing employees to one another.

The overall distribution of ratings is forced into a normal, or bell-shaped, curve under
the assumption that a relatively small portion of employees is truly outstanding, a
relatively small portion is unsatisfactory, and everybody else falls in between.

Forced distribution eliminates clustering almost all employees at the top of the
distribution (rater leniency), at the bottom of the distribution (rater severity), or in the
middle (central tendency).

However, it can foster a great deal of employee resentment if an entire group of

employees is either superior or substandard.

It is most useful when a large number of employees must be rated and there is more
than one rater.
Behavioral Checklist

The rater is provided with a series of statements that describe job-related behavior.
His/her task is simply to check which of the statements, or the extent to which each
statement, describes the employee.

Raters are not so much evaluators as reporters whose task is to describe job behavior.

Descriptive ratings are likely to be more reliable than evaluative (good-bad) ratings.

With a Likert method of summed ratings:

A declarative statement (e.g., He/she follows up on customer complaints) is
followed by several response categories, such as always, fairly often,
occasionally, and never. The rater checks the response category that he/she
thinks best describes the employee.
Each category is weighted, for example, from 5 (always) to 1 (never) if the
statement describes desirable behavior.

9-7

Chapter 09 - Performance Management

The overall numerical rating (or score) for each employee is the sum of the
weights of the responses that were checked for each item.
Critical Incidents

Critical incidents are brief anecdotal reports by supervisors of things employees do

that are particularly effective or ineffective in accomplishing parts of their jobs.

They focus on behaviors, not traits.

They can provide the basis for training programs.

Critical incidents lend themselves to appraisal interviews because supervisors can

focus on actual job behaviors rather than on vaguely defined traits.

Supervisors may find that recording incidents for their subordinates on a daily or even
a weekly basis is burdensome.

Incidents alone do not permit comparisons across individuals or departments; graphic

rating scales may overcome this problem.
Graphic Rating Scales

Many different forms of graphic rating scales exist.

In terms of the amount of structure provided, the scales differ in three ways:
The degree to which the meaning of the response categories is defined.
The degree to which the individual who is interpreting the ratings can tell clearly
what response was intended.
The degree to which the performance dimensions are defined for the rater.

Graphic rating scales may not yield the depth of essays or critical incidents, but they:
Are less time-consuming to develop and administer.
Allow results to be expressed in quantitative terms
Consider more than one performance dimension
Facilitate comparisons across employees.

Graphic rating scales, when compared to more sophisticated forced-choice scales,

have proved just as reliable and valid and are more acceptable to raters.
Behaviorally Anchored Rating Scales

A variation of the simple graphic rating scale is behaviorally anchored rating scales
(BARS).

The major advantage of BARS is that they define the dimensions to be rated in
behavioral terms and use critical incidents to describe various levels of performance.

BARS therefore provide a common frame of reference for raters.

9-8

Chapter 09 - Performance Management

BARS require considerable effort to develop, yet there is little research evidence to
support the superiority of BARS over other types of rating systems.

The participative process required to develop them provides information that is useful
for other organizational purposes, such as communicating clearly to employees
exactly what good performance means in the context of their jobs.

Results-Oriented Rating Methods

Management by Objectives

Management by objectives (MBO) relies on goal-setting to establish objectives for

the organization as a whole, for each department, for each manager within each
department, and for each employee.

MBO is not a measure of employee behavior; rather, it is a measure of each

employees contribution to the success of the organization.

To establish objectives, the key people involved should do three things:

Meet to agree on the major objectives for a given period of time
Develop plans for how and when the objectives will be accomplished, and
Agree on the measurement tools for determining whether the objectives have been
met.

In theory, MBO promotes success in each employee because, as each employee

succeeds, so do that employees manager, the department, and the organization.

Work Planning and Review

Work planning and review is similar to MBO; however, it places greater emphasis
on the periodic review of work plans by both supervisor and subordinate in order to
identify goals attained, problems encountered, and the need for training.

When Should Each Technique Be Used?

The rating format is not as important as the relevance and acceptability of the rating
system.

An extensive review of the research literature that relates the various rating methods
to indicators of performance appraisal effectiveness found no clear winner.

However, the researchers provided several if . . . then propositions and general

statements based on their study:
If the objective is to compare employees across raters for important employment
decisions, dont use MBO and work planning and review. They are not based on a
standardized rating scheme for all employees.
If you use a BARS, also make diary keeping a part of the process. This will
improve the accuracy of the ratings, and it also will help supervisors distinguish
between effective and ineffective employees.

9-9

Chapter 09 - Performance Management

If objective performance data are available, MBO is the best strategy to use.
In general, the appraisal methods that are best in a broad, organizational sense
BARS and MBOare the most difficult to use and maintain.
Methods that focus on describing, rather than evaluating, behavior (e.g., BARS,
summed rating scales) produce results that are the most interpretable across raters
and help remove the effects of individual differences in raters.
No rating method has been an unqualified success when used as a basis for merit
pay or promotional decisions.
When certain statistical corrections are made, the correlations between scores on
alternative rating formats are very high. Hence all the formats measure essentially
the same thing.
WHO SHOULD EVALUATE PERFORMANCE?

The most fundamental requirement for any rater is that he/she has an adequate
opportunity to observe the ratees job performance over a reasonable period of time.
The Immediate Supervisor

He/she is probably most familiar with the individuals performance and, in most jobs,
has had the best opportunity to observe actual job performance.

Is probably the person best able to relate the individuals performance to what the
department and organization are trying to accomplish.

Because he/she also is responsible for reward (and punishment) decisions, and for
managing the overall performance management process, feedback from supervisors is
more highly related to performance than that from any other source.
Peers

In some jobs, the immediate supervisor may observe a subordinates actual job
performance only rarely. In other environments, such as self-managed work teams,
there is no supervisor.

Peers can provide a perspective on performance that is different from that of

immediate supervisors.

To reduce potential friendship bias while increasing the feedback value of the
information provided, it is important to specify exactly what the peers are to evaluate.

In light of the potential problems associated with peer appraisals, it is wise not to rely
on them as the sole source of information about performance.
Subordinates

Appraisal by subordinates can be a useful input to the immediate supervisors

development.

9-10

Chapter 09 - Performance Management

Subordinates know firsthand the extent to which the supervisor actually delegates,
how well he/she communicates, the type of leadership style he/she is most
comfortable with, and the extent to which he/she plans and organizes.

Managers who met with their direct reports to discuss their upward feedback
improved more than other managers.

What managers do with upward feedback is related to its benefits.

Should subordinate ratings be anonymous?

Managers want to know who said what, but subordinates prefer to remain
anonymous to avoid retribution.
Collect and combine the ratings in such a manner that a managers overall rating
is not distorted by an extremely divergent opinion.
Evidence indicates that ratings provided by peers and subordinates are
comparable, for they reflect the same underlying dimensions.

Multi-Rater or 360-Degree Feedback

Many organizations now use input from managers, subordinates, peers, and
customers to provide a perspective on performance from all angles (360 degrees).

There are at least four reasons why such an approach is potentially valuable:
It includes observations from different perspectives, and perhaps includes
different aspects of performance that capture the complexities of an individuals
performance in multiple roles.
Feedback from multiple sources may reinforce feedback from the boss, thereby
making it harder to discount the viewpoint of that single person.
Discrepancies between self-ratings and those received from others may create an
awareness of ones needs for development, and motivate individuals to improve
their performance in order to reduce or eliminate such discrepancies.
At least some senior managers believe that if they can improve leadership among
their organizations leaders, ultimately that will benefit the bottom line.

WHEN AND HOW OFTEN SHOULD APPRAISAL BE DONE?

Research shows that the practice of annual or semi-annual appraisals are far too
infrequent.
This is why some firms add frequent, informal progress reviews between the
annual ones.

If a rater is asked to assess an employees performance over a 6- to 12-month period,

biased ratings may result, especially if information has been stored in the raters
memory according to irrelevant, oversimplistic, or otherwise faulty categories.

9-11

Chapter 09 - Performance Management

There should be no surprises in appraisals, and one way to ensure this is to do them
frequently.

Evaluating the Performance of Teams

Team-based organizations do not necessarily outperform organizations that are not

structured around teams, but there seems to be an increased interest in organizing how
work is done around teams.
Performance management systems should target not only individual performance but
also an individuals contribution to the performance of his/her team, as well as the
performance of teams as a whole.
If individual performance is not assessed and recognized, social loafing may occur;
when other team members see there is a free rider, they are likely to reduce their
efforts.
Assessing team performance should be seen as complementary to the assessment and
recognition of individual performance his/her contribution to team performance.
There are three types of teams:
Work or service teams.
Project teams.
Network teams.
End-of-project outcome measures should be geared toward the type of team.
Raters are likely to make intentional or unintentional mistakes in assigning
performance scores.
Raters can be trained to minimize such biases.

SECRETS OF EFFECTIVE PERFORMANCE FEEDBACK INTERVIEWS

Communicate Frequently

Once-a-year performance appraisals are of questionable value.

Coaching should be a day-to-day activityparticularly with poor performers or new

employees.

Feedback has maximum impact when it is given as close as possible to the action.

Communication of performance feedback in an interview is most effective when the

subordinate already has relatively accurate perceptions of his/her performance before
the session.
Get Training in Performance Feedback and Appraisal Interviewing

Train raters to observe behavior more accurately and fairly.

Focus on managerial characteristics that are difficult to rate and on characteristics that
people think are easy to rate but which generally result in disagreements.

Use a problem-solving, rather than a tell-and-sell, approach.

9-12

Chapter 09 - Performance Management

Encourage Subordinates to Prepare

Subordinates who spend more time prior to performance feedback interviews

analyzing their job responsibilities and duties, problems they encounter on the job,
and the quality of their performance are more likely to:
Be satisfied with the performance management process
Be motivated to improve their performance
Actually improve.
Encourage Participation

A perception of ownership is related strongly to subordinates satisfaction with the

appraisal interview, the appraisal system, motivation to improve performance, and the
perceived fairness of the system.

Participation provides an opportunity for employee voice in performance appraisal.

It encourages the belief that the interview was fair, that it was a constructive activity,
that some current job problems were cleared up, and that future goals were set.
Judge Performance, Not Personality

In addition to the potential legal liability of dwelling on personality rather than on job
performance, supervisors are far less likely to change a subordinates personality than
they are performance.

Maintain a problem-solving, job-related focus.

An emphasis on the employee as a person or his/her self-concept, as opposed to task

and task performance only, is likely to lead to lower levels of future performance.
Be Specific, and Be an Active Listener

Maximize information relating to performance improvements and minimize

information concerning the relative performance of other employees.

By being an active listener, the supervisor demonstrates genuine interest in the

subordinates ideas.

Active listening requires that you do five things well:

(1) Take the time to listenhold all phone calls and do not allow interruptions.
(2) Communicate verbally and nonverbally that you genuinely want to help.
(3) As the subordinate begins to tell his/her side of the story, do not interrupt and do
not argue.
(4) Watch for verbal as well as nonverbal cues regarding the subordinates agreement
or disagreement with your message.
(5) Summarize what was said and what was agreed to.

Specific feedback and active listening are essential to subordinates perceptions of the
fairness and accuracy of the process.

9-13

Chapter 09 - Performance Management

Avoid Destructive Criticism

Destructive criticism is general in nature, frequently delivered in a biting, sarcastic

tone, and often attributes poor performance to internal causes (e.g., lack of motivation
or ability).

It leads to three predictable consequences.

(1) It produces negative feelings among recipients and can initiate or intensify
conflict;
(2) It reduces the preference of individuals for handling future disagreements with the
giver of the feedback in a conciliatory manner (e.g., compromise, collaboration); and
(3) It has negative effects on self-set goals and on feelings of self-confidence.

This is one type of communication to avoid.

Set Mutually Agreeable Goals

Studies demonstrate that goals direct attention to the specific performance in

question, that they mobilize effort to accomplish higher levels of performance, and
that they foster persistence for higher levels of performance.

Set specific, challenging goals, for this clarifies for the subordinate precisely what is
expected and leads to high levels of performance.
Continue to Communicate, and Assess Progress toward Goals Regularly

Periodic tracking of progress toward goals has three advantages:

(1) It helps keep behavior on target,
(2) It provides a better understanding of the reasons behind a given level of
performance, and
(3) It enhances the subordinates commitment to perform effectively.

All of this helps to improve supervisor-subordinate work relationships, which in turn

has positive effects on performance.
Make Organizational Rewards Contingent on Performance

If subordinates see a link between appraisal results and employment decisions, they
are more likely to prepare for performance feedback interviews, to participate actively
in them, and to be satisfied with the overall performance management system.

CHALLENGING QUESTIONS
What would an effective performance management system look like?
An effective system for one organization will not look like that of another. The key
is in the development of the system. Employees and supervisors should be involved to
as great an extent as possible in the development of the system. Managers should
receive initial training on the rationale and importance of the system, and on how to
conduct appraisal interviews. Such training should involve filmed models of effective

9-14

Chapter 09 - Performance Management

and ineffective appraisal interviews, and an opportunity for role-play practice and
reinforcement. It is a good idea to start any change effortsuch as implementation of
new performance management system--at the top of the organization and in
departments that are most receptive to the idea. The early successes can generate
momentum for the program. It is important to recognize that changes in appraisal
systems signal major changes in the way of doing business, and therefore should be
handled similarly to large-scale organization development projects.
Whatever the final form of the performance management system, it should be legally
defensible.
What is the difference between performance management and performance appraisal?
A performance appraisal is generally done once or twice a year and is used to identify
and discuss job-relevant strengths and weaknesses of individuals and teams.
Performance management is used on a more frequent basis to help individuals and
teams determine where they are now and in what direction they should be headed.
You have been asked to design a rater-training program. What types of elements would
you build into the process?
The rater training program would be designed to help raters understand: (a) the
philosophy and uses for the system, (b) the system itself, (c) the roles and
responsibilities of the employees and raters, (d) common rating errors, (e) the
importance of providing ongoing feedback, (f) how to give feedback in a way that
minimizes defensiveness, and (g) how to identify and address training and
development needs. Further, raters should understand the legal issues surrounding the
evaluation process.

How is performance appraisal for teams different from performance appraisal for
individuals?
Individual performance appraisals focus on how well the individual performed and
how this performance contributed to the success of the team.
Performance evaluations for teams focus on the performance of the team as a whole
and how well the team contributed to the success of the organization.
How can we overcome employee defensiveness in performance feedback interviews?
Given the intensely emotional nature of such interviews, it is unlikely that
defensiveness can be totally eliminated. However, defensiveness may be reduced by
following the steps suggested in the text:
(a) communicate performance feedback regularly so that there are no surprises
come appraisal time;

9-15

Chapter 09 - Performance Management

(b) use a problem-solving, rather than tell-and-sell, approach;

(c) encourage subordinate preparation prior to the meeting and participation during
the meeting;
(d) judge performance, not personality;
(e) communicate clearly and listen actively;
(f) participatively set goals for future performance;
(g) follow-up by assessing progress toward goals; and
(h) make organizational rewards contingent on performance.
Beyond the advice in the text, other approaches are to:
(a) ask subordinates to come to the interview with a completed self-appraisal for
comparison with the supervisor's,
(b) ask subordinates to evaluate the supervisor in terms of how well he/she has
assisted them over the appraisal period,
(c) keep the discussion focused on future development and performance improvement
rather than on past deficiencies, and
(d) separate discussions of development from those involving salary considerations.
Should discussions of employee job performance be separated from salary
considerations?
No, discussions of employee performance should not be separated from salary
considerations because if employees see a link between appraisal results and
employment decisions, they are more likely to try to achieve the performance goals
set for them.
However, employees must understand what the performance goals are before the
performance review, in order to set their behavior patterns. Finding out that they did
not meet expectations at the time of the review leads to confusion, anger, and
resentment, and possibly decreased effort.

9-16