Chapter 7 Evaluating Employee Performance

2006, Educational Institute

Competencies for Evaluating Employee Performance

1. Describe general performance appraisal issues and summarize the functions of performance appraisals. 2. Identify and discuss potential problems with performance appraisals. 3. Describe the principal types of rating systems used in appraising employee performance. 4. Describe commonly used methods of appraising performance.
2006, Educational Institute

(continued)

Competencies for Evaluating Employee Performance

(continued)

5. Identify who should evaluate performance, and discuss objectives for programs that train managers and supervisors to conduct performance appraisals. 6. Discuss how often performance appraisals should be conducted, identify legal issues relating to performance appraisals, and summarize keys to developing an effective employee appraisal system.
2006, Educational Institute 2

Functions of Performance Appraisals

Performance feedback Employee training and development

Decision-making tool
Evaluation of training/policies/programs

Validation of selection process

2006, Educational Institute

Validity/Reliability Errors
Construct validity Content validity Inter-rater reliability Consistency

2006, Educational Institute

Bias Errors

Leniency
Severity Central tendency Recency Past anchoring

2006, Educational Institute

Halo

Three Types of Employee Ratings

Trait-based Behavior-based Results-based

2006, Educational Institute

Ranking Methods
Simple/straight ranking Alternative ranking Paired comparisons

2006, Educational Institute

Performance Appraisal Methods

Forced distribution

Graphic rating scale

Behaviorally anchored rating scales

2006, Educational Institute

Behavioral observation scale

Narrative essays Critical incidents Management by objectives
8

Evaluators of Performance
Supervisor

Peer evaluations
Staff evaluations of managers

Self-appraisal
Guest appraisals Multiple rater evaluation systems

2006, Educational Institute

Keys to an Effective Employee Appraisal System

Identify the functions the performance appraisal will serve Develop sound criteria for the system Identify the types of performance to measure

Choose the method of appraisal

Determine who will conduct appraisals and train them

Determine the frequency of performance appraisals

Make sure the system meets all legal requirements Periodically evaluate the appraisal process
10

2006, Educational Institute