PERFORMANCE

APPRAISAL
 Chapter Objectives

• Define performance appraisal.

• Identify the uses of performance
appraisal.
• Describe the performance appraisal
process.
• Explain performance appraisal
environmental factors.
 Chapter Objectives
(Continued)
• Identify the aspects of a person’s
performance that an organization
should evaluate.
• Identify who may be responsible for
performance appraisal and the
performance period.
• Identify the various performance
appraisal methods used.
 Chapter Objectives
(Continued)
• List the problems associated with
performance appraisal.
• Explain the characteristics of an
effective appraisal system.
• Describe the legal implications of
performance appraisal.
• Explain how the appraisal interview
should be conducted.
• Describe assessment centers.
Performance Appraisal
Defined
• System of review and
evaluation of job
performance
• Assesses accomplishments
and evolves plans for
development
• Performance management
is important
Uses of Performance
Appraisal
• Human resource planning
• Recruitment and selection
• Training and development
• Career planning and development
• Compensation programs
• Internal employee relations
• Assessment of employee potential
Performance Appraisal
Environmental Factors
• Legislation requiring
nondiscriminatory
appraisal systems
• Labor unions
• Factors within the internal
environment
• Type of corporate culture
 The Performance Appraisal
Process
• Identify specific performance appraisal
goals
• Establish job expectations (job analysis)
• Examine work performed
• Appraise performance
• Discuss appraisal with employee
What to Evaluate

• Traits
• Behaviors
• Task Outcomes
• Improvement
Potential
 Responsibility for
Appraisal
• Immediate supervisor
• Subordinates
• Peers
• Rationale for evaluations
conducted by team members
• Self-appraisal
• Customer appraisal
Rationale for Evaluations
Conducted by Team
Members
• Know each other's performance
and can evaluate more accurately
• Peer pressure is powerful
motivator
• Increased commitment and
productivity because members
know peers will evaluate
• Numerous opinions, not
dependent upon one individual
The Appraisal Period
• Prepared at specific
intervals
• Usually annually or
semi-annually
• Period may begin with
employee’s date of hire
• All employees may be
evaluated at same time
Performance Appraisal
Methods
• 360-Degree Evaluation
• Rating Scales
• Critical Incidents
• Essay
• Work Standards
• Ranking
 Performance Appraisal
Methods (Continued)
• Forced Distribution
• Forced-Choice and Weighted
Checklist Performance Reports
• Behaviorally Anchored Rating
Scales (BARS)
• Result-Based Systems
• Assessment Centers
 360-Degree Evaluation
• Multi-rater evaluation
• Input from multiple levels with firm and
external sources
• Focuses on skills needed across
organizational boundaries
• More objective measure of performance
• Process more legally defensible
Rating Scales
• Rates according to
defined factors
• Judgments are
recorded on a scale
• Many employees are
evaluated quickly
 Critical Incidents
• Written records of highly favorable
and unfavorable work actions
• Appraisal more likely to cover
entire evaluation period
• Does not focus on last few weeks
or months
 Essay
• Brief narrative describing
performance
• Tends to focus on
extreme behavior
• Depends heavily on
evaluator's writing ability
• Comparing essay
evaluations might be
difficult
Work Standards
• Compares performance to
predetermined standard
• Standards - normal output of
average worker operating at
normal pace
• Time study and work
sampling used
• Objective
• Workers need to know how
standards were set
 Ranking
• All employees from group ranked
in order of overall performance
• Paired comparison is a variation
• Comparison is based on single
criterion, such as overall
performance
 Forced Distribution
• Rater assigns individual in work
group to a limited number of
categories
• Assumes all groups of
employees have the same
distribution
Forced-Choice and Weighted
Checklist Performance
Reports
• Appraiser chooses from series of
statements that are most or least
descriptive of the employee
• Using weighted checklist performance
report, rater completes form similar
to forced-choice performance report
• Various responses have different
weights
Behaviorally Anchored
Rating Scales (BARS)
• Combines traditional
rating scales and critical
incidents methods
• Job behaviors derived
from critical incidents
described more
objectively
Behaviorally Anchored Rating
Scales (BARS) - (Continued)
• Deficiency - behaviors used are
activity oriented rather than
results oriented
• Relatively invulnerable to legal
challenge
• Supervisors and subordinates
accept it more readily
Result-Based Systems
• Manager and subordinate
agree on objectives for
next appraisal
• Evaluation based on how
well objectives are
accomplished
• May not be too helpful in
employee development
Assessment Centers
• Identify and select
employment for higher level
positions
• Part of a management
system that focuses on
employee development
• Predict employee potential
for advancement
Problems in Performance
Appraisal
• Lack of objectivity
• Halo error
• Leniency/strictness
• Central tendency
• Recent behavior bias
• Personal Bias
• Manipulating the evaluation
 Characteristics of an
Effective Appraisal System
• Job-related criteria
• Performance expectations
• Standardization
• Trained appraisers
• Continuous open communication
• Performance reviews
• Due process
Courts Normally Require
These Conditions to Exist
• Absence of adverse
impact on certain groups
or validation of process
• Review process prevents
manager from directing
or controlling
subordinate’s career
 Legal Implications
(Continued)

• Rater must have personal

knowledge and contact with
employee’s job performance
• Use of formal appraisal criteria
limits manager’s discretion
The Appraisal Interview
• Scheduling the interview
• Interview structure
• Use of praise and criticism
• Employees’ role
• Use of software
• Concluding the interview