Performance Appraisal

Chapter 7
BUAD 260
 Performance Appraisal

The identification, measurement,

and management of human
performance in organizations.
A Model of Performance Appraisal

Identification

Measurement

Management
Dimension

An aspect of performance that

determines effective job
performance.
 The Benefits of
Performance Appraisal
Employer Perspective:
■ Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
■ Documentation of performance appraisal and feedback may be needed for
legal defense.
■ Appraisal provides a rational basis for constructing a bonus or merit system.
■ Appraisal dimensions and standards can help to implement strategic goals
and clarify performance expectations.
■ Providing individual feedback is part of the performance management
process.
■ Despite the traditional focus on the individual, appraisal criteria can include
teamwork and the teams can be the focus of the appraisal.
 The Benefits of Performance
Appraisal (cont.)
Employee Perspective:
■ Performance feedback is needed and desired.
■ Improvement in performance requires assessment.
■ Fairness required that differences in performance
levels across workers be measured and have an
effect on outcomes.
■ Assessment and recognition of performance levels
can motivate workers to improve their performance.
Measurement Tools
■ Thetype of judgment that is
required
– Relative or absolute
■ The focus of the measure
– Trait, behavior, or outcome
Relative and Absolute Judgment
Relative Judgment

An appraisal format that asks supervisors to

compare an employee's performance to the
performance of other employees doing the same
job.

Absolute Judgment

An appraisal format that asks supervisors to make

judgments about an employee’s performance
based solely on performance standards.
 Rankings and Performance Levels
Across Work Teams
Actual Ranked Work Ranked Work Ranked Work

10 (High) Jill (1) Frank (1)

9 Julien (2)
8 Tom (2) Lisa (3)
7 Marcos (1) Sue (3)
6 Uma (2)
5
4 Joyce (3) Greg (4)
3 Bill (4) Ken (5) Jolie (4)
2 Richard (5) Steve (5)
1 (Low)
Trait Appraisal, Behavioral Appraisal &
Outcome Appraisal Instruments
Trait Appraisal
An appraisal tool that asks a supervisor to make judgments
about worker characteristics that tend to be consistent and
enduring.

Behavioral Appraisal
An appraisal tool that asks managers to assess a worker’s
behaviors.

Outcome Appraisal
An appraisal tool that asks managers to assess the results
achieved by workers.
Sample Trait Scales
Rate each worker using the scales below.

Decisiveness:
1 2 3 4 5 6 7
Very low Moderate Very high

Reliability:
1 2 3 4 5 6 7
Very low Moderate Very high

Energy:
1 2 3 4 5 6 7
Very low Moderate Very high
Loyalty:
1 2 3 4 5 6 7
Very low Moderate Very high
 Evaluation of Major Appraisal
Formats
Appraisal Administrative Developmental Legal
Format Use Use Defensibility
Absolute 0 + 0
Relative ++ - -
Trait + - --
Behavior 0 + ++
Outcome 0 0 +
-- Very Poor - Poor 0 Unclear or mixed + Good ++ Very good
Challenges to Effective
Performance Measurement
■ Rater errors and bias
■ The influence of liking

■ Organizational politics

■ Whether to focus on the individual

or the group
■ Legal issues
 Legal Issues
■ A recent analysis of 295 court cases involving performance
appraisal found judges’ decisions to be favorably influenced by
the following additional factors:
– Use of job analysis
– Providing written instructions
– Allowing employees to review appraisal results
– Agreement among multiple raters (if more than one was used)
– The presence of rater training
 Communication Skills for the
Appraisal Interview
Skills Benefit Description Example
Nonverbal Suggests interest Rater sits with a slight While the ratee is
Attending and active listening. forward, comfortable speaking, the rater
lean of the upper body, looks at the person
maintains eye contact, and gently nods head
and speaks in a steady to signal interest.
and soothing voice.
Open and Appropriate use of —Open questions — Open questions
Closed open and closed encourage information start with words like
Questions questions can sharing and are most “Could,” “Would,”
ensure an effective appropriate early in an “How,” “What,” or
flow of interview or in complex, “Why”.
communication ambiguous situations.
during an interview.
—Closed question — Closed questions
evoke short responses start with words like
and are useful for “Did,” “Is,” or “Are.”
focusing and clarifying.
 Communication Skills for the
Appraisal Interview (Cont.)
Skills Benefit Description Example
Paraphrasing Paraphrasing can clarify A paraphrase is a You might begin by
and convey to the ratee concise statement in saying “If I have this
that you are listening your own words of what right…” or “What
actively. someone has just said. you’re saying is…” and
It should be factual and end with “Is that
nonjudgmental. correct?” or “That’s
what you are saying?”
Reflection of Shows that you are Similar to paraphrase, a Start by saying
Feeling trying to understand the reflection of feeling is a something like “It
emotional aspect of the factual statement of the sounds like you’re
workplace. The empathy emotions you sense the feeling…” End as you
and sensitivity of such other person is feeling. would a paraphrase
reflection can open up Be cautious about using (“Is that right?”).
communication and this technique
allow the interview to insincerely or with those
move more who need professional
meaningfully to task- help.
related issues.
 Communication Skills for the
Appraisal Interview (Cont.)
Skills Benefit Description Example

Cultural Communication is more Pay attention to cultural When dealing with

Sensitivity effective when you are differences that may employees from a
sensitive to the possible influence how another culture that is highly
influence of cultural person communicates formal, avoid
differences. and how you might addressing them in the
communicate with workplace by their first
others. names. Doing so may
signal disrespect.
Situational (System) Factors to Consider in
Determining the Causes of Performance
Problems
• Poor coordination of work activities among workers.
• Inadequate information or instructions needed to perform a
job.
• Low-quality materials.
• Lack of necessary equipment.
• Inability to obtain raw materials, parts, or supplies.
• Inadequate financial resources.
• Poor supervision.
• Uncooperative coworkers and/or poor relations among
people.
• Inadequate training.
• Insufficient time to produce the quantity or quality of work
required.
• A poor work environment (for example, cold, hot, noisy,
frequent
interruptions.)
• Equipment breakdown.
 How to Determine and Remedy
Performance Shortfalls
Cause Questions to Ask Possible Remedies

Ability • Has the worker ever been • Train

able to perform adequately? • Transfer
• Can others perform the job • Redesign job
adequately, but not this worker? • Terminate
Effort • Is the worker’s performance • Clarify linkage between
level declining? performance and rewards
• Is performance lower on all • Recognize good
tasks? performance
Situation • Is performance erratic? • Streamline work process
• Are performance problems • Clarify needs to suppliers
showing up in all workers, • Change suppliers
even those who have adequate • Eliminate conflicting
supplies and equipment? signals or demands
• Provide adequate tools
 360° Feedback

The combination of peer,

subordinate, and self-review
Key Steps in Implementing 360°
Appraisal
■ Top management communicates the goals of and need for 360°
appraisal.
■ Employees and managers are involved in the development of the
appraisal criteria and appraisal process.
■ Employees are trained in how to give and receive feedback.
■ Employees are informed of the nature of the 360° appraisal
instrument and process.
■ The 360° system undergoes pilot testing in one part of the
organization.
■ Management continuously reinforces the goals of the 360°
appraisal and is ready to change the process when necessary.