CHAPTER 10

Evaluating Employee
Perfor mance

DeCenzo and Robbins HRM 7th Edition 1

CHAPTER 10 TOPICS:
❘ 1: Performance management system
purpose
❘ 2: Appraisal process steps
❘ 3: Absolute standards
❘ 4: Relative standards
❘ 5: MBO
❘ 6: Performance appraisal distortions
❘ 7: More effective performance appraisal
❘ 8: Alternative appraisal methods
❘ 9: Global issues

DeCenzo and Robbins HRM 7th Edition 2

1: PERFORMANCE
EVALUATION PURPOSES

❚ Performance
Management
Systems

❚ Feedback
❚ Development
❚ Documentation

DeCenzo and Robbins HRM 7th Edition 3

1: PERFORMANCE
EVALUATION PROBLEMS

❚ Focus on individual
personality
❙ Emotions, anger,
resentment,
satisfaction
❙ Expectations
❚ Focus on process
❙ Tied to budget
❙ Training
❙ AND….

DeCenzo and Robbins HRM 7th Edition 4

1: PERFORMANCE
EVALUATION PROBLEMS

❚ EEO requirements
❙ Reliable
❙ valid

DeCenzo and Robbins HRM 7th Edition 5

2: APPRAISAL PROCESS
STEPS

❚ 1. Establish
performance
appraisal standards
❚ 2. Mutually set
measurable goals
❚ 3. Measure actual
performance
❚ AND….

DeCenzo and Robbins HRM 7th Edition 6

2: APPRAISAL PROCESS
STEPS

❚ 4. Compare actual
with standard
❚ 5. Discuss appraisal
with employee
❚ 6. Corrective action
❙ Basic
❙ Immediate

DeCenzo and Robbins HRM 7th Edition 7

2: APPRAISAL METHODS

❚ Absolute standards
❙ Measure against
external reference
❚ Relative standards
❙ Evaluate employees
against each other
❚ Objectives
❙ Measure against
goals

DeCenzo and Robbins HRM 7th Edition 8

3: ABSOLUTE STANDARDS

❚ Essay
❚ Critical incident
❚ Checklist
❚ Adjective rating
scale
❚ Forced-choice
❚ Behaviorally-
Anchored Rating
Scale (BARS)
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3: ESSAYS

❚ Subjective
❚ Hard to compare
with others
❚ Simple
❙ Strengths
❙ Weaknesses
❙ Potential
❙ Suggestions for
improvement

DeCenzo and Robbins HRM 7th Edition 10

3: CRITICAL INCIDENT

❚ Essay about what

was most effective
or ineffective in a
key job situation
❚ Focus on behavior,
not personality
❚ Weekly is time-
consuming

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3: CHECKLIST

❚ Yes or No
❚ Predefined
behaviors or
qualities
❚ Items may be
irrelevant
❚ Helps reduce bias

DeCenzo and Robbins HRM 7th Edition 12

3: ADJECTIVE RATING
SCALE

❚ Factors present
❙ Job knowledge
❙ Cooperation
❙ Quality and
quantity of work
❚ 5 to 10 points on a
continuum

• See Exhibit 10-3

DeCenzo and Robbins HRM 7th Edition 13

Exhibit 10-3: Sample Adjective Rating Items and Format

DeCenzo and Robbins HRM 7th Edition 14

3: FORCED-CHOICE

❚ Bias and distortion

reduced
❚ Frustration about
lack of feedback
❚ Simple
❚ Like a multiple
choice test
question

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3: B.A.R.S.

❚ Simple
❚ Reduces rating
errors
❚ Definite,
observable job
behaviors

– See Exhibit 10-

4

DeCenzo and Robbins HRM 7th Edition 16

Exhibit 10-4: Sample BARS for an Employee Relations Specialist

DeCenzo and Robbins HRM 7th Edition 17

4: RELATIVE STANDARDS

❚ Group order ranking

❙ Quartiles
❚ Individual ranking
❙ Best to worst
❚ Paired comparison

❙ Similar to job ranking

❙ Compare each one to all
others

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5: MANAGEMENT BY
OBJECTIVE (MBO)

❚ STEPS
❚ Goal setting
❚ Action planning ?
❚ Self control
❚ Periodic review

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5: MBO ISSUES

❚ Advantages
❙ Results oriented
❙ Commitment
❚ Problems
❙ Trust needed
❚ Satisfaction
❙ Time-consuming
❙ Important to followup
❙ Frustration builder

DeCenzo and Robbins HRM 7th Edition 20

6: PERFORMANCE
APPRAISAL DISTORTIONS

❚ Leniency
❚ Halo
❚ Similarity
❚ Central tendency
❚ Inflationary
pressures
❚ Inappropriate
substitutes
❚ AND….

DeCenzo and Robbins HRM 7th Edition 21

6: PERFORMANCE
APPRAISAL DISTORTIONS

❚ Attribution theory
❚ Varies by control
❙ Internal
❙ External
❚ Impression
management

DeCenzo and Robbins HRM 7th Edition 22

7: TO IMPROVE
APPRAISALS

❚ Behavior based
measures
❚ Combine absolute and
relative measures
❚ Provide ongoing
feedback
❚ Have multiple raters
❚ Rate selectively
❚ Train appraisers

DeCenzo and Robbins HRM 7th Edition 23

8: MORE EFFECTIVE
APPRAISALS - PEERS

❚ Positives
❙ Constructive
criticism
❙ Specific feedback
❚ Negatives
❙ Fear
❙ Halo, leniency error
❙ Training
❚ Upward appraisal

DeCenzo and Robbins HRM 7th Edition 24

8: MORE EFFECTIVE
APPRAISAL (360-DEGREE)

❚ Multiple
appraisers
❙ Self
❙ Boss
❙ Peers
❙ Team members
❙ Customers
❙ Suppliers

DeCenzo and Robbins HRM 7th Edition 25

8: 360-DEGREE
APPRAISALS

❚ Positives
❙ Increase manager’s
awareness of own
actions
❙ More accurate
feedback
❙ Empowerment
❙ Developing leadership
❙ Reduces subjectivity

DeCenzo and Robbins HRM 7th Edition 26

9: GLOBAL ISSUES

❚ Does the cultural

environment vary
from host country to
corporate?
❚ Who does
evaluation?
❙ Host country
supervisor
❙ Home office
❚ AND…

DeCenzo and Robbins HRM 7th Edition 27

9: MORE GLOBAL ISSUES

❚ What do numbers,
ranking mean?
❙ Culture
❙ Economic issues
❙ Political realities
❚ Evaluation format
❚ AND….

DeCenzo and Robbins HRM 7th Edition 28

9: GLOBAL SUGGESTIONS

❚ Modify to suit
❙ Site
❙ Culture
❚ Use an expatriate

DeCenzo and Robbins HRM 7th Edition 29

REVIEW CHAPTER 10

❚ How do we do
performance
appraisal in this
course?
❚ Any suggestions to
improve it for next
semester?
❚ Any suggestions
for this semester?

DeCenzo and Robbins HRM 7th Edition 30

QUICK: REVIEW
CHAPTER 10

❙ ANSWER THESE QUESTIONS ON A

SHEET OF PAPER.
❘ 1. THE MOST IMPORTANT THING WE DID IN
CLASS TODAY _______.
❘ 2. I STILL HAVE QUESTIONS ABOUT___.
❘ 3. THE BEST THING ABOUT CLASS TODAY
WAS _______________.
❘ 4. DON’T DO ____________ ANYMORE.
• TURN THEM IN, PLEASE. NO NAMES. WE’LL TALK
NEXT CLASS SESSION

DeCenzo and Robbins HRM 7th Edition 31

PREVIEW: CHAPTER 11

❚ Ask 3 people you know:

❙ 1 college student
❙ 1 40-60 year old worker
❙ 1 retiree
❚ Why do/did you work?
❚ Tell me about the best “reward” you
received from a job?
❘ Write up their responses for 1 extra point on your final grade.

DeCenzo and Robbins HRM 7th Edition 32

Exhibit 10-1: The Appraisal Process

DeCenzo and Robbins HRM 7th Edition 33

Exhibit 10-2: Sample Checklist Items for Appraising
Customer Service Representative

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Exhibit 10-5: Factors That Distort Appraisals

DeCenzo and Robbins HRM 7th Edition 35

Exhibit 10-6: Towards a More Effective
Performance Management System

DeCenzo and Robbins HRM 7th Edition 36