Performance Appraisals

Performance Management

• Provides data to assess the current

skill, experience, and performance level
of every employee
• Impacts human resource planning,
training & development, career
development & compensation forecasts
• Requires effective performance
appraisal system i.e. valid
Uses of Performance
Appraisal
Performance Identify deficiencies in
improvement staffing process

Compensation Detect informational

adjustments inaccuracies

Placement decisions Diagnose job design

errors
Training & Development
needs Avoidance of
discrimination
Career planning &
development External challenges
Key Elements

Performance
Appraisal
Interview

Human Performance Employee

Performance Measures & Feedback
Criteria

Employee
Records &
HR Decisions
Appraisal Systems

• Job-related
– System evaluates critical behaviours that
constitute job success
• Practical
– Understood and relatively simple
• Performance standards
– Related to the desired results of each job
• Performance measures
– Reports on critical behaviours
Performance Measures
• Rater actually sees the employee’s
Direct
performance

• Rater must evaluate substitutes for

Indirect
performance (constructs)

• Verifiable by others
Objective
• Usually quantitative

• Not verifiable by others

Subjective
• Usually rater’s personal opinions
Problems with Subjective
Measures

Halo
effect

Error of
Recency
central
effect
Rater Biases tendency

Personal Leniency &

prejudice strictness bias
Characteristics for
Effectiveness

Validity

Reliability

Effective Input into system development

Performance
Appraisal Acceptable standards
System
Acceptable goals

Control of standards
more
Characteristics for
Effectiveness

Frequency of feedback

Rater training

Effective Ratee training

Performance
Appraisal Input into interview process
System
Appraisal consequences

Different sources (raters)

Past-Oriented:
Noncomparative
•Oldest and most widely used method
Rating scale •Subjective i.e. based on the rater’s opinion
•Responses may be given numerical values

Critical •Rater records performance statements

incident •Describes very effective/ineffective behaviour

Behaviourally •Behaviours are placed along a scale

anchored •Looks at specific job-related factors

Tests & •Appraisal based on a test

observations •Test may be pen & pencil or demonstration
Past-Oriented: Comparative

Ranking •Employees ranked from best to worst

Forced •Categories are developed

distributions •Employees assigned to categories
Future-Oriented Methods
Self- •Useful to further self-development
Appraisals •Can be used with any evaluation approach

Management- •Employee & supervisor jointly establish goals

by-objectives •Employee is later evaluated on the objectives

•Usually used to evaluate future potential

Assessment
•Multiple types of evaluation
centre
•Usually used for managers
Recent Developments

• 360-degree appraisal
– In line with the trend toward flatter
organizations
– Combination of perspectives e.g. peer, self,
supervisor, client
• Balanced scorecard
– Integrates organizational performance
measures such as financial, customer
satisfaction, internal processes, learning
Evaluation Interviews

• Performance review sessions that give

employees feedback about their past
performance or future potential
• Interview should be a positive,
performance-improving dialogue
Effective Evaluation
Interviews
• Emphasize positive aspects of employee
performance
• Tell each employee the evaluation session
is to improve performance not to discipline
• Conduct the performance review session in
private without interruptions
• Review performance formally at least
annually
• Make criticisms specific, not general and
vague
Effective Evaluation
Interviews
• Focus criticisms on performance, not on
personality
• Stay calm and do not argue with the
person being evaluated
• Identify specific actions to improve
performance
• Emphasize willingness to assist the
employee’s efforts to improve performance
• End the evaluation by stressing positive
aspects and reviewing improvement plans