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Chapter 7

Evaluating EmployeePerformance

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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.(continued)

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Competencies for

Evaluating Employee Performance

5. Identify who should evaluate performance, and

discuss objectives for programs that train managersand supervisors to conduct performance appraisals.

6. Discuss how often performance appraisals should

be conducted, identify legal issues relating toperformance appraisals, and summarize keys to

developing an effective employee appraisal system.

(continued)

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Functions of

Performance Appraisals

Performance feedback

Employee training and development

Decision-making tool

Evaluation of training/policies/programs Validation of selection process

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Validity/Reliability Errors

Construct validity

Content validity

Inter-rater reliability

Consistency

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Bias Errors

Leniency

Severity

Central tendency

Recency

Past anchoring

Halo

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Three Types of Employee Ratings

Trait-based

Behavior-based

Results-based

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Ranking Methods

Simple/straight ranking

Alternative ranking

Paired comparisons

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Performance Appraisal Methods

Forced distribution

Graphic rating scale

Behaviorally anchored rating scales Behavioral observation scale

Narrative essays

Critical incidents

Management by objectives

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Evaluators of Performance

Supervisor

Peer evaluations

Staff evaluations of managers

Self-appraisal

Guest appraisals

Multiple rater evaluation systems

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Keys to an Effective Employee

Appraisal System

Identify the functions the performance appraisal willserve

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