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

The type of judgment that is required–Relative or absolute

The focus of the measure–Trait, behavior, or outcome

Relative and Absolute Judgment

An appraisal format that asks supervisors to compare an employee's performance to the performance of other employees doing the same job.

Relative Judgment

An appraisal format that asks supervisors to make judgments about an employee’s performance based solely on performance standards.

Absolute Judgment

Rankings and Performance Levels Across Work Teams

Actual Ranked Work

10 (High)987654321 (Low)

Ranked Work Ranked Work

Marcos (1)Uma (2)

Joyce (3)Bill (4)Richard (5)

Jill (1)

Tom (2)Sue (3)

Greg (4)Ken (5)

Frank (1)Julien (2)Lisa (3)

Jolie (4)Steve (5)

Trait Appraisal, Behavioral Appraisal & Outcome Appraisal Instruments

An appraisal tool that asks a supervisor to make judgments about worker characteristics that tend to be consistent and enduring.

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

An appraisal tool that asks managers to assess the results achieved by workers.

Trait Appraisal

Behavioral Appraisal

Outcome Appraisal

Sample Trait Scales

Rate each worker using the scales below.

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

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

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

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

Evaluation of Major Appraisal Formats

Absolute

Relative

Trait

Behavior

Outcome

0

++

+

0

0

+

-

-

+

0

0

-

--

++

+

Appraisal Format

Administrative Use

Developmental Use

Legal Defensibility

-- Very Poor - Poor + Good ++ Very good0 Unclear or mixed

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

Nonverbal Attending

Open and Closed Questions

Suggests interest and active listening.

Appropriate use of open and closed questions can ensure an effective flow of communication during an interview.

Rater sits with a slight forward, comfortable lean of the upper body, maintains eye contact, and speaks in a steady and soothing voice.

—Open questions encourage information sharing and are most appropriate early in an interview or in complex, ambiguous situations.

—Closed question evoke short responses and are useful for focusing and clarifying.

While the ratee is speaking, the rater looks at the person and gently nods head to signal interest.

— Open questions start with words like “Could,” “Would,” “How,” “What,” or “Why”.

— Closed questions start with words like “Did,” “Is,” or “Are.”

Skills Benefit Description Example

Communication Skills for the Appraisal Interview (Cont.)

Paraphrasing

Reflection of Feeling

Paraphrasing can clarify and convey to the ratee that you are listening actively.

Shows that you are trying to understand the emotional aspect of the workplace. The empathy and sensitivity of such reflection can open up communication and allow the interview to move more meaningfully to task-related issues.

A paraphrase is a concise statement in your own words of what someone has just said. It should be factual and nonjudgmental.

Similar to paraphrase, a reflection of feeling is a factual statement of the emotions you sense the other person is feeling. Be cautious about using this technique insincerely or with those who need professional help.

You might begin by saying “If I have this right…” or “What you’re saying is…” and end with “Is that correct?” or “That’s what you are saying?”

Start by saying something like “It sounds like you’re feeling…” End as you would a paraphrase (“Is that right?”).

Skills Benefit Description Example

Communication Skills for the Appraisal Interview (Cont.)

Cultural Sensitivity

Communication is more effective when you are sensitive to the possible influence of cultural differences.

Pay attention to cultural differences that may influence how another person communicates and how you might communicate with others.

When dealing with employees from a culture that is highly formal, avoid addressing them in the workplace by their first names. Doing so may signal disrespect.

Skills Benefit Description Example

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

Ability

Effort

Situation

Possible Remedies

•Has the worker ever beenable to perform adequately?

•Can others perform the jobadequately, but not this worker?

• Is the worker’s performance level declining?

• Is performance lower on all tasks?

• Is performance erratic?•Are performance problemsshowing up in all workers,even those who have adequatesupplies and equipment?

•Train•Transfer•Redesign job•Terminate•Clarify linkage betweenperformance and rewards

•Recognize good performance

•Streamline work process•Clarify needs to suppliers•Change suppliers•Eliminate conflicting 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.