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Spring 2008 1
Performance Appraisal
2Spring 2008
Performance Appraisal
Performance appraisal vs. performance management
Why it doesn’t happen PA formats Problems with PA 360º feedback
3Spring 2008
Why Performance Appraisal ?
Why?Reward good performanceFeedback to employeesEmployee developmentDocumentation for future managers, legal
purposes
4Spring 2008
What Makes Good Performance Appraisal? PA should be based on job performance alone PA also should be an ongoing process, not a once-
a-year ritual 6 characteristics of effective PA
Subordinate participation Subordinate acceptance Goal setting Discussing problems with performance Minimal criticism (defensiveness) Subordinate voice
5Spring 2008
Defining Performance
Objective vs. subjective What can the individual control? Job related vs. organization related behaviors Dimensions to rate on
6Spring 2008
Who Evaluates Performance?
Supervisor Self Subordinate Peers Customers
7Spring 2008
Appraisal Formats
Trait ratings Rankings Outcome measures Dimensional scales BARS MBO
8Spring 2008
Trait Ratings
Traits (i.e., “industrious”) mean different things to different people Lack of reliability
Not specific enough for useful feedback What, specifically, does the employee need to do to
be “industrious”?
Still used, though...... It’s quick and easy, and appealing to managers (“looks” good)
9Spring 2008
Currently popular Managers required to rate a certain proportion of employees in each
category General Electric (“Rank-and-Yank”)
However…. All employees may be equally good or bad, so forced distribution isn't
the answer May be comparing apples and oranges, if employees in different jobs No anchor points (The employee on the bottom of the list may be
satisfactory, but all of the others are simply better) Not specific enough, in terms of areas and specific behavior, for
useful feedback
Rankings and Forced Distribution
10Spring 2008
Nothing wrong with measuring outcomes..…
Need to chose correct outcomes Focus on results not always helpful in
showing employees what to do to get results
Outcomes may not be under employee’s control
Outcome Measures
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Behaviorally Anchored Rating Scales (BARS) Format:
Scales for different areas or dimensions (usually 8-10 scales per job)
Each scale has 9 points or levels At least three levels are anchored or defined with representative
behaviors, describing superior, average, and below average levels of performance
The supervisor: Responds to the question “This is the type of employee who
would...” Rates the employee from 9 (best) to 1 (worst), for each scale
12Spring 2008
Management by Objectives (MBO)
About goals Goals must be challenging, yet reachable Must have meaningful employee participation
Three steps in process: Employee and manager agree on goals Progress toward goals monitored during appraisal
period At end of period, employee and supervisor meet
again to determine if goals met
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Systematic Problems With Performance Appraisal No performance appraisal or performance
appraisal as a ritual only Lack of top management support for
performance appraisal or for meaningful appraisal
Appraisal should be (but too often isn’t) an ongoing process of feedback
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Problems in the Appraisal Interview Disagreement (between employee and
manager) Defensiveness (when employee is given bad
news in a non-constructive manner) Manager’s unwillingness to confront problem
employees One-way communication (top-down only;
employee has no opportunity to respond)
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Rater Errors (I)
Systematic errors/biases; normally, rater is unaware of these
Errors in rating process Irrelevant information
Errors in observation Stereotypes Employee similar/not similar to rater Pattern of performance (improve/decline) Variability of performance
16Spring 2008
Rater Errors (II)
Errors in storage and recallTrait recallMemory decay
Errors in actual evaluationPolitical goalsForced distribution/limited pot of moneyFear of confronting problem employeesDesire to look good
Contrast Error First and Last Impressions Halo Effect Stereotyping “Similar-to-Me Effect” Central Tendency Error Negative and Positive Leniency
18Spring 2008
360º Appraisal
Also called “multisource feedback” Gather information on performance from
multiple sourcesSupervisorPeersSubordinatesSelfCustomers
