preformance appraisal

8/10/2019 Preformance Appraisal

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PERFORMANCE APPRAISAL

Performance appraisals take place in every organization whether there is a formal program or not.Managers are constantly observing the way their employees carry out their assignments and

thereby forming impressions about the relative worth of these employees to the organization.

Most organizations, however, do seem to use a formal program.

The success or failure of a performance appraisal program depends on the philosophy

underlying it and the attitudes and skills of those responsible for its administration. Many different

methods can be used to gather information about employee performance. However, gathering

information is only the first step in the appraisal process. The information must then be evaluated

in the context of organizational needs and communicated to employees so that it will result in high

levels of performance.


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Performance Appraisal Programs

ormal programs for performance appraisal and merit ratings are by no means new to

organizations. The federal government began evaluating employees in !"#$, when %ongresspassed a law mandating yearly performance reviews for department clerks. rom this early

beginning, performance appraisal programs have spread to large and small organizations in both

the public and private sectors. &dvocates see these H' programs as among the most logical

means to appraise, develop, and thus effectively utilize the knowledge and abilities of employees.

However, a growing number of observers point out that performance appraisals fre(uently fall

short of their potential.

'ecent interest in total)(uality management *T+M, for example, has caused numerous

organizations to rethink their approach to performance appraisal. The late -. dward /eming, a

pioneer in T+M, identified performance appraisal as one of seven deadly diseases of 0.1.

management. -hile most managers still recognize the benefits of performance appraisal, T+M

challenges some long)standing assumptions about how it should be conducted. Motorola, 2eneralMotors, and /igital, for example, have modified their appraisal systems to better acknowledge

quality of performance *in addition to (uantity, teamwork *in addition to individual

accomplishments, andprocess improvements *in addition to performance outcomes.

Purposes of Performance Appraisal

& performance appraisal program can serve many purposes that benefit both the organization andthe employee. The Travelers 3nsurance %ompany has the following ob4ectives for its performanceappraisal program. They are similar to the ob4ectives of other organizations.

!. To give employees the opportunity to discuss performance and performance standards

regularly with their supervisor

$. To provide the supervisor with a means of identifying the strengths and weaknesses of an

employee5s performance

6. To provide a format enabling the supervisor to recommend a specific program designed to

help an employee improve performance

#. To provide a basis for salary recommendations

The list below shows the most common uses of performance appraisals. 3n general, these can

be classified as either administrative or developmental.


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USES OF PERFORMANCE APPRAISAL

RANKING1.2.3.4.5.6.7.8.9.

10.11.12.13.14.15.16.17.18.19.20.

Salary administrationPerformance feedbackIdentication of indi!id"al stren#t$s and %eaknesses&oc"mentation of 'ersonnel decisions(eco#nition of indi!id"al 'erformance&etermination of 'romotionIdentication of 'oor 'erformance)ssistance in #oal identication&ecision in retention or termination*!al"ation of #oal ac$ie!ement

+eetin# le#al re,"irements&etermination of transfers and assi#nments&ecision on layo-sIdentication of indi!id"al trainin# needs&etermination of or#aniational trainin# needsPersonnel 'lannin#(einforcement of a"t$ority str"ct"reIdentication of or#aniational de!elo'ment needs*stablis$ment of criteria for !alidation researc$*!al"ation of 'ersonnel systems

Administrative Purposes

rom the standpoint ofadministration, appraisal programs provide input that can beused for the

entire range of H'M activities. or example, research has shown that performance appraisals are

used most widely as a basis for compensation decisions. The practice of 7pay)for)performance8 is

found in all types of organizations.

Performance appraisal is also directly related to a number of other ma4or H' functions, such

as promotion, transfer, and layoff decisions. Performance appraisal data may also be used in H'

planning, in determining the relative worth of 4obs under a 4ob evaluation program, and as criteriafor validating selection tests.

Performance appraisals also provide a 7paper trail8 for documenting H'M actions that may

result in legal action. 9ecause of government :;&& directives, employers must maintain

accurate, ob4ective records of employee performance in order to defend themselves against

possible charges of discrimination in connection with such H'M actions as promotion, salary

determination, and termination.

inally, it is important to recognize that the success of the entire H' program depends on


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knowing how the performance of employees compares with the goals established for them. This

knowledge is best derived from a carefully planned and administered H' appraisal program.

&ppraisal systems have the capability to influence employee behavior, thereby leading directly to

improved organizational performance.

Developmental Purposes

rom the standpoint of individual development, appraisal provides the feedback essential for

discussing strengths and weaknesses as well as improving performance. 'egardless of the

employee


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:ther reasons why performance appraisal programs can fail to yield the desired results

include the following>

!. Managers feel that little or no benefit will be derived from the time and energy spent in theprocess.

$. Managers dislike the face)to)face confrontation of appraisal interviews.6. Managers are not sufficiently adept in providing appraisal feedback.#. The 4udgmental role of appraisal conflicts with the helping role of developing employees.

Performance appraisal at many organizations is a once)a)year activity in which the appraisalinterview becomes a source of friction for both managers and employees. &n important principleof performance appraisal is that continual feedback and employee coaching must be a positive7daily8 activity. The annual or semiannual performance review should simply be a logical

extension of the day)to)day supervision process.:ne of the main concerns of employees is the fairness of the performance appraisal system,

since the process is central to so many H'M decisions. mployees who believe the system is

unfair may consider the appraisal interview a waste of time and leave the interview with feelings

of anxiety or frustration. &lso, they may view compliance with the appraisal system as perfunctory

and thus play only a passive role during the interview process. 9y addressing these employee

concerns during the planning stage of the appraisal process, the organization will help the

appraisal program to succeed in reaching its goals.


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Developing an Effective Appraisal Program

The H' department ordinarily has the primary responsibility for overseeing and coordinating the

appraisal program. Managers from the operating departments must also be actively involved,particularly in helping to establish the ob4ectives for the program. urthermore, employees are

more likely to accept and be satisfied with the performance appraisal program when they have the

chance to participate in its development. Their concerns about fairness and accuracy in

determining raises, promotions, and the like tend to be alleviated somewhat when they have been

involved at the planning stage and have helped develop the performance standards themselves.

Estalis!ing Performance Standards

9efore any appraisal is conducted, the standards by which performance is to be evaluated should

be clearly defined and communicated to the employee. These standards should be based on 4ob)related re(uirements derived from 4ob analysis and reflected in the 4ob descriptions and 4ob

specifications. -hen performance standards are properly established, they help translate

organizational goals and ob4ectives into 4ob re(uirements that convey acceptable and unacceptable

levels of performance to employees.

3n establishing performance standards, there are four basic considerations> strategic

relevance, criterion deficiency, criterion contamination, and reliability.

Strategic Relevance

This refers to the extent to which standards relate to the strategic ob4ectives of the organization.or example, if a T+M program has established a standard that 7?@ percent of all customer

complaints are to be resolved in one day,8 then it is relevant for the customer service

representatives to use such a standard for their evaluations. %ompanies such as 6M and

'ubbermaid have strategic ob4ectives that $@ to 6A percent of their sales are to be generated from

products developed within the past five years. These ob4ectives are translated into performance

standards for their employees.

Criterion Deficienc"

& second consideration in establishing performance standards is the extent to which the standardscapture the entire range of an employee


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Criterion Contamination

Bust as performance criteria can be deficient, they can also be contaminated. There are factors

outside an employee5s control that can influence his or her performance. & comparison ofperformance of production workers, for example, should not be contaminated by the fact that

some have newer machines than others. & comparison of the performance of traveling

salespersons should not be contaminated by the fact that territories differ in sales potential.

Reliailit"

'eliability refers to the stability or consistency of a standard, or the extent to which individuals

tend to maintain a certain level of performance over time. 3n ratings, reliability may be measured

by correlating two sets of ratings made by a single rater or by two different raters. or example,

two managers may rate the same individual and estimate his or her suitability for a promotion.Their ratings could be compared to determine interrater reliability.

Performance standards will permit managers to specify and communicate precise

information toemployees regarding (uality and (uantity of output. Therefore, when performance

standards are written, they should be defined in (uantifiable and measurable terms.

or example, 7ability and willingness to handle customer orders8 is not as good a

performance standard as 7all customer orders will be filled in # hours with a ?" percent accuracy

rate.8 -hen standards are expressed in specific, measurable terms, comparing the employee5s

performance against the standard results in a more 4ustifiable appraisal.

Compl"ing #it! t!e La#

1ince performance appraisals are used as one basis for H'M actions, they must meet certain

legal re(uirements. Performance appraisals are sub4ect to the same validity criteria as selection

procedures. &s the courts have made clear, a central issue is to have carefully defined and

measurable performance standards.

3n light of recent court rulings, performance appraisals should meet the following legal

guidelines>

Performance ratings must be 4ob)related, with performance standards developed through 4ob

analysis.

mployees must be given a written copy of their 4ob standards in advance of appraisals.

Managers who conduct the appraisal must be able to observe the behavior they are rating.

This implies having a measurable standard with which to compare employee behavior.

1upervisors should be trained to use the appraisal form correctly. They should be instructed in

how to apply appraisal standards when making 4udgments.

&ppraisals should be discussed openly with employees and counseling or corrective guidance

offered to help poor performers improve their performance.

&n appeals procedure should be established to enable employees to express disagreement with


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the appraisal.

To comply with the legal re(uirements of performance appraisals, employers must ensure that

managers and supervisors document appraisals and reasons for subse(uent H'M actions. Thisinformation may prove decisive should an employee take legal action. &n employer


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self'appraisalsystem re(uires an employee to complete the appraisal form prior to the

performance interview. &t a minimum, this gets the employee thinking about his or her strengths

and weaknesses and may lead to discussions about barriers to effective performance.

Self'appraisal

Performance appraisal done " t!e emplo"ee eing

evaluated( generall" on an appraisal form completed "

t!e emplo"ee prior to t!e performance intervie#

/uring the performance interview, the manager and the employee discuss 4ob performance

and agree on a final appraisal. This approach also works well when the manager and the employee

4ointly establish future performance goals or employee development plans.

%ritics of self)appraisal argue that self)raters are more lenient than managers in their

assessments and tend to present themselves in a highly favorable light. or this reason, self)

appraisals may be best for developmental purposes rather than for administrative decisions. 0sedin con4unction with other methods, self)appraisals can be a valuable source of appraisal

information.

Suordinate Appraisal

Suordinate appraisalhas been used in companies such as Cerox and 39M to give managers

feedback on how their subordinates view them. 1ubordinates are in a good position to evaluate

their managers since they are in fre(uent contact with their superiors and occupy a uni(ue

position from which to observe many performance)related behaviors. Those performance

dimensions 4udged most appropriate for subordinate appraisals include leadership, oralcommunication, delegation of authority, coordination of team efforts, and interest in subordinates.

However, dimensions related to managers< specific 4ob tasks, such as planning and organizing,

budgeting, creativity, and analytical ability, are not usually seen as appropriate for subordinate

appraisal.

Suordinate appraisal

Performance appraisal of a superior " an emplo"ee(

#!ic! is more appropriate for developmental t!an

for administrative purposes

1ince subordinate appraisals give employees power over their bosses, the managersthemselves may be hesitant to endorse such a system, particularly when it might be used as a basis

for compensation decisions. However, when the information is used for developmental purposes,

managers tend to be more open to the idea. =evertheless, to avoid potential problems, subordinate

appraisals should be submitted anonymously and combined across several individual raters.


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Peer Appraisal

3ndividuals of e(ual rank who work together are increasingly asked to evaluate each other. & peer

appraisalprovides information that differs to some degree from ratings by a superior, since peersoften see different dimensions of performance. Peers can readily identify leadership and

interpersonal skills along with other strengths and weaknesses of their co)workers. & superior

asked to rate a patrol officer on a dimension such as 7dealing with the public8 may not have had

much opportunity to observe it. ellow officers, on the other hand, have the op portunity to

observe this behavior regularly.

Peer appraisal

Performance appraisal done " one&s fello# emplo"ees(

generall" on forms t!at are compiled into a single profile

for use in t!e performance intervie# conducted "

t!e emplo"ee&s manager

:ne advantage of peer appraisals is the belief that they furnish more accurate and valid

information than appraisals by superiors. The supervisor often sees employees putting their best

foot forward, while those who work with their fellow employees on a regular basis may see a

more realistic picture. -ith peer appraisals, co)workers complete an evaluation on the employee.

The forms are then usually compiled into a single profile, which is given to the supervisor for use

in the final appraisal.

/espite the evidence that peer appraisals are possibly the most accurate method of 4udging

employee behavior, there are reasons why they have not been used more fre(uently. The reasons

commonly cited include the following>

!. Peer ratings are simply a popularity contest.$. Managers are reluctant to give up control over the appraisal process.6. Those receiving low ratings might retaliate against their peers.#. Peers rely on stereotypes in ratings.

-hen peers are in competition with one another, such as with sales associates, peer

appraisals may not be advisable foradministrative decisions such as salary or bonuses. mployers

using peer appraisals must also be sure to safeguardconfidentiality in handling the review forms.

&ny breach of confidentiality can create interpersonal rivalries or hurt feelings and bring about

hostility among fellow employees.

)eam Appraisal

&n extension of the peer appraisal is the team appraisal* -hile peers are one(ual standing with

one another, they may not work closely together. 3n a team setting, it may be nearly impossible to

separate out an individual


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address this issue, organizations such as 2eneral oods, 2eneral Motor


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)eam appraisal

Performance appraisal( ased on )+M concepts( t!at

recogni,es team accomplis!ment rat!er

t!an individual performance

& company


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Estalis!ing an Appraisal Plan

Training programs are most effective when they follow a systematic process that begins with an

explanation of the ob4ectives of the performance appraisal system.3t is important for the rater to

know the purpose for which the appraisal is to be used. or example, using the appraisal for

compensation decisions rather than development purposes may affect how the rater evaluates the

employee, and it may change the rater


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Lenienc" or strictness error

Performance'rating error in #!ic! t!e

appraiser tends to give emplo"ees eit!er

unusuall" !ig! or unusuall" lo# ratings

&nother approach is to re(uire ratings to conform to a forced distribution. Managers

appraising employees under a forced)distribution system would be re(uired to place a certain

percentage of employees into various performance categories. or example, it may be re(uired

that !A percent of ratings be poor *or excellent. This is similar to the re(uirement in some schools

that instructors grade on a curve.

1ome rating errors are temporal in that the performance review is biased either favorably or

unfavorably, depending on the way performance information is selected, evaluated, and organized

by the rater over time. or example, when the appraisal is based largely on the employee


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they have something in common. or example, if both the manager and the employee are from

small towns, the manager may unwittingly have a more favorable impression of the employee. The

effects of a similar)to)me error can be powerful, and when the similarity is based on race, religion,

gender, or some other protected category, it may result in discrimination.

Similar'to'me error

Performance'rating error in #!ic! an appraiser

inflates t!e evaluation of an emplo"ee ecause

of a mutual personal connection

& host of organizations such as 1ears, -eyerhauser, and &llied %hemical have developed

formal training programs to reduce the sub4ective errors commonly made during the rating

process. This training can pay off, particularly when participants have the opportunity to *!

observe other managers making errors, *$ actively participate in discovering their own errors,

and *6 practice 4ob)related tasks to reduce the errors they tend to make.

Providing Feedac-

inally, a training program for raters should provide some general points to consider for planning

and conducting the feedback interview. The interview not only provides employees with

knowledge of results of their evaluation, but it allows the manager and employee to discuss

current problems and set future goals. Training in specific skills should cover at least three basic

areas> *! communicating effectively, *$ diagnosing the root causes of performance problems, and

*6 setting goals and ob4ectives.

& checklist can be used to assist supervisors in preparing for the appraisal interview. &checklist suggested by &TDT is shown below. The &TDT checklist reflects the growing tendency

of organizations to have employees assess their own performance prior to the appraisal interview.


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SUPERVISORS CHECKLIST FOR

PERFORMANCE APPRAISAL

Scheduling

1. Sc$ed"le t$e re!ie% and notify t$e em'loyee ten days or t%o %eeks inad!ance.

2. )sk t$e em'loyee to 're'are for t$e session by re!ie%in# $is or $er'erformance ob obecti!es and de!elo'ment #oals.

3. learly state t$at t$is %ill be t$e formal ann"al 'erformance a''raisal.

Preparing for the Review

1. (e!ie% t$e 'erformance doc"mentation collected t$ro"#$o"t t$e year.oncentrate on %ork 'atterns t$at $a!e de!elo'ed.

2. e 're'ared to #i!e s'ecic eam'les of abo!e or belo%a!era#e'erformance.

3. $en 'erformance falls s$ort of e'ectations determine %$at c$an#esneed to be made. If 'erformance meets or eceeds e'ectations disc"sst$is and 'lan $o% to reinforce it.

4. )fter t$e a''raisal is %ritten set it aside for a fe% days and t$en re!ie% ita#ain.

5. :ollo% %$ate!er ste's are re,"ired by yo"r or#aniation;s 'erformancea''raisal system.

Conducting the Review

1. Select a location t$at is comfortable and free of distractions. $e locations$o"ld enco"ra#e a frank and candid con!ersation.

2. &isc"ss eac$ item in t$e a''raisal one at a time considerin# bot$stren#t$s and s$ortcomin#s.

3. e s'ecic and descri'ti!e not #eneral or "d#mental. (e'ort occ"rrencesrat$er t$an e!al"atin# t$em.

4. &isc"ss yo"r di-erences and resol!e t$em. Solicit a#reement %it$ t$ee!al"ation.

5.


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Performance Appraisal Met!ods

1ince the early years of their use by the federal government, methods of evaluating personnel have

evolved considerably. :ld systems have been replaced by new methods that represent technicalimprovements and legal re(uirements and are more consistent with the purposes of appraisal.

Performance appraisal methods can be broadly classified as measuring traits, behaviors, or

results. Trait approaches continue to be the more popular systems despite their inherent

sub4ectivity. 9ehavioral approaches provide more action)oriented information to employees and

therefore may be best for development. The results)oriented approach is gaining popularity

because it focuses on the measurable contributions that employees make to the organization.

)rait Met!ods

Trait approaches to performance appraisal are assigned to measure the extent to which anemployee possesses certain characteristicsEsuch as dependability, creativity, initiative, andleadershipEthat are viewed as important for the 4ob and the organization in general. The fact thattrait methods are the most popular method is due in large part to the ease with which they aredeveloped. However, if not designed carefully on the basis of 4ob analysis, trait appraisals can benotoriously biased and sub4ective.

0rap!ic Rating Scales

3n the grap!ic rating scale met!od, each trait or characteristic to be rated is represented by a

scale on which a rater indicates the degree to which an employee possesses that trait orcharacteristic. &n example of this type of scale is shown below. There are many variations of the

graphic rating scale. The differences are to be found in *! the characteristics or dimensions on

which individuals are rated, *$ the degree to which the performance dimension is defined for the

rater, and *6 how clearly the points on the scale are defined. 3n the example below, the

dimensions are defined briefly, and some attempt is made to define the points on the scale.

1ub4ectivity bias is reduced somewhat when the dimensions on the scale and the scale points are

defined as precisely as possible. This can be achieved by training raters and by including

descriptive appraisal guidelines in a performance appraisal reference book developed by the

organization.

0rap!ic rating scale met!odA trait approac! to performance appraisal

#!ere" eac! emplo"ee is rated according

to a scale of c!aracteristics

&lso, the rating form should provide sufficient space for comments on the behavior

associated with each scale. These comments improve the accuracy of the appraisal since they

re(uire the rater to think in terms of observable employee behaviors while providing specific


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examples to discuss with the employee during the appraisal interview.


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GRAPHIC RATING SCALE WITH PROVISION FOR COMMENTS

)''raise em'loyee/s 'erformance in P(*S*= )SSI>=+*=. $eck ?@A mosta''ro'riate s,"are. )''raisers are urged to freely use t$e B(emarksC sections forsi#nicant comments descri'ti!e of t$e indi!id"al.

1. D=EF*&>* E:E(DGHnderstandin# ofall '$ases of$is$er %ork andrelated matters

=eedsinstr"ction or

#"idance

as re,"iredkno%led#e of

o%n andrelated %ork

asece'tional

kno%led#e ofo%n and

related %ork

(emarksG

Is 'artic"larly #ood on #as en#ines2. I=II)IJ*G

)bility to ori#inateor de!elo' ideasand to #et t$in#sstarted

Facksima#ination

+eetsnecessary

re,"irements

Hn"s"allyreso"rcef"l

(emarksG

as #ood ideas %$en asked for ano'inion b"t ot$er%ise %ill not o-er

t$em. Some%$at lackin# in selfcondence.3. )PPFI)IE=G

)ttention anda''lication to$is$er %ork

astes time=eeds closes"'er!ision

Steady and%illin#%orker

*ce'tionallyind"strio"s

(emarksG

)cce'ts ne% obs %$en assi#ned.4. KH)FIL E:

E(DG$oro"#$nessneatness andacc"racy of %ork

=eedsim'ro!ement

(e#"larlymeets

reco#niedstandards

onsistentlymaintains$i#$est,"ality


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(emarksG

$e %ork $e t"rns o"t is al%ays of

t$e $i#$est 'ossible ,"ality.5. JEFH+* E:E(DGK"antity ofacce'table %ork

S$o"ld beincreased

(e#"larlymeets

reco#niedstandards

Hn"s"ally$i#$ o"t'"t

(emarksG

o"ld be $i#$er if $e did not s'endso m"c$ time c$eckin# and

rec$eckin# $is %ork.

Mi.ed Standard Scales

The mi.ed standard scale met!odis a modification of the basic rating scale method. 'ather than

evaluating traits according to a single scale, the rater is given three specific descriptions of each

trait. These descriptions reflect three levels of performance> superior, average, and inferior. &fter

the three descriptions for each trait are written, they are randomly se(uenced to form the mixed

standard scale. 1upervisors evaluate employees by indicating whether their performance is better

than, e(ual to, or worse than the standard for each behavior.

Mi.ed standard scale met!od

A trait approac! to performance appraisal

similar to ot!er scale met!ods ut ased on comparison

#it! 1etter t!an( e2ual to( or #orse t!an3 a standard


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MIXED STANDARD SCALE

&I(*IE=SG Please indicate %$et$er t$e indi!id"al/s 'erformance is abo!e?MA e,"al to ?0A or lo%er ?A t$an eac$ of t$e follo%in# standards.

1. *m'loyee "ses #ood "d#ment %$en addressin# 'roblems and'ro!ides %orkable alternati!esN $o%e!er at times does not takeactions to 're!ent 'roblems. (medium PROBLEM SOLVING)

2. *m'loyee lacks s"'er!isory skillsN fre,"ently $andles em'loyees'oorly and is at times ar#"mentati!e. (low LEADERSIP)

3. *m'loyee is etremely coo'erati!eN can be e'ected to take t$e leadin de!elo'in# coo'eration amon# em'loyeesN com'letes ob tasks

%it$ a 'ositi!e attit"de. (!ig! "OOPERA#ION)4. *m'loyee $as e-ecti!e s"'er!ision skillsN enco"ra#es 'rod"cti!ity,"ality and em'loyee de!elo'ment. (medium LEADERSIP)

5. *m'loyee normally dis'lays an ar#"mentati!e or defensi!e attit"deto%ard fello% em'loyees and ob assi#nments. (low "OOPERA#ION)

6. *m'loyee is #enerally a#reeable b"t becomes ar#"mentati!e attimes %$en #i!en ob assi#nmentsN coo'erates %it$ ot$er em'loyeesas e'ected. (medium "OOPERA#ION)

7. *m'loyee is not #ood at sol!in# 'roblemsN "ses 'oor "d#ment and

does not antici'ate 'otential dic"lties. (low PROBLEM SOLVING)

8. *m'loyee antici'ates 'otential 'roblems and 'ro!ides creati!e'roacti!e alternati!e sol"tionsN $as #ood attention to follo%"'. (!ig!PROBLEM SOLVLING)

9. *m'loyee dis'lays skilled directionN e-ecti!ely coordinates "nitacti!itiesN is #enerally a dynamic leader and moti!ates em'loyees to$i#$ 'erformance. (!ig! LEADERSIP)

Forced'C!oice Met!od

The forced'c!oice met!od re(uires the rater to choose from statements, often in pairs, that

appear e(ually favorable or e(ually unfavorable. The statements, however, are designed to

distinguish between successful and unsuccessful performance. The rater selects one statement

from the pair without knowing which statement correctly describes successful 4ob behavior. or

example, forced)choice pairs might include the following>


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4a* -orks hard4* -orks (uickly5a* 3s responsive to customers5* 1hows initiative6a* Produces poor (uality6* Facks good work habits.

Forced'c!oice met!od

A trait approac! to performance appraisal t!at re2uirest!e rater to c!oose from statements designed to distinguis!

et#een successful and unsuccessful performance

The forced)choice method is not without limitations, the primary one being the cost of

establishing andmaintaining its validity. The fact that it has been a source of frustration to many

raters has sometimes caused the method to be eliminated from appraisal programs. 3n addition ( it

cannot be used as effectively as some of the other methods to help achieve the commonly heldob4ective of using appraisals as a tool for developing employees by such means as the appraisal

interview.

Essa" Met!od

0nlike rating scales, which provide a structured form of appraisal, the essa" met!odre(uires the

appraiser to compose a statement that best describes the employee being appraised. The appraiser

is usually instructed to describe the employee


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sub4ective and may not focus on relevant aspects of 4ob performance.

7e!avioral Met!ods

&s mentioned above, one of the potential drawbacks of a trait)oriented performance appraisal is

that traits tend to be vague and sub4ective. -e discussed earlier that one way to improve a rating

scale is to have descriptions of behavior along a scale, or continuum. These descriptions permit

the rater to readily identify the point where a particular employee falls on the scale.

9ehavioral methods have been developed to specifically describe which actions should *or

should not be exhibited on the 4ob. They are fre(uently more useful for providing employees with

developmental feedback.

Critical Incidents Met!od

The critical incident method is also used as a method of appraisal. 'ecall, a critical incident

occurs when employee behavior results in unusual success or unusual failure on some part of the

4ob. & favorable critical incident is illustrated by the 4anitor who observed that a file cabinet

containing classified documents had been left unlocked at the close of business. The 4anitor called

the security officer, who took the necessary action to correct the problem. &n unfavorable incident

is illustrated by the mail clerk who failed to deliver an xpress Mail package immediately, instead

putting it in with regular mail to be routed two hours later.

Critical incident

8nusual event t!at denotes superioror inferior emplo"ee performance

in some part of t!e /o

:ne advantage of the critical incident method is that it covers the entire appraisal period *and

therefore may guard against recency error. &nd because the behavioral incidents are specific, they

can facilitate employee feedback and development. However, unless both favorable and

unfavorable incidents are discussed, employees who are appraised may have negative feelings

about this method. 1ome employees have been known to refer to it as the 7little black book8

approach. Perhaps its greatest contribution is in developing 4ob specifications and in constructing

other types of appraisal procedures.

7e!avioral C!ec-list Met!od

:ne of the oldest appraisal techni(ues is the behavioral checklist method. 3t consists of having the

rater check those statements on a list that the rater believes are characteristic of the employee


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GGGGGGGGG 3s able to explain e(uipment clearlyGGGGGGGGG eeps abreast of new developments in technologyGGGGGGGGG Tends to be a steady workerGGGGGGGGG 'eacts (uickly to customer needsGGGGGGGGG Processes orders correctly

7e!aviorall" Anc!ored Rating Scale 17ARS3

& e!aviorall" anc!ored rating scale 17ARS3 consists of a series of five to ten vertical scales))

one for each important dimension of performance identified through 4ob analysis. These

dimensions are anchored by behaviors identified through a critical incidents 4ob analysis. The

critical incidents are placed along the scale and are assigned point values according to theopinions of experts.

7e!aviorall" anc!ored rating scale 17ARS3

A e!avioral approac! to performance appraisal

)!at consists of a series of vertical scales( one for

Eac! important dimension of /o performance

& 9&'1 is typically developed by a committee that includes both subordinates and managers.

The committee


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signed duties.


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Management " o/ectives 1M7O3

P!ilosop!" of management t!at rates performance

on t!e asis of emplo"ee ac!ievement of goals set "

mutual agreement of emplo"ee and manager

M9: is a system involving a cycle *see below that begins with setting the organization


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PERFORMANCE APPRAISAL UNDER AN MBO PROGRAM

1Er#aniation/s common

#oals+eas"res of or#aniation

'erformance

2&e'artments'ecic #oals+eas"res of de'artment

'erformance

3 3S"'er!isor lists #oals andmeas"res for s"bordinate

S"bordinate 'ro'oses #oalsand meas"res for $is or $er

ob

!(e!ie% of

or#aniation'erformance


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The 7interview8 is an examination of the employee


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Re2uirements for a Successful M7O Program

3f they are to succeed, M9: programs should meet several re(uirements. irst ob4ectives set at

each level of the organization should be (uantifiable and measurable for both the long and shortterm. 1econd, the expected results must be under the employeeoal

(es'onsibility


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>oal

The success of an M9: program depends heavily on a behavioral change by both thesupervisor and the subordinate. 9oth individuals must be willing to mutuallyestablish goals and

measurable standards for employee performance. urthermore, M9: must be viewed as part of a

system of managing, not as merely an addition to the manager


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appraisal. =ote that the simplest and least expensive techni(ues often yield the least)accurate

information.


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SUMMARY OF VARIOUS APPRAISAL METHODS

A&AN*AG'S ISA&AN*AG'S

*rait

/ethod

1. )re ine'ensi!e to de!elo'2. Hse meanin#f"l dimensions3. )re easy to "se

1. a!e $i#$ 'otential for ratin#errors

2. )re not "sef"l for em'loyeeco"nselin#

3. )re not "sef"l for allocatin#re%ards

4. )re not "sef"l for 'romotiondecisions

ehavioral

/ethod

1. Hse s'ecic 'erformance

dimensions2. )re acce'table to em'loyees

and s"'eriors3. )re "sef"l for 'ro!idin#

feedback4. )re fair for re%ard and

'romotion decisions

1. an be timecons"min# to

de!elo'"se2. an be costly to de!elo'3. a!e some 'otential for ratin#

error

Reult

/ethod

1. as less s"becti!ity bias2. Is acce'table to em'loyees and

s"'eriors3. Finks indi!id"al 'erformance to

or#aniational 'erformance4. *nco"ra#es m"t"al #oal settin#5. Is #ood for re%ard and

'romotion decisions

1. Is timecons"min# tode!elo'"se

2. +ay enco"ra#e s$ortterm'ers'ecti!e

3. +ay "se contaminated criteria4. +ay "se decient criteria

However, research has not always supported a clear choice among appraisal methods. -hile

researchers and H' managers generally believe that the more sophisticated and more time)

consuming methods offer more useful information, this may not always be the case. Managers

must make cost)benefit decisions about which methods to use.


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Appraisa4 Intervie#s

The appraisal interview is perhaps the most important part of the entire performance appraisal

process. The appraisal interview gives a manager the opportunity to discuss a subordinate


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listening, accepting, and responding to feelings are essential.

However, the problem)solving method goes beyond an interest in the employee5s

feelings. 3t seeks to stimulate growth and development in the employee by discussing the

problems, needs, innovations, satisfactions, and dissatisfactions the employee hasencountered on the 4ob since the last appraisal interview. Maier recommends this

method, since the ob4ective of appraisal is normally to stimulate growth and

development in the employee.

Managers should not assume that only one type of appraisal interview is appropriate for

every review session. 'ather, they should be able to use one or more of the interview types,

depending on the topic being discussed or on the behavior of the employee being appraised. The

interview should be seen as re(uiring a flexible approach.

Conducting t!e Appraisal Intervie#

-hile there are probably no hard)and)fast rules for how to conduct an appraisal interview, there

are some guidelines that may increase the employee5s acceptance of the feedback, satisfaction with

the interview, and intention to improve in the future. Many of the principles of effective 4ob

interviewing apply to performance appraisal interviews as well. Here are some other guidelines

that should also be considered.

Ask for a self assessment. 3t is useful to have employees evaluate their own performance prior

to the appraisal interview. ven if this information is not used formally, the self)appraisal starts

the employee thinking about his or her accomplishments.

1elf)appraisal also ensures that the employee knows against what criteria he or she isbeing evaluated, thus eliminating any potential surprises. -hen the employee has evaluated his

or her own performance, the interview can be used to discuss those areas where the manager

and the employee have reached different conclusions.

Invite participation. The core purpose of a performance appraisal interview is to initiate a

dialogue that will help an employee improve her or his performance. To the extent that an

employee is an active participant in that discussion, the more likely it is that the root causes

and obstacles to performance will be uncovered, and the more likely it is that constructive

ideas for improvement will be raised.

3n addition, research evidence suggests that participation is strongly related to an

employee5s satisfaction with the appraisal feedback as well as her or his intention to improveperformance. &s a rule of thumb, supervisors should spend only about 6A to 6@ percent of the

time talking during the interview. The rest of the time they should be listening to employees

respond to (uestions.

!press appreciation. Praise is a powerful motivator, and in an appraisal interview, particularly,

employees are seeking out positive feedback. 3t is fre(uently beneficial to start the appraisal

interview by expressing appreciation for what the employee has done well. 3n this way, he or


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she may be less defensive and more likely to talk about aspects of the 4ob that are not going so

well.

However, try to avoid obvious use of the 7sandwich techni(ue,8 in which positive

statements are followed by negative ones, which are then followed by positive statements. Thisapproach may not work for several reasons. Praise often alerts the employee that criticism will

be coming. Positive comments following the criticism then suggest to the employee that no

more negative comments will come for a while. 3f managers follow an appraisal form, the

problem of the sandwich techni(ue will oftentimes be avoided.

"inimi#e criticism. mployees who have a good relationship with their managers may be able

to handle criticism better than those who do not. However, even the most stoic employees can

absorb only so much criticism before they start to get defensive. 3f an employee has many areas

in need of improvement, managers should focus on those few ob4ective issues that are most

problematic or most important to the 4ob.

$hange the behavior, not the person. Managers fre(uently try to play psychologist, to 7figure

out8 why an employee has acted a certain way. However, when dealing with a problem area, in

particular, remember that it is not the person who is bad, but the actions they have exhibited on

the 4ob. &void suggestions about personal traits to changeK instead suggest more acceptable

ways of performing.

or example, instead of focusing on a person


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6. Fimit plans for growth to a few important items that can be accomplished within a

reasonable period of time.

#. stablish specific action plans that spell out how eachgoal will be achieved. These actionplans may also include a list of contacts, resources, and timetables for follow)up.

%ollow up day to day. 3deally, performance feedback should be an ongoing part of a

manager


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Summar"

Performance appraisal programs serve many purposes, but in general those purposes can be

clustered into two categories> administrative and developmental. The administrative purposesinclude decisions about who will be promoted, transferred, or laid off. They can also include

compensation decisions and the like. /evelopmental decisions include those related to improving

and enhancing an individual


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consuming and costly to develop. 'esults appraisals are more ob4ective and can link individual

performance to the organization as a whole, but they may encourage a short)term perspective

*e.g., annual goals and may not include subtle yet important aspects of performance.

The degree to which the performance appraisal program benefits the organization and itsmembers is directly related to the (uality of the appraisal interviews that are conducted.

3nterviewing skills are best developed through instruction and supervised practice. &lthough there

are various approaches to the interview, research suggests that employee participation and goal

setting lead to higher satisfaction and improved performance. /iscussing problems, showing

support, minimizing criticism, and rewarding effective performance are also beneficial practices. 3n

the interview, deficiencies in employee performance can be discussed and plans for improvement

can be made.


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KEY TERMS

9ehaviorally anchored rating scale *9&'1

9ehavior observation scale *9:1

%ontrast error

%ritical incident

%ustomer appraisal

rror of central tendency

ssay method

orced)choice method

2raphic rating scale method

Feniency or strictness error

Management by ob4ectives *M9:

Manager;supervisor appraisal

Mixed standard scale method

Peer appraisals

'ecency error

1elf)appraisal

1imilar)to)me error

1ubordinate appraisal

Team appraisal

preformance appraisal

Documents