Appraising Performance

You have to get ongoing constructive feedback to push you out of your comfort zone.

—Kevin Sharer, CEO,

Amgen

Chapter 17

Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

Learning Objectives

1. Summarize the benefits of conducting performance appraisals.

2. Identify the steps in appraising performance systematically.

3. Discuss guidelines for avoiding discrimination in performance appraisals.

4. Compare types of appraisals.

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Learning Objectives

5. Describe sources of bias in appraising performance.

6. Explain the purpose of conducting performance appraisal interviews.

7. Tell how supervisors should prepare for a performance appraisal interview.

8. Describe guidelines for conducting the interview.

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Performance Appraisal

• Performance appraisal– Formal feedback on how well an employee is

performing his or her job

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Purposes of Performance Appraisal

• To improve, employees need to know how they are doing.

• An appraisal can help motivate employees.

• Performance appraisals are part of the ongoing control process and provide important records for the organization.

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The Appraisal Process

• Establish and communicate expectations for performance.

• Establish and communicate standards for measuring performance.

• Observe and measure individual performance against standards.

• Reinforce performance or provide remedies.

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The Appraisal Process

• Establish and communicate expectations for performance.– List three to five major responsibilities of each

position.– Focus the appraisal on these responsibilities.– Be sure employees know and understand what

is expected of them.– Employee are most likely to understand and be

committed to objectives they helped develop.

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The Appraisal Process

• Establish and communicate standards for measuring performance.– Each expectation should be measurable.– A supervisor’s task includes deciding how to

measure employees’ performance and then making sure employees know what will be measured.

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The Appraisal Process

• Observe and measure individual performance against standards.– A supervisor should continuously gather

information about each employee’s performance.

– When preparing a performance appraisal, a supervisor compares this information with the standards for the employee being appraised.

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The Appraisal Process

• Reinforce performance or provide remedies.– Point out to employees where they have

performed well.– Asking an employee to help solve a problem

is often more effective than the supervisor simply stating a remedy.

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Possible Causes for Poor Performance

• Inadequate skills• Lack of effort• Shortcomings of the

process• External conditions• Personal problems

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What to Measure in an Appraisal

• Do not label people with certain characteristics.

• Focus on behavior and results.

• Base conclusions on observations about behavior and results.– Record at least one specific example for each

category rated.

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Qualities of Effective Performance Appraisal Measures

• Objective

• Job-related

• Based on behaviors

• Within employee’s control

• Related to specific tasks

• Communicated to employees

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EEOC Guidelines

• The behaviors and characteristics measured by a performance appraisal should be related to the job and to succeeding on the job.

• Appraisals should be based on the employee’s success in carrying out the essential tasks of a particular job.

• An employee should know performance standards in advance.

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Performance Appraisals and Pay Reviews

• Many organizations review an employee’s wage or salary level at the time of the performance appraisal.– Employees may focus on the issue of money,

diminishing a supervisor’s motivating and coaching opportunities.

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Types of Appraisals

• Graphic rating scales– Rates the degree to which an employee has

achieved various characteristics– Most commonly used

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Types of Appraisals

• Paired-comparison approach– Measures the relative performance of

employees in a group– Appropriate to find one outstanding employee

in a group– Drawbacks: possible harm to morale and

teamwork, and possible lawsuits

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Types of Appraisals

• Forced-choice approach– Presents an appraiser with sets of statements

describing employee behavior; the appraiser must choose which statement is most characteristic of the employee and which is least characteristic

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Types of Appraisals

• Essay appraisal– Often used with other types of appraisals,

such as graphic rating scales– Drawback: depends on supervisor’s writing

skills

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Types of Appraisals

• Behaviorally Anchored Rating Scales (BARS)– A performance appraisal in which an

employee is rated on scales containing statements describing performance in several areas

– Advantages: can be tailored to organization’s objectivesand less subjective

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Behaviorally Anchored RatingScale for Nurses

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Types of Appraisals

• Checklist appraisal– Contains a series of questions about an

employee’s performance– Drawbacks: can be difficult to prepare and a

supervisor has no way to adjust the answers for any special circumstances that affect performance

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Sample Checklist Appraisal

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Types of Appraisals

• Critical-incident appraisal– Written record of incidents that show positive

and negative ways an employee has acted

• Work-standards approach– A supervisor compares employee’s actual

performance with established standards

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Types of Appraisals

• Management by Objectives (MBO)– A supervisor compares each employee’s

accomplishments with the objectives for that employee

• 360-degree feedback– supervisors may combine their appraisals with self-

assessments by the employee or appraisals by peers and customers.

– Appraisals of supervisors and other managers also may come from their subordinates

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Sources of Bias

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Sources of Bias

• Harshness bias– Rating employees

more severely than their performances merit

• Similarity bias– The tendency to

judge others more positively when they are like yourself

• Leniency bias– Rating employees

more favorably than their performances merit

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Sources of Bias

• Central tendency– The tendency to

select employee ratings in the middle of a scale

• Proximity bias– The tendency to

assign similar scores to items that are near each other on a questionnaire

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The Performance Appraisal Interview

• Purpose of the interview– communicate information about an

employee’s performance.

• Preparing for the interview– allow plenty of time for completing the

appraisal form– notify the employee about the appraisal

interview ahead of time– prepare an appropriate meeting place

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The Performance Appraisal Interview

• Conducting the interview– Problem solving and coaching– Signatures– Follow-up

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The Process of Conducting a Performance Appraisal Interview

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