Chapter 7Chapter 7Appraising and

Managing Performance

In-the-News

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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 AppraisalEmployer 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 measureTrait, 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 JudgmentRelative Judgment

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

Absolute JudgmentAbsolute 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, and 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 AppraisalTrait Appraisal

Behavioral AppraisalBehavioral Appraisal

Outcome AppraisalOutcome Appraisal

Sample Trait ScalesRate each worker using the scales below.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

Legal Defensibility

Absolute

Relative

Trait

Behavior

Outcome

0

++

+

0

0

+

-

-

+

0

0

-

--

++

+

Appraisal Format

Administrative Use

Developmental Use

-- 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

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.

Shortcuts-4 easy steps to Effective Performance Appraisal

Encourage Discussion

Constructive Intention

Set Performance GOALS

Appraiser Credibility

QUIZ #6

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