Comparing Performance Appraisal
and Performance Management
Performance appraisal
– Evaluating an employee’s current and/or past
performance relative to his or her performance
standards which involves:
• Setting work standards
• Employees’ actual performance vs standards set
• Feedback to employees to motivate them to eliminate
deficiencies and perform above par
9–1
Comparing Performance Appraisal
and Performance Management
Performance management
– The process that consolidates goal setting,
performance appraisal and development into a
single, common system, the aim of which is to
ensure employee’s performance is supporting the
company’s goals
9–2
Comparing Performance Appraisal
and Performance Management
 An effective performance management
process includes:
–
–
–
–
–
–
Direction sharing
Role clarification
Goal setting and planning
Goal alignment
Developmental goal setting
Ongoing performance monitoring
9–3
Comparing Performance Appraisal
and Performance Management
 An effective performance management
process includes:
–
–
–
–
Coaching and support
Performance assessment (appraisal)
Rewards, recognition, and compensation
Workflow, process control, and return on
investment management
9–4
Basic Concepts in Performance
Management and Appraisal
 Defining Employee’s Goals and Work
Standards
– Quantify standards by setting measurable
standards for each objective
– “SMART” goals
• Specific goals
• Measurable goals (set in absolute terms)
• Challenging goals (realistic and not impossible)
9–5
An Introduction to Appraising
Performance
Why appraise performance?
– It provides the opportunity to review employees’
career plans based on their weaknesses and
strengths.
– It provides information for making decisions on
promotion and salary.
– It provides an opportunity for supervisors and
subordinates to review their work-related behavior.
– It helps the company to better manage employees
and improve overall performance.
9–6
An Introduction to Appraising
Performance – Roles
Supervisors
– Usually do the actual appraising.
– Must be familiar with basic appraisal techniques.
– Must understand and avoid problems that can
cripple appraisals.
– Must know how to conduct appraisals fairly.
9–7
An Introduction to Appraising
Performance – Roles
HR department
– Serves a policy-making and advisory role.
– Provides advice and assistance regarding the
appraisal tool to use.
– Prepares forms and procedures and insists that all
departments use them.
– Responsible for training supervisors to improve their
appraisal skills.
– Responsible for monitoring the system to ensure
that appraisal formats and criteria comply with EEO
laws and are up to date.
9–8
Steps in Appraising
Performance
1. Define the job
– Make sure that you and your subordinate agree on
his or her duties and job standards.
2. Appraise performance
– Compare your subordinate’s actual performance to
the standards that have been set; this usually
involves some type of rating form.
3. Provide feedback
– Discuss the subordinate’s performance and
progress, and making plans for any development
required.
9–9
Designing the Appraisal Tool
What to measure?
How to measure?
– Work output (quality
and quantity)
– Graphic rating scales
– Personal
competencies
– Paired comparison
– Goal (objective)
achievement
– Alternation ranking
– Forced distribution
– Critical incident
– Narrative form
– Behavioral anchored
rating scale
9–10
Performance Appraisal
Methods
Graphic rating scale
– A scale that lists a number of traits and a range of
performance for each that is used to identify the
score that best describes an employee’s level of
performance for each trait.
9–11
Graphic Rating
Scale with
Space for
Comments
9–12
Portion of an Administrative Secretary’s
Sample Performance Appraisal Form
Source: James Buford Jr., Bettye Burkhalter, and Grover Jacobs, “Link Job Description
to Performance Appraisals,” Personnel Journal, June 1988, pp. 135–136.
9–13
Source: www.cwru.edu.
Performance
Management Outline
9–14
Source: www.cwru.edu.
9–15
Source: www.cwru.edu.
9–16
Performance Appraisal Methods
Alternation ranking method
– Ranking employees from best to worst on a
particular trait, choosing highest, then lowest, until
all are ranked.
Paired comparison method
– Ranking employees by making a chart of all
possible pairs of the employees for each trait and
indicating which is the better employee of the pair.
9–17
Alternation Ranking Scale
Scale for
Alternate
Ranking of
Employees
9–18
Ranking Employees by the
Paired Comparison Method
Note: + means “better than.” − means “worse than.” For each chart, add up the
number of 1’s in each column to get the highest-ranked employee.
9–19
Performance Appraisal Methods
Forced distribution method
– Similar to grading on a curve; predetermined
percentages of ratees are placed in various
performance categories.
– Example:
•
•
•
•
•
15% high performers
20% high-average performers
30% average performers
20% low-average performers
15% low performers
Narrative Forms
9–20
AppraisalCoaching
Worksheet
Source: Reprinted with permission of
the publisher, HRnext.com; copyright
HRnext.com, 2003.
9–21
Performance Appraisal Methods
Critical Incident Method
– Keeps record of uncommonly good or undesirable
examples of an employee’s work-related behavior
and reviewing it with the employee at
predetermined times
– Ensures supervisor thinks about appraisal during
the year
– Numerical rating needed for comparing employees
or making salary decisions
9–22
Examples of Critical Incidents
for an Assistant Plant Manager
9–23
Performance Appraisal Methods
Behaviorally anchored rating scale
(BARS)
– An appraisal method that aims at combining the
benefits of narrative critical incidents and quantified
ratings by anchoring a quantified scale with specific
narrative examples of good and poor performance.
9–24
Behaviorally Anchored Rating
Scales
Figure 9.11
Performance Dimensions for Grocery Check-out Clerks
9–25
Management by Objectives
(MBO)
 Set specific measurable goals with each
employee and then periodically review
progress
1.
2.
3.
4.
5.
6.
Set the organization’s goals
Set departmental goals
Discuss departmental goals
Define expected results (set individual goals)
Performance reviews
Provide feedback
9–26
Computerized and Web-Based
Performance Appraisal
Performance appraisal software
programs
– Keep notes on subordinates during the year.
– Electronically rate employees on a series of
performance traits.
– Generate written text to support each part
of the appraisal.
9–27
Mixing Methods
Combining several methods
– Allows rater to provide several critical incidents
– Critical incidents provide specific examples for
developmental discussions
– Quantifiable rating:
• Facilitates comparing employees
• Useful for salary, transfer and promotion decisions
– Graphic rating scale
9–28
Appraising Performance:
Problems and Solutions
Potential Rating Scale Appraisal Problems
– Unclear standards
• An appraisal that is too open to interpretation.
– Halo effect
• Occurs when a supervisor’s rating of a subordinate on one
trait biases the rating of that person on other traits.
– Central tendency
• A tendency to rate all employees the same way, such as
rating them all average.
9–29
Appraising Performance:
Problems and Solutions)
Potential Rating Scale Appraisal Problems
– Leniency or Strictness
• Problem when supervisor has a tendency to rate all
subordinates either high or low
– Bias
• The tendency to allow individual differences such as age,
race, and sex to affect the appraisal ratings employees
receive.
9–30
How to Avoid Appraisal Problems
1. Learn and understand the potential problems,
and the solutions for each.
2. Use the right appraisal tool. Each tool has its
own pros and cons.
3. Train supervisors to reduce rating errors such
as halo, leniency, and central tendency.
9–31
Advantages and Disadvantages
of Appraisal Tools
Tool
Advantages
Disadvantages
Graphic rating
scale
Simple to use;
Provides a quantitative
rating for each employee.
BARS
Provides behavioral anchors; Difficult to develop
Accurate
Alternation
ranking
Simple to use;
Avoids central tendency and
other problems of rating
scales.
Standards may be unclear;
Halo effect, central tendency,
leniency, and bias can also be
problems.
Can cause disagreements
among employees;
May be unfair if all employees
are excellent.
9–32
Advantages and Disadvantages
of Appraisal Tools
Tool
Advantages
Disadvantages
Forced
distribution
method
End up with a
predetermined percentage
of people in each group
Employees’ appraisal results
depend on your choice of
cutoff points.
Critical incident
method
Helps to specify what is
“right” or “wrong” about the
employee’s performance;
Forces the supervisor to
evaluate subordinates on an
ongoing basis
Difficult to rate or rank
employees relative to one
another
MBO
Tied to jointly-agreed
performance objectives
Time-consuming
9–33
Who Should Do the Appraising?
Figure 9.13
Who Does the Appraising?
9–34