1. Performance Management and Appraisal9
Performance Management and Appraisal
This chapter gives an overview of the performance appraisal process and the different tools and methods available. The main topics covered include the performance management process, appraisal methods, appraisal performance problems and solutions, and the appraisal interview.
Despite lots of attention, money, and effort, performance appraisals remain an area with which few managers or employees are satisfied.
The following questions are worth considering with respect to why some managers and employees are dissatisfied.
Is it just that we don't have a good enough system yet?
Is there an intrinsic problem with performance appraisals?
Is it just human nature to dislike them? 
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2. Learning Objectives
Define performance management and discuss how it differs from performance appraisal.
Describe the appraisal process.
Set effective performance appraisal standards.
At the conclusion of this chapter, you will be able to:
Define performance management and discuss how it differs from performance appraisal.
Describe the appraisal process.
Set effective performance appraisal standards.
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3. Learning Objectives
Develop, evaluate, and administer performance appraisal tools.
Explain and illustrate the problems to avoid in appraising performance.
Perform an effective appraisal interview.
At the conclusion of this chapter, you will be able to:
Develop, evaluate, and administer at least four performance appraisal tools.
Explain and illustrate the problems to avoid in appraising performance.
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4. Define performance management differs from performance appraisal.
and discuss how it
differs from performance appraisal.
Performance management has to do with creating an organizational system that is fair, effective, and widely understood by all. The goal of the system is to support the strategic aims of the firm by establishing a valid and reliable process connecting the employees to it.
Performance appraisal involves :
setting work standards,
assessing actual performance relative to those standards, and
providing feedback to the employee.
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5. Basic Concepts in Performance Management and Appraisal
Performance Appraisal: Setting work standards,
assessing actual performance, and providing feedback to employees to motivate, correct, and continue their performance.
Performance Management: Performance management has to do with creating an organizational system that is fair, effective, and widely understood by all.
An integrated approach to ensuring that an employee’s performance supports and contributes to the organization’s strategic aims by establishing a valid and reliable process connecting the employees to it..
Comparing Performance Appraisal and Performance Management

6. Describe the appraisal process.
For this learning objective, we will discuss the need to have a performance appraisal process, provide continuous feedback and how to manage performance.
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7. The Performance Appraisal Process
Why appraise performance?
Continuous feedback
Performance management
Effective appraisals begin before the actual appraisal, with the manager defining the employee’s job and performance criteria. Defining the job means making sure that you and your subordinate agree on his or her duties and job standards and on the appraisal method you will use.
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8. To summarize the purpose of performance appraisal :
Why Appraise Performance? 1 2
Is the basis for pay and promotion decisions 3
Plays an integral role in performance management 4
Helps in correcting deficiencies and reinforcing good performance
Is useful in career planning

9. Appraising performance is important for several reasons
Appraising performance is important for several reasons. Many employers still base pay and promotions on employee appraisals. Appraisals play an integral role in the employer's performance management process. The appraisal lets the boss and subordinate develop a plan for correcting any deficiencies while reinforcing correct actions. Appraisals are a useful career planning tool. In addition, appraisals play a role in identifying training and development needs.  In addition, training and development activities are based on the appraisal system.
Aligning the employee’s efforts with the job’s standards should be a continuous process. When you see a performance problem, the time to take action is immediately. Similarly, when someone does something well, the best reinforcement comes immediately, not six months later.
Finally, providing continuous feedback and making improvements to how employees and employers do things contributes to organizational success. Performance management includes continuously adjusting how an organization and its team members do things. Team members who need coaching and training receive it, and procedures that need changing are changed.
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10. Set effective performance appraisal standards.
Most employees need and expect to know ahead of time on what basis their employerwill appraise them. Let’s discuss how you can make this happen.
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11. Defining the Employee’s Goals and Work Standards
Assign Specific Goals
Encourage Participation
Assign Measurable Goals
Assign Challenging but Doable Goals
Guidelines for Effective Goal Setting

12. Setting Goals SMART Goals:
Specific, and clearly state the desired results
Measurable in answering “how much”
Attainable, and not too tough or too easy
Relevant to what’s to be achieved
Timely in reflecting deadlines and milestones
Encourage participation- employees should always have the opportunity to have meaningful input into the goals they are to achieve

13. Employee’s Goals and Performance Standards
Basing appraisal standards on required competencies. Competencies are often arranged according to the basic technical, motor, intellectual, and other skills needed to be successful in a job. In addition, the minimum level of each skill needed should be specified.
The role of job descriptions: Ideally, what to appraise and how to appraise it will be obvious from the job description. For the criteria to appraise, the job description should list the job’s duties or tasks, including how critical each is to the job and how often it’s performed.
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14. Who Should Do the Appraising?
Human Resources Management 12e Gary Dessler
Who Should Do the Appraising?
Self-rating
Subordinates
360-degree feedback
Potential Appraisers
Immediate supervisor HR
Peers
Traditionally, the employee’s direct supervisor appraises his or her performance. However, other options are available and used.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

15. Performance Appraisal 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
Rating committees consist of multiple raters, typically the employee’s immediate supervisor and three or four other supervisors.

16. (cont) The HR Department Serves a policy-making and advisory role
Provides advice and assistance regarding the appraisal tool to use
Trains supervisors to improve their appraisal skills
Monitors the appraisal system’s effectiveness
Corrects any deviations from procedures

17. Human Resources Management 12e Gary Dessler
(cont)
Peer appraisal
Performance appraisal by peers is becoming popular.
Studies found that peer appraisal has a positive impact on improving open communication, task motivation, cohesion and satisfaction.
Self ratings :
Some employers ask employee to evaluate him self.
The basic problem is that employees usually rate themselves higher than do their supervisors or peers.
The human resources department serves a policy-making and advisory role. The human resource team should also be responsible for training supervisors to improve their appraisal skills, for monitoring the appraisal system’s effectiveness, and for ensuring that it complies with EEO laws.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

18. Human Resources Management 12e Gary Dessler
(cont)
Human Resources Management 12e Gary Dessler
Appraisal by subordinates
Studies found that managers who received upward feedback poor or moderate showed significant improvements. And managers who met their subordinates to discusse their assessment improved than who did not.
360-degree feedback
It means that the employer collects performance information from all around the employee:
Supervisors, peers, customers, self-ratings
Results are mixed
Most employees prefer this approach
The human resources department serves a policy-making and advisory role. The human resource team should also be responsible for training supervisors to improve their appraisal skills, for monitoring the appraisal system’s effectiveness, and for ensuring that it complies with EEO laws.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

19. Develop, evaluate, and administer at least four
performance appraisal tools.
Next, we will discuss and interpret 10 performance appraisal tools.
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20. Designing the Appraisal Tool
The graphic rating scale method is the simplest and most popular performance appraisal technique. First, a scale is used to list a number of traits and a range of performance for each. Then the employee is rated by identifying the score that best describes his/her performance level for each trait.
What to Measure?
Managers must decide which job performance aspects to measure. Such aspects include generic dimensions, actual job duties, or behaviorally recognizable competencies.
Generic dimensions – quality, quantity, and timeliness of work
Developing one’s competencies, or achieving one’s goals

21. Performance Appraisal Tools
Alternation ranking
Forced distribution
Critical incident
Behaviorally Anchored Rating Scales (BARS)
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22. Performance Appraisal Tools
Management by objectives (MBO)
Computerized and web-based performance appraisal
Electronic performance monitoring (EPM)
Management by Objectives (MBO) – The manager sets specific measurable goals with each employee and then periodically discusses the employee’s progress toward them. The process consists of six steps:
set organizational goals
set departmental goals
discuss
define expected results
conduct performance reviews
provide feedback
A computerized and web-based performance appraisal approachgenerally enables managers to keep notes on subordinates during the year. It allows employee ratings on a series of performance traits, and then generates text to support each part of the appraisal.
Electronic Performance Monitoring use computer network technology to allow managers access to their employees’ computers and telephones.
Note, however, the most effective appraisal forms often merge several approaches
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23. The Alternation Ranking Method ranks employees from best to worst on a specific trait, choosing highest, then lowest, until all are ranked.
Forced Distribution Method – Predetermined percentages of employee ratings are placed in various performance categories, similar to grading on a curve.
Critical Incident Method – A supervisor keeps a record of uncommonly good and/or undesirable examples of an employee’s work-related behavior. The supervisor then reviews the record with the employee at predetermined times.
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24. Behaviorally Anchored Rating Scale (BARS)
Behaviorally Anchored Rating Scales (BARS) is a method that combines the benefits of, critical incidents, and quantified scales. It does so by anchoring a scale with specific behavioral examples of good or poor performance.
Developing a BARS
Advantages of BARS
Generate critical incidents
Develop performance dimensions
Reallocate incidents
Scale the incidents
Develop a final instrument
A more accurate gauge
Clearer standards
Feedback
Independent dimensions
Consistency

25. Management by Objectives (MBO) – The manager sets specific measurable goals with each employee and then periodically discusses the employee’s progress toward them. The process consists of six steps:
set organizational goals
set departmental goals
discuss
define expected results
conduct performance reviews
provide feedback
A computerized and web-based performance appraisal approach generally enables managers to keep notes on subordinates during the year. It allows employee ratings on a series of performance traits, and then generates text to support each part of the appraisal.
Electronic Performance Monitoring use computer network technology to allow managers access to their employees’ computers and telephones.
Note, however, the most effective appraisal forms often merge several approaches

26. Explain and illustrate the problems to avoid in
appraising performance.
As we said, few things managers do are fraught with more peril than appraisingsubordinates’ performance.We now turn to appraisal problems and how to solvethem, and to several other appraisal issues.
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27. Appraising Performance: Problems and Solutions
Unclear Standards
Leniency or Strictness
Halo Effect
Potential Rating-Scale Appraisal Problems
Central Tendency
Bias
Recency Effect

28. If standards are unclear, ambiguous traits and degrees of merit can result in an unfair appraisal.
The influence of a rater’s general impression on ratings of specific qualities is known as the halo effect.
Central tendency occurs when supervisors stick to the middle of the rating scales, thus rating everyone average.
Leniency or strictness occurs if supervisors have a tendency to rate everyone either high or low.
Recency effects involve letting what the employee has done recently blind the manager to the employee’s performance over the entire year.
Bias is a tendency to allow individual differences such as age, race, and sex affect employee appraisal ratings.
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29. Guidelines for Effective Appraisals Dealing with appraisal problems
Human Resources Management 12e Gary Dessler
Guidelines for Effective Appraisals Dealing with appraisal problems
Know the problems
Get agreement on a plan
Use the right tool
Guidelines for effective appraisals
Keep a diary
Be fair
Managers can do these five things to help ensure that they fairly conduct effective appraisals.
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30. Guidelines for appraisal effectiveness
Human Resources Management 12e Gary Dessler
Guidelines for appraisal effectiveness
Appraisals are always interpersonal and so subject to human bias
First The rater must learn and understand the potential appraisal problems such as central tendency and work to avoid them.
Second, he must use the right appraisal tool or combination of tools because each tool has its pros and cons
Third, he must keep a diary for employee’s performance over the year. Studies proved that critical incidents as they occur reduces appraisal problems.
An employee’s performance may be so weak that it requires a formal written warning.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

31. Human Resources Management 12e Gary Dessler
Guidelines for appraisal effectiveness
Cont.
Fourth, he must get agreement on a plan because the aim of the appraisal is to improve unsatisfactory performance and reinforce good performance.
Therefore the appraisal’s end product, should always be a plan for what the employee must do to improve his effort.
Fifth, ensure fairness. Some managers ignore accuracy and honesty in performance appraisal, therefor performance standards must be clear to ensure that the appraisal is fair.
An employee’s performance may be so weak that it requires a formal written warning.
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32. Perform an effective appraisal interview.
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33. Types of Appraisal Interview
Human Resources Management 12e Gary Dessler
Types of Appraisal Interview
Satisfactory—Promotable
Satisfactory—Not Promotable
Unsatisfactory—Correctable
Unsatisfactory—Uncorrectable
Types of Appraisal Interviews
As a supervisor, you will face four types of appraisal interviews, each with its unique objectives.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

34. Human Resources Management 12e Gary Dessler
Satisfactory-promotable: the person’s performance is satisfactory and there is a promotion a head. In this case, The supervisor discuss the person’s career plans.
Satisfactory-not promotable: the person’s performance is satisfactory, but the promotion is not possible. The objective here is to maintain satisfactory, so the best option is to find incentives to maintain performance.
Unsatisfactory but correctable. The objective here is to lay out an action plan for correcting the unsatisfactory performance.
If the performance is unsatisfactory and uncorrectable the interview is skipped
An employee’s performance may be so weak that it requires a formal written warning.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

35. How to conduct the appraisal interview
Human Resources Management 12e Gary Dessler
How to conduct the appraisal interview
Talk in terms of objective work data
Get agreement
Don’t get personal
Encourage the person to talk
Guidelines for Conducting an Interview
These are four main things to keep mind when actually conducting the interview.
Such as absences, productivity, quality
Try to compare person’s performance to standards
Llisten and ask open questions
Make sure the person know his weak points and put plan with him
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Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

36. Performance Management
Three concepts distinguish performance management from performance appraisal:
performance management is continuous
it is goal-directed
it is continuously re-evaluating and modifying the way people accomplish their work
Using information technology to support performance management allows management to monitor and correct deficiencies in real time.
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37. Six basic elements of Performance Management
Human Resources Management 12e Gary Dessler
Six basic elements of Performance Management
Direction sharing
Goal alignment
Ongoing performance monitoring
Ongoing feedback
Coaching and development support
Rewards, recognition, and compensation
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Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

38. Performance Management Summary
Performance management’s six basic elements:
Direction sharing means communicating the company’s goals throughout the company. Then translating these into doable departmental, team, and individual goals.
Goal alignment means having a method that enables managers and employees to see the link between the employees’ goals and those of their department and company.
Ongoing performance monitoring usually includes using computerized systems that measure and then progress and exception reports. The reports are based on the person’s progress toward meeting his or her performance goals.
Ongoing feedback includes both face-to-face and computerized feedback regarding progress toward goals.
Coaching and developmental support should be an integral part of the feedback process.
Recognition and rewards provide the consequences needed to keep the employee’s goal-directed performance on track.