Purposes of Performance Appraisal To improve, employees need to know how they are doing. The supervisor and employee can plan how to improve weak areas. An appraisal can help motivate employees. Performance appraisals are part of the ongoing control process. Performance appraisals provide important records for the organization. 17-1 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

The Appraisal Process – Step 1 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. 17-2 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

The Appraisal Process – Step 2 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. 17-3 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

The Appraisal Process – Step 3 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. 17-4 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

The Appraisal Process – Step 4 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. 17-5 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Possible Causes for Poor Performance Inadequate skills Lack of effort Shortcomings of the process External conditions Personal problems 17-6 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

What to Measure in an Appraisal Do not label people with certain characteristics. Focus on behavior and results. When appraisals require supervisors to draw conclusions about the employee’s personal characteristics, try to base them on observations about behavior and results. Record at least one specific example for each category rated. 17-7 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Qualities of Effective Performance Appraisal Measures Objective Job-related Based on behaviors Within employee’s control Related to specific tasks Communicated to employees 17-8 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

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. The ratings in a performance appraisal should not be discriminatory. An employee should know performance standards in advance. Employees should be able to ask questions about their ratings. 17-9 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

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. A supervisor who must review pay rates at performance appraisal time should make an extra effort to emphasize performance. 17-10 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Types of Appraisals Graphic rating scales: Paired-comparison approach: Most commonly used; relatively easy to use Rates the degree to which an employee has achieved various characteristics 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 17-11 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Types of Appraisals (continued) Forced-choice approach: Appraisal form provides sets of statements describing employee behavior Essay appraisal: Often used with other types of appraisals, such as graphic rating scales Drawback: depends on supervisor’s writing skills Behaviorally Anchored Rating Scales (BARS): Rate employee performance in several areas such as work quantity and quality Drawbacks: can be tailored and less subjective 17-12 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Types of Appraisals (continued) 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 17-13 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Sample Checklist Appraisal 17-14 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Types of Appraisals (continued) 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 Management by Objectives (MBO): A supervisor compares each employee’s accomplishments with the objectives for that employee Assessments by someone other than supervisor: 360-degree feedback 17-15 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Sources of Bias 17-16 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

The Performance Appraisal Interview Purpose of the interview Preparing for the interview Conducting the interview Problem solving and coaching Signatures Follow-up 17-17 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

The Process of Conducting a Performance Appraisal Interview 17-18 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.