1. PERFORMANCE APPRAISAL

2. Basic Concepts in Performance Management and Appraisal
Human Resources Management 12e Gary Dressler
Basic Concepts in Performance Management and Appraisal
Performance Appraisal
Setting work standards, assessing performance, and providing feedback to employees to motivate, correct, and continue their performance.
Every manager needs some way to appraise employees’ performance. If employees’ performance is good, you’ll want to reinforce it, and if it’s bad, you’ll want to take corrective action.
Performance appraisal means evaluating an employee’s current and/or past performance relative to his or her performance standards.
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3. Relationship between jab analysis and performance appraisal:
Job analysis performance performance
standards appraisal
Job description
and job
specification
Translate job
Into levels of
acceptable
performance
Describes the
Jobs relevant
strengths and
weakness of
Each individual
(Compare with
actual)

4. Employee’s Goals and Performance Standards
HR in practice: how to set effective goals
Assign specific goals
Assign measurable goals
Assign challenging but doable goals
Encourage participation
At the heart of performance management is the idea that employees’ efforts should be goal directed. Such a process involves clarifying expectations and quantifying them by setting measurable standards for each objective. Goals should be:
specific
measurable
challenging but attainable
relevant and timely
Finally, employees should always have the opportunity to have meaningful input into the goals they are to achieve.
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5. An Introduction to Appraising Performance
Human Resources Management 12e Gary Dressler
An Introduction to Appraising Performance
Why Appraise Performance? 1 2
Is basis for pay and promotion decisions. 3
Plays an integral role in performance management. 4
Helps in correcting deficiencies and reinforcing good performance.
Appraisals have several purposes that relate both to the appraised employee and the organization.
Is useful in career planning.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

6. Effectively Appraising Performance
Human Resources Management 12e Gary Dressler
Effectively Appraising Performance
Steps in Appraising Performance 1 2
Defining the job and performance criteria 3
Appraising performance
Providing feedback session
Effective appraisals should follow these three steps.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

7. Model of Performance Management
Above Expectations
Reinforce
Below Expectations
Coach/ Counsel/ Discipline
Plan Manage Appraise

8. Who Should Do the Appraising?
Peer appraisals
Rating committees
Self-ratings
Appraisal by subordinates
360-degree feedback
Who should do the appraising?The immediate supervisor is usually in the best position to observe and evaluate the subordinate’s performance. He or she also is typically responsible for that person’s performance.
Peer appraisals are becoming more popular with firms using self-managing teams.
Rating committees consist of multiple raters, typically the employee’s immediate supervisor and three or four other supervisors.
Self-ratings tend to be higher than supervisor or peer ratings although input from the subordinate is always to be encouraged.
Appraisal by subordinates is also known as upward feedback. In this instance, subordinates anonymously rate their supervisor’s performance.
360-degree feedback has become more widely used. Ratings are collected from the employee’s supervisors, subordinates, peers, and occasionally, internal or external customers. The best advice is that firms should carefully assess costs, train those giving feedback thoroughly, and not rely solely on 360-degree feedback.
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9. Performance Appraisal Roles
Human Resources Management 12e Gary Dressler
Performance Appraisal Roles
The Supervisor’s Role
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
Supervisors must therefore be familiar with appraisal techniques, understand and avoid problems that can cripple appraisals, and know how to conduct appraisals fairly.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

10. Performance Appraisal Roles (cont’d)
Human Resources Management 12e Gary Dressler
Performance Appraisal Roles (cont’d)
The HR Department’s Role
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 effectiveness and compliance with HRM laws.
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

11. Sample performance appraisal
Management staff
Factory non management staff
Managerial competencies
(Knowledge, skill, Planning, Organizing, Controlling)
Work standard
(skill, speed, accuracy, care of equipment)
Interpersonal skills
(communication, teamwork, adaptability)
Work habit
(orderliness, dependability, safety, prompts)
Achieving results
(problem solving, decision making, commitment, independence)
Job knowledge
(own job, related jobs)
Leadership
Attitude
(interest, attitude towards supervision, company policy)
Output (volume, quality, deadline)
Personal characteristic
(health, resourcefulness, job judgement, initiative, adaptability
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12. Performance Appraisal Methods
Human Resources Management 12e Gary Dressler
Performance Appraisal Methods
Appraisal Methodologies 1 6 3 2 7 8
Graphic rating scale
Narrative forms 4 9
Alternation ranking
Behaviorally anchored rating scales (BARS) 5
Paired comparison
Management by objectives (MBO)
Forced distribution
Computerized and Web-based performance appraisal
Appraising performance requires choosing an appraisal tool, form, or methodology that provides an effective means for comparing a subordinate’s actual performance to the standards for his or her job.
Critical incident
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13. Graphic Rating Scale Method –
is the simplest and most popular performance appraisal technique. 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
Managers must decide which job performance aspects to measure. E.g. generic dimensions, actual job duties, or behaviorally recognizable competencies.

14. Human Resources Management 12e Gary Dressler
Sample of graphic rating scale
Figure 9-2 shows one graphic rating scale. A graphic rating scale lists traits (such as “quality and reliability” or “teamwork”) and a range of performance values (from “unsatisfactory” to “outstanding,” or “below expectations” to “role model”) for each trait.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
9–14
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
9–14

15. Graphic Rating Scale Continuous Rating Scale
Employee name_________ Deptt_______
Rater’s name ___________ Date________
Exc. Good Acceptable Fair Poor _
Dependability
Initiative
Overall output
Attendance
Attitude
Cooperation
Total score Continuous Rating Scale

17. Human Resources Management 12e Gary Dressler
FIGURE 9–4 Appraisal Form for Assessing Both Competencies and Specific Objectives
Some graphic rating forms assess several things. Figure 9-4 (Section I) assesses the employee’s performance relating to both competencies and objectives. The employee and supervisor would fill in the objectives section at the start of the year, and then assess results and set new ones as part of the next appraisal.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
9–17
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
9–17

18. Human Resources Management 12e Gary Dressler
FIGURE 9–4 Appraisal Form for Assessing Both Competencies and Specific Objectives (cont’d)
Some graphic rating forms assess several things. In Figure 9-4, Section II illustrates the competencies an employee is expected to develop and exhibit such as “identifies and analyzes problems” (Problem Solving), and “maintains harmonious and effective work relationships with co-workers and constituents” (Teamwork).
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
9–18
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
9–18

19. (b) Alternation Ranking Method –
is where employees are ranked from best to worst on a particular trait, choosing highest, then lowest, until all are ranked.

20. Human Resources Management 12e Gary Dressler
FIGURE 9–5 Scale for Alternate Ranking of Appraise
Ranking employees from best to worst on a trait or traits is another option. Supervisors choosing the alternation ranking method would use a form like that in Figure 9-5 to alternately choose and list employees who are the highest on the characteristic being measured and the ones who are the lowest.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
9–20
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
9–20

21. (C) Paired Comparison Method –
involves ranking employees by making a chart of all possible pairs of employees for each trait and indicating which is the better employee of the pair. Figure 9-6 shows an example of the paired comparison method

22. Human Resources Management 12e Gary Dressler
FIGURE 9–6 Ranking Employees by the Paired Comparison Method
The paired comparison method helps make the ranking method more precise. For every trait (quantity of work, quality of work, and so on), you pair and compare every subordinate with every other subordinate. In the paired comparison method, you make a chart, as in Figure 9-6, of all possible pairs of employees for each trait.
Note: + means “better than.” - means “worse than.” For each chart, add up the number of +’s in each column to get the highest ranked employee.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
9–22
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
9–22

23. (d) Forced Distribution Method –
is where predetermined percentages of rates are placed in various performance categories; similar to grading on a curve.

24. (e) Critical Incident Method –
is where a supervisor keeps a record of uncommonly good and/or undesirable
the supervisor keeps a log of positive and negative examples (critical incidents) of a subordinate’s work-related behavior

25. Human Resources Management 12e Gary Dressler
TABLE 9–1 Examples of Critical Incidents for Assistant Plant Manager
Continuing Duties
Targets
Critical Incidents
Schedule production
for plant
90% utilization of personnel and machinery in plant; orders delivered on time
Instituted new production scheduling system; decreased late orders by 10% last month; increased machine utilization in plant by 20% last month
Supervise procurement of raw materials and on inventory control
Minimize inventory costs while keeping adequate supplies on hand
Let inventory storage costs rise 15% last month; over-ordered parts “A” and “B” by 20%; under-ordered part “C” by 30%
Supervise machinery
maintenance
No shutdowns due to faulty machinery
Instituted new preventative maintenance system for plant; prevented a machine breakdown by discovering faulty part
With the critical incident method, the supervisor keeps a log of positive and negative examples (critical incidents) of a subordinate’s work-related behavior. Every 6 months or so, supervisor and subordinate meet to discuss the latter’s performance, using the incidents as examples.
In Table 9-1, one of the assistant plant manager’s continuing duties was to supervise procurement and to minimize inventory costs. The critical incident log shows that the assistant plant manager let inventory storage costs rise 15%; this provides an example of what performance she must improve in the future.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

26. Human Resources Management 12e Gary Dressler
f. Narrative Forms – involve rating the employee’s performance for each performance factor, writing down examples and an improvement plan, aiding the employee in understanding where his/her performance was good or bad, and summarizing by focusing on problem solving.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

27. Human Resources Management 12e Gary Dressler
FIGURE 9–7 Appraisal-Coaching Worksheet
All or part of the written appraisal may be in narrative form as shown in Figure 9-7. The supervisor’s narrative assessment aids the employee in understanding where his or her performance was good or bad, and how to improve that performance.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

28. (g) Behaviorally Anchored Rating Scales (BARS) – combines the benefits of narratives, critical incidents, and quantified scales, by anchoring a scale with specific behavioral examples of good or poor performance

29. Behaviorally Anchored Rating Scale (BARS)
Human Resources Management 12e Gary Dressler
Behaviorally Anchored Rating Scale (BARS)
Developing a BARS
Write critical incidents
Develop performance dimensions
Reallocate incidents
Scale the incidents
Develop a final instrument
A behaviorally anchored rating scale (BARS) is an appraisal tool that anchors a numerical rating scale with specific examples of good or poor performance. Its proponents say it provides better, more equitable appraisals than do the other appraisal tools. It takes more time to develop a BARS, but the tool has several advantages.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

31. Human Resources Management 12e Gary Dressler
FIGURE 9–8 Example of a Behaviorally Anchored Rating Scale for the Dimension Salesmanship Skills
Figure 9-8 presents an example of a section of a final BARS instrument that lists the critical incidents that serve as behavioral anchors on the performance scale for the dimension Salesmanship Skills.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

32. (h) Management by Objectives (MBO)
Human Resources Management 12e Gary Dressler
(h) Management by Objectives (MBO)
A comprehensive and formal organization wide goal-setting and appraisal program requiring:
Setting of organization’s goals
Setting of departmental goals
Discussion of departmental goals
Defining expected results (setting individual goals)
Conducting periodic performance reviews
Providing performance feedback
Employers use management by objectives (MBO) for one of two things. Many use it as the primary appraisal method. Others use it to supplement to a graphic rating or other appraisal method. MBO generally refers to the comprehensive and formal organization wide goal-setting and appraisal program.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

33. Human Resources Management 12e Gary Dressler
Using MBO
Setting unclear objective
Conflict with subordinates over objectives
Potential Problems with MBO
Time-consuming appraisal process
In using MBO, it is best to keep the guidelines for goal setting (SMART, specific, and so on) in mind. Setting objectives with the subordinate sometimes turns into a tug-of-war, with the supervisor pushing for higher quotas and the subordinate pushing for lower ones.
The more that is known about the job and the person’s ability, the more confident a supervisor can be about setting standards.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

34. (h) Computerized and Web-Based Performance Appraisal Systems
Human Resources Management 12e Gary Dressler
(h) Computerized and Web-Based Performance Appraisal Systems
Allow managers to keep notes on subordinates.
Notes can be merged with employee ratings.
Software generates written text to support appraisals.
Allows for employee self-monitoring and self-evaluation.
Electronic Performance Monitoring – these systems use computer network technology to allow managers access to their employees’ computers and telephones.
Employers increasingly use computerized or Web-based performance appraisal systems that enable them to keep computerized notes on subordinates during the year. The notes can then be merged with ratings of employees on several performance traits. The software then generates written text to support each part of the appraisal. Most appraisal software combines several of the basic methods such as graphic ratings plus critical incidents or BARS.
Electronic performance monitoring (EPM) systems use computer network technology to allow managers access to their employees’ computers and telephones. They allow managers to monitor the employees’ rate, accuracy, and time spent working online.
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35. Human Resources Management 12e Gary Dressler
FIGURE 9–9 Online Performance Appraisal Tool
Many employers today make use of online appraisals for evaluating employee performance. Figure 9-9 shows an online service’s offerings of a graphic rating scale that is supported with specific behavioral competency expectations. These expectations pinpoint what raters should look for.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

36. Dealing with Performance Appraisal Problems
Human Resources Management 12e Gary Dressler
Dealing with Performance Appraisal Problems
Unclear standards
Leniency or strictness
Halo effect
Raters error problem
Central tendency
Bias
Graphic-type rating scales in particular are susceptible to several problems: unclear standards, halo effect, central tendency, leniency or strictness, and bias.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

37. Raters error problem
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 one specific ratee qualities/character is known as the halo effect.
Central tendency occurs when supervisors stick to the middle of the rating scales, thus rating everyone average.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

38. Raters error problem
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.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

39. Human Resources Management 12e Gary Dressler
TABLE 9–2 A Graphic Rating Scale with Unclear Standards
Table 9-2 illustrates the unclear standards problem. This graphic rating scale seems objective. However, it would probably result in unfair appraisals, because the traits and degrees of merit are ambiguous.
The best way to fix this problem is to include descriptive phrases that define or illustrate each trait.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall