1. Definitions Performance Appraisal
Systematic description of job relevant strengths and weaknesses within and between employees and groups.
Performance appraisal should accurately describe job performance behavior (not effectiveness)

2. Types of Evaluation Data
Objective (Quantitative) Production Information
Dollar Volume of Sales
Number of Passing Yards
Personnel Data
Absenteeism
Turnover
Accidents
Subjective (Judgmental) Data
Ratings of performance
Objective (Quantitative) Production Information
Problems with Objective Data
May result from factors other than performance
effectiveness versus performance
Are you using the “right” criterion
Personnel Data
Problems with personnel data
How do they reflect actual performance?
How relevant are they?
How accurate are your records?
Subjective (Judgmental) Data
Relevant for almost all types of jobs
Problems with Judgmental Data
Prone to bias and error associated with observation and judgement

3. Errors in Performance Ratings
Three types of error
Halo errors
Leniency errors
negative - “hard grader”
positive - “easy grader”
Central tendency errors
Halo
rater’s general impression of employee (good or bad) will influence ratings on all dimensions of performance
Ex. Clumsy waiter may be great at dealing with irate customers
Leniency
being a “hard” or “easy” grader
Hard grader - want to motivate employee performance
Easy grader - may be uncomfortable giving negative feedback
Central Tendency
Rater’s reluctance to use the extreme edges of the scale

4. Uses for PA Information
Development
Identifies training needs
Helps employees do their jobs better
Research
Appraisals can serve as criteria for test validation
Appraisals can serve as predictors for promotion
Administrative
Assigns people to the work they do best
Maintains fairness in personnel decisions
Development
Identifies areas of employee strength
Identifies areas of employee job-related “weakness”
employees want to know how they are doing on the job
timely, concrete, accurate, constructive feedback is necessary for effective performance
key to employee motivation (goal setting & equity theory)
Research
Appraisals can serve as criteria for test validation
Appraisals can serve as predictors for promotion
Administrative
Assigns people to the work they do best
people are hired to do one job…
but may eventually become more suited for another job
but may develop particular areas of expertise
but may develop new skills and abilities (or interests)
Rewarding good performance
Promotion, wage and salary, and benefits
Addressing poor performance
remediating poor performers
terminating poor performers
Requires accurate measurement of how well people do their jobs

5. Legal Issues Properties of a legally sound appraisal system
Barrett & Kernan (1987)
Based on job analysis
Focuses on behaviors as opposed to traits
Evaluators are trained to use the system
Results are reviewed with employee
Appeal mechanisms are available to employees
Evaluations are documented
Poor performers receive corrective guidance
Rountree v. Dept. of Agriculture (1995)
Received low performance appraisal rating from supervisor
Claimed it was because of racial bias
Filed a claim with the EEOC
Received $8,000 for lost wages and benefits that a fair appraisal would have brought
Hopkins v. Price Waterhouse (1987)
She was senior manager in charge of large government computer contracts
Only woman among 88 partner candidates
Supported by colleagues (evaluated as outstanding)
Not accepted
Told that to improve her chances she needed to:
“walk, dress, and talk more femininely; wear makeup and jewelry, and have her hair styled”
Also, one board member stated outright would not consider a woman for partner…
did not believe women were capable of functioning as partners
Ultimately won her case in Supreme Court

6. Performance Appraisal Methods
Relative (employee) comparisons
Order employees in terms of overall performance
rank order
alteration ranking
paired comparisons
forced distributions

7. Forced Distributions
The rater must normally distribute performance ratings across employees
Controls leniency, severity, and central tendency biases
Employees at bottom may not be “bad” performers

8. Forced Distributions (Example)
Excellent
Good
Average
Poor
Bad
Number of employees

9. Utility of Relative Comparisons
Advantages
Helpful in making personnel decisions
Effectively control:
leniency/severity and central tendency errors
Disadvantages
Employees compared on a global “suitability” criterion
Halo error is obscured not eliminated
Difficult to compare rankings across work groups

10. Performance Appraisal Methods
Using Absolute Standards
Behavioral Checklists and Scales
Critical Incidents
Weighted Checklist
Behavioral Observation Scale
Behaviorally Anchored Rating Scale (BARS)

11. Exercise: Evaluate Your Boss
Think of your boss and the things he or she does at work
On a blank piece of paper, choose one or two dimensions of work performance from the following list:
Training others
Planning work for others
Assigning tasks to others
Scheduling people
Observing others’ work

12. Exercise: Evaluate Your Boss
Next, for each area/dimension you have chosen, write three sentences
Sentence A: Give an example of very poor performance in this area
Sentence B: Give an example of acceptable performance in this area
Sentence C: Give an example of excellent performance in this area
Make a rating scale from 1 to 5, where 1 corresponds to sentence A, 3 to sentence B, and 5 to sentence C

13. Example: Scheduling People
1 - “Often forgets to tell people when he has made changes to the shift schedule.”
2 -
3 - “Gives people a choice of shifts, whenever possible.”
4 -
5 - “Plans shifts so that no one person always ends up working the bad shift.”
Generating critical incidents - Behavioral statements describing different levels of performance.
Retranslating
Scaling

14. Exercise: Make your rating
Using your example statements as a guide, make a rating of your boss on the scale you designed.
In actual work settings, I/O psychologists would spend much time and effort with workers and supervisors to make sure that:
All of the performance areas made sense for the job being rated
All of the example statements fit the areas
All of the scale values were fair

15. Rater Training Can minimize error Can be used to “calibrate” ratings
leniency/severity and central tendency
Can be used to “calibrate” ratings
provide all raters with common points of reference

16. Performance Feedback Identify tasks performed of the job
Develop performance standards
Train raters
Communicate frequently
Evaluate own performance first
Encourage subordinate preparation/participation
Evaluate performance (not personality)
Provide specific, behavioral, constructive criticism
Be an active listener
Set mutually agreeable goals
Make rewards contingent on performance

17. Evaluating Work Performance
Suggestions
Identify tasks performed of the job
Develop performance standards
Develop job-relevant evaluation system
Train supervisors to:
observe/evaluate performance accurately
focus on only job-relevant issues
deliver feedback effectively
coach poor performers
Study why and how rating errors happen
Identify the knowledge, skills, abilities, and other qualities necessary for performance
Create standards for performance: What is acceptable, or good, or excellent?
Train supervisors to:
observe/evaluate performance accurately
focus on only job-relevant issues
Study why and how rating errors happen

18. Conclusions
Performance evaluation is an important issue both for companies and for workers
With careful design and appropriate use, performance evaluations can support productivity and fair allocation of rewards
Industrial-organizational psychologists specialize in making sure that performance evaluations are designed correctly
Prepared by the Society for Industrial and Organizational Psychology - SIOP © 1998