1. Dessler, Cole, Goodman, and Sutherland
In-Class Edition
Management of Human Resources
Second Canadian Edition 7
Chapter Seven
Performance Appraisal: The Key to Effective Performance Management
© 2007 Pearson Education Canada

2. Performance Management
–entire process affecting how well an employee
performs
–foundation is performance appraisal

3. The Performance Appraisal Process
Three steps:
1. Defining performance expectations
2. Appraising performance
3. Providing feedback to employee
regarding performance

4. The Performance Appraisal Process
Performance Appraisal Problems
lack of standards; irrelevant, subjective,
unrealistic standards
poor measures of performance
rater errors
poor feedback to employees; eg. arguing
failure to use evaluation results for decision
making

5. Step 1: Defining Performance Expectations
quantifiable and measurable standards of
performance required
more specific than job descriptions
ensure employees clearly understand
expectations

6. Step 2: Appraising Performance
Performance Appraisal Methods
Graphic rating scale
Forced distribution
Critical incident
Behaviourally anchored rating scale
Management by objectives
Technology-based

7. Appraisal Methods Graphic Rating Scale Trait: _____ ____ Outstanding
____ Very Good
____ Good
____ Improvement Needed
____ Unsatisfactory
____ Not Rated

8. Critical Incident Method
Appraisal Methods
Critical Incident Method
keep a record of:
uncommonly good
undesirable
work-related behaviours
review with employee at predetermined times

9. Management by Objectives (MBO)
Appraisal Methods
Management by Objectives (MBO)
Set the organization’s objectives
Allocate objectives to departments
Set objectives for business units
Define expected results (individual)
Define action plans for individuals
Implement action plans
Performance reviews: measure the results
Provide rewards for meeting objectives

10. Management by Objectives (MBO)
Appraisal Methods
Management by Objectives (MBO)
Problems
1. Setting unclear, unmeasurable objectives
2. Time consuming
3. Tug of war between manager and employee

11. Technology-based Methods
Appraisal Methods
Technology-based Methods
New software programs enable employees to
check their own performance against prescribed
criteria

12. Performance Appraisal Problems
Validity: criteria must be relevant,
specific and cover all aspects of the job
in order to be accurate
Reliability: criteria must provide consistent
measures of performance across many
employees and many raters
Unclear performance standards

13. Performance Appraisal Problems
Who Should Do the Appraisal?
immediate supervisor
peers
rating committees
self
employees/subordinates
360-degree appraisal (all of the above)

14. Dealing with Rater Errors
Performance Appraisal
Dealing with Rater Errors
halo effect
central tendency
leniency or strictness
appraisal bias
recency effects
similar-to-me bias

15. Performance Appraisal
Avoiding Rater Errors
Ensure rater
awareness
of problems
Train
supervisors
to eliminate
rating errors
Ensure that
appraisals are
reviewed by
the supervisor’s
immediate boss

16. Step 3: Providing Feedback
Appraisal Interview
An interview in which the supervisor and
employee review the appraisal and make
plans to remedy deficiencies and reinforce
strengths

17. The Appraisal Interview
How to Conduct an Appraisal Interview
be direct and specific
focus on job-related behaviours
encourage the person to talk
develop an action plan

18. The Appraisal Interview
How to Handle a Defensive Employee
recognize that defensive behaviour is normal
never attack a person’s defenses
postpone action
recognize human limitations

19. The Appraisal Interview
constructive criticism within a dignified
context
ensure the interview leads to improved
performance
consider appropriate use of formal written
warnings

20. Legal and Ethical Issues
use rating instruments based on specific job
behaviours
provide an honest assessment of performance
requires raters to have regular contact with
employees
accurate feedback is critical to defend charges
of biases based on prohibited grounds