1. Performance Appraisal—An Important Component of Performance Management
Dessler, Cole, Goodman and Sutherland
Fundamentals of Human Resources Management
in Canada 7
Chapter Seven
Performance Appraisal—An Important Component of Performance Management
© 2004 Pearson Education Canada Inc., Toronto, Ontario 7-1

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

3. The Performance Appraisal Process
Why Should Performance Be Appraised?
1. Provides information for promotion and salary
decisions
2. Provides opportunity for reinforcement and/or
corrective action regarding performance
3. Provides opportunity to review career plans

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
job description often insufficient to clarify
performance expectations
measurable standards should be developed
for each position

6. Step 2: Appraisal Methods—Who, How
Graphic Rating Scale
Trait: _____ ____ Outstanding
____ Very Good
____ Good
____ Improvement Needed
____ Unsatisfactory
____ Not Rated

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

8. 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

9. 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

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

11. Performance Appraisal: Problems and Solutions
Validity and Reliability
validity
reliability
unclear standards

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

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

14. Performance Appraisal: Problems and Solutions
Avoiding Appraisal Problems
Ensure rater
awareness
of problems
Train
supervisors
to eliminate
rating errors
Ensure that
appraisals are
reviewed by
the supervisor’s
immediate boss

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

16. The Appraisal Interview
How to Prepare for the Appraisal Interview
assemble the data
prepare the employee
choose the time and place

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
should be the bedrock of a performance
appraisal
accurate feedback is based on human rights
legislation prohibitions