PERFORMANCE

MANAGEMENT
 Comparing Performance
Management and Performance
Appraisal
Performance Performance
Appraisal Management

Evaluating an The continuous

employee’s process of
identifying,
performance
measuring and
relative to his developing the
or her performance of
performance individuals and
standards. teams and aligning
their performance
with the
organization’s
goals.
The Components of an Effective
Performance Management Process
Defining Goals and Work
Efforts
 Guidelines for effective goals
 Set SMART goals
 Assign challenging but doable goals
 Encourage participation

 SMART goals are:

 Specific, and clearly state the desired

results.
 Measurable in answering “how much.”
 Attainable, and not too tough or too easy.
 Relevant to what’s to be achieved.
 Timely in reflecting deadlines and
Why appraise performance?
 Appraisals play an integral role in the
employer’s performance management process.
 Appraisals provide to each employee and
manager the opportunity to communicate their
expectations from each other, and develop a
better understanding.
 Appraisals help in planning for correcting
deficiencies and reinforce things done
correctly.
 Appraisals, in identifying employee strengths
and weaknesses, are useful for career planning
 Appraisals act as the employer’s base for pay,
promotion and retention decisions.
 to meet legal requirements by maintaining
documents.
The Appraisal Process
Performance Appraisal
 The performance appraisal
decision need to include:
 decisions about who should

evaluate performance
 what format should be used
 how the results should be utilized
Who Should Do the
Appraising?
 The immediate supervisor
 Peers
 Rating committees
 Self-ratings
 Subordinates
 360-Degree feedback
Performance Appraisal
Roles
 Supervisors
 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.
 Performance Appraisal Roles
(cont’d)
 HR department
 Serves a policy-making and advisory role.
 Provides advice and assistance regarding the
appraisal tool to use.
 Prepares forms and procedures and insists
that all departments use them.
 Responsible for training supervisors to improve
their appraisal skills.
 Responsible for monitoring the system to
ensure that appraisal formats and criteria
comply with EEO laws and are up to date.
Effectively Appraising
Performance
Steps in Appraising
Performance
Defining the job and performance
1
criteria
Appraising
2
performance
3
Providing feedback
session
Designing the Appraisal
Tool
 What to measure?
 Work output (quality and quantity)
 Personal competencies
 Goal (objective) achievement
Performance Appraisal
Methods
Appraisal Methodologies

Graphic rating
1 6 Narrative forms
scale
Alternation Behaviorally anchored
2 7
ranking rating scales (BARS)
Paired Management by objectives
3 8
comparison (MBO)
Computerized and Web-
Forced
4 9 based performance
distribution
appraisal
5 Critical incident 10 Merged methods
Performance Appraisal
Methods
 Graphic rating scale
 A scale that lists a number of traits
and a range of performance for
each that is used to identify the
score that best describes an
employee’s level of performance
for each trait.
Source: www.cwru.edu.
 Figure 9–5b
Source: www.cwru.edu.
 Figure 9–5c
Source: www.cwru.edu.
 Performance Appraisal
Methods (cont’d)
 Alternation ranking method
 Ranking employees from best to worst
on a particular trait, choosing highest,
then lowest, until all are ranked.
 Paired comparison method
 Ranking employees by making a chart
of all possible pairs of the employees for
each trait and indicating which is the
better employee of the pair.
Alternation Ranking Scale
Paired Comparison Method

Note: + means “better than.” − means “worse than.” For each chart, add up
the number of 1’s in each column to get the highest-ranked employee.
Performance Appraisal Methods
(cont’d)
Forced distribution method
Similar to grading on a curve;
predetermined percentages of rates
are placed in various performance
categories.
 Example:
15% high performers
20% high-average performers
30% average performers
20% low-average performers
Performance Appraisal Methods
(cont’d)
 Critical Incident Method: is where a supervisor
keeps a record 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
 It provides examples of good and poor performance
the supervisor can use to explain the person’s rating.
 It makes the supervisor think about the subordinate’s
appraisal all during the year.
 The list provides examples of what specifically the
subordinate can do to eliminate deficiencies.
Performance Appraisal
Methods (cont’d)
 Narrative Form: All or part of the
written appraisal are in narrative form in
this method. 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.
Performance Appraisal
Methods (cont’d)
 Behaviorally anchored rating scale
(BARS)
 An appraisal method that uses quantified
scale with specific narrative examples of
good and poor performance.
 Developing a BARS:
 Generate critical incidents
 Develop performance dimensions
 Reallocate incidents
 Scale the incidents
 Develop a final instrument
Performance Appraisal
Methods (cont’d)
 Advantages of using a BARS
 A more accurate gauge
 Clearer standards
 Feedback
 Independent dimensions
 Consistency
Performance Appraisal Methods
(cont’d)
 Management by Objectives (MBO)
Involves setting specific measurable goals
with each employee and then periodically
reviewing the progress made.
1. Set the organization’s goals.
2. Set departmental goals.
3. Discuss departmental goals.
4. Define expected results (set individual goals).
5. Performance reviews.
6. Provide feedback.
 Computerized and Web-
Based Performance Appraisal
 Performance appraisal software programs
 Keep notes on subordinates during the
year.
 Electronically rate employees on a
series of performance traits.
 Generate written text to support each
part of the appraisal.
 Electronic performance monitoring (EPM)
 Having supervisors electronically
monitor the amount of computerized
data an employee is processing per day,
and thereby his or her performance.
 Potential Rating Scale
Appraisal Problems
 Unclear standards
 An appraisal that is too open to
interpretation.
 Halo effect

 Occurs when a supervisor’s rating of a

subordinate on one trait biases the rating

of that person on other traits.
 Central tendency

 A tendency to rate all employees the same

way, such as rating them all average.

 Potential Rating Scale Appraisal
Problems (cont’d)
 Strictness/leniency
 The problem that occurs when a supervisor

has a tendency to rate all subordinates either

high or low.
 Recency Effects
The tendency to evaluate the employee


based on the most recent performance.

 Bias

 The tendency to allow individual differences

such as age, race, and sex to affect the

appraisal ratings employees receive .
 Guidelines for Effective
Appraisals
How to Avoid
Appraisal Problems

Get
Know the Use the Keep a Be
agreement
problems right tool diary fair
on a plan
Choosing the Right
Appraisal Tool
Criteria for Choosing an
Appraisal Tool

Employee
Accessibility Ease-of-use Accuracy
acceptance
 The Appraisal Interview
 Types of appraisal interviews
 Satisfactory—Promotable
 Satisfactory—Not promotable
 Unsatisfactory—Correctable
 Unsatisfactory—Uncorrectable
 How to conduct the appraisal interview
 Talk in terms of objective work data.
 Don’t get personal.
 Encourage the person to talk.
 Don’t tiptoe around.
 The Appraisal Interview
(cont’d)
 How to ensure the interview leads to
improved performance
 Don’t make the subordinate feel
threatened during the interview.
 Give the subordinate the opportunity to
present his or her ideas and feelings and
to influence the course of the interview.
 Have a helpful and constructive
supervisor conduct the interview.
 Offer the subordinate the necessary
support for development and change.