CHAPTER 6

PERFORMANCE
APPRAISAL
Lecturer
Dang Thanh Thuy, MBA
LEARNING OUTCOMES

1. Understand the definition of performance appraisal

2. Recognize the process and methods to evaluate

employees

3. Develop skills for performance appraisal

 What is performance appraisal?

Evaluating employees’ current and/or past performance

relative to their performance standards

 Peer appraisal

Direct HR department
supervisor

Employees

Customers Self-rating

Subordinates
 Performance appraisal process

Step 1
Define the job and its standards

Step 2
Measure employees’ performance against these standards

Step 3
Provide feedback to the employees so that they can improve their
performance
Step 1: Define the job and its standards

Job description

SMART Goals
7
 Step 2: Measure employees’ performance against these
standards
Graphic rating scale
1
Management by Alternation ranking
objectives 7 2 method

Forced distribution
method 6 APPRAISAL Paired comparison
3
METHODS method

Critical incident Behavioral observation

method 5 4 scale (BOS)
 1.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
 Graphic Rating Scale

1 2 3 4 5 6 7 8 9 10

Good Average Below expectations

Unsatisfactory Questionable Satisfactory Outstanding

1 2 3 4
 2.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
 FOR THE TRAIT “QUALITY OF WORK”
Employee rated:

As compared to A B C D E
Art Maria Chuck Diana Jose Note:
+ means “better than”.
A – means “worse than”.
Art + + - -
For each chart, add up
B the number of +’s in
Maria - - - each column to get the

C highest-ranked employee
Chuck - + + -

D
Diana + + - -

E
Jose + + + - +
Maria ranks highest here
 3.Behavioral Observation Scale (BOS)

The BOS technique involves a process of identifying the key tasks

for a particular job. Employees are evaluated according to how
frequently they exhibit the required behavior for effective
performance. The scores for each of these observed behaviors can
then be totalled to produce an overall performance score
 4.Management by objectives (MBO)

MBO involves setting specific measurable goals with each

employee and then periodically reviewing the progress made
 5.Alternation ranking method

Ranking employees from best to worst on a particular

trait, choosing highest, then lowest, until all are
ranked
 Put the highest-ranking employee’s name on line 1. Put the lowest-
ranking employee’s name on line 20. Continue until all names are on the
scale
 6.Critical Incident Method

The supervisor keeps a log of positive and negative examples

(critical incidents) of a subordinate’s work-related behavior and then
reviews it with the employee at predetermined times
Source: http://www.emeraldinsight.com/journals.htm?articleid=1583775
 7.Forced distribution method
 Similar to grading on a curve; predetermined percentages of
ratees are placed in various performance categories
 Example:

60%
15% 25%
 Step 3: Provide feedback to the employees so that
they can improve their performance
• The appraisal interview
An interview in which the supervisors and subordinate review the
appraisal and make plans to remedy deficiencies and reinforce
strengths
• 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
 Appraising performance:
Problems and Solutions

Problems:
 Unclear standards
 Halo effect
 Central tendency
 Leniency or strictness
 Bias
 Appraising performance:
Problems and Solutions

How to avoid appraisal problems?

1.Know the 2.Use the right 3.Train

problems tool supervisors