PERFORMANCE APPRAISAL &

MANAGEMENT
Chapter 8
Peretz and Fried (2012)
1
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• Please answer 4 questions that are based on our previous
class – selection
• These are clicker questions

Highlights from previous

class 2
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• 3 minutes
• 2-1 slides
• Other students provide feedback using a ‘traffic light’
model
What worked well?
• Share your top two hightlights of the
presentation

What could be done differently?

• Suggest one thing that could be done
differently next time

What did not work well?

• Share one thing that could be improved

Individual Presentations 3
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 1. Discuss relationships between strategy, performance
management, and appraisal
2. Explain the objectives of performance appraisal
3. Identify sources of error in appraisal
4. Discuss major types of appraisal systems
5. Outline the importance of goal setting in performance
improvement
6. Describe the impact of EEO on performance appraisal.
7. Practically learn on how to design an effective
performance appraisal for companies operating in
different countries.

Learning objectives 4
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Awkward performance review 5
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• Performance appraisal
• Concerned with determining how well employees are doing
their job, communicating that information to employees,
agreeing on new objectives and establishing a plan for
performance improvement.
• Performance management
• Aims to improve organisational, functional, unit and
individual performance by linking the objectives of each.
To advance, transmit and sustain knowledge
and understanding through the conduct of
teaching, research and scholarship at the
highest international standards, for the
benefit of the Western Australian, Australian
and international communities.

Definitions 6
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• Creation of a shared vision.
• Establishment of performance objectives.
• Derived from the organisation’s strategic business objectives for
each function & employee
• Use of a formal review process to evaluate functional group
and individual progress towards goal achievement.
• The linking of performance evaluation and employee
development and rewards to motivate and reinforce desired
behaviour.

Key elements of performance management 7

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1. Discriminate on the basis of performance
1. Good performers are rewarded
2. Non-performing employees are reprimanded/ corrected
2. Rewarding performance
3. Developing employees
4. Giving feedback to employees

PA Objectives 8
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1. Define purposes of appraisal program.
2. Program consistent with organisational objectives,
culture.
3. Full understanding of and support for program.
4. Involve employees, managers in development.
5. Performance standards and evaluation are clear, job-
related, fair, objective.
6. Establish training sessions.
7. Provide formal procedure for employees to challenge
performance appraisals.
8. Monitor the program.

Introducing an appraisal program 9

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1. Maintain regular dialogue with staff
2. Give concrete examples and comparisons
3. Give feedback that includes both positive and negative
aspects of performance
4. Explain how individual performance is liked to
corporate objectives
5. Discuss methods of improving performance
6. Monitor staff member’s performance post-discussion

Tips for giving effective

feedback 10
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• Rater errors
• Halo effect
• Central tendency
• Leniency/strictness bias
• Prejudice
• Recency effect
• Relationship effect

Awareness is the key! Having clear, job-relevant, fair, and objective

performance criteria is critical!

Some rater errors 11

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• Ranking
• Grading
• Critical incidents
• Behaviour observation scales
• The balanced scorecard
• People, internal operations,
customer satisfaction, & finance

Some performance appraisal

systems 12
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 Group Activity
Peretz & Fried (2012)
• You are invited for BHP Billiton as an external consultant and
asked to create performance appraisal for its Australian and
Chinese offices. Please outline recommendations of effective
PA for BHP Billiton in Australia and China based on this
week’s article. You also need to persuade them why it is
important to consider cultural values when creating PAs.
• The two panels of internal PA consultants will evaluate the
soundness of your advice.
Australia China
Low power distance (4.74); high future High power distance (5.04); low future
orientation (4.09); low collectivism (4.17) orientation (3.75); high collectivism (5.80)

Creating PA for 13
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• Performance appraisal is a management program; it is not
just an HR department responsibility.
• It is also an important motivator and employee
development tool.
• Management should understand that an organisation’s
strategic business objectives are better achieved through
satisfying individual goals.
• The fairness of the performance appraisal system strongly
affects how employees feel about the organisation.
• To ensure people stay in the organization, it is important
to integrate cultural values into design of performance
appraisal.

Summary 14
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1) Peer-reviewed management articles, not books or
Wikipedia or blogs or other internet sources!
2) Define all the constructs
3) Back up your arguments, elaborate, say ‘why’, and
justify
4) Irrelevant to the topic discussion
5) Manger!  Proofread and spellcheck!
6) Page-long paragraphs
7) Sentence-long paragraphs
8) Colloquial language

Some tips for your essay (40%) 15

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• Read chapter 9 and the article by Blume, Ford, Baldwin,
& Huang (2010)
• Your essay must be submitted by April 28th , 5pm via
LMS
• Only one submission attempt
• 5% penalty for each late day
• Please follow the instuctions on LMS regarding content and
format

Your homework 16
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