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chapter

8 PERFORMANCE MANAGEMENT AND


THE EMPLOYEE APPRAISAL PROCESS

A properly planned and effectively utilized performance appraisal program should contribute
to improved employee performance. In this chapter there is an extensive discussion of the
development of an appraisal program, including various sources of appraisal information. In
addition, several performance appraisal methods are described within the categories of trait,
behavior, and results approaches. A summary of the major strengths and weaknesses of
various appraisal techniques is shown in Figure 8.8. The section on feedback of appraisal has
been expanded with some practical suggestions for appraisal interviews. A section on improving
performance, which includes an examination of sources of ineffective performance, concludes the
chapter. We have found that performance appraisal is one of the functions that most concerns
managers and about which they often have many questions. In this chapter we attempt to bring
out the issues about which questions are frequently raised.
It is important for students to realize that training employees will not eliminate many of the
differences found among employees at the time they are hired. For this reason, performance
appraisal should be viewed as one of the important HR functions that can contribute to the
continuing development of the individual employee. The need for standards of satisfactory job
performance should be emphasized, particularly in this era of downsizing and restructuring.
From their own job experiences, students may be asked to list such criteria for various jobs. This
listing can give you an opportunity to point out those worker qualities that can be objectively
determined versus those that are subjectively determined. For example, the quantity of production
can be objectively determined, whereas employee cooperativeness is largely a matter of
subjective interpretation.

CHAPTER LEARNING OUTCOMES

LEARNING OUTCOME 1 Explain what performance management is and how the establishment
of goals, ongoing performance feedback, and the appraisal process
are part of it.

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
LEARNING OUTCOME 2 Explain the purposes of performance appraisals and the reasons they
sometimes fail.

LEARNING OUTCOME 3 Describe the different sources of appraisal information.

LEARNING OUTCOME 4 Explain the various methods used to evaluate the performance of
employees.

LEARNING OUTCOME 5 Outline the characteristics of an effective performance appraisal


interview.

LECTURE OUTLINE
I. PERFORMANCE MANAGEMENT SYSTEMS
• Performance appraisal is a process, typically delivered annually by a supervisor to a
subordinate, that is designed to help employees understand their roles, objectives, and
expectations when it comes to contributing to the firm’s success. In addition, new
employees are often put on probationary status for a period of time and evaluated 30,
60, or 90 days after being hired, with their continued employment contingent upon
their performing satisfactorily.
• Performance management is the process of creating a work environment in which
employees can perform to the best of their abilities.
• Performance appraisal programs and merit rating systems are not new or unique to
organizations. From their early use in the federal government, performance
appraisals have become a major activity of HRM.
• Mention that most successful organizations use performance appraisals as a basis for
HR activity. Mention that recent interest in teamwork, continuous improvement,
learning, and the like has caused many organizations to rethink their approach to
performance appraisals.

II. ONGOING PERFORMANCE FEEDBACK


Because feedback is most useful when it is immediate and specific to a particular situation,
it should be a regularly occurring activity. For example, if you are a sales manager, should
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
98 Part 3: Developing Effectiveness in Human Resources

you wait to appraise your employees once or twice a year? Probably not. Most likely you
would want to monitor their sales on a weekly and monthly basis. Has a particular
salesperson met his or her customer-contact numbers this week? Why or why not? Is the
salesperson closing deals with the people he or she does contact? If at the six-month mark,
the salesperson isn’t making his or her goals, how can you help the person if you haven’t
provided the individual with ongoing feedback? The lack of sales will be hard to make up
at this point.

III. PERFORMANCE APPRAISAL PROGRAMS


A. The Purposes of Performance Appraisal
Performance appraisal programs benefit both the employee and the organization.
1. Administrative Purposes—For the organization, performance appraisals
provide inputs for many other HR functions. The concept of “pay-for-performance”
has gained wide acceptance among employers. Emphasize the importance of
correctly administered performance appraisals as a key to the proper
compensation of employees.
2. Developmental Purposes
• For the employee, performance appraisals provide feedback about daily
performance while also stressing employee training, development, and growth
plans.
• Refer to Figure 8.2 in the textbook to illustrate the more common uses of
performance appraisals. Have students, in groups or individually, brainstorm
different objectives of an appraisal program. Discuss how they contribute to
organizational growth and employee job satisfaction. List the objectives on
the board and see if any of the objectives might conflict with one another. If
they do, ask the class what problems this might cause for supervisors.
B. Why Appraisal Programs Sometimes Fail
• Have students, in groups or individually, brainstorm why performance appraisal
programs fail. List their reasons on the board and compare them to those given in
the textbook.
• Stress that in order to be motivated, employees must perceive that their appraisals
are fair and accurate. Also, when employees are involved in the procedure rather
than play a passive role, they are more likely to believe their appraisals are fair.
Providing employees with feedback on a continual basis not only improves their
performance but helps them know where they stand, thereby lessening the anxiety
they feel during their formal appraisals.
• Ask students what influence “politics” may play in the performance appraisal
process.

IV. DEVELOPING AN EFFECTIVE APPRAISAL PROGRAM


• Developing an appraisal system is normally the joint responsibility of the HR
department and line and staff managers. The HR department is responsible for over-
Chapter 8: Performance Management and the Employee Appraisal Process 99

seeing and coordinating the appraisal program while other managers assist in
establishing objectives for the program.
• Studies have shown that employees have greater trust and respect for appraisal systems
when they participate in the development of the rating instrument.
A. What Are the Performance Standards?
Before managers can appraise the performance of employees, appropriate
performance standards must be established and communicated to employees. These
standards, or criteria, must be job-related requirements. Discuss the basic
considerations for establishing performance standards. Use Figure 8.4 in the textbook
for this discussion.
1. Strategic Relevance—This refers to how the appraisal standards relate to the
strategic objectives of the organization. A strategy-driven performance appraisal
process results in the documentation HR managers need to justify various training
expenses in order to close any gaps between, employees’ current skills and those
they will need in the future to execute the firm’s strategy.
2. Criterion Deficiency
• Performance standards must capture the full range of a person’s job. When
standards focus on only one element of the job (e.g., sales), they are likely
leave out important evaluation criteria.
• You may choose relate the concept of criterion deficiency to content validity
discussed in Chapter 6.
3. Criterion Contamination—Performance standards should not be influenced
by factors outside the employee’s control. For example, if bad materials or poor
equipment affects an employee’s performance, his or her performance standards
may be contaminated.
4. Reliability
• This refers to the stability or consistency of a standard, or the extent to which
individuals tend to maintain a certain level of performance over time.
• Stress that performance standards should be written and that they should be
defined in quantifiable and measurable terms.
• A new process some companies are using to make sure managers are rating
employees consistently is called calibration. During calibration meetings, a
group of supervisors, led by their managers and facilitated by an HR
professional, discuss the performance of individual employees to ensure all
managers apply similar standards to all of the firm’s employees. Calibration
meetings can be particularly helpful after a merger or acquisition, especially
one that’s global.
• Have students develop quantifiable and measurable performance standards
for the jobs of (1) college recruiter, (2) college teacher, (3) sales clerk,
(4) computer operator, and/or (5) bus driver.
100 Part 3: Developing Effectiveness in Human Resources

• Obtain some sample performance appraisal forms from organizations. Have


students critique (1) the characteristics on which individuals are evaluated in
terms of how relevant they are to the job, and (2) the evaluator’s probable
opportunity to observe the behaviors described on the forms.
B. Are You Complying with the Law?
Based on recent court rulings, HR managers recommend that performance
appraisals meet these legal guidelines:
1. Performance ratings must be job-related (based on job analysis).
2. Employees should have a copy of their job standards.
3. Employee performance should be observable.
4. Performance problems should be documented and referred to in employee
appraisals.
5. Supervisors should be properly trained in the appraisal process.
6. Managers should openly discuss performance with employees and offer help
where needed.
7. An appeals procedure should be developed whereby employees can voice
disagreement with the appraisal received.
C. Who Should Appraise an Employee’s Performance?
• Just as there are multiple standards by which to evaluate performance, there are
a multitude of persons with valuable information about a person’s work
effectiveness.
• Use Figure 8.5 in the textbook as a basis for discussion about multiple sources
of appraisal.
1. Manager/Supervisor Appraisal—Because managers and supervisors work
directly with their employees, they are the logical choice to appraise the
performance of their employees. Managers and supervisors can use daily work
records and the direct observation of employees to complete the appraisal review.
2. Self-Appraisal—Self-appraisals are used when managers seek to increase
employees’ involvement in the appraisal process. One problem with this method is
that appraisers may evaluate their performance higher than the supervisor would.
It can also lead employees to wrongly believe they have more influence over the
process than they really do.
3. Subordinate Appraisal—Appraisal by subordinates has been used when
supervisors seek feedback on how subordinates view them. Employees are in a
good position to evaluate the leadership, communications, planning, and
delegation of authority of their managers. Discuss with students why managers
may not favor this appraisal method.
4. Peer Appraisal—Have students discuss when peer appraisals can be most
effectively used. What are several advantages and disadvantages of this appraisal
method? Have students discuss why this appraisal approach is not widely used.
Chapter 8: Performance Management and the Employee Appraisal Process 101

5. Team Appraisal—This is an extension of the peer appraisal. In a team setting,


it might be impossible to separate out an individual’s contribution. In such cases,
doing individual appraisals might detract from the critical mission of the team.
Team appraisals are designed to evaluate the performance of the team as a whole.
6. Customer Appraisal—Driven by TQM concerns, internal and external
customers are increasingly used as sources of performance appraisal information.
The opinions of vendors and suppliers are also sometimes utilized in the appraisal
process. Internal customers can include anyone within the organization who
depends on the employee’s work output.
D. Putting It All Together: 360-Degree Appraisal
• Over 25 percent of all U.S. companies and over 90 percent of Fortune 1000
companies use some form of 360-degree appraisal. The system is intended to
give employees the most accurate view of their performance because it solicits
input from multiple sources—their supervisors, peers, subordinates, customers,
and so forth.
• Use Figure 8.6: Pros and Cons of 360-Degree Appraisal to discuss the plusses
and minuses of 360-degree appraisal.
E. Training Appraisers
Although performance appraisal is widely practiced by organizations, many
managers must perform the process without the benefit of training. This point is
highlighted by the quote by the following quote in the textbook: “What’s important is
not the (appraisal) form or (measuring) scale. What’s important is that managers can
objectively observe people’s performance and give them objective feedback on that
performance.” To accomplish this goal, performance appraisal training programs
should focus on the following:
1. Establishing an Appraisal Plan—This systematic process covers (1) the
objectives of the performance appraisal system, and (2) the mechanics of the rating
system (including the method, frequency, and strengths and weaknesses of the
system).
2. Eliminating Rater Error
• Research has shown that appraisers are prone to make several different types
of rating errors.
• Distributional errors (e.g., central tendency, leniency, and strictness errors)
involve the arrangement of a group of ratings across several employees.
Forced distribution and peer rankings are techniques that some organizations
use to eliminate these types of errors. However, not all corporate cultures are
conducive to forced rankings systems. Firms that place a high-priority on
teamwork would probably find forced ranking to be counterproductive. In
addition, these ranking systems can sometimes adversely affect employee
morale and lead to lawsuits. Behavioral anchors may be a more effective
approach to minimizing distributional errors. (See section III for more about
behavioral anchors.)
102 Part 3: Developing Effectiveness in Human Resources

• Temporal errors (e.g., recency) are the result of how a person evaluates
information over time.
• Contrast error occurs when an employee’s evaluation is biased either
favorably or unfavorably because of a previous employee’s performance
evaluation.
• Similar-to-me error occurs when an appraiser inflates the evaluation of a
person with whom they have something in common.
• Discuss how various stereotypes held toward minorities and women may
affect their performance review.
3. Feedback Training
• Feedback not only provides employees with knowledge of results, but it also
allows the manager and employee to discuss current problems and set future
goals. Managers need to realize that employees want feedback. That is, they
want know how they are doing and how they can improve. They are less eager
to be appraised or judged.
• Refer to Highlights in HRM 1: Supervisor’s Checklist for the Performance
Appraisal in the textbook. This piece provides excellent points for
scheduling, preparing for the review, and conducting the performance review
with the employee.

V. PERFORMANCE APPRAISAL METHODS


This section discusses the major contemporary methods of performance appraisal. Other,
less frequently used systems are also reviewed. Performance appraisal systems can be
broadly classified as trait methods, behavioral methods, or results-oriented methods.
A. Trait Methods
1. Graphic Rating Scales—In the graphic rating-scale method, traits or
characteristics are rated on a line or scale. Highlights in HRM 2 in the textbook
shows an example. Rating scale forms may differ between organizations based on
the dimensions to be appraised, the degree to which the performance dimensions
are defined, and the degree to which the points on the scale are defined.
2. Mixed-Standard Scales
• These scales are extensions of the basic rating scale. In the mixed-standard
scales method, the manager evaluates the trait under consideration (e.g.,
initiative) against three specific behavioral descriptions relevant to each trait to
be rated. An example is provided in Highlights in HRM 3 in the textbook.
• Each descriptor for the trait should reflect different levels of performance—
superior, average, or below average, for example. Managers appraise their
employees by indicating that the employees are better than, equal to, or worse
than the standard for each behavioral descriptor.
3. Forced-Choice Method—In the forced-choice method, the manager is
required to choose from a pair of statements that appear equally favorable or
Chapter 8: Performance Management and the Employee Appraisal Process 103

unfavorable, selecting the one statement that best describes the employee’s
behavior. The manager selects the statement without knowing which statement
correctly describes successful job performance.
4. Essay Method
• The essay method of performance appraisal requires the supervisor to write
a statement that describes the employee’s behavior. Normally both strengths
and weaknesses are described, along with a plan for future employee
development.
• Have students discuss what they see as the advantages and weaknesses of
this appraisal method.
B. Behavioral Methods
1. Critical Incident Method—The critical incident method appraises employees
based on favorable or unfavorable critical incidents related to the job. Managers
keep a log on employees and note the critical incidents in the log as they occur.
Ask students to keep a list of favorable and unfavorable critical incidents of
students’ behavior in their various classes (without names). Discuss their entries in
class.
2. Behavioral Checklist Method—Checklists consist of groups of statements that
pertain to a given job. The rater checks those statements that apply to the ratee.
3. Behaviorally Anchored Rating Scale (BARS)
• A behaviorally anchored rating scale (BARS) is often mentioned as one
way to improve rating scales. It does this by providing a description of
behavior along the scale, or continuum. A BARS is based on critical incidents
of job performance. Normally, a BARS consists of a series of five to ten
vertical scales, one for each important dimension of job performance. High-
lights in HRM 4 in the textbook provides an example of a behaviorally
anchored rating scale for firefighters.
• While BARS instruments have been widely publicized as a more effective
way to appraise performance, at present there is no strong evidence that a
BARS reduces all of the rating errors mentioned earlier.
4. Behavior Observation Scales (BOS)—A behavior observation scale (BOS) is
similar to BARS but asks raters to evaluate how frequently each behavior has
been observed. In contrast to BARS, this approach allows the appraiser to play
more the role of observer than judge. Highlights in HRM 4 in the text-book show
an example of BOS for a sales representative.
C. Results Methods
1. Productivity Measures
• A number of measures can be used to assess results achieved. Salespeople,
for example, are evaluated based on sales volume. Production workers can be
evaluated based on output produced, scrap rate, defects, and the like.
104 Part 3: Developing Effectiveness in Human Resources

• There are a number of potential problems with output measures. Recall the
earlier discussion of criteria contamination and criteria deficiency.
2. Management by Objectives
• Developed by Peter Drucker in 1954, management by objectives (MBO) is a
philosophy of management as well as a goal-setting and performance
appraisal system. At periodic time intervals, employees set goals with their
supervisors and are evaluated against those goals on specified review dates.
Figure 8.7 in the textbook illustrates how performance appraisal functions under
an MBO program.
• Ask the class if anyone has worked or is currently working under an MBO
system. Have students explain the MBO process at their organizations.
a. Requirements for a Successful MBO Program
• To be successful, MBO programs must meet several characteristics.
Established goals should be quantifiable and set for both the long run and
the short run. Goals must be realistically set and under the employee’s
control. Managers and employees must establish specific times when goals
are to be reviewed and evaluated. Accompanying the goals should be a
detailed description of how the goals will be achieved.
• Advantages of MBO include the following: (1) employees can measure
their own performance; (2) quantifiable goals are set; (3) goal setting is a
joint effort between the employee and the manager; and (4) employees
have the satisfaction of achieving mutually established objectives.
b. Criticisms of MBO. The disadvantages of MBO include (1) some studies
show that MBO programs have achieved only mediocre success; (2) goals
may be unrealistically set; (3) employees and managers may not be fully
committed to the MBO process; and (4) some goals may be hard to quantify
but, nevertheless, are important to employee job success.
3. The Balanced Scorecard
• Developed by Harvard professors Robert Kaplan and David Norton, the
Balanced Scorecard (BSC), discussed initially in Chapter 2, is a measurement
framework that helps managers translate strategic goals into operational
objectives. The logic of the BSC is that learning and people management help
organizations improve their internal processes.
• Discuss with students the importance of not only measuring performance in
terms of bottom-line, but in long-term measures that may not provide
immediate benefits to the organization.
• Similar in some ways to MBO, the BSC enables managers to translate broad
corporate goals into divisional, departmental and team goals. Highlights in
HRM 5 shows an example of a personal scorecard used for this process.
Chapter 8: Performance Management and the Employee Appraisal Process 105

D. Which Performance Appraisal Method to Use?


• The choice of which appraisal method to use largely depends on the intended
purpose of the appraisal program. To discuss the major strengths and weaknesses
of the different appraisal methods refer to Figure 8.8 in the textbook. In addition,
HR managers can periodically administer a survey to the firm’s employees and
managers to get a sense of whether or not they think the organization’s performance
appraisal process is improving.
• It is common for a supervisor’s appraisal of an employee to be reviewed by higher
levels of management. This is often done by the supervisor’s superior. Review of
an evaluator’s appraisal helps to ensure objectivity and fairness. This method also
can serve to train new supervisors in the proper application of performance
appraisal. Additionally, performance appraisals shouldn’t be done for middle
managers and rank-and-file employees only but for top managers as well—
particularly if the organization’s goals are to cascade downward through the
company.

VI. APPRAISAL INTERVIEWS


Appraisal interviews are a very important part of the entire appraisal process. Unfortunately,
many supervisors do not devote the time or attention needed to conduct the interview
properly. Appraisers should remember that employees want and deserve an honest
appraisal of their performance. This only comes through a well-planned and well-
conducted appraisal interview. The form of the interview will depend mostly on the purpose
of the interview. Generally, feedback sessions will have a different approach from growth
and development interviews. Employees should have adequate time in the interview to
ask questions and provide additional input, if needed.
A. Three Types of Appraisal Interviews
Norman Maier, an authority on the appraisal interview, notes that there are three basic
appraisal interview types.
1. Tell-and-Sell Interview—This method requires that the supervisor use
persuasion to change an employee in a desired manner. This can be accomplished
by having the employee see how the changed behavior will benefit him or her.
2. Tell-and-Listen Interview—When using this method, the supervisor discusses
the employee’s strong and weak points during the first half of the interview.
During the second half of the interview, the employee’s feelings about the
interview are thoroughly explored. At this time the supervisor attempts to deal
with the objections of the employee through nondefensive behavior. It is
assumed that the opportunity to release frustrated feelings through catharsis will
help to reduce or remove unpleasant feelings.
3. Problem-Solving Interview—The supervisor who uses the problem-solving
method employs nondirective interviewing procedures, but in addition, the
supervisor seeks to develop a growth and development approach to the interview.
Maier recommends this method since the appraisal process should exist to help
employees grow and develop.
106 Part 3: Developing Effectiveness in Human Resources

B. Conducting the Appraisal Interview


• The textbook provides several considerations for conducting the appraisal
interview. A guiding rule to follow is not to discuss too much information at one
time. Dividing the appraisal interview into two sessions, one for the performance
review and the other for future development plans, can reduce time constraints.
• By dividing the appraisal interview into two sessions, the supervisor can serve
as evaluator at one period and counselor at the other period. This relieves the
burden of performing both tasks during one session.
• Some specific guidelines about conducting an appraisal interview may
increase employees’ acceptance of feedback, their satisfaction with the interview,
as well as their intention to improve in the future. Many of the principles of
good selection interviewing (see Chapter 6) apply to appraisal interviews.
1. Ask for a Self-Assessment—Self-assessment gets employees thinking about
their performance and assures that they know the standards against which they
will be evaluated.
2. Invite Participation—Participation helps bring out some of the root causes of
performance problems and may increase an employee’s satisfaction with the
process.
3. Express Appreciation—Praise is a powerful motivator. However, avoid the
“sandwich technique.” With this method, positive statements are given first,
followed by negative statements, which are followed by more positive remarks.
For many years HR professionals recommended that managers use the sandwich
technique when giving appraisal information to employees. Currently, this
technique is not recommended for these reasons: (1) giving praise first signals to
the employee that bad news is on the way; (2) the final positive comments
indicate to the employee that no more negative comments will follow; and
(3) employees may simply see this approach as a way to ease through the appraisal
interview without any real communication between those involved.
4. Minimize Criticism—Criticism leads to defensiveness, and this may hurt the
chances of solving the problem. It’s hard to change a person’s behavior with a
single conversation, so “laying it on the line” isn’t probably a good idea.
5. Change the Behavior, Not the Person—Instead of focusing on traits that are
personal characteristics (and difficult to change) focus on behaviors that can be
corrected or improved.
6. Focus on Solving Problems—Rather than blaming, focus on remedying the
situation.
7. Be Supportive—Some of the best leaders are those who focus on finding ways to
help employees eliminate obstacles to successful performance.
8. Establish Goals—Try to focus the employee on the future rather than the past.
9. Follow Up Day to Day—Feedback is more powerful when it occurs
frequently. Informal talks reinforce the goals and objectives laid out in the
formal appraisal interview.
Chapter 8: Performance Management and the Employee Appraisal Process 107

C. Improving Performance
Employees cannot improve their performance unless they know exactly what is
expected of them. Supervisors have the responsibility to inform employees of their
job standards at the start of the review period. By doing this, employees can adjust
their behavior to conform to performance criteria, and surprises can be avoided at the
appraisal interview.
1. Identifying Sources of Ineffective Performance
• Use Figure 8.9: Factors That Influence Performance and Figure 8.10:
Performance Diagnosis to talk about the major causes of ineffective job
performance, broken into three categories: (1) ability, (2) motivation, and
(3) environment. These ideas were first brought up in Chapter 1 under
discussions about productivity enhancement.
• It is recommended that ineffective employee job performance be diagnosed
according to three interactive factors: the employee’s skill, the employee’s
effort levels, and the external conditions surrounding the job.
2. Performance Diagnosis
• Although performance appraisal systems can often tell us who is not
performing well, they typically cannot reveal why. So, if someone is not
achieving desired results, it can be difficult to decide if it is due to ability,
motivation, or external constraints.
• It is thus important to compare various measures of performance to ensure
improvement. For example, if someone is demonstrating all the desired
behaviors but is not achieving the desired results, logic suggests that it may be
due to factors beyond his or her control.
3. Managing Ineffective Performance—A three-step process is recommended to
correct poor employee performance. First, identify the source of poor
performance. Second, develop a course of action to improve performance.
Third, motivate the employee to correct undesirable job behavior.

Performance Diagnosis
HRM EXPERIENCE

1. Noting that Carl works very hard on the gopher problem, this may offer a clue
that his problem is not motivation or external issues, but that he lacks the skills
to address the situation. A potential solution would be to offer training courses
on how to deal with the problem.
2. Clark may be having external problems at home (e.g., his wife’s sister-in-law
and their family have decided to visit and stay at the house for a whole month—
putting extra financial and emotional strain on Clark). Obviously, we cannot be
sure of the problems Clark is facing, but finding out why he feels so dejected
about the bonus may offer clues to his poor performance. If the problems are
108 Part 3: Developing Effectiveness in Human Resources

external, maybe offering some time off will help Clark work out his problems at
home so he can better accomplish his assignment at work.

3. There could be several explanations including lack of sales training or perhaps


his college degree is in a different field that is of greater interest to him.
Students will have various explanations.

ANSWERS TO END-OF-CHAPTER DISCUSSION QUESTIONS


1. The performance appraisal an employee receives is directly linked with other HR functions.
A poor appraisal review can limit promotional or transfer opportunities. A poor appraisal
may necessitate additional training to bring the employee up to acceptable performance
standards. Depending on the appraisal received, increases in salary may or may not be
recommended.
2. The courts have emphasized the importance of having carefully defined and measurable
criteria as a basis for appraising employee performance. They have insisted on employers
having some type of record of performance based on identifiable objective criteria rather than
vague descriptions such as attitude, cooperation, or initiative.
3. Some criteria that can be used to appraise performance in the following jobs are:
a. Sales representative: Volume of sales made, number of sales contacts made, and
customer complaints.
b. TV repairer: Number of repairs made in a specified period of time, and amount of
work that must be redone because of faulty workmanship.
c. Director of nursing in a hospital: Success in establishing standards of performance
and the cost-effective utilization of members of the nursing staff.
d. HR manager: Effectiveness of HR programs in relation to cost, employee effectiveness
and morale, and quality of response to special problems within the organization.
e. Air-traffic controller: skill in managing traffic, completion of required operational
procedures (updating weather reports, keeping records), coordination and communication
with pilots, and use of emergency equipment and procedures.
4. a. The tell-and-sell method requires the ability to persuade an individual to change in the
prescribed manner. The tell-and-listen method requires the ability to communicate the strong
and weak points of a subordinate’s performance and to explore the subordinate’s feelings
about the appraisal. The problem-solving method requires the ability to stimulate growth
and development through discussion.
b. The skills for the problem-solving type of interview can be developed by first adopting
the attitude that through discussion, new ideas and mutual interests can be developed. Training
and practice in listening and reflecting feelings, reflecting ideas, using exploratory questions,
and summarizing are essential.
c. Probably most students will agree that the tell-and-sell method is the least desirable
because it leads to suppressed defensive behavior and feelings of hostility.
Chapter 8: Performance Management and the Employee Appraisal Process 109

5. Poor performance should be detected during the daily observation of employees. The major
factors that influence performance are listed in Figure 8.8 in the textbook.

ANSWERS TO USING THE INTERNET ACTIVITIES


Internet Exercise #1, page 358

U.S. Office of Personnel Management


http://www.opm.gov/

Question:
Visit the website of the U.S. Office of Personnel Management and conduct a search of “360-
degree assessment” for the organization’s training assistance program. Review the
organization’s 360-degree feedback procedures and list the sources of feedback. What questions
are considered for each feedback source?

Answer:
The feedback sources included in OPM’s 360-feedback process include the following:
• Superiors
• Self-assessment
• Peers
• Subordinates
• Customers
For each feedback source, the following two questions are covered:
• “What does this rating source contribute?”
• “What cautions should be addressed?”

Source:
http://www.opm.gov/perform/wppdf/360asess.pdf

Internet Exercise #2, page 368

U.S. Army Research Institute


http://www.hqda.army.mil/ari/

Question:
Visit the U.S. Army Research Institute and conduct a search of “behaviorally anchored rating
scales” (BARS). Provide a summary of how the U.S. Army has used BARS to assess tactical
thinking.
110 Part 3: Developing Effectiveness in Human Resources

Answer:
An ongoing need exists in the Army to enhance combat leaders’ tactical thinking skills. A
Tactical Thinking Behaviorally Anchored Rating Scale (T-BARS) was generated and inter-rater
reliability was established. Eight themes of tactical thinking identified in the “Think Like A
Commander” program of research and training formed the basis of the scales. These included:
• Know and Use All Assets Available
• Focus on the Mission and Higher’s Intent
• Model a Thinking Enemy
• Consider Effects of Terrain
• Consider Timing
• See the Big Picture
• Consider Contingencies and Remain Flexible
• Visualize the Battlefield
Interviews were conducted with Army officers with a range of operational experience to elicit
patterns of thinking and behaviors within a set of tactical exercises. Interview data were utilized
to generate behavioral indicators to populate the five levels of cognitive performance within the
T-BARS.

Source:
http://www.hqda.army.mil/ari/pdf/RR1854.pdf
Chapter 8: Performance Management and the Employee Appraisal Process 111

VIDEO CASE DISCUSSION GUIDE


Students will offer a number of answers to this question, so they should be encouraged to fully
explain their rationale for their ideas. Some possibilities might include increasing job
satisfaction by encouraging employees to take on additional tasks or increasing productivity
through training.
A good place to begin this discussion is by comparing and contrasting the meaning of traits
(characteristics), behaviors, and results. Encourage students to imagine what traits,
behaviors, and results are most likely to be exhibited in a bakery. From there, students will
probably reach a general consensus about which of these they think would be most important
and therefore most likely to be used at Metropolitan.
The video suggests that the two owners do most of the performance reviews. Guide students in
discussing who else might be able to offer accurate, reliable performance evaluations. Then
guide students in discussing the merits and feasibility of having other stakeholders, such as
peers, participate in performance evaluations. Ask students to share their opinions about
whether the employees should be given an opportunity to evaluate themselves.
It might be useful to spend some time discussing how so much of the work done at a bakery is
routine work, and how important it is to be consistent on a daily basis. These factors might
lead students to determine how best to evaluate performance at Metropolitan. As for
differences between supervisors and nonsupervisors, one of the specific circumstances
mentioned in the video is a high turnover rate, and the managers even point out that an
annual or semi-annual review is not always appropriate because many of their employees
don’t stay with them that long. Guide students in discussing what might be a more
appropriate and effective timeframe for giving performance feedback at Metropolitan,
especially for entry-level employees.

NOTES FOR END-OF-CHAPTER CASE STUDIES


Case Study 1: Performance Management System Helps Freeport McMoran
Switch Strategic Gears
1. The firm needed a means o coordinating and focusing its workforce around the world on
carrying out its strategy. Performance appraisal measurements provide one way to do that.
Also, it the firm needs to change its strategy, an adjustment in performance appraisal
measurements can help expedite that change.
2. In posting that question to the class, it will be interesting to see if anyone thinks that paper and
pencil would be better. Some might argue that if those who are going to do the appraisals are
not familiar with computers, paper and pencil might be better but if the firm wishes to maintain
a global data base, someone would need to input the information from the paper and thus it
might be better to train raters to the extent needed to complete performance appraisals.
112 Part 3: Developing Effectiveness in Human Resources

Case Study 2: Appraising Employees at the San Diego Zoo


1. The performance appraisal an employee receives is directly linked with other HR functions.
A poor appraisal review can limit promotional or transfer opportunities. A poor appraisal
may necessitate additional training to bring the employee up to acceptable performance
standards. Depending on the appraisal received, increases in salary may or may not be
recommended.
2. The courts have emphasized the importance of having carefully defined and measurable
criteria as a basis for appraising employee performance. They have insisted on employers
having some type of record of performance based on identifiable objective criteria rather than
vague descriptions such as attitude, cooperation, or initiative.
3. Some criteria that can be used to appraise performance in the following jobs are:
a. Sales representative: Volume of sales made, number of sales contacts made, and
customer complaints.
b. TV repairer: Number of repairs made in a specified period of time, and amount of
work that must be redone because of faulty workmanship.
c. Director of nursing in a hospital: Success in establishing standards of performance
and the cost-effective utilization of members of the nursing staff.
d. HR manager: Effectiveness of HR programs in relation to cost, employee effectiveness
and morale, and quality of response to special problems within the organization.
e. Air-traffic controller: skill in managing traffic, completion of required operational
procedures (updating weather reports, keeping records), coordination and communication
with pilots, and use of emergency equipment and procedures.
4. a. The tell-and-sell method requires the ability to persuade an individual to change in the
prescribed manner. The tell-and-listen method requires the ability to communicate the strong
and weak points of a subordinate’s performance and to explore the subordinate’s feelings
about the appraisal. The problem-solving method requires the ability to stimulate growth
and development through discussion.
b. The skills for the problem-solving type of interview can be developed by first adopting
the attitude that through discussion, new ideas and mutual interests can be developed. Training
and practice in listening and reflecting feelings, reflecting ideas, using exploratory questions,
and summarizing are essential.
c. Probably most students will agree that the tell-and-sell method is the least desirable
because it leads to suppressed defensive behavior and feelings of hostility.
5. Poor performance should be detected during the daily observation of employees. The major
factors that influence performance are listed in Figure 8.8 in the textbook.
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