HUMAN RESOURCE MANAGEMENT

Appraising and Managing Performance

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall
 Learning Objectives

1. Identify advantages/disadvantages of various

performance rating systems
2. Manage impact of rating errors/bias on
performance appraisals
3. Identify major legal issues related to appraising &
managing performance

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

 What is Performance Appraisal?
o Performance appraisal includes the identification,
measurement , and management of human
performance in organizations
Identification
To determine the areas to be
examined by manager for
performance measurement

Measurement
Making managerial judgments about
employee performance

Management
Managers must provide workers with
feedback and coach them to higher
levels
Copyright of performance
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 Uses of Performance Appraisals

o Administrative purpose
– When performance appraisals provide the basis for a decision
about the employee’s work conditions.
o Developmental purpose
– Appraisals which are geared toward improving employees’
performance and strengthening their job skills.

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 Identifying Performance Dimensions
o Deciding the aspects, or dimensions, which determine
effective job performance.
– Performance dimensions should be identified on the basis of
job analysis
– Performance dimensions can also be identified based on
strategic objectives of the organizations.
– An increasingly popular approach to identifying performance
dimensions focuses on competencies
• The observable characteristics people bring with them in order
to perform the job successfully
• The set of competencies associated with a job is often referred
to as a competency model

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 Performance Measurement Tools
o Appraisal formats can be classified in two ways:
o By the type of judgment that is required
– Relative
• An appraisal format that asks supervisors to compare an
employee’s performance to the performance of other
employees doing the same job.
– Absolute
• An appraisal format that asks supervisors to make judgments
about an employee’s performance based solely on
performance standards
o By the focus of the measure/data
– Trait
– Behavior
– Outcome
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Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall
 Measurement tools
o Performance measurement systems can be classified by
the type of performance data on which they focus
– Trait appraisal instruments
• An appraisal tool that asks a supervisor to make judgments
about worker characteristics that tend to be consistent and
enduring.
– Behavior appraisal instruments
• These instruments focus on assessing a worker’s behaviors.
Instead of ranking leadership ability (a trait), the rater is asked
to assess whether an employee exhibits certain behaviors (for
example, works well with coworkers, comes to meetings on
time).
– Outcomes appraisal instruments
• These appraisal instruments ask managers to assess the results
achieved by workers, such as total sales or number of products
produced.
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 Measurement Tools

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 Measurement Challenges
oRater errors and bias
oThe influence of liking
oPrecautions
– The recording of behavioral incidents to serve as the basis
for evaluation and other managerial actions.
oOrganizational politics
– Political Vs Rational approach
oWhether to focus on the individual or the group
oLegal issues

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 Measurement: Groups & Teams

o Assess group and individual contributions

o Use behavioral measures for individuals
o Develop individual measures with team input
o Keep team measurements balanced
 Financial outcomes are not the only measures
 Look at both financial and behavioral outcomes as well as
process measures

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 Measurement: Legal Issues

o Factors influencing judges’ decisions:

 Use of job analysis
 Consistency/providing written instructions
 Employees can review appraisal results
 Agreement among multiple raters
 Presence of rater training

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 Managing Performance
o The appraisal interview
– Upon completing the performance rating, the supervisor
usually conducts an interview with the worker to provide
feedback—one of the most important parts of the appraisal
process.

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 Managing Performance
o Supervisors who manage performance effectively
generally share four characteristics. They:
– Explore the causes of performance problems.
– Direct attention to the causes of problems.
– Develop an action plan and empower workers to reach a
solution.
– Direct communication at performance and provide
effective feedback.
o Each of these characteristics is critical to achieving
improved and sustained performance levels

o Performance results from:

 Ability, motivation and situational factors
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How to Determine and Remedy Shortfalls

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 Summary and Conclusions

 Identify the dimensions of the job that determine

effective performance
 Recognize and avoid rating biases
 Provide useful, constructive feedback
 Keep a performance log or diary with specific
behavioral examples
 Manage performance regularly [i.e., don’t save
“laundry list” for annual appraisal]

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