Human Resource Management: Performance Management and Appraisal

Human Resource
Management
TWELFTH EDITION
GARY DESSLER
BIJU VARKKEY
Part 3 | Training and Development
Chapter 9
Performance Management and Appraisal

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e
After studying this chapter, you should be able to:
1. Evaluate and improve the appraisal form in Figure 9–1.

2. Describe the appraisal process.
3. Develop, evaluate, and administer at least four
performance appraisal tools.
4. Explain and illustrate the problems to avoid in
appraising performance.
5. List and discuss the pros and cons of six appraisal
methods.
6. Perform an effective appraisal interview.
7. Discuss the pros and cons of using different raters to
appraise a person’s performance.
9–2
Basic Concepts in Performance
Management and Appraisal
Comparing
Performance Appraisal
and
Performance Management
Performance Appraisal: Performance Management:

Setting work standards, assessing An integrated approach to
performance, and providing ensuring that an employee’s
feedback to employees to motivate, performance supports and
correct, and continue their contributes to the organization’s
performance. strategic aims.
9–3
Why Performance Management?
Total Quality
The
Performance
Appraisal Issues
Management
Approach
Strategic Focus

9–4
The Building Blocks of an Effective Performance Management Process
Direction sharing Role clarification Goal setting and planning
Goal alignment Developmental goal setting
Ongoing performance monitoring
Ongoing feedback Coaching and support
Performance assessment (appraisal)
Rewards, recognition, and compensation
Workflow, process control, and return on investment management

9–5
Defining the Employee’s Goals
and Work Standards
Guidelines for
Effective Goal Setting
Assign
Assign Assign
Challenging Encourage
Specific Measurable
but Doable Participation
Goals Goals
Goals

9–6
Setting Goals
• SMART Goals:
 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 milestones.

9–7
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.
9–8
Performance Appraisal Roles (continued)
• The HR Department
 Serves a policy-making and advisory role.
 Provides advice and assistance regarding the

appraisal tool to use.
 Trains supervisors to improve their appraisal skills.
 Monitors the appraisal system effectiveness and

compliance with relevant laws and guidelines.

9–9
An Introduction to Appraising Performance
Why Appraise Performance?
1 Is basis for pay and promotion decisions.
2 Plays an integral role in performance management.
Helps in correcting deficiencies and reinforcing good

3
performance.
4 Is useful in career planning.

9–10
(Un)Realistic Appraisals
• Motivations for Soft Appraisals
 The fear of having to hire and train someone new.
 The unpleasant reaction of the appraisee.
 An appraisal process that’s not conducive to candor.
• Hazards of Soft Appraisals

 Employee loses the chance to improve before being
forced to change jobs.
 Lawsuits arising from actions involving inaccurate
performance appraisals.

9–11
An Introduction to Appraising Performance
Steps in Appraising Performance
1 Defining the job
2 Appraising performance
3 Providing feedback

9–12
Performance Appraisal Methods
Appraisal Methodologies
1 Graphic Rating Scale Method 6 Narrative Forms
Behaviorally Anchored Rating

2 Alternation Ranking Method 7
Scales (BARS)
Management by Objectives
3 Paired Comparison Method 8
(MBO)
Computerized and Web-Based
4 Forced Distribution Method 9
Performance Appraisal
5 Critical Incident Method 10 Merged Methods
11 Annual Confidential Report (ACR)

9–13
Management by Objectives (MBO)
• A comprehensive and formal organizationwide
goal-setting and appraisal program requiring:
1. Setting of organization’s goals.
2. Setting of departmental goals.
3. Discussion of departmental goals.
4. Defining expected results (setting individual

goals).
5. Conducting periodic performance reviews.
6. Providing performance feedback.

9–14
Using MBO
Setting unclear Time-consuming

objectives appraisal process
Problems with
MBO
Conflict with
subordinates over
objectives
9–15
Appraising Performance:
Problems and Solutions (continued)
How to Avoid
Appraisal Problems
Control
Know Use the Train Keep
Outside
Problems Right Tool Supervisors a Diary
Influences

9–16
Who Should Do the Appraising?
Immediate
Self-Rating
Supervisor
Peers
Potential Subordinates
Appraisers
Rating 360-Degree
Committee Feedback

9–17
The Appraisal Interview
Satisfactory—Promotable
Satisfactory—Not Promotable
Types of Appraisal
Interviews
Unsatisfactory—Correctable
Unsatisfactory—Uncorrectable

9–18
The Appraisal Interview (continued)
Guidelines for
Conducting an Interview
Talk in terms Encourage

Don’t get Don’t tiptoe
of objective the person to
personal. around.
work data. talk.

9–19
How to Handle a Defensive Subordinate
1 Recognize that defensive behavior is normal.
2 Never attack a person’s defenses.
3 Postpone action.
4 Recognize your own limitations.

9–20
How to Criticize a Subordinate
1
Do it in a manner that lets the person maintain
his or her dignity and sense of worth.
2 Criticize in private, and do it constructively.

Give daily feedback so that the review has no
3
surprises.
4 Never say the person is “always” wrong.
5 Criticism should be objective and free of biases.

9–21
KEY TERMS
performance appraisal management by objectives (MBO)

performance management electronic performance monitoring
graphic rating scale (EPM)
alternation ranking method unclear standards
paired comparison method halo effect
forced distribution method central tendency
critical incident method strictness/leniency
behaviorally anchored rating bias
scale (BARS) appraisal interview

9–22

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Human Resource

Part 3 | Training and Development

Performance Management and Appraisal

1. Evaluate and improve the appraisal form in Figure 9–1.

Performance Appraisal: Performance Management:

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

Direction sharing Role clarification Goal setting and planning

Goal alignment Developmental goal setting

Ongoing performance monitoring

Ongoing feedback Coaching and support

Performance assessment (appraisal)

Rewards, recognition, and compensation

Workflow, process control, and return on investment management

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

 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 milestones.

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

 Provides advice and assistance regarding the

 Monitors the appraisal system effectiveness and

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

Why Appraise Performance?

1 Is basis for pay and promotion decisions.

2 Plays an integral role in performance management.

Helps in correcting deficiencies and reinforcing good

4 Is useful in career planning.

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

• Hazards of Soft Appraisals

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

Steps in Appraising Performance

1 Defining the job

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

1 Graphic Rating Scale Method 6 Narrative Forms

Behaviorally Anchored Rating

5 Critical Incident Method 10 Merged Methods

11 Annual Confidential Report (ACR)

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

2. Setting of departmental goals.

3. Discussion of departmental goals.

4. Defining expected results (setting individual

6. Providing performance feedback.

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

Setting unclear Time-consuming

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

Talk in terms Encourage

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

How to Handle a Defensive Subordinate

1 Recognize that defensive behavior is normal.

2 Never attack a person’s defenses.

4 Recognize your own limitations.

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

How to Criticize a Subordinate

2 Criticize in private, and do it constructively.

5 Criticism should be objective and free of biases.

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

performance appraisal management by objectives (MBO)

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

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