Chapter 6 Performance Management and Appraisal

Performance Management Linkage
Organizational Strategies >
Performance Management >
Employee Performance >
Performance Management Outcomes >
Organizational Results
Performance management
is a series of activities designed to ensure that the organization gets the performance it needs from its employees.

Involves the following:
-Make clear of what the organization expects
-Document performance
-Identify areas of success
-Provide performance information.

Performance appraisal
is the process of determining how well employees do their jobs relative to a standard and communicating that information to them.
Performance-focused Organizational Cultures
Organizational cultures may vary in many countries in terms of how the emphasizes performance

They have two types:
1. Entitlement- when rewards aren’t directly linked to merit but rather to length of employment (they are entitled to rewards over a certain period of time), which means that adequate performance and stability dominate the organization.

2. Performance Driven- organizational culture that is focused on results and contribution. An example of this is performance base pay

Identifying and Measuring Employee performance
o Quantity/Quality outcome
o Timeliness of outcome
o Presence/attendance on the job
o Efficiency/Effectiveness of work completed
Job duties
identify the important elements in a given job and define what the organization pays employees to do. Which emphasizes the reason why job duties and performance of an individual should be measured and compared against each other.
3 Types of performance Information
1. Trait based info (less useful)

2. Behavior based info (middle)

3. Result based info (most useful)

Trait-based information
identifies a characters trait of the employee (attitude, creativity ) and may or not be job related. This is not helpful when evaluating a person to enter the job because it is vary vague and not consistent and can lead managers to ignore important behaviors and outcomes.
Behavior-based information
focuses on specific job behaviors that lead to job success. This specifies the behavior that manager expect.
Result-based information
this considers employees accomplishments, and for jobs in which measurement is easy and obvious. Example a professor can get extra compensation if they publish work.
Performance standard
define the expected level of employee performance. (aka benchmark, goals, targets), also is how satisfactory job performance is defined, so performance standard should be established before work is performed.
Performance Appraisal
This is to asses an employees performance and to give feedback about past, current, and future performance expectations.

This includes:
(employee rating, employee evaluation, performance review, performance evaluation, or result appraisal)

Organization uses appraisal in two conflicting ways
1.Administrative – provide a measure of performance for consideration in making pay or other administrative decisions abut employees. This it difficult because it is based on judgment.

2. Development – the manager actors more like a counselor and a coach rather than a judge. It emphasizes current training and development.

Administrative Uses of Appraisals
There are 3 was administrative appraisal is used
1. Determining pay adjustments
2. Making job placement decisions like promotion
3. Choosing employee disciplinary actions up to and including termination of employment.

(linkage between job performance and additional pay and rewards)

Developmental use of appraisals
The point of this is to both reinforce satisfactory employee performance and to address performance deficiencies.

This focuses on areas where the employee needs to grow

Types of Appraisal
the manager can conduct and informal appraisal in day to day bases in terms of their relationship. This can be through conversations. This can present problems in terms of giving formal feedback.

Example of an informal: saying good job in the bathroom stale.

Systematic appraisal
when contact between the manager and employee is formal and a system is in place to report managerial impressions and observations.
Who conducts appraisals
Supervisory Rating of Subordinate
Employee Rating Managers
Team/Peer Rating
Outsider rating
Multisource/360-Degree Rating
Various tools that can be used to appraise
Graphic Rating Scales
Comparative methods
Native Methods
Management Objectives
Graphic Rating Scales
allows the rater to mark an employee’s performance on a continuum indicating low to high levels of a particular characteristic.

+ Properly evaluate people
– There are some questions on the form that don’t relate specificity and it is difficult to evaluate them on that.

There are 3 aspects of performance using graphic rating scales
1. Descriptive – as a quantity of work, attendance, and dependability.

2. Job duties – taken from the job description

3. Behavioral dimension – such as decisions making employee development and communication effectiveness.

Behaviorally anchored rating
(Graphic rating skill)
this is identifying important job dimensions, which are the most important performance factor in a job description.
Comparative Method
This requires the manager to directly compare the performance levels of their employees against one another, and these comparisons can provide useful information for performance management. Example of this is as follows

Forced Distribution

– This could lead to biases in which people can over rate etc

individuals being rated from highest to lowest based on performance levels and relative contributions.
Forced Distribution
the rating of employee’s performance must be distributed along a bell-shape curve.
Narrative Methods
Managers may be required to provide written appraisal narratives.

Critical Incident

Management by Objectives (MBO)
specifies the performance goals that an individual and manager identify together.

MBO is a stage process.
1. Job preview and agreement
2. Development of performance standards
3. Setting of objectives
4. Continuing performance discussions.

Training Managers and Employees in Performance Appraisals
Most systems can help to improve by training supervisors in how to do performance appraisals. Trainings are done to avoid the following
Central tendency error
giving even outstanding and poor performers an average rating.
Leniency error
occurs when rating of all employees fall at the high end of scale.
Strictness errors
occurs when a manager uses only the lower part of the scale to rate employees.
Rater bias
occurs when a rater’s values or prejudices distorts the rating.
Halo effect
occurs when a rater scores an employee high on all job criteria because of performance in one area.
Horns effect
which occurs when a low rating one one characteristic leads to an overall low rating
Contrast effect
the tendency to rate people relative to one another