Chapter
Appraising and
Improving Performance
Managing Human Resources
PowerPoint Presentation by Monica Belcourt York University
and Charlie Cook The University of West Alabama
Learning Outcomes
After studying this chapter, you should be able to:
1.
2.
3.
4.
Explain the purposes of performance appraisals and the
reasons they can sometimes fail, and identify the
characteristics of an effective appraisal program.
Describe the different sources of appraisal information.
Explain the various methods used for performance
evaluation.
Outline the characteristics of an effective performance
appraisal interview.
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Performance Appraisal Programs
Performance Appraisal
Performance Management
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Purposes of Performance Appraisal
Appraisal Programs
Administrative
Developmental
Compensation
Ind. Evaluation
Job Evaluation
Training
EE Support
Career Planning
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Figure 8.1
Purposes of Performance Appraisal
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Performance Appraisal and Other HRM Functions
Performance appraisal judges
effectiveness of recruitment
efforts
Recruitment
Quality of applicants
determines feasible
performance standards
Selection
Selection should produce
workers best able to meet
job requirements
Performance appraisal
determines training needs
Training and
Development
Training and development
aids achievement of
performance standards
Performance appraisal is a
factor in determining pay
Compensation
Management
Compensation can affect
appraisal of performance
Performance appraisal
justifies personnel actions
Labour
Relations
Performance appraisal
validates selection function
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Appraisal standards and
methods may be subject to
negotiation
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Reasons Appraisal Programs Sometimes Fail
 Lack of top-management
information and support
 Unclear performance standards
 Difficult to give negative feedback
 Use of the appraisal program for
conflicting (political) purposes.
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Developing an Effective Appraisal Program
Strategic
Relevance
Individual standards directly
relate to strategic goals.
Criterion
Deficiency
Standards capture all of an
individual’s contributions.
Criterion
Contamination
Performance capability is not
reduced by external factors.
Reliability
Standards are quantifiable,
measurable, and stable.
(Consistency)
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Guidelines for Appraisals
 Include:
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Sources of Performance Appraisal
Manager and/or Supervisor
Subordinate Appraisal
Self-Appraisal
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Sources of Performance Appraisal
Peer Appraisal

Why peer appraisals are not used more often:
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Sources of Performance Appraisal
Team Appraisal
Customer Appraisal
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Figure 8.4 Alternative Sources of Appraisal
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Figure 8–5
Pros and Cons of 360-Degree Appraisal
PROS
 The system is more comprehensive in that responses are
gathered from multiple perspectives.
 Quality of information is better. (Quality of respondents is more
important than quantity.)
 It complements TQM initiatives by emphasizing
internal/external customers and teams.
 It may lessen bias/prejudice since feedback comes from more
people, not one individual.
 Feedback from peers and others may increase employee selfdevelopment.
Sources: Compiled from David A. Waldman, Leanne E. Atwater, and David Antonioni, “Has 360-Degree Feedback Gone Amok?” Academy of Management
Executive 12, no. 2 (May 1998): 86–94; Bruce Pfau, Ira Kay, Kenneth Nowak, and Jai Ghorpade, “Does 360-Degree Feedback Negatively Affect Company
Performance?” HRMagazine 47, no. 6 (June 2002): 54–59; Maury Peiperl, “Getting 360-Degree Feedback Right,” Harvard Business Review 79, no. 1
(January 2001): 142–47; Joyce E. Bono and Amy E. Colbert, Understanding Responses to Multi-Source Feedback: The Role of Core Self-Evaluations,”
Personnel Psychology 58, no. 1 (Spring 2005): 171–205.
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Figure 8–5
Pros and Cons of 360-Degree Appraisal (cont’d)
CONS
 The system is complex in combining all the responses.
 Feedback can be intimidating and cause resentment if
employee feels the respondents have “ganged up.”
 There may be conflicting opinions, though they may all be
accurate from the respective standpoints.
 The system requires training to work effectively.
 Employees may collude or “game” the system by giving invalid
evaluations to one another.
 Appraisers may not be accountable if their evaluations are
anonymous.
Sources: Compiled from David A. Waldman, Leanne E. Atwater, and David Antonioni, “Has 360-Degree Feedback Gone Amok?” Academy of Management
Executive 12, no. 2 (May 1998): 86–94; Bruce Pfau, Ira Kay, Kenneth Nowak, and Jai Ghorpade, “Does 360-Degree Feedback Negatively Affect Company
Performance?” HRMagazine 47, no. 6 (June 2002): 54–59; Maury Peiperl, “Getting 360-Degree Feedback Right,” Harvard Business Review 79, no. 1
(January 2001): 142–47; Joyce E. Bono and Amy E. Colbert, Understanding Responses to Multi-Source Feedback: The Role of Core Self-Evaluations,”
Personnel Psychology 58, no. 1 (Spring 2005): 171–205.
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360-Degree Performance Appraisal System
Integrity Safeguards
Assure anonymity
Make respondents accountable
Prevent “gaming” of the system
Use statistical procedures
Identify and quantify biases
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Training Performance Appraisers
Common rater-related errors
Error of central tendency
Leniency or strictness errors
Similar-to-me errors
Recency errors
Contrast and halo errors
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Rater Errors
Error of Central Tendency
Leniency or Strictness Error
Recency Error
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Rater Errors (Cont’d)
Contrast Error
Similar-to-Me Error
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Performance Appraisal Methods
The trait method
The behavioural method
Results methods
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Performance Appraisal Methods
Graphic Rating
Scale
Trait
Methods
Mixed Standard
Scale
Forced-Choice
Essay
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Trait Methods
Graphic Rating-Scale Method
Mixed-Standard Scale Method
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Trait Methods (Cont’d)
Forced-Choice Method
Essay Method
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Behavioural Methods
Critical Incident
Behavioural Checklist
Behavioural
Methods
Behaviourally Anchored
Rating Scale (BARS)
Behaviour Observation
Scale (BOS)
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Behavioural Methods
Critical Incident Method
Behavioural Checklist Method
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Behavioural Methods (Cont’d)
Behaviourally Anchored Rating Scale (BARS)
Behaviour Observation Scale (BOS)
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Highlights in HRM 8.4
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Highlights in HRM 8.5
Sample Items from Behaviour Observation Scales
Instructions: Please consider the sales representative’s behaviour on the job in the past rating period. Read
Each statement carefully. Then circle the number that indicate the extent to which the employee has
demonstrated this effectiveness and ineffective behaviors.
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Results Methods
Productivity Measures
Behavioural
Methods
Management By
Objectives
Balanced Scorecard
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Results Methods
Productivity Measures
Management by Objectives (MBO)
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The Balanced Scorecard
The appraisal focuses on four related
categories:
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Summary of Appraisal Methods
Trait Methods
 Advantages
 Disadvantages
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Summary of Appraisal Methods (cont’d)
Behavioural Methods
 Advantages
 Disadvantages
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Summary of Appraisal Methods (cont’d)
Results Methods
 Advantages
 Disadvantages
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Appraisal Interviews
Types of Appraisal Interviews
Tell and Sell - persuasion
Tell and Listen - nondirective
Problem Solving - focusing the
interview on problem resolution
and employee development
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Appraisal Interview Guidelines
Invite Participation
Ask for a Self-Assessment
Change Behaviour
Problem Solving Focus
Minimize Criticism
Express Appreciation
Establish Goals
Be Supportive
Follow Up Day by Day
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Figure 8–8
Factors That Influence Performance
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Figure 8.9
Performance Diagnosis
Source: Scott Snell, Cornell University.
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