Competencies
• Broad range of knowledge, skills, traits and
behaviors that may be technical in nature, relate
to interpersonal skills, or be business oriented
• In leadership jobs, relevant competencies might
include developing talent, delegating authority
and people management skills
• Competencies selected should be those that are
closely associated with job success
© 2008 by Prentice Hall
8-1
Goal Achievement
• Use if organizations consider ends more
important than means
• Outcomes established should be within
control of individual or team
• Should be those results that lead to firm’s
success
© 2008 by Prentice Hall
8-2
Improvement Potential
• Many of criteria used focus on the past
• Cannot change past
• Firms should emphasize future, including
behaviors and outcomes needed to
develop the employee, and, in the
process, achieve firm’s goals
© 2008 by Prentice Hall
8-3
Responsibility for Appraisal
•
•
•
•
•
Immediate supervisor
Subordinates
Peers and team members
Self-appraisal
Customer appraisal
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8-4
Immediate Supervisor
• Traditionally been most common choice
• Supervisor is usually in excellent position
to observe employee’s job performance
• Supervisor has responsibility for managing
a particular unit
© 2008 by Prentice Hall
8-5
Subordinates
• Our culture has viewed evaluation by
subordinates negatively
• Some firms conclude that evaluation of
managers by subordinates is both feasible
and needed
• Will do a better job of managing
• Might be caught up in a popularity contest
© 2008 by Prentice Hall
8-6
Peers and Team Members
• Work closely with evaluated employee and
probably have an undistorted perspective
on typical performance
• Problems include reluctance of some
people who work closely together,
especially on teams, to criticize each other
© 2008 by Prentice Hall
8-7
Self-Appraisal
• If employees understand their objectives
and criteria used for evaluation, they are in
good position to appraise their own
performance
• Employee development is selfdevelopment
• Employees who appraise their own
performance may become more highly
motivated
© 2008 by Prentice Hall
8-8
Customer Appraisal
• Customer behavior determines a firm’s
degree of success
• Organizations use this approach because
it demonstrates a commitment to
customer, holds employees accountable,
and fosters change
© 2008 by Prentice Hall
8-9
The Appraisal Period
• Prepared at specific
intervals
• Usually annually or
semiannually
• Period may begin with
employee’s date of hire
• All employees may be
evaluated at same time
© 2008 by Prentice Hall
8-10
Performance Appraisal Methods
• 360-Degree
Evaluation
• Rating Scales
• Critical Incidents
• Essay
• Work Standards
• Ranking
• Paired Comparisons
• Forced Distribution
• Behaviorally
Anchored Rating
Scales (BARS)
• Result-Based
Systems
© 2008 by Prentice Hall
8-11
360-Degree Valuation
• Multi-rater evaluation
• Input from multiple levels within firm and
external sources
• Focuses on skills needed across
organizational boundaries
• More objective measure of performance
• Process more legally defensible
© 2008 by Prentice Hall
8-12
Trends & Innovations: 720-Degree
Review
• More intense, personalized and greater
review of upper-level managers that brings
in perspective of their customers or
investors, as well as subordinates
• Start with a 360-degree review, but then
go out and do interviews
© 2008 by Prentice Hall
8-13
Rating Scales
• Rates according to
defined factors
• Judgments are
recorded on a scale
• Many employees are
evaluated quickly
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8-14
Critical Incidents
• Written records of highly favorable
and unfavorable work actions
• Appraisal more likely to cover entire
evaluation period
• Does not focus on last few weeks or
months
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8-15
Essay
• Brief narrative describing
performance
• Tends to focus on extreme
behavior
• Depends heavily on
evaluator's writing ability
• Comparing essay evaluations
might be difficult
© 2008 by Prentice Hall
8-16
Work Standards
• Compares performance to
predetermined standard
• Standards - Normal output of
average worker operating at
normal pace
• Time study and work sampling
used
• Workers need to know how
standards were set
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8-17
Ranking
• All employees from group ranked in
order of overall performance
• Comparison is based on single
criterion, such as overall performance
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8-18
Paired Comparison
• Variation of ranking method
• Compares performance of each
employee with every other employee
in the group
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8-19
Forced Distribution
• Rater assigns individual in work group
to limited number of categories similar
to normal distribution
• Assumes all groups of employees
have same distribution
© 2008 by Prentice Hall
8-20
Behaviorally Anchored Rating
Scales (BARS)
• Combines traditional rating
scales and critical
incidents methods
• Job behaviors derived
from critical incidents
described more objectively
© 2008 by Prentice Hall
8-21
Result-Based Systems
• Manager and
subordinate agree on
objectives for next
appraisal
• Evaluation based on
how well objectives
accomplished
© 2008 by Prentice Hall
8-22
Use of Computer Software
• Available in recording
appraisal data
• Reduces required
paperwork
© 2008 by Prentice Hall
8-23
Problems in Performance Appraisal
• Appraiser discomfort
• Lack of objectivity
• Halo/horn error
• Leniency/strictness
• Central tendency
• Recent behavior bias
• Personal bias
• Manipulating the evaluation
• Employee anxiety
© 2008 by Prentice Hall
8-24
Appraiser Discomfort
• Performance
appraisal process
cuts into manager’s
time
• Experience can be
unpleasant when
employee has not
performed well
© 2008 by Prentice Hall
8-25
Lack of Objectivity
• In rating scales method, commonly used
factors such as attitude, appearance, and
personality are difficult to measure
• Factors may have little to do with
employee’s job performance
• Employee appraisal based primarily on
personal characteristics may place
evaluator and company in untenable
positions
© 2008 by Prentice Hall
8-26
Halo/Horn Error
• Halo error - Occurs when manager
generalizes one positive performance
feature or incident to all aspects of
employee performance resulting in
higher rating
• Horn error - Evaluation error occurs
when manager generalizes one
negative performance feature or
incident to all aspects of employee
performance resulting in lower rating
© 2008 by Prentice Hall
8-27
Leniency/Strictness
• Leniency - Giving
undeserved high ratings
• Strictness - Being unduly
critical of employee’s work
performance
• Worst situation is when firm
has both lenient and strict
managers and does nothing
to level inequities
© 2008 by Prentice Hall
8-28
Central Tendency
• Error occurs when employees are
incorrectly rated near average or middle of
scale
• May be encouraged by some rating scale
systems requiring evaluator to justify in
writing extremely high or extremely low
ratings
© 2008 by Prentice Hall
8-29
Recent Behavior Bias
• Employee’s behavior often improves and
productivity tends to rise several days or
weeks before scheduled evaluation
• Only natural for rater to remember recent
behavior more clearly than actions from
more distant past
• Maintaining records of performance
© 2008 by Prentice Hall
8-30