Performance Appraisal
Chapter 17
Performance Appraisal
The identification, measurement,
and management of human
performance in organizations.
A Model of Performance Appraisal
Identification
Measurement
Management
Dimension
An aspect of performance that
determines effective job
performance.
The Benefits of
Performance Appraisal
Employer Perspective:

Despite imperfect measurement techniques, individual differences
in performance can make a difference to company performance.

Documentation of performance appraisal and feedback may be
needed for legal defense.

Appraisal provides a rational basis for constructing a bonus or
merit system.

Appraisal dimensions and standards can help to implement
strategic goals and clarify performance expectations.

Providing individual feedback is part of the performance
management process.

Despite the traditional focus on the individual, appraisal criteria can
include teamwork and the teams can be the focus of the appraisal.
The Benefits of Performance
Appraisal (cont.)
Employee Perspective:
 Performance feedback is needed and
desired.
 Improvement in performance requires
assessment.
 Fairness required that differences in
performance levels across workers be
measured and have an effect on outcomes.
 Assessment and recognition of performance
levels can motivate workers to improve their
performance.
Measurement Tools
 The
type of judgment that is
required
–Relative or absolute
 The
focus of the measure
–Trait, behavior, or outcome
Relative and Absolute Judgment
Relative Judgment
An appraisal format that asks supervisors to
compare an employee's performance to the
performance of other employees doing the same
job.
Absolute Judgment
An appraisal format that asks supervisors to make
judgments about an employee’s performance
based solely on performance standards.
Rankings and Performance Levels
Across Work Teams
Actual
10 (High)
9
8
7
6
5
4
3
2
1 (Low)
Ranked Work
Ranked Work
Jill (1)
Marcos (1)
Uma (2)
Joyce (3)
Bill (4)
Richard (5)
Tom (2)
Sue (3)
Greg (4)
Ken (5)
Ranked Work
Frank (1)
Julien (2)
Lisa (3)
Jolie (4)
Steve (5)
Trait Appraisal, Behavioral Appraisal &
Outcome Appraisal Instruments
Trait Appraisal
An appraisal tool that asks a supervisor to make judgments
about worker characteristics that tend to be consistent and
enduring.
Behavioral Appraisal
An appraisal tool that asks managers to assess a worker’s
behaviors.
Outcome Appraisal
An appraisal tool that asks managers to assess the results
achieved by workers.
Sample Trait Scales
Rate each worker using the scales below.
Decisiveness:
1
2
Very low
3
4
Moderate
5
6
7
Very high
Reliability:
1
2
Very low
3
4
Moderate
5
6
7
Very high
Energy:
1
2
Very low
3
4
Moderate
5
6
7
Very high
Loyalty:
1
2
Very low
3
4
Moderate
5
6
7
Very high
Evaluation of Major Appraisal
Formats
Appraisal
Format
Administrative
Use
Legal
Developmental
Defensibility
Use
Absolute
0
+
0
Relative
++
-
-
Trait
+
-
--
Behavior
0
+
++
Outcome
0
0
+
-- Very Poor
- Poor
0 Unclear or mixed
+ Good
++ Very good
Challenges to Effective
Performance Measurement
Rater errors and bias
 The influence of liking
 Organizational politics
 Whether to focus on the individual
or the group
 Legal issues

Legal Issues

A recent analysis of 295 court cases involving performance
appraisal found judges’ decisions to be favorably influenced
by the following additional factors:
– Use of job analysis
– Providing written instructions
– Allowing employees to review appraisal results
– Agreement among multiple raters (if more than one was
used)
– The presence of rater training
Communication Skills for the
Appraisal Interview
Skills
Benefit
Description
Example
Nonverbal
Attending
Suggests interest
and active listening.
Rater sits with a slight
forward, comfortable
lean of the upper body,
maintains eye contact,
and speaks in a steady
and soothing voice.
While the ratee is
speaking, the rater
looks at the person
and gently nods head
to signal interest.
Open and
Closed
Questions
Appropriate use of
open and closed
questions can
ensure an effective
flow of
communication
during an interview.
—Open questions
encourage information
sharing and are most
appropriate early in an
interview or in complex,
ambiguous situations.
— Open questions
start with words like
“Could,” “Would,”
“How,” “What,” or
“Why”.
—Closed question
evoke short responses
and are useful for
focusing and clarifying.
— Closed questions
start with words like
“Did,” “Is,” or “Are.”
Communication Skills for the
Appraisal Interview (Cont.)
Skills
Benefit
Description
Example
Paraphrasing Paraphrasing can clarify
and convey to the ratee
that you are listening
actively.
A paraphrase is a
concise statement in
your own words of what
someone has just said.
It should be factual and
nonjudgmental.
You might begin by
saying “If I have this
right…” or “What
you’re saying is…” and
end with “Is that
correct?” or “That’s
what you are saying?”
Reflection of Shows that you are
trying to understand the
Feeling
emotional aspect of the
workplace. The empathy
and sensitivity of such
reflection can open up
communication and
allow the interview to
move more
meaningfully to taskrelated issues.
Similar to paraphrase, a
reflection of feeling is a
factual statement of the
emotions you sense the
other person is feeling.
Be cautious about using
this technique
insincerely or with those
who need professional
help.
Start by saying
something like “It
sounds like you’re
feeling…” End as you
would a paraphrase
(“Is that right?”).
Communication Skills for the
Appraisal Interview (Cont.)
Skills
Cultural
Sensitivity
Benefit
Communication is more
effective when you are
sensitive to the possible
influence of cultural
differences.
Description
Pay attention to cultural
differences that may
influence how another
person communicates
and how you might
communicate with
others.
Example
When dealing with
employees from a
culture that is highly
formal, avoid
addressing them in the
workplace by their first
names. Doing so may
signal disrespect.
Situational (System) Factors to Consider in
Determining the Causes of Performance
Problems
• Poor coordination of work activities among workers.
• Inadequate information or instructions needed to perform a
job.
• Low-quality materials.
• Lack of necessary equipment.
• Inability to obtain raw materials, parts, or supplies.
• Inadequate financial resources.
• Poor supervision.
• Uncooperative coworkers and/or poor relations among
people.
• Inadequate training.
• Insufficient time to produce the quantity or quality of work
required.
• A poor work environment (for example, cold, hot, noisy,
frequent
interruptions.)
• Equipment breakdown.
How to Determine and Remedy
Performance Shortfalls
Cause
Ability
Effort
Situation
Questions to Ask
• Has the worker ever been
able to perform adequately?
• Can others perform the job
adequately, but not this worker?
• Is the worker’s performance
level declining?
• Is performance lower on all
tasks?
• Is performance erratic?
• Are performance problems
showing up in all workers,
even those who have adequate
supplies and equipment?
Possible Remedies
• Train
• Transfer
• Redesign job
• Terminate
• Clarify linkage between
performance and rewards
• Recognize good
performance
• Streamline work process
• Clarify needs to suppliers
• Change suppliers
• Eliminate conflicting
signals or demands
• Provide adequate tools
360° Feedback
The combination of peer,
subordinate, and self-review
Key Steps in Implementing 360°
Appraisal

Top management communicates the goals of and need for
360° appraisal.

Employees and managers are involved in the development
of the appraisal criteria and appraisal process.

Employees are trained in how to give and receive feedback.

Employees are informed of the nature of the 360° appraisal
instrument and process.

The 360° system undergoes pilot testing in one part of the
organization.

Management continuously reinforces the goals of the 360°
appraisal and is ready to change the process when
necessary.