CHAPTER 6
PERFORMANCE MANAGEMENT
AND APPRAISAL
Nguyen Tran Duyen Phu - MBA
Learning Outcomes
■ Introduction to appraising performance
■ Steps in appraising performance
■ Appraisal methods
■ Appraising performance: problems and solutions
■ The appraisal interview
Performance Appraisal
■ Evaluating employees’ current and/or past
performance relative to their performance
standards.
Provide
Set
Assessing Feedback to
Standards
motivate
Performance Management
Set goals Training Appraising Reward
The process employers use to make sure employees
are working toward organizational goals
Introduction to Appraising Performance
Ø Why Appraising Performance?
Ø For supervisors and subordinates to review their work related behavior
Ø Helps company to better manage employees and improve overall
performance.
Ø Identifies employees strengths and weaknesses, useful for career
planning.
Ø Provide information for making decisions on promotion and salary.
Steps in Appraising Performance
■ Define the Job : supervisor and subordinates agree on their duties
and job standards.
■ Compare actual performance to the standards that have been set
■ Provide feedback.
Appraisal Methods
■ Graphic Rating Scale Method
– A scale that lists a number of traits and a range of performance for
each. Employees are then rated by identifying the score that best
describes their level of performance for each trait.
Appraisal Methods
■ Alternation Ranking method
– Ranking employees from best to worst on a particular trait, choosing the
highest, then the lowest, until all are ranked.
– Paired Comparison method
– Ranking employees by making a chart of all possible pairs of the employees
for each trait and indicating which is the better employee of the pair.
Appraisal Methods
■ Forced Distribution method
– Similar to grading on a curve, predetermined percentages of rated employees are placed in
various performance categories.
– Example:
■ 15% high performers
■ 20% percent high-average performers
■ 30% percent average performers
■ 20% low average performers
■ 15% percent low performers.
Appraisal Method
■ Critical Incident method
– Keep a record of uncommonly good or undesirable examples of an
employee’s work related behavior and reviewing it with the employee
at predetermined times.
■ Behaviorally anchored rating scales (BARS)
– An appraisal method that aims at combining the benefits of narrative
critical incidents and quantified ratings by anchoring a quantified
scale with specific narrative examples of good and poor performance.
Appraisal Methods
■ Developing a BARS:
– Generate critical incidents
– Develop performance dimensions
– Reallocate incidents
– Scale the incidents
– Develop a final instrument
Appraisal Methods
■ Advantages of using BARS:
– A more accurate gauge
– Clearer standards
– Feedback
– Independent dimensions
– Consistency
Appraising Performance : Problems
■ Potential Rating Scale Appraisal Problems
– Unclear Standards :an appraisal that is too open to interpretation
Appraising Performance : Problems
■ Halo Effect
– Occurs when a supervisor’s rating of a subordinate on one trait biases the
rating of that person on other traits.
■ Central Tendency
– A tendency to rate all employees the same way, such as rating them all
average.
Appraising Performance : Problems
■ Strictness/leniency
– The problem that occurs when a supervisor has a tendency to rate all
subordinates either high or low
■ Bias
– The tendency to allow individual differences such as age, race, and sex
to affect the appraisal rating employees receive.
Solutions
■ Know the problems : Learn and understand the potential problems
and solutions.
■ Use the right tool : each tool has its pros and cons.
■ Train supervisors : train supervisors to reduce rating errors such as
halo, leniency and central tendency.
Who should do the Appraising
Direct
Supervisor
360-degree
feedback Peers
Who does
the
Appraising?
Rating
Subordinates
Committee
Self- rating
The Appraisal Interview
■ Appraisal Interview
– An interview in which the supervisor and subordinate review the appraisal and make plans
to remedy deficiencies and reinforce strengths.
– Types of appraisal interviews:
– Satisfactory – promotable
– Satisfactory – not promotable
– Unsatisfactory – Correctable
– Unsatisfactory - uncorrectable
How to conduct the Appraisal interview
■ Talk in terms of objective work data
■ Don’t get personal
■ Encourage the person to talk
■ Don’t tiptoe around
The Appraisal Interview
■ How to handle a defensive subordinate
– Recognize that defensive behavior is normal
– Never attack a person’s defenses
– Postpone action.
– Recognize your own limitations.
The Appraisal Interview
■ How to criticize a subordinate
– Do it in a manner that lets the person maintain their dignity and sense of worth.
– Criticize in private, and do it constructively.
– Avoid once- a –year “critical broadsides” by giving feedback on a daily basis, so that at the
formal review contains no surprises.
– Never say the person is “always” wrong
– Criticism should be objective and free of any personal biases on your part.
– Provide examples of critical incidents and specific suggestion of what could be done and why.
The Appraisal Interview
■ How to ensure the interview leads to improve performance
– Don’t make the subordinate feel threatened during the interview
– Give the subordinate the opportunity to present his or her ideas and feelings and to
influence the course of the interview.
– Have a helpful and constructive supervisor conduct the interview
The Appraisal Interview
■ How to handle a formal written warning
– Purposes of the written warning
• To shake your employee our of bad habits
• Help you defend your rating, both to your own boss and (if needed) to the courts.
– Written warnings should:
• Identify standards by which employee is judged
• Make clear that employee was aware of the standard
• Specify deficiencies relative to the standard.
• Indicates employee’s prior opportunity for correction.