CHAPTER 4 (PART II)
PERFORMANCE
MESUREMENT
INSTRUMENT
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Overview (Chapter 3/Part III)
Performance Appraisal Instruments
(Appraisal form)
●Characteristics of Appraisal Forms
●Determining Overall Rating
Appraisal Forms:
Eight Desirable Features
1. Simplicity
2. Relevancy
3. Descriptiveness
4. Adaptability
5. Comprehensiveness
6. Definitional Clarity
7. Communication
8. Time Orientation
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PROCESS OF DEVELOPING PERFORMANCE APPRAISAL
INSTRUMENT/FORM
Determine Measurement Criteria
The criteria for measuring employee’s performance can be based
on various aspects:
o traits
o behaviors
o results
Performance measure statement should be concise and easy to
understand.
Specify the length of time to clarify the reporting cycle
Indicate what is being measured.
● usually an attribute of work performance identified in an activity
description, expected results statement, etc.
Identify Measurement System
Comparative system
◦ Compares employees with one another
● Simple rank order
● Alternation rank order
● Paired comparisons
● Relative percentile
● Forced distribution
Absolute system
◦ Compares employees with pre-specified performance
standards.
● Essays
● Behavior checklists
● Critical incidents
● Graphic rating scales, etc.
Comparative Systems
Advantages
● Easy to explain
● Straightforward
● Identifies top as well as underperformers
● Better control for biases and errors found in absolute systems
◦ Leniency
◦ Severity
◦ Central tendency
Disadvantages
● Rankings may not be specific enough for:
◦ Useful feedback
◦ Protection from legal challenge
● No information on relative distance between employees
● Specific issues with forced distribution method
Comparative System:
Simple Rank Order
• It is the oldest and simplest formal systematic method
• Employee is compared with all others for the purpose of
placing order of worth
• The employees are ranked from the highest to the lowest
or from the best to the worst
• Limitation of ranking method
◦ It does not tell that how much better or worse one is than another
◦ The task of ranking individuals is difficult when a large number of
employees are rated
◦ It is very difficult to compare one individual with others having
varying behavioral traits
Comparative System:
Alternation Ranking
• Ranking employees from best to worst on a trait.
• It is easier to distinguish between the worst and
best employees.
• Supervisors will indicate the employees who are
the highest on the characteristic being measured
and the ones who are the lowest.
Scale for Alternate Ranking of Appraisee
Comparative System:
Paired comparison
• Each employee is compared with other employees on one-one basis
• 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.
• For every trait (quantity of work, quality of work, etc.), supervisor will
pair and compare every subordinate with every other subordinate.
• The number of possible pairs for a given number of employees is
ascertained by the following formula:
N(N-1)/2
Where N = the total number of employees to be evaluated.
Ranking Employees by the Paired Comparison Method
Note: + means “better than.” - means “worse than.” For each chart, add up the number of +’s in
each column to get the highest ranked employee.
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Comparative System:
Relative Percentile Method
◦ Managers are required to consider all ratees at the same time and to
estimate the relative performance of each by using a 100-point scale
◦ The 50-point mark on this scale (i.e., 50th percentile) suggests the location
of an average employee—about 50% of employees are better performers
and about 50% of employees are worse performers than this individual.
◦ Relative percentile methods may include one such scale for each
competency and also include one scale on which raters evaluate the overall
performance of all employees
◦ It tends to eliminate or reduce bias
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Comparative System:
Forced Distribution Method
◦ Managers are required to distribute ratings for those being
evaluated, into a pre-specified performance distribution
ranking/categories. For example: Good 20%, Fair 70%, Poor
10%
◦ This method assume that employees’ performance level
confirms to a normal statistical distribution (for example 10,
20, 40, 20, 10)
◦ Useful for rating a large number of employee’s job performance
and promote ability
◦ It tends to eliminate or reduce bias
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Comparative System: Forced distribution method
Absolute Systems
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Absolute Systems
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Absolute Systems
● Advantages:
◦ Can be used in large and small organizations
◦ Evaluations more widely accepted by employees
● Disadvantages:
◦ Higher risk of leniency, severity, and central tendency biases
◦ Generally, more time consuming than comparative systems
Determine Baseline/Rating
• Determine types of rating
o Frequency
o Amount
o Evaluation
o Agreement
• Choose the rating scales
o 3–point scale
o 5–point scale
● should be sufficient to capture an employee’s performance on the
behavior being rated.
● Advantage: less complex than 7-point scales. superior to 3-point scales
because they are more likely to motivate performance improvement
o 7–point scale
o Etc.
What Is Performance Standards?
• Is the expected level of performance associated with a
particular performance indicator.
• The purpose is to communicate expectations
• Performance standards are:
◦ Based on the position, not the individual
◦ Observable, specific indicators of success
◦ Meaningful, reasonable and attainable
◦ Describe “fully satisfactory” performance once trained
◦ Expressed in terms of quantity, quality, timeliness, cost, safety or
outcomes.
Appraisal Forms:
Determine the Weights
Nine Major Components
1. Basic Employee Information
2. Signatures
3. Accountabilities, Objectives, and Standards
4. Competencies and Indicators
5. Major Achievements and Contributions
6. Stakeholder Input
7. Employee Comments
8. Developmental Achievements
9. Developmental
◦ Needs
◦ Plans
◦ Goals
Determining Overall Rating
• Judgmental strategy
◦ Consider every aspect of performance
◦ Arrive at defensible summary
• Mechanical strategy
◦ Consider scores assigned to each section
◦ Add weighted scores to obtain overall scores
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Open-Ended (Comments) Sections
Information is not used effectively because:
• Difficult to systematically categorize and analyze
• Quality, length, and content vary
Tools to overcome challenges
• Computer-aided text analysis (CATA) software
• Establish goals of information provided
• Training in systematic and standardized rating skills
Performance Measurement Guidelines
Purposes of performance measurement guidelines:
• To provide the necessary tools to assist leaders in
conducting comprehensive and effective performance
meetings with their employees.
• It was designed to assist managers and employees in
communicating about performance
• To ensure employees know what is expected of them, how
they are performing and what can be done to strengthen
performance