2. Performance Management
• Provides data to assess the current
skill, experience, and performance level
of every employee
• Impacts human resource planning,
training & development, career
development & compensation forecasts
• Requires effective performance
appraisal system i.e. valid
3. Uses of Performance
Appraisal
Performance Identify deficiencies in
improvement staffing process
Compensation Detect informational
adjustments inaccuracies
Placement decisions Diagnose job design
errors
Training & Development
needs Avoidance of
discrimination
Career planning &
development External challenges
4. Key Elements
Performance
Appraisal
Interview
Human Performance Employee
Performance Measures & Feedback
Criteria
Employee
Records &
HR Decisions
5. Appraisal Systems
• Job-related
– System evaluates critical behaviours that
constitute job success
• Practical
– Understood and relatively simple
• Performance standards
– Related to the desired results of each job
• Performance measures
– Reports on critical behaviours
6. Performance Measures
• Rater actually sees the employee’s
Direct
performance
• Rater must evaluate substitutes for
Indirect
performance (constructs)
• Verifiable by others
Objective
• Usually quantitative
• Not verifiable by others
Subjective
• Usually rater’s personal opinions
7. Problems with Subjective
Measures
Halo
effect
Error of
Recency
central
effect
Rater Biases tendency
Personal Leniency &
prejudice strictness bias
8. Characteristics for
Effectiveness
Validity
Reliability
Effective Input into system development
Performance
Appraisal Acceptable standards
System
Acceptable goals
Control of standards
more
9. Characteristics for
Effectiveness
Frequency of feedback
Rater training
Effective Ratee training
Performance
Appraisal Input into interview process
System
Appraisal consequences
Different sources (raters)
10. Past-Oriented:
Noncomparative
•Oldest and most widely used method
Rating scale •Subjective i.e. based on the rater’s opinion
•Responses may be given numerical values
Critical •Rater records performance statements
incident •Describes very effective/ineffective behaviour
Behaviourally •Behaviours are placed along a scale
anchored •Looks at specific job-related factors
Tests & •Appraisal based on a test
observations •Test may be pen & pencil or demonstration
11. Past-Oriented: Comparative
Ranking •Employees ranked from best to worst
Forced •Categories are developed
distributions •Employees assigned to categories
12. Future-Oriented Methods
Self- •Useful to further self-development
Appraisals •Can be used with any evaluation approach
Management- •Employee & supervisor jointly establish goals
by-objectives •Employee is later evaluated on the objectives
•Usually used to evaluate future potential
Assessment
•Multiple types of evaluation
centre
•Usually used for managers
13. Recent Developments
• 360-degree appraisal
– In line with the trend toward flatter
organizations
– Combination of perspectives e.g. peer,
self, supervisor, client
• Balanced scorecard
– Integrates organizational performance
measures such as financial, customer
satisfaction, internal processes, learning
14. Evaluation Interviews
• Performance review sessions that give
employees feedback about their past
performance or future potential
• Interview should be a positive,
performance-improving dialogue
15. Effective Evaluation
Interviews
• Emphasize positive aspects of employee
performance
• Tell each employee the evaluation session
is to improve performance not to discipline
• Conduct the performance review session in
private without interruptions
• Review performance formally at least
annually
• Make criticisms specific, not general and
vague
16. Effective Evaluation
Interviews
• Focus criticisms on performance, not on
personality
• Stay calm and do not argue with the
person being evaluated
• Identify specific actions to improve
performance
• Emphasize willingness to assist the
employee’s efforts to improve performance
• End the evaluation by stressing positive
aspects and reviewing improvement plans
