Performance Appraisals

• The periodic, formal evaluation of employee performance

• Applications– Pay raises– Promotions– Who gets fired?– Increase efficiency– Validate selection

techniques– Training requirements

Who Dares Oppose?

• Labor Unions• Employees: who likes

to be judged or to receive negative feedback?

• Managers: Want to avoid extra work and conflict

Objective Methods

• Quantity and quality of output: environ. factors, job difficulty– Good for assembly line

type jobs

• Electronic Performance Monitoring– ½ of workers are

currently monitored continuously

- Is it used to improve work quality?

- Many believe that it makes evaluations more objective

- 80% still find it stressful!

• Job Related Personal Data: Absenteeism, accidents, tardiness

Judgmental Appraisal Methods

• Written Narrative Appraisals: may be ambiguous or misleading

• Ratings Scales• Ranking Techniques: workers are all ranked

from best to worst– Doesn’t work for large #’s of employees– Less information than ratings– What if they are all horrible (or all good!)

More Methods• Forced Distribution Technique: Rate

employees on curve– What if all workers deserve good ratings?

• Forced Choice Scales: Must choose from equally favorable/unfavorable statements (only one of which is correlated with job performance)

Methods with Initials

• BARS (Behaviorally Anchored Rating Scales): evaluate performance in terms of critical employee behaviors

• BOS (Behavioral Observation Scales): rate the frequency of critical employee behaviors

• MBO (Management by Objective): Mutually agreed upon goals– Often become unrealistic over time

Revenge! Appraisal of Managers

• Assessment Center: simulated job activities• Evaluation by Superiors• Peer Ratings: Good predictors of promotion• Self-Evaluation: Leniency is a concern• Evaluation by Sub-ordinates: upward

feedback. Good predictor of managerial success. Must be anonymous

• 360Degree Feedback: Combines evaluations from a number of sources.

Potential Biases in Evaluation

• Halo Effect

• Systematic Bias

• Most-Recent Performance Error

• Inadequate Information Error

• Central Tendency Effect

• Fundamental Attribution Error

Can We Improve Performance Appraisals?

• Training– What to look for

– Objectivity

– Normal Curve

• Provide Feedback to Raters

Post Appraisal Interview

• Usually hated by all involved• Suggestions for improvement

– Active participation of employees in the whole process

– Interviewer should adopt a positive and supportive attitude

– Interviewer should focus on specific job issues, not personality characteristics

– Should try to establish joint and specific goals

Suggestions: Part Two

• Employee should have right to question, challenge, and rebut evaluation without fear of retribution

• Discussion of salary and rank changes should be linked directly to performance appraisal criteria