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PERFORMANCE APPRAISAL

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Performance Appraisal Defined

System of review and evaluation of job performance

Assesses accomplishments and evolves plans for development

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Performance Management

Process that significantly affects organizational success

Managers and employees work together to set expectations, review results and reward performance.

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Purposes of Performance Mangement

Strategic Aligning employee performance with

organizational objectives

Administrative Making employment-related decisions

Developmental Aiding employee growth

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Appraiser Discomfort

Performance appraisal process cuts into manager’s time

Experience can be unpleasant when employee has not performed well

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Employee Anxiety

Creates anxiety for appraised employee

Rationale for Performance Appraisal

Provides legal and other benefits for employers

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Designing a performance management system

Conduct job analysis Set performance standards Appraise performance Feedback information to employee

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Establish Performance Criteria

Traits Behaviors

Competencies Goal Achievement

Improvement Potential

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Responsibility for Appraisal

Immediate supervisor Subordinates Peers Rationale for evaluations conducted

by team members Self-appraisal Customer appraisal

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360-Degree Valuation

Multi-rater evaluation Input from multiple levels with firm and

external sources Focuses on skills needed across

organizational boundaries More objective measure of performance Process more legally defensible

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Performance Measure Standards

Strategic congruence Reliability Validity Acceptability Specificity

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The Appraisal Period

Prepared at specific intervals

Usually annually or semiannually

Period may begin with employee’s date of hire

All employees may be evaluated at same time

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Appraisal categories and types Comparative

Ranking (Simple, alternation) Forced distribution Paired comparison

Attribute Graphic rating scale

Behavioral Critical incidents BARS BOS

Results MBO

Quality

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Problems in Performance Appraisal

Lack of objectivity Halo error

Leniency/strictness Central tendency

Recent behavior bias Personal bias

Manipulating the evaluation

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Reasons for Intentionally Inflating or Lowering Ratings

Believe accurate ratings would have a Believe accurate ratings would have a damaging effect on subordinate’s damaging effect on subordinate’s motivation and performance.motivation and performance.

Improve employee’s eligibility for merit Improve employee’s eligibility for merit raises.raises.

Avoid airing department’s “dirty Avoid airing department’s “dirty laundry.”laundry.”

Avoid creating negative permanent Avoid creating negative permanent record that might haunt employee in record that might haunt employee in the future.the future.

Protect good workers whose Protect good workers whose performance suffered because of performance suffered because of personal problems.personal problems.

Reward employees displaying great Reward employees displaying great effort even when results were relatively effort even when results were relatively low.low.

Avoid confrontation with hard-to-Avoid confrontation with hard-to-manage employees.manage employees.

Promote a poor or dislike employee up Promote a poor or dislike employee up and out of the department.and out of the department.

Scare better performance out of an Scare better performance out of an employee.employee.

Punish a difficult or rebellious Punish a difficult or rebellious employee.employee.

Encourage a problem employee to Encourage a problem employee to quit.quit.

Create a strong record to justify a Create a strong record to justify a planned firing.planned firing.

Minimize the amount of merit increase Minimize the amount of merit increase a subordinate receives.a subordinate receives.

Comply with an organizational edict Comply with an organizational edict that discourages managers from giving that discourages managers from giving high ratings.high ratings.

Inflating Ratings Lowering Ratings

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Characteristics of an Effective Appraisal System

Job-related criteria Performance expectations Standardization Trained appraisers Continuous open communication Performance reviews Due process

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Legal Implications

With enactment of Americans with Disabilities Act and civil rights legislation, employers must prepare for more discrimination lawsuits and jury trials related to performance appraisals

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The Appraisal Interview

Scheduling the interview Interview structure Use of praise and criticism Employees’ role Use of software Concluding the interview