Ch. 7

• Performance appraisal


  The process of evaluating an employee's job performance and productivity in relation to certain pre-established criteria and organizational objectives
• Reasons for performance appraisal

  • Providing employee training and feedback
  • Determining salary increases
  • Making promotion decisions
  • Making termination decisions
  • Conducting personnel research
• The most important use of performance evaluation is providing employee training and feedback
• Promoting the best or most senior employee often results in the Peter Principle
• Environmental and cultural limitations

  • Overwork
  • Stress
  • Financial limitations
• Who can evaluate performance

  • Supervisors
  • Peers
  • Subordinates
  • Customers
  • Self-appraisal
• Supervisor rating


  Common type of performance appraisal where the supervisor evaluates the employee
• Peer rating


  Employees who work directly with the employee being rated, reliable only when peers are similar and well acquainted
• Upward feedback


  Subordinates providing feedback on their supervisor's performance, difficult due to fear of backlash
• Customer feedback


  Customers providing feedback on employee performance through complaints or compliments
• Self-appraisal


  Employees evaluating their own behavior and performance, suffer from leniency but most accurate when not used for administrative purposes
• Appraisal method decisions


  • Focus of appraisal dimensions
  • Whether dimensions should be weighted
  • Use of employee comparisons, objective measures, or ratings
• Trait-focused performance dimensions


  • Concentrate on employee attributes like dependability, honesty, and courtesy
  • Provide poor feedback and do not result in employee development
• Competency-focused performance dimensions


  • Concentrate on employee's knowledge, skills, and abilities
• Task-focused performance dimensions


  • Organized by the similarity of tasks performed
  • Easier for supervisors to evaluate performance
  • More difficult to offer suggestions for improvement
• Goal-focused performance dimensions


  • Organized based on the goals to be accomplished by the employee
  • Easier to understand why certain behaviors are expected
• Contextual performance


  • The effort an employee makes to get along with peers, improve the organization, and perform tasks not officially part of their job
• Weighting performance dimensions makes good philosophical sense, reduces biases, and is administratively easier
• Employee comparison methods


  • Rank order
  • Paired comparisons
  • Forced distribution
• Rank order


  Employees are ranked in order by their judged performance for each relevant dimension
• Paired comparisons


  Involves comparing each possible pair of employees and choosing which one is better
• Forced distribution


  A predetermined percentage of employees are placed in each of the performance categories
• Employee comparison methods do not provide information about how well an employee is actually doing
• Objective performance measures


  • Quantity of work
  • Quality of work
  • Attendance
  • Safety
• Quantity of work


  Measured by simply counting the number of relevant job behaviors
• Quality of work


  Usually measured in terms of errors or deviations from a standard
• Attendance


  Can be measured by absenteeism, tardiness, and tenure
• Safety


  Employees who follow safety rules and have no accidents cost the organization less
• Rating methods


  • Graphic rating scale
  • Behavioral checklist
  • Comparison with other employees
  • Frequency of desired behaviors
  • Extent to which organizational expectations are met
• Graphic rating scale


  The most common rating scale, easy to construct and use but susceptible to rating errors
• Behavioral checklist


  A list of behaviors, expectations, or results for each performance dimension, forces the supervisor to focus on relevant behaviors
• Comparison with other employees

  Comparing the employee's performance to that of other employees, can reduce leniency errors but may force supervisors to rate high performers as worse than others
• Behavior-based performance appraisal methods provide easier feedback and suggestions for improvement
• Frame-of-reference training for raters

  • Provides job-related information, practice in rating, and examples of expert ratings
  • Communicates the organization's definition of effective performance and gets raters to focus on relevant behaviors
• The better employees understand the performance appraisal system, the greater their satisfaction with it
• Observing and documenting performance

  1. Observe employee behavior

  2. Document critical incidents of excellent and poor performance

  3. Write in a critical incident log

  4. Documentation forces the supervisor to focus on behaviors
• Rater training


  Provides raters with job-related information, practice in rating, and examples of ratings made by experts as well as the rationale behind those expert ratings
• Goal of rater training

  To communicate the organization's definition of effective performance and to then get rates to consider only relevant employee behaviors when making performance evaluations
• The better that employees understand the performance appraisal system


  The greater is their satisfaction with the system
• Observe and Document Performance

  1. Observe employee behavior

  2. Document critical incidents (examples of excellent and poor employee performance)

  3. Usually written in critical incident log

  4. Documentation forces the supervisor to focus on employee behaviors

  5. Helps supervisors recall the behaviors

  6. Provides examples to use when reviewing performance ratings with employees

  7. Helps an organization defend against legal actions