MGT-351

Human Resource Management

Chapter-9

Performance Management and Appraisal

1–
1
 Basic Concepts in Performance
Management and Appraisal

Comparing
Performance Appraisal and
Performance Management

Performance Appraisal: Performance Management:

Setting work standards, assessing An integrated approach to
performance, and providing ensuring that an employee’s
feedback to employees to motivate, performance supports and
correct, and continue their contributes to the organization’s
performance. strategic aims.

9–2
 Why Performance Management?

Total Quality

The Performance
Management Appraisal Issues
Approach

Strategic Focus

9–3
 Defining the Employee’s Goals
and Work Standards

Guidelines for
Effective Goal Setting

Assign
Assign Assign
Challenging Encourage
Specific Measurable
but Doable Participation
Goals Goals
Goals

9–4
Setting Goals
• SMART Goals:
 Specific, and clearly state the desired results.

 Measurable in answering “how much.”

 Attainable, and not too tough or too easy.

 Relevant to what’s to be achieved.

 Timely in reflecting deadlines and milestones.

9–5
Performance Appraisal Roles
• Supervisors
 Usually do the actual
appraising.
 Must be familiar with
basic appraisal
techniques.
 Must understand and
avoid problems that can
cripple appraisals.
 Must know how to
conduct appraisals fairly.

9–6
Performance Appraisal Roles (cont’d)
• The HR Department
 Serves a policy-making and advisory role.

 Provides advice and assistance regarding the

appraisal tool to use.
 Trains supervisors to improve their appraisal skills.

 Monitors the appraisal system effectiveness and

compliance with EEO laws.

9–7
An Introduction to Appraising Performance

Why Appraise Performance?

1 Is basis for pay and promotion decisions.

2 Plays an integral role in performance management.

3 Helps in correcting deficiencies and reinforcing good performance.

4 Is useful in career planning.

9–8
An Introduction to Appraising Performance

Steps in Appraising Performance

1 Defining the job

2 Appraising performance

3 Providing feedback

9–9
Designing the Appraisal Tool
• What to Measure?
 Work output (quality and quantity)
 Personal competencies
 Goal (objective) achievement

• How to Measure?
 Generic dimensions
 Actual job duties
 Behavioral competencies

9–10
Performance Appraisal Methods

Appraisal Methodologies

1 Graphic Rating Scale Method 6 Narrative Forms

2 Alternation Ranking Method 7 Behaviorally Anchored Rating Scales (BARS)

3 Paired Comparison Method 8 Management by Objectives (MBO)

Computerized and Web-Based Performance

4 Forced Distribution Method 9 Appraisal

5 Critical Incident Method 10 Merged Methods

9–11
FIGURE 9–6 Scale for Alternate Ranking of Appraisees

9–12
FIGURE 9–7 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.
9–13
Management by Objectives (MBO)
• A comprehensive and formal organizationwide
goal-setting and appraisal program requiring:
1. Setting of organization’s goals.

2. Setting of departmental goals.

3. Discussion of departmental goals.

4. Defining expected results (setting individual

goals).
5. Conducting periodic performance reviews.

6. Providing performance feedback.

9–14
 Using MBO

Setting unclear Time-consuming

objectives appraisal process

Problems with
MBO

Conflict with
subordinates over
objectives

9–15
 Appraising Performance:
Problems and Solutions

Potential Rating
Scale Appraisal
Problems

Unclear Halo Central Leniency or

Bias
Standards Effect Tendency Strictness

9–16
TABLE 9–2 A Graphic Rating Scale with Unclear Standards

Excellent Good Fair Poor

Quality of work

Quantity of work

Creativity

Integrity

Note: For example, what exactly is meant by “good,” “quantity of work,” and so forth?

9–17
 Who Should Do the Appraising?

Immediate
Self-Rating
Supervisor

Peers
Potential Subordinates
Appraisers

Rating 360-Degree
Committee Feedback

9–18
 The Appraisal Interview

Satisfactory—Promotable

Satisfactory—Not Promotable
Types of Appraisal
Interviews
Unsatisfactory—Correctable

Unsatisfactory—Uncorrectable

9–19
 The Appraisal Interview (cont’d)

Guidelines for
Conducting an Interview

Talk in terms Encourage

Don’t get Don’t tiptoe
of objective the person to
personal. around.
work data. talk.

9–20
 The Appraisal Interview (cont’d)

How to Handle a Defensive Subordinate

1 Recognize that defensive behavior is normal.

2 Never attack a person’s defenses.

3 Postpone action.

4 Recognize your own limitations.

9–21
 The Appraisal Interview (cont’d)

How to Criticize a Subordinate

1 Do it in a manner that lets the person maintain his or her dignity and sense of worth.

2 Criticize in private, and do it constructively.

3 Give daily feedback so that the review has no surprises.

4 Never say the person is “always” wrong.

5 Criticism should be objective and free of biases.

9–22
 The Appraisal Interview (cont’d)

How to Ensure Improved Performance

1 Don’t make the subordinate feel threatened during the interview.

2 Give the subordinate the opportunity to present his or her ideas and feelings.

3 Give daily feedback so that the review has no surprises.

4 Never say the person is “always” wrong.

5 Criticism should be objective and free of biases.

9–23