Gary

tenth edition Dessler

Chapter 9 Part 3 Training and Development

Performance Management
and Appraisal
© 2005 Prentice Hall Inc. PowerPoint Presentation by Charlie Cook
All rights reserved. The University of West Alabama
After
After studying
studying this
this chapter,
chapter,
you
you should
should be
be able
able to:
to:
1. Describe the appraisal process.
2. Develop, evaluate, and administer at least four
performance appraisal tools.
3. Explain and illustrate the problems to avoid in
appraising performance.
4. List and discuss the pros and cons of six appraisal
methods.
5. Perform an effective appraisal interview.
6. Discuss the pros and cons of using different raters
to appraise a person’s performance.
©
© 2005
2005 Prentice
Prentice Hall
Hall Inc.
Inc. All
All rights
rights reserved.
reserved. 9–2
9–2
 Comparing Performance Appraisal
and Performance Management
 Performance appraisal
– Evaluating an employee’s current and/or
past performance relative to his or her
performance standards.
 Performance management
– The process employers use to make sure
employees are working toward
organizational goals.

© 2005 Prentice Hall Inc. All rights reserved. 9–3

 Why Performance Management?
 Increasing use by employers of performance
management reflects:
– The popularity of the total quality
management (TQM) concepts.
– The belief that traditional performance
appraisals are often not just useless but
counterproductive.
– The necessity in today’s globally
competitive industrial environment for every
employee’s efforts to focus on helping the
company to achieve its strategic goals.

© 2005 Prentice Hall Inc. All rights reserved. 9–4

 An Introduction to Appraising
Performance
 Why appraise performance?
– Appraisals play an integral role in the
employer’s performance management
process.
– Appraisals help in planning for correcting
deficiencies and reinforce things done
correctly.
– Appraisals, in identifying employee
strengths and weaknesses, are useful for
career planning
– Appraisals affect the employer’s salary raise
decisions.
© 2005 Prentice Hall Inc. All rights reserved. 9–5
 Classroom
Teaching
Appraisal By
Students

Source: Richard I. Miller, Evaluating Faculty

for Promotional and Tenure (San Francisco:
Jossey-Bass Publishers, 1987), pp. 164–165.
Copyright © 1987, Jossey-Bass Inc.,
Publishers. All rights reserved. Reprinted with
permission.
Figure 9–1
© 2005 Prentice Hall Inc. All rights reserved. 9–6
 Realistic Appraisals
 Motivations for soft (less-than-candid)
appraisals
– The fear of having to hire and train
someone new
– The unpleasant reaction of the appraisee
– A company appraisal process that’s not
conducive to candor
 Hazards of giving soft appraisals
– Employee loses the chance to improve
before being forced to change jobs.
– Lawsuits arising from dismissals involving
inaccurate performance appraisals.
© 2005 Prentice Hall Inc. All rights reserved. 9–7
 Continuous improvement
 A management philosophy that requires
employers to continuously set and
relentlessly meet ever-higher quality, cost,
delivery, and availability goals by:
– Eradicating the seven wastes:
• overproduction, defective products, and unnecessary
downtime, transportation, processing costs, motion, and
inventory.
– Requiring each employee to continuously
improve his or her own personal
performance, from one appraisal period to
the next.
© 2005 Prentice Hall Inc. All rights reserved. 9–8
 The Components of an Effective
Performance Management Process
 Direction sharing
 Role clarification
 Goal alignment
 Developmental goal setting
 Ongoing performance monitoring
 Ongoing feedback
 Coaching and support
 Performance assessment (appraisal)
 Rewards, recognition, and compensation
 Workflow and process control and return
Figure 9–2
© 2005 Prentice Hall Inc. All rights reserved. 9–9
 Defining Goals and Work Efforts
 Guidelines for effective goals
– Assign specific goals
– Assign measurable goals
– Assign challenging but doable goals
– Encourage participation
 SMART goals are:
– 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.
© 2005 Prentice Hall Inc. All rights reserved. 9–10
 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.

© 2005 Prentice Hall Inc. All rights reserved. 9–11

 Performance Appraisal Roles
(cont’d)
 HR department
– Serves a policy-making and advisory role.
– Provides advice and assistance regarding
the appraisal tool to use.
– Prepares forms and procedures and insists
that all departments use them.
– Responsible for training supervisors to
improve their appraisal skills.
– Responsible for monitoring the system to
ensure that appraisal formats and criteria
comply with EEO laws and are up to date.

© 2005 Prentice Hall Inc. All rights reserved. 9–12

 Steps in Appraising Performance
 Defining the job
– Making sure that you and your subordinate
agree on his or her duties and job standards.
 Appraising performance
– Comparing your subordinate’s actual
performance to the standards that have
been set; this usually involves some type of
rating form.
 Providing feedback
– Discussing the subordinate’s performance
and progress, and making plans for any
development required.
© 2005 Prentice Hall Inc. All rights reserved. 9–13
 Designing the Appraisal Tool
 What to measure?
– Work output (quality and quantity)
– Personal competencies
– Goal (objective) achievement
 How to measure?
– Graphic rating scales
– Alternation ranking method
– MBO

© 2005 Prentice Hall Inc. All rights reserved. 9–14

 Performance Appraisal Methods
 Graphic rating scale
– A scale that lists a number of traits and a
range of performance for each that is used
to identify the score that best describes an
employee’s level of performance for each
trait.

© 2005 Prentice Hall Inc. All rights reserved. 9–15

 Graphic
Rating
Scale with
Space for
Comments

Figure 9–3
© 2005 Prentice Hall Inc. All rights reserved. 9–16
 Portion of an Administrative Secretary’s
Sample Performance Appraisal Form

Source: James Buford Jr., Bettye Burkhalter, and Grover Jacobs, “Link Job
Description to Performance Appraisals,” Personnel Journal, June 1988, pp. 135–136.
Figure 9–4
© 2005 Prentice Hall Inc. All rights reserved. 9–17
 Performance
Performance
Management
Management
Outline
Outline

Source: www.cwru.edu.
Figure 9–5a
© 2005 Prentice Hall Inc. All rights reserved. 9–18
 Performance
Performance
Management
Management
Outline
Outline
(cont’d)
(cont’d)

Figure 9–5b
Source: www.cwru.edu.
© 2005 Prentice Hall Inc. All rights reserved. 9–19
 Performance
Performance
Management
Management
Outline
Outline
(cont’d)
(cont’d)

Figure 9–5c
Source: www.cwru.edu.
© 2005 Prentice Hall Inc. All rights reserved. 9–20
 Performance Appraisal Methods
(cont’d)
 Alternation ranking method
– Ranking employees from best to worst on a
particular trait, choosing highest, then
lowest, until all are ranked.
 Paired comparison method
– Ranking employees by making a chart of all
possible pairs of the employees for each
trait and indicating which is the better
employee of the pair.

© 2005 Prentice Hall Inc. All rights reserved. 9–21

 Alternation Ranking Scale

Figure 9–6
© 2005 Prentice Hall Inc. All rights reserved. 9–22
 Ranking Employees by the
Paired Comparison Method

Note: + means “better than.” − means “worse than.” For each chart, add up
the number of 1’s in each column to get the highest-ranked employee.
Figure 9–7
© 2005 Prentice Hall Inc. All rights reserved. 9–23
 Performance Appraisal Methods
(cont’d)
 Forced distribution method
– Similar to grading on a curve;
predetermined percentages of ratees are
placed in various performance categories.
– Example:
• 15% high performers
• 20% high-average performers
• 30% average performers
• 20% low-average performers
• 15% low performers
 Narrative Forms

© 2005 Prentice Hall Inc. All rights reserved. 9–24

 Performance Appraisal Methods
(cont’d)
 Behaviorally anchored rating scale (BARS)
– An appraisal method that uses quantified
scale with specific narrative examples of
good and poor performance.
 Developing a BARS:
– Generate critical incidents
– Develop performance dimensions
– Reallocate incidents
– Scale the incidents
– Develop a final instrument

© 2005 Prentice Hall Inc. All rights reserved. 9–25

 Performance Appraisal Methods
(cont’d)
 Advantages of using a BARS
– A more accurate gauge
– Clearer standards
– Feedback
– Independent dimensions
– Consistency

© 2005 Prentice Hall Inc. All rights reserved. 9–26

 Appraisal-
Coaching
Workshee
t

Source: Reprinted with permission of

the publisher, HRnext.com; copyright
HRnext.com, 2003.
Figure 9–8
© 2005 Prentice Hall Inc. All rights reserved. 9–27
 Examples of Critical Incidents for
an Assistant Plant Manager

Table 9–1
© 2005 Prentice Hall Inc. All rights reserved. 9–28
 Example of a
Behaviorally
Anchored Rating
Scale for the
Dimension
Salesmanship
Skill

Source:Walter C. Borman, “Behavior

Based Rating,” in Ronald A. Berk (ed.),
Performance Assessment: Methods and
Applications (Baltimore, MD: Johns
Hopkins University Press, 1986), p. 103.
Figure 9–9
© 2005 Prentice Hall Inc. All rights reserved. 9–29
 Management by Objectives (MBO)
 Involves setting specific measurable goals
with each employee and then periodically
reviewing the progress made.
1. Set the organization’s goals.
2. Set departmental goals.
3. Discuss departmental goals.
4. Define expected results (set individual
goals).
5. Performance reviews.
6. Provide feedback.

© 2005 Prentice Hall Inc. All rights reserved. 9–30

 Computerized and Web-Based
Performance Appraisal
 Performance appraisal software programs
– Keep notes on subordinates during the year.
– Electronically rate employees on a series of
performance traits.
– Generate written text to support each part
of the appraisal.
 Electronic performance monitoring (EPM)
– Having supervisors electronically monitor
the amount of computerized data an
employee is processing per day, and
thereby his or her performance.
© 2005 Prentice Hall Inc. All rights reserved. 9–31
 Potential Rating Scale Appraisal
Problems
 Unclear standards
– An appraisal that is too open to
interpretation.
 Halo effect
– Occurs when a supervisor’s rating of a
subordinate on one trait biases the rating of
that person on other traits.
 Central tendency
– A tendency to rate all employees the same
way, such as rating them all average.

© 2005 Prentice Hall Inc. All rights reserved. 9–32

 A Graphic Rating Scale with Unclear
Standards

Note: For example, what exactly is meant by

“good,” “quantity of work,” and so forth?

Table 9–2
© 2005 Prentice Hall Inc. All rights reserved. 9–33
 Potential Rating Scale Appraisal
Problems (cont’d)
 Strictness/leniency
– The problem that occurs when a supervisor
has a tendency to rate all subordinates
either high or low.
 Bias
– The tendency to allow individual differences
such as age, race, and sex to affect the
appraisal ratings employees receive.

© 2005 Prentice Hall Inc. All rights reserved. 9–34

 How to Avoid Appraisal Problems
 Learn and understand the potential problems,
and the solutions for each.
 Use the right appraisal tool. Each tool has its
own pros and cons.
 Train supervisors to reduce rating errors such
as halo, leniency, and central tendency.
 Have raters compile positive and negative
critical incidents as they occur.

© 2005 Prentice Hall Inc. All rights reserved. 9–35

 Who Should Do the Appraising?
 The immediate supervisor
 Peers
 Rating committees
 Self-ratings
 Subordinates
 360-Degree feedback

© 2005 Prentice Hall Inc. All rights reserved. 9–36

 Advantages and Disadvantages of Appraisal
Tools

Table 9–3
© 2005 Prentice Hall Inc. All rights reserved. 9–37
 The Appraisal Interview
 Types of appraisal interviews
– Satisfactory—Promotable
– Satisfactory—Not promotable
– Unsatisfactory—Correctable
– Unsatisfactory—Uncorrectable
 How to conduct the appraisal interview
– Talk in terms of objective work data.
– Don’t get personal.
– Encourage the person to talk.
– Don’t tiptoe around.

© 2005 Prentice Hall Inc. All rights reserved. 9–38

 Performance
Contract

Source: David Antonion, “Improving the

Performance Management Process Before
Discontinuing Performance Appraisals,”
Compensation and Benefits Review May–
June 1994, p. 33, 34.
Figure 9–10
© 2005 Prentice Hall Inc. All rights reserved. 9–39
 Checklist
During the
Appraisal
Interview

Source: Reprinted with permission of

the publisher, HRnext.com. Copyright
HRnext.com, 2003.
Figure 9–11
© 2005 Prentice Hall Inc. All rights reserved. 9–40
 The Appraisal Interview (cont’d)
 How to handle a defensive subordinate
– Recognize that defensive behavior is
normal.
– Never attack a person’s defenses.
– Postpone action.
– Recognize your own limitations.

© 2005 Prentice Hall Inc. All rights reserved. 9–41

 The Appraisal Interview (cont’d)
 How to criticize a subordinate
– Do it in a manner that lets the person
maintain his or her dignity and sense of
worth.
– Criticize in private, and do it constructively.
– Avoid once-a-year “critical broadsides” by
giving feedback on a daily basis, so that the
formal review contains no surprises.
– Never say the person is “always” wrong
– Criticism should be objective and free of any
personal biases on your part.
© 2005 Prentice Hall Inc. All rights reserved. 9–42
 The Appraisal Interview (cont’d)
 How to ensure the interview leads to
improved performance
– Don’t make the subordinate feel threatened
during the interview.
– Give the subordinate the opportunity to
present his or her ideas and feelings and to
influence the course of the interview.
– Have a helpful and constructive supervisor
conduct the interview.
– Offer the subordinate the necessary support
for development and change.

© 2005 Prentice Hall Inc. All rights reserved. 9–43

 The Appraisal Interview (cont’d)
 How to handle a formal written warning
– Purposes of the written warning
• To shake your employee out of bad habits.
• Help you defend your rating, both to your own boss and
(if needed) to the courts.
– Written warnings should:
• Identify standards by which employee is judged.
• Make clear that employee was aware of the standard.
• Specify deficiencies relative to the standard.
• Indicates employee’s prior opportunity for correction.

© 2005 Prentice Hall Inc. All rights reserved. 9–44

 Creating the Total Performance
Management Process
 “What is our strategy and what are our
goals?”
 “What does this mean for the goals we set for
our employees, and for how we train,
appraise, promote, and reward them?”
 What will be the technological support
requirements?

© 2005 Prentice Hall Inc. All rights reserved. 9–45

 Information Required for TRW’s Web-
Based Performance Management System

Source: D. Bradford Neary,“Creating a Company-Wide, Online, Performance Management System:

A Case Study at TRW, Inc.,” Human Resource Management 41, no 4 (Winter 2002), p. 495.
Figure 9–12
© 2005 Prentice Hall Inc. All rights reserved. 9–46
 HR
Scorecard for
Hotel Paris
International
Corporation*

Note: *(An abbreviated example showing selected

HR practices and outcomes aimed at implementing
the competitive strategy, “To use superior guest
services to differentiate the Hotel Paris properties
and thus increase the length of stays and the return
rate of guests and thus boost revenues and
profitability”)

Figure –13
© 2005 Prentice Hall Inc. All rights reserved. 9–47
 Key Terms

performance appraisal management by objectives

(MBO)
performance management
electronic performance
graphic rating scale
monitoring (EPM)
alternation ranking method
unclear standards
paired comparison method
halo effect
forced distribution method
central tendency
critical incident method
strictness/leniency
behaviorally anchored rating
bias
scale (BARS)
appraisal interview

© 2005 Prentice Hall Inc. All rights reserved. 9–48