Performance Appraisal Step by Step Approach

7/30/2019 Performance Appraisal Step by Step Approach

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Employee Appraisal


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CHAPTER OVERVIEW

Performance appraisal is a powerful tool to

help the supervisor meet the objectives of the

department and organization. The benefits of conducting performance

appraisals include providing information necessary

for improving performance and motivating

employees. Performance appraisals also provide important

records for the company.

Managers use this information for decisions on raises,

promotions, and discipline.


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There are systematic steps in appraisingperformance. First, performance and results expectations and

standards of performance are established andcommunicated to employees.

The supervisor then observes behavior andperformance results, comparing them to the

standards set. Finally, the supervisor provides reinforcement for

acceptable or excellent performance and workswith employees to develop remedies forinadequate performance.


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It is impossible for different supervisors toevaluate employees in exactly the same way. A supervisor may have a tendency to select some

specific ratings or identify certain behaviors asproblematic over others.

Biases about specific people and groups of peoplecan affect the appraisal process.

For example, supervisors who fail to keep good recordsmay rely on recent events when evaluating an employee.

A supervisor may give a more favorable appraisal tosomeone who is similar to the supervisor and appraisemore negatively a person who is different from thesupervisor.


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Another bias comes from the halo effect, which

leads people to generalize one positive or

negative trait to a persons entire performance.


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There are several types of appraisals

used to evaluate performance.

Supervisors usually do not choose the typeof form to use, rather it is selected by the

human resources department or upper

management.


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The goal of some appraisal forms is tomake the process easy and consistent

for all employees. Ideally, the form focuses on behavioral

performance and results to reduce bias antincrease objectivity.

The graphic rating scale is an example of thistype of appraisal form.

However, this type of form is susceptible to lackof consistency from supervisor to supervisor.


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Another type of appraisal is the paired-

comparison approach, which measures

the relative performance of employeesin a group.

This form rank orders all employees to find

the best employees. Therefore, it reflects negatively on other

employees.


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The appraisal interview providesfeedback to the employee and allows

the employee to join in the process ofperformance improvement.

The interview should follow careful andthoughtful completion of the appraisal form,

and should be in a private place with plentyof time for the employee to discuss issuesraised in the interview.


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The final outcome of the interview

should be agreement between the

supervisor and employee about whatimprovements need to be made and the

method for achieving the improvement

goals.


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Benefits of Conducting a

Performance Appraisal Performance Appraisal: Formal feedback

on how well an employee is performing his or

her job. Performance appraisals may be accomplished

with the use of a standard form, which includes

questions or items to guide the process.

On the other hand, performance appraisal can beaccomplished without a standard form.

In either case, the evaluation should be based on

predetermined performance expectations that are

communicated to employees.


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Performance appraisals provide informationnecessary for employees to improve thequality of their work. It can help motivate employees.

Employees like to hear how they are doing, andbehaviors that are evaluated or measured tend to getmore attention from individuals.

Therefore, when it is useful to the organization tohave special attention directed at a goal, it isuseful to have that item on a formal appraisal.

For example, if the quality of a product or service isimportant, it is worthwhile to have a section on theperformance appraisalon quality.


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Another reason for conducting performance

appraisals is that they provide important

records for the organization. They are a useful source of information when

deciding on raises, promotions, and discipline, and

they provide evidence that these were

administered fairly. In the case of employee behavior or performance

problems, an appraisal documents the problem.


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Appraisal Process

Establish and communicate

expectations for performance.

Observe and measure individualperformance against standards.

Reinforce performance to provide

remedies


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Establish and Communicate

Expectations During the planning process and related

action plans, the supervisor spells out

who is to do what in order to accomplishthe department objectives.

This information will indicate what eachemployee must do in order to help the

department or work group meet itsobjectives. One approach is to list three to five major

responsibilities of each position; then focus on

these responsibilities.


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It is important that each employee

knows and understands what is

expected. The supervisor must communicate the

objectives effectively.

Employees are most likely to understandand be committed to objectives when they

have a say in developing.


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Observe and Measure Individual

Performance Through the control process, the

supervisor should continuously gather

information about each employeesperformance.

This is an ongoing process, not something

the supervisor saves to do when filling outappraisal forms.


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Performance appraisals should focus onbehaviorand results.

Focusing on behavior means the appraisalshould describe specific actions or patternsof behaving.

Focusing on results means describing the

extent to which the employee has satisfiedthe objective for which he or she isresponsible.


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Sometimes a supervisor needs to

appraise personal characteristics, for

example, an employees dependabilityor attitude.

While such ratings are necessarily

subjective, the supervisor can try to basethem on observations about behavior and

results.


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Reinforce Performance

To keep employees motivated and

informed, the supervisor needs to tell

them when they are doing somethingright, not just when they are making a

mistake.

Reinforce good performance by pointingout to employees the areas in which their

performance is good.


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In areas where the employee falls short

of the standards, he or she needs to

know how to improve.An effective way to help the employee is

for the supervisor and employee to work

together in solving performance problems.


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To move beyond discussing symptoms to uncover theunderlying problems, the supervisor can ask which of thefollowing kinds of causes led to the poor performance:

(1) Inadequate skills.

The supervisor should see that the employee gets the necessarytraining.

(2) Lack of effort.

The supervisor may need to apply the principles of motivation.

(3) External Additions.

If the problem is something beyond the control of the supervisor

and employee, such as a poor economy or lack of cooperationfrom another department, the appraisal standards and ratingsshould be adjusted so that they are fair to the employee.

(4) Personal problems.

The supervisor should handle the situation as described inChapter 14.


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Avoiding Discrimination in

Performance Appraisals The Equal Employment Opportunity

Commission (EEOC) is the government

agency charged with enforcing federallaws against discrimination.

The EEOC has published the UniformGuidelines of Employee Selection

Procedures, which include guidelines fordesigning and implementing performanceappraisals.


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In general, the behaviors or

characteristics measured by a

performance appraisal should berelated to the job and to succeeding on

the job.


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The supervisor and others responsiblefor the content of performance

appraisals should make sure that whatthey measure is still relevant to aparticular job.

Ratings of performance should not be

discriminatory. That is, they should not be based on the

employees race, sex, or other protectedcategory, but on whether the employee meetsstandards of performance.


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Types of Appraisals

Types of commonly used performance

appraisal techniques include:

Graphic rating scales.

Paired-comparison approach.

Forced-choice approach.

Essay appraisal.


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Graphic Rating Scale

Graphic Rating Scale:A performanceappraisal that rates the degree to which theemployee has achieved various

characteristics. The graphic rating scale is the most common type

of appraisal used.

Various characteristics such as job knowledge or

punctuality are rated by the degree ofachievement.

The rate usually receives a score of 1 to 5, with 5representing excellent performance.

Some forms allow for additional comments.


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The advantage of this type of appraisal

is that it is relatively easy to use.

However, the ratings themselves aresubjective.

What one supervisor considers excellent may

seem just average to someone else.

Also, many supervisors tend to rate everyone

as being at least a little bit above average.

Additional descriptive information is an attempt

to overcome these problems.


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Paired-comparison Approach:A

performance appraisal that measures the

relative performance of employees in agroup.

This is a method of performance evaluation that

results in a rank ordering of employees to come

up with a best employee. This type of approach measures the relative

performance of employees in a group.


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Employees are ranked by comparing the firsttwo employees on the list. The supervisor places a check mark next to the

name of the employee whose performance isbetter.

The process is repeated, comparing the firstemployees performance with that of the otheremployees.

Then the supervisor compares the secondemployee on the list with all the others, and so onuntil each pair of employees has been compared.

The employee with the most check marks isconsidered the most valuable.


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The paired-comparison approach isappropriate when the supervisor needs

to find one outstanding employee in agroup for a promotion or specialassignment.

The fact that paired comparison makes

some employees look good at the expenseof others makes this technique less usefulas a method of providing feedback toindividual employees.


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Forced-Choice Approach

Forced-choice Approach: A

performance appraisal that presents the

appraiser with sets of statementsdescribing employee behavior; the

appraiser must choose which statement

is most characteristic of the employeeand which is least characteristic.


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This type of appraisal form gives the

supervisor sets of statements describing

employee behavior. For each set of statements, the supervisor must

select the one that is most and the one that is

least characteristic of the employee.

These questionnaires prevent the supervisor from saying

only positive things about employees. It is used when an

organization finds that supervisors have been rating an

unbelievably high proportion of employees as above

average.


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Behaviorally Anchored Rating

Scales Behaviorally Anchored Rating Scales:A

performance appraisal in which the employee is ratedon scales containing statements describing

performance in several areas. This is a method of performance appraisal that is tailored to

the organization and positions within that organization.

Some organizations pay behavioral scientists ororganizational psychologists to create behaviorally anchoredrating scales.

These scales rate employee performance in several areas.

The supervisor selects the statement that best describeshow the employee performs.

Each job title in the organization has a different set of ratingstatements.


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The advantage of using this techniqueis that it is tailored to the organizations

objectives for employees. It also tends to be less subjective than

some other approaches.

However, developing the scales is time-consuming and therefore relativelyexpensive.


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Checklist Appraisal

A checklist appraisal is a record ofperformance, not an evaluation by the

supervisor. It contains a series of questions about

the employees performance.

The supervisor checks boxes to answer

the questions yes or no. The human resources department has a

key for scoring the items resulting in arating of the employees performance.


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The advantage of this type of appraisalis that it is easy to complete.

However, it has several disadvantages. The checklist can be difficult to prepare,

and each job category will probably requirea different set of questions.

Also, there is no way for the supervisor toadjust the answers for any specialcircumstances that affect performance.


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Critical-Incident Appraisal

Critical-incident Appraisal: A

performance appraisal in which the

supervisor keeps a record of incidentsthat show positive and negative ways

the employee has acted; the supervisor

uses this record to assess theemployees performance.


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To conduct a critical-incident appraisal, thesupervisor keeps a written record of incidentsthat show positive and negative ways in

which the employee has acted. The record should include dates, people involved,actions taken, and any other details that arerelevant.

At the time of the appraisal, the supervisor reviews

the record to reach an overall evaluation of theemployees behavior.

During the appraisal interview, the employee hasa chance to respond to each of the incidentsrecorded.


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The advantage of this method is that it

focuses on actual behaviors.

However, the recordkeeping is time-consuming, and since negative behaviors

are more likely to be recorded than positive

behaviors, it can be overly harsh.


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Work Standards Approach: A performance

appraisal in which the appraiser compares

the employees performance to objectivemeasures of what an employee should do.

This type of appraisal requires the supervisor to

establish objective measures of performance.

A typical work standard would be the quantity producedby an assembly-line worker.

The supervisor then compares the employees actual

performance with the standards.

This approach works best with production workers.


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Management by Objectives

(MBO) In organizations where MBO is used to set

goals and objectives for employees, the

supervisor will use this approach forperformance appraisal also.

The appraisal is based on whether or not the

employee has met his or her objectives.

The advantage is that employees know what toexpect.

The supervisor focuses on results rather than

more subjective criteria.


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Agents by Someone Other than

the Supervisor 360-degree Feedback: Performance appraisal that

combines assessment from several sources.

Because the supervisor cannot know all of an

employees behaviors and their impact on others inthe organization, the supervisor may combine his orher appraisal with self-assessments by the employeeor with appraisals by peers or subordinates. Combining several sources of appraisals is called 360-

degree feedback. The self-assessment may be done before the interview.

Then the supervisor and employee can compare theemployees appraisal with his or her own evaluation.


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Peer Reviews: Performance appraisals

conducted by an employees co-

workers. Peer appraisals are less common.

In organizations that use teams, the

members may appraise theperformance of their team members.


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There are many techniques for appraisingperformance. Usually the human resources department or

higher-level management dictates which type(s)the supervisor will use.

All supervisors will likely use the same approachbecause it is easier to keep records showing

performance over time. The supervisor may be able to supplement theappraisal format with other techniques if theyseem helpful by using the Comment section ofthe form or an attached addition.


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An increasing number of major

companies are having subordinates rate

how well their bosses manage. The purpose is to give managers

information they can use to supervise

more effectively and make theircorporations more competitive.


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Bias in Appraising

Performance Performance appraisals should be free

of bias, but this is impossible.

There are several identifiable biases in theperformance appraisals by supervisors.

Harshness Bias: Rating employees more

severely than their performance merits.

Leniency Bias: Rating employees morefavorably than their performance merits.


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Harshness bias tends to frustrate anddiscourage workers who resent the unfairassessments of their performance.

At the other extreme is the leniency bias,where supervisors rate their employees morefavorably than the performance merits. Employees who receive favorable ratings may see

it as an advantage. However, it cheats them and the department of the

benefits of truly developing and coaching employees.


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There are also supervisors who tend toselect ratings that are related to the

structuring of answers on thequestionnaire.

A tendency may be to select ratings in themiddle of the scale, which is called central

tendency. This type of bias misses important opportunities

to praise or correct employees.


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Proximity bias, or assigning similar scores to

items that are near each other on a

questionnaire, can result in misleading

appraisals.

If the supervisor is uncertain about specific

questions or wants to adjust a low score, he or

she may resort to making random choices.

This should be avoided by trying to apply objective

criteria.


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Personal preferences of the supervisor will

bias performance appraisals also.

There is a tendency to judge others morepositively when they are like oneself.

There is also a tendency to place most weight on

the events that have occurred most recently.

This is called recency syndrome.

The supervisor should be careful to consider events and

behaviors that occurred throughout the entire period

covered by the review.


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Similarity Bias: Thetendency to judge

others more positively when they are like

oneself.

The halo effect refers to the tendency to

generalize one positive or negative aspect of

a person to the persons entire performance,

resulting in either a higher or lower ratingthan the employee deserves.


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Finally, the supervisors prejudices about

various types of people can unfairly influence

a performance appraisal.

The supervisor must remember that each

employee is an individual, not just a representative

of a group.

This is especially important in light of the EEOC

guidelines discussed earlier in the chapter.


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Purpose of Conducting

Performance Appraisals The interview between the supervisor

and employee is where performance is

reinforced or remedies are provided. The supervisor describes what he or she

has observed and discusses this appraisal

with the employee.

Together they agree on areas for

improvement and development.


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Supervisors often dread conducting

appraisal interviews.

Pointing out another personsshortcomings can be unpleasant at best.

To overcome these feelings, if helps to focus

on the benefits of appraising employees.


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The purpose of holding an appraisal interview

is to communicate information about the

employees performance.

An interview is an appropriate setting

because if sets aside time to focus on and

discuss the appraisal in private.

It is a two-way communication with thesupervisor and employee working together to

devise ways to improve performance.


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Preparing for a Performance

Appraisal Preparation for the interview begins with

completing the appraisal form.

The supervisor should allow enough timeto complete the form carefully andthoughtfully.

The supervisor should think about how the

employee is likely to react to the appraisaland should plan how to handle theemployees reaction.

Also be ready with some ideas for how to

correct problems noted in the appraisal.


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Notify the employee ahead of the time

of the interview.

Arrange for a private place to hold theinterview.

Make arrangements to prevent

interruptions.

This is a very important event for both the

supervisor and the employee--treat it as such.


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In preparation for the appraisal interview, it is

also useful for the supervisor to review for

himself or herself why appraisals are

important for the organization, department,

and most of all for the supervisor to be

competent at the job.

When the supervisor is convinced theperformance is a positive enterprise and that

it can be a win-win situation, it will be easier

to do the interview.


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Guidelines for Conducting the

Interview Begin the interview session by an attempt to put the

employee at ease. A refreshment and small talk may help break the ice.

Review the employees self-evaluation first, if there isone. Ask for reasons for the various ratings.

Then the supervisor describes his or her evaluation of theemployee.

Start with an overall impression, then explain the contents ofthe appraisal forms.

Most employees are waiting for the bad news, so it isprobably most effective to describe areas for improvement first.

Then describe the employees strengths.


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Allow time for the employee to respond

to the performance appraisal.

The employee should be allowed to agreeor disagree with the supervisors

conclusions, as well as to ask questions.

It is important for the supervisor to keep an

open mind and listen to the employee.


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When the supervisor and employeeunderstand each others point of view, theyshould reach a decision on how to solve

problems described in the appraisal. At the end of the interview, the supervisor and

employee are usually required to sign theappraisal form.

By doing so, they acknowledge that the interviewhas been conducted and that the employee hasread and understood the form.


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After the interview is over, the

supervisor continues to appraise

performance. Training and coaching for improvement

should ensue.

The follow-up is an ongoing process.

Performance Appraisal Step by Step Approach

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