CHAPTER 8APPRAISING AND MANAGING PERFORMANCE

1. STRATEGY, PERFORMANCE MANAGEMENT AND PERFORMANCE APPRAISAL

Rapid change, tighter budgets, downsizing and restructuring, and pressures for greater employee accountability are placing greater emphasis on performance management by translating the organisation’s objectives and strategies into individual job objectives and performance standards. Performance management Aims to improve organisational, functional, unit and individual performance by linking the objectives of each. Incorporates job design, recruitment and selection, training and development, career planning, and remuneration and benefits, in addition to performance appraisal.The evaluation of organisational and employee performance permits managers to check that strategic business objectives are valid, are being communicated successfully throughout the organisation and are being achieved. In short, performance management ensures that jobs are properly designed and that qualified personnel are hired, trained, rewarded and motivated to achieve the organisation’s strategic business objectives. Performance management promotes the organisational and employee behaviour and performance required to improve bottom-line results.Performance appraisal, signals to managers and employees what is really important; it provides ways to measure what is important; it fixes accountability for behaviour and results; and it helps to improve performance.(Research, for example, shows that development-oriented appraisals are significantly linked to organisational commitment.) Performance appraisal is necessary to defend the organisation against individuals who legally challenge the validity of management decisions relating to promotions, transfers, pay changes and termination.HR can use to demonstrate that the organisation had legitimate, non-discriminatory reasons for termination or other adverse action against an employee’.

In practice, however, performance appraisal systems are often ad hoc and divorced from the organisation’s strategic business objectives. Other studies show that the use of performance management systems remains problematic, and a large gap can exist between employee expectations and their actual experience.In addition, highly unionized, university and public sector organisations often have cultures that promote strong opposition to any form of performance evaluation In the public sector, the cultural preference for collaboration rather than competition means that peer competitiveness can be seen as a strong negative factor in employee job satisfaction. Indian research, shows that private sector employees perceive greater fairness and satisfaction with their performance appraisals than do public sector employees. Overall research suggests that the introduction of appraisal-based performance pay into the public sector needs to be considered very carefully, as it requires major conceptual shifts in individual thinking and behaviour, and organisational culture.

2. PERFORMANCE MANAGEMENTOrganisational interest in performance management has increased as a result of competitive pressures, the influence of HRM and the individualization of the employment relationship. Performance management is ‘an interlocking set of policies and practices which have as their focus the enhanced achievement of organisational objectives through a concentration on individual performance’.Performance management involves goal establishment, performance evaluation, employee development and rewards. It provides the link between the organisation’s strategic business objectives, employee performance, development and rewards, and organisational results.The key elements of performance management are:

The creation of a shared vision of the organisation’s strategic objectives The establishment of performance objectives for each function, group and individual The use of a formal review process to evaluate group and individual progress towards goal

achievement The linking of performance evaluation and employee development and rewards to motivate

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3.

PERFORMANCE APPRAISALPerformance appraisal may be viewed as an overall measure of organisational effectiveness because organisational objectives are met through the efforts of individual employees. If employee performance is improved, the organisation will lift its performance. Some experts argues that:

Individual employees do not differ significantly in their work performance Any observed differences are simply the result of sampling error Any variation in performance is predominantly a result of factors outside the individual’s control Management appraisers are incapable of distinguishing between employee-caused and system-caused

variations in performance.

Other research, in contrast, indicates that rather than being contradictory, both performance appraisal and total quality management (TQM) can add value if there is a clear strategic link between the two. Nevertheless, appraisal of employee performance remains a critical and ongoing management activity. The evaluation process may be

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formal or informal. Either way, it has a direct impact on the employees’ pay increases, promotions, demotions, terminations, training and development, and career progression.

Despite the importance of performance management, many organisations do not have any systematic method of appraisal or use a system that lacks congruence with the organisation’s culture and strategic business objectives. Appraisal schemes rarely work as their formal procedures suggest because in practice they are predominantly concerned with surveillance, accountability and control. In contrast, other research indicates that when employees perceive their performance appraisals as accurate and fair there is a positive effect on their motivation and development.There are other barriers that can restrict the effectiveness of performance appraisal schemes.

Reliance on subjective measures Disregard for individual performance objectives Supervision by untrained managers Inconsistency in reward allocation Lack of top management support

Barbara Townley, expresses serious concerns about the real intent of performance appraisal. Performance appraisal is little more than a scientific management technique for handling labour relations. The real purpose is to monitor and control employees. This is done by emphasising the assessment of current performance and using subjective traits rating rather than objective job-based criteria.

3.1 Performance Appraisal Objectives

Discriminating on the basis of performanceA manager must be able to objectively discriminate between those who are contributing to the achievement of the organisation’s strategic business objectives and those who are not. A performance-oriented organisation has no room for egalitarianism: inadequate performance cannot be tolerated. Those who are underperforming;

Should be given the opportunity and assistance to improve Corrective action such as transfer, demotion or termination

(Microsoft annually weeds out about 5% of its employees. Intel employs a tough ‘up or out’ program)Results

The costs of keeping non-performers are significant Send the wrong signals to other employees who are performing well Lost sales, high rejection rates, customer dissatisfaction and damaged public image

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Hidden costs include loss of motivation among good performers

Employees who achieve want to be recognized and rewarded for their efforts, while poor performers prefer egalitarian pay plans. To motivate performance, outstanding performers therefore must be identified and rewarded. Unfortunately, research indicates that ingratiating subordinates are better liked and receive more pay increases, more favorable performance appraisals than do equally qualified, and non-ingratiating workers. Managers admit that political considerations are nearly always part of the evaluation process.

Rewarding performanceEmployees who have contributed the most to the achievement of the organisation’s strategic business objectives should receive the greatest rewards. If not, how are employees to be motivated? In the past’, says Murray, ‘there have been situations where people have not delivered performance and still got well paid. In that circumstance you create a culture where people are not hungry enough to deliver performance, whereas today people very much know that there is a measured way of assessing their performance.

However, there is now evidence to suggest that organisations are increasingly rewarding performance, even though the key factor in determining rewards in the past has been membership. Membership-based rewards include ‘across-the-board’ pay increases, cost-of-living increases and so on. Performance-based rewards include piecework payments, commissions, incentives, bonuses pay plans.

Linking employee contributions and rewards also ensures that the organisation gets maximum value for its remuneration dollar. General Electric CEO states: ‘If your company is managing people well, it tightly aligns good performance with rewards.

Developing employeesPerformance improvement comes about by building on strengths and overcoming weaknesses. It is the manager’s job to help each employee to grow and develop. Developmental schemes enhance the appraisal process by encouraging communication and employee participation. (Performance measures framed in a positive way promote creativity, problem solving and communication).

Performance ratings are of significantly better quality when made for developmental purposes than for administrative purposes. Appraisals are negative and static when they are concerned with past performance rather than with improving future performance. Development-oriented appraisals and comprehensive training also show a significant positive relationship with organisational commitment and job satisfaction. If it is perceived as having unfair procedures or outcomes, however, performance appraisal will generate emotional stress among employees.Any organisation seeking to pursue quality over an extended period of time must make development a primary concern. Without this emphasis, performance appraisal becomes a negative experience, leading employees to see it as an unfair judgement.

Negative experiences also explain why there is often considerable management, employee and union opposition to performance appraisal. Particularly for top executives feedback that leads to increased awareness, insight and development is critical. Unfortunately, top executives often do not perceive (observe) the need for feedback and change.

Giving feedback to employees (Communicating that assessment)Managers are responsible for evaluating the performance of their employees and for accurately communicating that assessment. This requires managers to;

Identify an employee’s deficiencies and Determine how they can be overcome, to Know what specialised training and development are needed Ensure that opportunities are created for any new job experiences required

Evaluating staff members’ performance’ and ‘having to make decisions that affect the lives of individual people know’ were major managerial stressors. Stress is aggravated (Worse) when;

Performance appraisal scheme is subjective,

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Unfair in its procedures and outcomesManagers who are untrained or who are inadequately prepared

Hong Kong and mainland China, feel it is impolite to even say something negative about another person. Singaporean managers similarly dislike performance appraisals because the cultural influence of face is so powerful. Not surprisingly, performance appraisals are often ambiguous and incomplete with generalities such as ‘Try harder!’ and ‘Keep on doing what you are doing, but do it better! Although subordinates generally prefer to have a clear understanding of ‘How am I doing?’ and How can I improve?, this is not universal. Japanese typically prefer a far greater degree of ambiguity, do not want their weaknesses discussed and, in many cases, want appraisal results kept secret and not discussed at all. Hofstede recommends giving feedback indirectly in such situations.

3.2 Rater of employee performance

The evaluation of employee performance is done by the immediate supervisor in most organisations or by anyone who know-how to distinguish between behaviours that produce effective or ineffective job performance and familiar with the job’s responsibilities and performance objectives

Supervisor evaluationThis is because it is assumed that the supervisor best knows the job, the performance standards to be met and the actual performance of the individual employee. Research indicates that supervisory ratings have a higher inter-rater reliability than do peer ratings. Disadvantages

The subjectivity of the supervisor (if there is a personality conflict), Manipulation of ratings to justify pay increases or promotions Discrimination and supervisor incompetence

Organisations usually subject the supervisor’s evaluation to management review and provide a mechanism for employee appeal and train supervisors.

Peer EvaluationOrganisations employing total quality management concepts and teams are increasingly using peer evaluations. This require a high level of trust among team members. Are often more accurate, since team members usually know each other’s performance Employees are subject to peer pressure, which is a powerful motivator to improve performance Increase team members’ commitment and productivity Show good reliability and validity Are a valuable supplement to the immediate supervisor’s ratings Lead to a greater acceptance of performance appraisal.

Self-evaluationThis is particularly in organisations that aim to promote a less authoritarian culture and encourage employee participation and self-development. More satisfying and constructive performance review discussions Less defensiveness among employees regarding the appraisal process Improved job performance through greater commitment to organisational goals.

Problems Lack of agreement between supervisor ratings and self-ratings Bias (especially when the ratings are being used for pay and promotion purposes) Gender differences (Men tending to rate themselves more highly on intelligence than women)

Self-evaluations are probably best used for self-development and the identification of training needs.

Subordinate evaluationAlthough upward appraisals are a seldom-used management tool, organisations using total quality management and seeking continuous improvement increasingly employ this technique to evaluate

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manager performance. Subordinates are in an excellent position to appraise a manager’s leadership skills and ongoing performance, how well the organisation’s managers are perceived to be managing others.

Benefits Generate unique information about the manager Improve communication Create an incentive for the manager to change Enhance employee job satisfaction Reduce power and status

Disadvantages Information may be limited to situations involving personal interaction Pressure may result in the manager making popular rather than right decisions The authority status of some managers may be undermined (Weakened), effectiveness Some managers may be unable to cope emotionally with negative feedback.

Successful upward appraisals, it is important to: Guarantee anonymity (Privacy) to participants Use the upward performance appraisal for development not evaluation Not conduct it at the same time as the formal performance appraisal Provide support for the employee being appraised Have top management commitment

Multisource evaluations360-degree appraisals are gaining increasing popularity with companies as they strive to improve organisational and individual performance.Multi-rater feedback can:

Help achieve strategic business objectives and Facilitate change by identifying the knowledge, skills and competencies needed Create the required training and development programs Track employee progress in applying new learning on the job To communicate and reinforce for employees the organisation’s mission, values and

strategic business objectivesThe objectives of the 360-degree evaluation are to identify areas of organisational and individual performance that need improvement.

i. Identify observable managerial and leadership behaviours that are critical to the organisation’s business success and culture enforcement.

ii. Superiors, peers, and subordinates are asked to rate the employee iii. The employee similarly rates their own performanceiv. Finally, results are compiled by an independent consultant and fed back to the employeev. The employee then uses the information to identify those areas where differences exist and

explore possible reasons for different perceptions.An essential factor in determining the overall value of 360-degree feedback is the follow-up on the required training and development activities identified by the feedback. Such evaluations should be seen as a part of the overall management development process and not a one-off event.

Pay decisions that are not linked to accomplishment or results Not maintaining confidentiality by limiting the amount of information Questionnaires are often lengthy and time-consuming to complete Autocratic hierarchical organisations will probably find 360-degree evaluations a source of stress

Team appraisalsEconomic, social and technological changes have seen organisations become less hierarchical in structure, adopt more participative management styles and introduce self-managed work teams. Challenges due to following reasons:

It is not always clear what results should be measured.

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It is not clear how performance should be measured. Teams vary in personality, diversity and the type of work, so it is not easy to design a

universal program. Team and individual measures of performance are in conflict Performance measurement has to be done at both the team and individual level. Individual performance, however, may be difficult to measure in some team activities. can produce dissatisfaction and feelings of inequity among hardworking members

To reduce the negative impact of such problems; Has clearly defined group goals that are accepted by all team members Has group rewards that are linked to the achievement of group goals Is applied where the personality of the team members and the work to be performed are

compatible with a team approach Involves team members in the design of the appraisal program Has measures of individual and team performance that are transparent, accepted and not

in conflict with each other.

3.3 Sources of Error in Performance Appraisal

Management Attitude : If managers see appraisal as something imposed on them by the HR department, the process will lack the genuine support and will simply become a cosmetic process to be treated with indifference. Performance appraisal is valued when it is seen as facilitating the accomplishment of the organisation’s strategic business objectives by motivating employees to improve their performance and reach their potential.

Rater Errors : Most managers and employees are aware of the rater errors that arise in performance appraisal due to central tendency, leniency(Sympathy)/strictness bias, prejudice, the recency effect and the like. ‘Easy’ and ‘tough’ managers and managers who play favorites create situations that result in unfair and inaccurate ratings.

The halo effect If a manager gives an employee the same rating on all factors by generalizing from one specific factor, this causes a ‘halo effect’ error. Research shows that people with good attendance records are viewed as intelligent and responsible.

Central tendency (Playing Safe) This is a problem caused by a manager giving everyone an average or acceptable rating, regardless of actual performance. A study found that employees actually perceive a performance rating of ‘satisfactory’ as negative, and that the rating significantly reduces the employee’s commitment.

Leniency (punishment)/strictness bias A leniency or strictness bias occurs when managers rate their employees either consistently high or low. (Managers who require their subordinates to ‘walk on water’ before rating). Rating an employee for administrative purposes are likely to be more lenient and less accurate than when evaluating performance for research, feedback or employee development purposes.

Prejudice (preconception) If a manager has a negative or positive prejudice towards an individual or a group, this causes a rater-generated error. One study, for example, found rater bias against the ‘performance capacity’ and ‘potential for development’ of employees aged 60 years or more. There is also evidence to suggest a race bias exists in performance appraisal.

The recency effect If a manager overemphasizes the employee’s most recent behaviour

The relationship effect Employees in high-quality, trusting relationships with managers receive higher ratings regardless of how long they have worked for the manager. The research showed that ratings on subjective criteria such as dependability and trustworthiness, were more heavily influenced.

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An Emphasis On Subjective Performance CriteriaAn examination of many traditional performance appraisal systems reveals an emphasis on subjective criteria (Most difficult) such as personality, loyalty and initiative, as opposed to objective criteria such as number of units produced, days absent, sales and late arrivals at work. Some appraisals are vague, subjective and open to charges of discrimination; they create a culture of ‘yes’ men and women generally avoided. But, the nature of the job and the purposes of the assessment determine the type of criteria to be used. Thus, organisations use a combination of objective and subjective criteria. Singapore Airlines, uses performance criteria relating to quality and quantity, job attitudes and behaviour (for example, dependability, teamwork, cooperation) and management skills (supervision and communication).

3.4 Major Types of Performance Appraisal Systems

When choosing an appraisal system, managers must consider the strategic business objectives of the organisation as well as specific performance evaluation purposes. The system selected should also be compatible with the organisation’s culture.

Ranking It compares each person’s performance with the performance of others in the group. The manager ranking all subordinates from ‘best’ to ‘worst’ using a single overall rating by using various criteria (Job knowledge, quality of work, quantity of work, attendance, punctuality) Assumed that the manager understands the job of every subordinate. It is suitable for dealing with only a small number of employees. Ranking involves considerable in discriminating between employees in the middle and does not give any indication as to why one employee is superior to another.

GradingThe grading system describes specific performance levels, such as superior, good, acceptable, marginal, and unsatisfactory. Fixed percentage of employees are allocated to each grade — for example, 5% are superior, 15% are good, 60% are satisfactory, 15% are marginal and 5% are unsatisfactory.This overcomes the problems of managers overrating, underrating or rating everyone as average. Moreover, it forces managers to think seriously about their employees, so there is a much greater likelihood of identifying performers and non-performers. (Ford, General Electric and Hewlett-Packard)May not suitable for small companies those seeking to promote a ‘family culture’. Although intended to improve organisational performance and better reward performance, they can erode trust and stimulate unhealthy competition between employees.

Graphic scalesTypically, the manager can choose one of five degrees for each specific criterion. The selection of criteria to be measured can be centred on subjective factors (such as initiative and dependability) and/or on objective factors (such as quality and quantity of work). Graphic scales, while appearing to be scientific, are notoriously unreliable. Another problem is that criteria may be important in one job but not in another. (Creativity, critical for success as an advertising director but, little importance to good performance as a data-entry operator). Research also suggests that many criteria commonly chosen on graphic rating scales are inter correlated.

Critical incidentsThis method requires the manager to record those occurrences or critical incidents of employee job behaviour that highlight good or bad job performance. The manager then uses the record of critical incidents to assess the employee’s performance when it is time for performance appraisal. In addition, the critical incident technique increases the probability that a manager’s evaluation will cover the entire period subject to appraisal, not just recent happenings.Diary-keeping managers were shown to be less lenient (Humane), and more critical in their reviews than were other managers. The critical incident technique can be likely to to recency error, manipulation by

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selective reporting, difficulty in comparing individual employees, and involve very time-consuming recording for managers.

Behaviorally anchored rating scalesBehaviorally anchored rating scales (BARS) are designed to evaluate behaviour demonstrated in performing a job. Profiles of good and bad performance in a particular job are collected from supervisors and/or people familiar with the work. Then grouped into various job dimensions such as job knowledge, customer relations and safety. Next, specific examples of job behaviour are placed on a scale, which is usually from one to seven.

It is argued that BARS reduce bias and subjectivity because the positions along the scale are defined in terms of job behaviour. In addition, subordinates are more committed, less tense and more satisfied than those subject to other types of appraisal systems. Drawback with BARS is that they take a great deal of management time and effort to develop.

Behaviour observation scalesUse critical incidents to develop a list of the desired behaviours needed to perform a specific job successfully. The employee is then evaluated by the manager on the frequency with which they demonstrate such behaviour on the job, using a five-point scale ranging from ‘almost never’ (1) to ‘almost always’ (5).

There is evidence that both managers and employees prefer appraisals based on behaviour observation scales to those based on BARS and graphic rating scales. Legal opinion suggests that behaviour observation scales may be more defensible than BARS and graphic rating scales in EEO challenges.The job-specific nature of the technique makes it costly and time-consuming to develop.

Essay descriptionA manager may be asked to describe, in their own words, the employee’s performance (covering the quantity and quality of work performed, job know-how, human relations skills, strengths and weaknesses, promotability and so on). The major problems: The impact of the manager’s writing skills on the impression conveyed in the report, and the difficulty in comparing reports written by different supervisors. Managers can find essay reports a time-consuming bureaucratic annoyance (large number of subordinates).

Management by objectivesThe manager and the subordinate mutually identify common goals, define the subordinate’s major areas of responsibility in terms of expected results, and use these as measures in assessing the subordinate’s performance. Measurement creates discipline. MBO is popular with both managers and subordinates. This is because it is easy to understand, is objective and involves the subordinate in the appraisal process. Research shows that user acceptance is critical to the success of a performance appraisal system, and this is a major plus for the MBO approach. Hofstede suggests that the effectiveness of an MBO program may depend on national culture.

SMART objectives (To make MBO easier to understand and implement)

Specific/Stretching objectives – Must be clear and precise (Increase sales by 10%) and not vague or generalized. Stretching objectives must have ‘stretch’ built in. In other words, they must be challenging (but not impossible) to achieve. Objectives that are too easy to achieve result in under-achievement and the demotivation of those with high achievement needs.

Measurable objectives – Measurable objectives should be measurable and quantifiable.

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Agreed/Achievable objectives – Jointly agreed upon by the supervisor and the subordinate. For subordinates to be motivated they must have a sense of ownership of the objective.

Realistic objectives – Achievable objectives must be achievable. Impossible objectives will result in employees giving up

Time-bounded objectives – Time-bounded objectives must have a specific deadline or time frame by which they are to be achieved

The balanced scorecardThe BSC emphasizes that all areas are important to organisational performance and that balance should exist between them. It translates vision and strategy into a tool that effectively communicates strategic intent and motivates and tracks performance against the established goals’.Performance in four key areas: (Objectives and performance measures are set for each area)

People. Attention to learning and innovation. Performance measures:Employee satisfaction Employee retentionEmployee productivity Employee abilities, knowledge and skills

Internal operations. Attention to the development of a learning organisation. Performance measures:Innovation (for example, percentage of sales from new products)Operational efficiencyService (for example, time from order to delivery)

Customer satisfaction. Attention to the needs of the customer. Performance measures include:Market share Customer acquisitionCustomer retention Customer satisfactionCustomer profitability Service/product qualityImage/reputation.

Financial. Attention to the financial results that drive the business. Performance measures include:Revenue growth and mix Cost reductionProductivity improvement Return on investmentReturn on sales Asset utilization

Grouped together, these generate a balanced view of the organisation’s overall performance and specific employee performance.

Advantages of the BSC approach It creates an alignment between organisational, departmental and individual objectives. It balances short-term and long-term objectives. It focuses attention on four key performance areas. It provides guidance for change. It provides performance feedback.

Disadvantages of the BSC approach It can become overly complex The four factors may not be equally important drivers of performance. It requires extensive training. It requires extensive communication. It requires the setting of objectives throughout the organisation

Workplace surveillance

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Monitor employee performance and behaviour is rapidly becoming a matter of considerable controversy. A survey by PWC found that more than half of Australia’s leading companies use video surveillance to monitor their employees.Companies concerned about the financial and public relations risks associated with inappropriate email and internet use by employees:

diminished productivity potential legal liability information theft

Subjected to considerable criticism from unions and others who claim that they are symptomatic of a low-trust approach to people management, produce stress, loss of morale.

4. STATIC AND DYNAMIC PERFORMANCE APPRAISALS

It should emphasize employee growth and development and the setting of new goals, not just judgmental decisions about past performance. This kind of performance appraisal is ‘more likely to be effective, credible and sustainable’. Most admired companies set more challenging goals, link remuneration to achievement of those goals and are more oriented towards long-term performance. In contrast, a dynamic performance appraisal program helps employees to know where they are going, how and when they are going to get there.Judgmental decisions: On ‘what happened. Developmental decisions: On ‘how it happened’.

4.1 Characteristics of a dynamic performance appraisal program Goal establishment Performance feedback Performance improvement

Good performance measurement is an absolute necessity for effective feedback. Feedback, in turn, is also necessary for a quality goal-setting program because it allows employees to see how well they are performing and helps them to set new goals.

In general, research findings indicate that: The setting of specific goals is more likely to lead to higher performance Goals that are supposed to be difficult to achieve or require stretch tend to result in better performance Employee participation in goal setting tends to lead to higher goals being set Frequent performance feedback results in higher performance Employees will set higher goals if they are evaluated on performance than on goal attainment

When using goal setting in performance appraisal, it is important not to: Evaluate employees on factors over which they have no influence or control (Economic, Exchange rates) Subject employees to ‘punishment’ because they improve their performance

5. THE PERFORMANCE APPRAISAL RECORDProperly designed, the record is a valuable tool for:

Goal setting Defining performance levels Facilitating job performance review discussion Identifying training and development needs Identifying low- and high-potential employees Rewarding performance.

6. THE PERFORMANCE REVIEW DISCUSSION

Research shows that three factors are important in producing effective performance appraisal interviews:i. The manager’s knowledge of the employee’s job and performance

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ii. The manager’s support of the employeeiii. The manager’s involvement of the employee in the discussion.

The absence of these factors will have a negative impact on the quality of the performance appraisal interview. The performance review discussion is critical because this is when the manager sits down with the employee to:

Mutually review the employee’s responsibilities Mutually examine the employee’s performance Mutually explore what each can do to ensure performance improvement Mutually review the employee’s short-term and long-term goals.

The performance appraisal interview should be a positive experience for the manager and the employee. Yet, all too frequently, it becomes stressful and unpleasant lack of training in conducting a job performance review. Instead of generating an improvement in performance, it produces a demotivated and angry employee and results in performance decline.

6.1 The Preparation Required For The Performance Review Discussion

Before meeting an employee, the manager should undertake the following tasks. Review the employee’s job description to ensure that it is still accurate and that nothing has been

overlooked. Check that there is a proper match between the job and the employee’s skills, knowledge, abilities and interests.

Read the employee’s last performance appraisal report to be refreshed on key points and to identify areas of improvement and areas still requiring emphasis.

Check the employee’s actual performance against the mutually agreed goals. Consult with other managers who have contact with the employee in the performance of the job. Alert the employee well in advance so they can do the necessary preparation (completing a self-

appraisal, reviewing the job description, examining goal achievement, thinking about career steps and so on).

List all key points to be discussed in the interview. It is also desirable to ask the employee to do the same.

Ensure that there is sufficient time available for the appraisal discussion and that there are no interruptions.

6.2 Conduct of the performance review discussion (Guidelines for an effective performance)

Problems should be discussed as problems and not as criticisms. Should be constructive, not destructive. Should not be used as an attack the employee’s personality. This simply makes the employee defensive and

increases their dissatisfaction with the performance appraisal process. The employee should be encouraged to talk. Strong social inhibitions in some cultures may prevent such

openness. Questions that can be used to bring an employee into the discussion follow.– What can I do to help you to do your job better?– How can I give you better feedback on your performance?– How involved do you see yourself in the work of the department?– How do you feel about the amount of responsibility I am delegating to you?

Specific performance improvement objectives should be set. The manager should discuss only those things that can be changed. The manager should avoid using positional authority.

7. PERFORMANCE APPRAISAL AND EEO (Must Satisfy)Transfer or promotion must be based on a fair assessment of an employee’s potential, ability and work record. Ideally the work record should reflect an objective assessment of the employee’s performance.’ In addition, it is desirable for employees to include progress in EEO as part of the performance assessment of managers.

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Following practices should be used to successfully defend its appraisal system as being non-discriminatory. Job analysis must be used to develop the system. The performance appraisal scheme must be behaviour-oriented rather than trait-oriented. Managers must be given definite instructions and training on how to make appraisals. Results must be communicated to employees. There must be a provision for appeal in the case of disagreement.

Without a valid system of performance management, organisations risk an eventuality where even unintentional discrimination may consume large amounts of time and money on employee complaints, grievances and suits. The impact on public relations, managerial confidence in personnel decisions, and employee morale may be even more devastating.

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