Chapter 7
Performance Appraisal
INP3004/MAN3360
Dr. Steve
Performance Appraisals
How do performance appraisals benefit the organization?
1. Help orgs make decisions about promotions and firing
2. Provide feedback to employees that serves to motivate or convince poor workers to leave
3. Improve commitment and satisfaction4. Provide documentation in case an employee
sues for wrongful termination
Performance AppraisalDevelopment and Applications
Job Analysis
Criterion Development
Performance Appraisal
Personnel TrainingWage DeterminationPlacementPromotionDischargePersonnel Research
Performance AppraisalApplications
1. Personnel Training – Determine employees strengths & weaknesses to determine need for training• Diagnostic tool to help employee improve
2. Determining Wages – Determine who should get a raise and how much• This issue may interfere with employee development,
employees may become defensive to protect salary• Possible solution: intermediate appraisals for diagnosis,
and year end for wage determination
3. Placement – Use P.A. data to re-assign workers to tasks they are best suited for
4. Promotion – Typically based on performance (P.A.), seniority, and available opening• Good P.A. needed to legally defend choice of
employee for promotion
5. Discharge – Organization that fires an employee may be asked to defend appraisal system• Should demonstrate firing was last alternative
6. Personnel research – Provides database for determining level of performance expected• Establish criteria for training and selection validities
Performance AppraisalApplications (continued)
Performance Appraisal Systems
Performance Appraisal Systems should:• Be relevant to the job• Not be used to assess non-observable behavior• Not be overly vague• Not show adverse impact• Use job analysis for establishing criteria• Show construct validity• Be used by supervisors trained in its proper use• Provide employees opportunity to appeal evaluation
and opportunity to improve before discharge
Performance Appraisal Employee Data
ConceptualCriterion
ObjectiveData
PersonnelData
JudgmentalData
Performance Appraisal Employee Data
• Objective data– Ex: # cars sold, time to completion, efficiency, etc
Problem: Criterion contamination
Conceptual Criteria: • Salesmanship
Actual Criteria:• # cars sold/month
Criterion Contamination: • Geographic region worker is assigned
Criterion Deficiency: • total revenue• profit• markup• repeat customers• time spent on customer.
• Personnel data– Absenteeism - # of days missed from work
• How well does absences discriminate good from bad employee?• Are unexcused absences more harmful than excused?• Voluntary (requested time off) vs Involuntary (medical)
– Turnover – how long employee stays on job• Voluntary (quit) vs Involuntary (discharged)• Why appraise length of time workers stay?
– May be a reflection of management, procedures, pay, etc
– Accidents – cost to the company in terms of damage and time off work• Typically used for truckers, machinists, production workers, etc.
Problem: Criterion Deficiency• Appear to be only measures of ‘poor’ performance
Performance Appraisal Employee Data
• Judgmental data – subjective ratings– Majority of performance appraisal systems– Can be used in any type of job– May be correlated with other measures (objective
or personnel)
Problem: Rater must be skilled at identifying relevant behaviors
Performance Appraisal Employee Data
Performance Appraisal Methods
• Graphic Rating Scales – rate worker on number of different dimensions by checking a box, circling a #, Likert scale, etc.
Examples:
Job Knowledge:
5 4 3 2 1
X
Quality of Work:Superior Above
AverageAverage Below
AverageUnacceptable
X
• Graphic Rating Scales (continued)
Common Problems:• Halo Errors – Overall impression of worker
biases individual ratings• Leniency Errors – Particularly hard grader
(negative) or easy grader (positive)• Central Tendency Errors – Tendency to select
the mid point of scale particularly when unsure
Performance Appraisal Methods
• Rank-Order – rank all employees from best to worst on performance (ordinal scale)
Ex:
1. Sally
2. Charlie
3. Lucy
4. Linus
5. PigPen
Problems: • Employee rankings are relative to each other rather than a standard.• Difficult with large number of workers
Performance Appraisal Methods
• Paired Comparison – compare each employee to every other employee
Example:
Performance Appraisal Methods
Sally-Charlie
Sally-Lucy
Sally-Linus
Sally-PigPen
Charlie-Lucy
Charlie-Linus
Charlie-PigPen
Lucy-Linus
Lucy-PigPen
Linus-PigPen
Lucy – 3 PigPen – 2 Linus – 3 Charlie - 0Sally – 2
• Problem: # comparisons = n(n-1) / 2
• Forced Distribution – Use normal curve to place workers into categories of performance– Useful when large number of workers– Forces distribution to be normal, so that most workers
are average
Performance Appraisal Methods
0
2
4
6
8
10
12
14
16
18
20
Fre
qu
en
cy
Lowest 10% Next 20% Middle 40% Next 20% Highest 10%
Problem: No reason to believe distribution to be normalPoor performers are weeded out
Performance AppraisalMethods using Specified Behaviors
• Critical Incidents – Those behaviors that are particularly important for doing the job– Supervisor keeps a running list of employees’ critical
incidents as they relate to various job-related behaviors such as job knowledge, decision making, leadership, etc.
– Used mainly as a diagnostic toolExamples: – “Failed to complete report” – “Decision to use fluorescent bulbs instead of
incandescent saved company $600 on year’s electric bill”
• Weighted Checklists – Takes critical incidents and weights each one according to importance– SMEs list of critical incidents from good to bad for
completing the job.– Supervisor then uses scale to identify behaviors worker
engaged in, then computes score
Performance AppraisalMethods using Specified Behaviors
Weighted ChecklistPosition: SecretaryCritical Incident Scale Value- Knows the difference between correcting the +6.5grammar in the boss’s letter and correcting writing style- Knows various postal rates and mails material in +4.2a cost-efficient manner- Knows what typing is to be done on plain vs. company letterhead +3.1- Keeps a running count on the use of office supplies +2.5- Opens all mail whether or not it is marked “confidential” -1.9- Confuses priorities on typing that needs immediate attention -3.8and projects that have no established deadlines- Files away correspondence so that it can rarely be found for -5.2later reference- Leaves many mistakes in typing from failing to proofread the -7.1typed copy
Behaviorally Anchored Rating ScalesBARS
• BARS – Rating scale which uses specific behaviors as anchor points
Five step development process:1. Create list of critical incidents2. Group incidents into meaningful dimensions3. Sort incidents (assess goodness of fit in groups)
and discard inconsistent ones4. Rate remaining incidents on representativeness of
the dimension (those with low inter-rater agreement are discarded)
5. Incidents are placed on scale according to their rating
Behaviorally Anchored Rating ScalesBARS Example
Position: Patrol officerJob Knowledge: Awareness of procedures, laws, and court rulings and changes in them
Could be expected to follow correct procedures for evidence preservation at scene of crime
Could be expected to be fully aware of recent court rulings and conduct him/herself accordingly
Could be expected to know s/he could break down locked door while in hot pursuit and thus arrest fleeing suspect
Could be expected to occasionally have to ask other officers about points of law
6
8
7
5
9
4
3
2
1
Very High
Moderate
Very Low
Could be expected to misinform public on legal matters through lack of knowledge
Could be expected to search suspect’s car two hours after suspect was booked
Behavioral-Observation ScalesBOS
• BOS – Supervisor rates employee on frequency of how often each critical incident occurs
Position: Student
1. Comes to class on time2. Asks intellectual questions3. Does not interrupt class4. Takes detailed notes
Never Seldom Sometimes Generally Always 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Performance AppraisalsOther Factors
1. Rater Training – try to minimize errors such as leniency, halo, central tendency, etc.• Perhaps videotaped performance with known rating
(est by SMEs) and have rater match ratings to expert opinion
2. Rater Motivation – provide motivation for giving accurate ratings• Are supervisor’s rewards tied to performance of
subordinate ratees?
Performance AppraisalRater Motivation
Other Types of Appraisals
1. Self Assessment – appraise oneself on how well you think you are doing.• Likely positive leniency• People generally acknowledge their weaknesses when
not tied to monetary considerations• Can help diagnose training needs
2. Peer Assessment – evaluate co-workersa. Peer Nomination – nominate specified # of top
coworkers
b. Peer Ratings – rate co-workers on various dimensions
c. Peer Rankings – rank co-workers from top to bottom
Performance Appraisal Follow-Up
• Post-appraisal interview with subordinate to discuss evaluation
• Identify both strengths and weaknesses• Set goals for improvement (motivate)
– Factors affecting motivation of appraisal• Does employee agree with assessment?• Does employee approve and accept the goals?
Performance Appraisal Acceptance
• Seven things that contribute to employee acceptance of their evaluations as fair
1. Was input solicited from employee and used in appraisal?2. Was there 2-way communication in feedback interview?3. Was there opportunity for employee to challenge
evaluation?4. Was rater well-acquainted with employee’s work?5. Are performance standards applied uniformly?6. Are ratings based on actual performance (not
personality)?7. Are salary & promotion decisions based on ratings?
Top 10 Military Performance Appraisal Comments
1. Got a full 6-pack, but lacks the plastic thingy to hold it all together2. This man is depriving a village somewhere of an idiot3. He has the wisdom of youth and the energy of old age4. Wheel is turning but the hamster is dead5. Was left on the tilt-whirl too long as a baby6. If he were any more stupid, he’d have to be watered twice a week7. She sets low personal standards and consistently fails to achieve
them8. So dense, light bends around him9. Got into the gene pool while the lifeguard wasn’t watching10. A prime candidate for natural de-selection