Performance Appraisal

Overview The Criterion Problem Sources of Performance Data Specific Performance Appraisal Methods The Performance Appraisal Interview

Performance Appraisal
Performance appraisal is the formalized means of assessing worker performance in comparison to certain established organizational standards. the process used by an organization to evaluate the extent to which its workers are doing their jobs satisfactorily.

Development and Use of Performance Appraisal

Uses of Performance Data Training Job Analysis Compensation Administration Placement Promotions Discharge Performance Appraisal System Personnel Research

Criterion Development

Uses of Performance Appraisal

Between-person uses - salary administration, promotion, retention/termination, recognition of individual performance, layoff, and identification of poor performers. Within-person uses - identification of individual training needs, performance feedback, determining transfers and assignments, and identifying individual strengths and weakness. System maintenance uses - workforce planning, determining organization training needs, evaluating goal achievement, evaluating personnel practices.

Performance Criteria
Performance criteria are measures used to determine successful and unsuccessful job performance. The Criterion Problem - How should we judge worker performance? Objective performance measures - quantitative indicators of work outcomes. Judgmental (subjective) performance ratings/rankings made by some knowledgeable individual.

Performance Criteria
Three different levels of criteria
The ultimate criterion - an abstract, idealized concept of the criterion. The conceptual criterion - the various concepts that together make up the ultimate criterion. The operational criterion - the manner in which the operational criteria are measured.

The match between the operational criterion to the conceptual criterion determines the relevance of the criteria

Performance Criteria
Criterion Deficiency

Conceptual Criterion
Criterion Relevance

Criterion Contamination

Operational Criterion

Sources of Performance Data

Personnel Data - work-related information that is regularly recorded
e.g., absenteeism, tardiness, # of accidents, letters of commendation or reprimand

Advantages
Relatively easy to obtain Do not require subjective interpretation

Disadvantages
Assess mostly negative behaviors Many aspects of job performance are not measured Contextual factors may influence personnel records

Sources of Performance Data

Results-oriented (hard) criteria - direct measures of job performance, productivity
e.g., dollar volume of sales, number of words typed, units produced

Advantages
Face Validity

Disadvantages
Aspects of job performance may not be measured Contextual factors may influence hard criteria

Sources of Performance Data

Judgmental (Soft) criteria - ratings or rankings of job performance Advantages
Ratings scales are flexible and can used to measure many different aspects of job performance.

Disadvantages
Rating errors and biases can result in criterion contamination.

Who Rates Job Performance?

Supervisors Self-appraisals Peer appraisals Subordinate appraisals Customer appraisals 360-degree feedback is a method of gathering performance ratings from supervisors, subordinates, peers, and customers.

Rating Errors
Rating errors are unintentional rating inaccuracies. Leniency - the tendency to give ratings that are overly high Severity - the tendency to give ratings that are overly low Central Tendency - the tendency to use the midpoint of the scale too often

Rating Errors
Halo - the tendency to use an overall impression of someone when making ratings on specific performance dimensions. Attributional errors - the tendency to underestimate situational factors that may constrain the ratees performance. Personal biases - unintentional discrimination based on age, sex, race, etc. Recency effect - the tendency to give greater weight to recent performance and lesser weight to earlier performance.

Reducing Rating Errors

Train performance raters
Rater error training (RET) - making raters aware of unintentional rating errors Rater accuracy training (RAT) - train the rater in what constitutes good or poor performance and practice rating (videotaped) work samples and get feedback on accuracy.

Use more than one performance rater Improve the rating process
e.g., structuring observations, changing rating scale format

Rating Biases
Rating biases are intentional rating inaccuracies. Longenecker et al. (1987), The politics of performance appraisal.
Interviewed executives familiar with rating performance to investigate the thought processes they used when rating performance Revealed that distortion of ratings was an acceptable means of accomplishes various ulterior goals. Accurately rating performance is not as important as keeping things cooking.

Rating Biases
Seven common reasons for inflating ratings:
Pain-in-the-neck factor To get more bonuses/raises for the unit To promote someone out of the unit Boost morale Underdog factor Dirty laundry factor Recognition of recent improvements

Rating Biases
Four common reasons for deflating ratings:
Give a kick in the pants to someone who is coasting Pay is linking to performance and the budget is tight Show them whos the boss In an effort to provide justification for future firing

Reducing Rating Biases

Reward supervisors who rate accurately Limit access to performance appraisal information Make managers aware of the benefits of accurate performance ratings and the detrimental affects of inaccurate performance ratings Redesign organizational systems that promote intentional distortion

Specific Performance Appraisal Methods

Narrative Evaluations
An essay describing the employees performance over some time period. Used as either the only performance appraisal method or to supplement a more structured approach (i.e., ratings/ranking). Used in self-, peer, subordinate, customer, and supervisor performance appraisals.

Specific Performance Appraisal Methods

Narrative Evaluations
Advantages May provide specific behavioral examples of job performance Fill in gaps Few development demands (i.e., up-front time)

Specific Performance Appraisal Methods

Narrative Evaluations
Disadvantages Time consuming Requires good communication and writing skills on the part of the assessor May not address all of the aspects of job performance (especially if it is the only method used) Affected by error and bias No quantitative information and therefore difficult to compare across employees

Specific Performance Appraisal Methods

Graphic Rating Scales Performance appraisal methods using a predetermined scale to rate the worker on important job dimensions. It usually consists of:
a list and description of job related performance dimensions/traits numerical anchoring system (typically 5-9 points) or verbal anchoring system (e.g., good/poor,

Specific Performance Appraisal Methods

Graphic Rating Scales
Advantages Quantifies job performance Relatively easy to develop

Disadvantages
Affected by error and bias Often ambiguous and therefore different raters infer different meanings Often generic and may not represent job very well

Specific Performance Appraisal Methods

Behaviorally Anchored Rating Scales (BARS)
Using ratings scales with labels or anchors reflecting examples of poor, average, and good behavioral incidents Four step development process Critical incidents are generated One group of SMEs clustered the critical incidents into performance dimensions Another group of SMEs confirms the performance and Rates each critical incident (effective/ineffective)

Specific Performance Appraisal Methods

Behaviorally Anchored Rating Scales (BARS)
Advantages Performance dimensions are clearly defined Based on job analysis and therefore job relevant and legally defensible Useful for feedback purposes High content and face validity (if it is well developed) The development process may promote buy-in a frame-of-reference for evaluating performance

Specific Performance Appraisal Methods

Behaviorally Anchored Rating Scales (BARS)
Disadvantages Development is time-consuming and expensive Affected by error and bias If anchors are too representative of a particular employees performance this may result in rating errors

Specific Performance Appraisal Methods

Behavioral Observation Scales (BOS)
Requires appraisers to rate how often a worker has been observed performing key work behaviors (critical incidents) Values on the rating scale can reflect specific percentages of time 5 = 95-100% 4= 87-94% 3 = 75-84% 2 = 65-74% 1 = 0-64%

Specific Performance Appraisal Methods

Behavioral Observation Scales (BOS)
Advantages It is (supposedly) measuring observations of behavior and therefore lessening subjective judgement Based on job analysis and therefore job relevant and legally defensible Very useful for feedback purposes High content and face validity (if well developed) The development process may promote buy-in a frame-of-reference for evaluating performance

Specific Performance Appraisal Methods

Behavioral Observation Scales (BOS)
Disadvantages A supervisor cannot always be observing the workers he or she is rating Appraisers cannot remember how often very specific periods of time over any extensive time period (certainly not 6 to 12 months) Affected by error and bias

Specific Performance Appraisal Methods

Comparative Approaches
Rankings - involve a simple rank ordering workers from best to worse Paired Comparison - comparing each worker with each other worker in the group Forced Distribution - assigning workers to established categories of poor to good performance with fixed limitations on how many employees can be assigned to each category Relative Percentile Method - indicating the percentage of other employees performing at or below level demonstrated by a worker

Specific Performance Appraisal Methods

Comparative Approaches
Advantages Relatively simple to develop (however, certain methods may involve critical incidents) Easy for raters and ratees to understand Forces raters to make distinction among ratees

Specific Performance Appraisal Methods

Disadvantages
Most methods make it difficult to compare across work groups Provides no information about an absolute level of performance -- a problem with work groups of exceptionally good or poor performers Usually not very descriptive of performance behaviors Using for performance feedback may be difficult

The Performance Appraisal Interview

At some point there is typically (and preferably) a face-to-face interview between the rater and the ratee at which the results of the performance appraisal are discussed. There shouldnt be surprises in the interview.The ratee should understand the appraisal process and should be receiving feedback frequently. There should be a review of job responsibilities and goals how well theyve been met Goals for future performance should be identified

The Performance Appraisal Interview

Performance feedback should:
focus on activities under the workers control should be timely describe the situation and behavior in specific terms should allow for two-way communication typically should balance the recognition of good performance with the identification of areas for improvement should be constructive, not manipulative should be used to motivate the worker

The Performance Appraisal Interview

Characteristics promoting perceptions that the performance appraisal system is fair (Greenburg, 1986)
Soliciting the ratees input prior to the performance appraisal and using it Two-way communication Opportunity to challenge/rebut the evaluation The raters degree of familiarity with the ratees work Consistent application of performance standards

Content Recommendations for Legally Sound Performance Appraisals

Appraisal criteria should be:
should be job-related and based on job analysis should be based on behaviors rather than traits should be within the control of the ratee should relate to specific functions, not global assessments should be communicated to ratees in advance

Content Recommendations for Legally Sound Performance Appraisals

Appraisal procedures should:
be standardized and uniform for all employees in a work group be formally communicated to employees allow employees to review appraisal results provide formal appeal mechanisms use multiple, diverse, and unbiased raters provide written instructions for training raters require thorough and consistent documentation establish a system for detecting error and bias