Are You Performance Appraisal Savvy?

Method to Document and Evaluate an Employee's Job Performance

• Performance appraisals are periodic and systematic processes to document and evaluate an employee's job performance.

• These appraisals are often conducted by an employee's immediate or line manager and are a part of career development within organizations.

• Performance appraisals assess an individual employee's job performance and productivity in relation to pre-established criteria and organizational objectives.

• There are three main methods of collecting performance appraisal data, including objective production, personnel, and judgmental evaluation.

• Judgmental evaluations are the most commonly used method and can be prone to errors such as leniency, central tendency, and halo effects.

• Rater training is essential to reduce errors and develop a common frame of reference for evaluation of individual performance.

• Performance appraisals are often conducted annually but can be conducted more frequently for employees in non-routine jobs.

• Performance appraisals are used for employment decisions, research, communication, personal objectives, feedback, documentation, and wage and salary administration.

• Potential benefits of performance appraisals include performance improvement, motivation, and productivity.

• Potential drawbacks of performance appraisals include legal issues, dissatisfaction, misuse, and cross-cultural transferability issues.

• Performance feedback needs to be positive, immediate, graphic, and specific to be effective.

• Leadership development coaches suggest finding alternatives to annual performance reviews and providing frequent feedback to employees.Performance Appraisal: A Comprehensive Overview

• Optimal PA process involves a combination of multiple assessment modalities, starting with self-assessment, to peer-assessment, to management assessment.

• Research has shown that the source of the feedback (either manager or peer) does not matter in influencing employees' subsequent innovative or extra-role behaviors after the feedback is received.

• The Principal-agent framework is a model describing the relationship of information held between an employer and an employee. It is used to forecast responses from employees and strategies at finding resolutions against misaligned incentives that interfere with the goals of the employer.

• Incentive pay leads to the increase of agents' awareness of their own actions and seek to maximize their pay by considering the best possible actions that can be taken for the success of the firm and actively explore several options to minimize opportunity costs.

• Organizational citizenship behavior (OCB) consists of employee behavior that contributes to the welfare of the organization but is beyond the scope of the employee's job duties. These extra-role behaviors may help or hinder the attainment of organizational goals.

• The performance appraisal (PA) interview is typically the final step of the appraisal process. The interview is held between the subordinate and supervisor, and it is most advantageous when both the superior and subordinate participate in the interview discussion and establish goals together.

• Numerous researchers have reported that many employees are not satisfied with their performance appraisal (PA) systems.

• Computers have been playing an increasing role in PA for some time, and there are two main aspects to this: electronic monitoring of performance and mediating the feedback process.

• Mistakes made by raters are a major source of problems in performance appraisal.

• Varying standards, recency effects, primacy effects, central tendency, leniency, strictness, rater bias, halo effect, horn effect, contrast, similar-to-me/different-from-me, and sampling are the most common rater errors.

• It is difficult to minimize rater errors, but making raters aware of them through training is helpful.

• Performance rating mainly measures the unique rating tendencies of the rater and thus reveals more about the rater than about the person who is rated.

• 360-degree feedback and similar time-intensive exercises are replaced by team leaders' "performance snapshots" that focus on what they would do with each team member rather than what they think of that individual, and yearly appraisals of past performance are replaced by weekly check-ins among team leader and team member, preferably initiated by the team member, that focus on current and upcoming work.