Managing Performance Appraisal Chapter

Study Notes

Performance Appraisal

Performance appraisal is a regular review of an employee's job performance and productivity in relation to certain pre-established criteria and organizational goals.
It involves establishing job criteria, comparing and measuring actual performance vs. job criteria, and communicating results to employees.
Performance appraisal can be conducted annually, every six months, or in a shorter cycle such as weekly or bi-weekly.

Purposes of Performance Appraisal

The central reason for using performance appraisal is to measure, correct, and improve employee work performance.
It can be used as a basis for employment decisions such as promotion, termination, transfers, and demotion.
Two basic reasons for using performance appraisal that are favorable to both organizations and employees are:
- As an administrative tool, helping in HR roles such as promotions, demotions, and re-assignments.
- As a development-oriented tool, helping in feedback, identifying strengths and weaknesses, and acknowledging training needs.

Creating Performance Criteria

Fundamental points to consider in creating performance criteria include:
- Relevance to company strategic goals.
- All aspects of an individual's responsibilities should be covered.
- The more deficiencies, the more irrelevant the criterion becomes.

Performance Appraisal Methods

Subordinate appraisal: done by a subordinate to his supervisor, also referred to as upward appraisal.
Peer appraisal: done by an employee to another employee.
360-degree assessment: gathers feedback from peers, colleagues, supervisors, and external sources such as customers, investors, and suppliers.
Character traits method: evaluates the extent to which an individual possesses certain traits or behavior.
Behavior-based method: focuses on specific behaviors or actions of an employee.
Output-based method: focuses on production or outcomes.

Types of Performance Appraisal Methods

Graphic rating scale: evaluates the extent to which an individual possesses certain traits or behavior.
Mixed standard rating scale: provides performance dimensions showing outstanding, average, and bad performance.
Forced choice method: requires the evaluator to choose a single option in rating the employees.
Written report method: prepares a written report that details the employee's strengths and weaknesses.
Critical incident appraisal method: keeps a record of exceptionally good and unacceptable employee behaviors.
Behavioral checklist method: rates behavioral aspects relevant to the employee's job.
Behaviorally anchored rating scale: uses rating scales that are behaviorally anchored on a sequence of statements descriptive of the employee's behavior.

Performance Appraisal Errors

Halo effect: gives an all-positive rating based on one or more traits and characteristics of an employee.
Horn error: sees only a particular negative trait of an employee and gives the employee a low rating on all areas of performance.
Central tendency: rates the performance of all or almost all employees as average.
Strictness/leniency: rates employee performance as either too low or too high.
Bias: negatively rates employee performance based on age, sex, race, and other personal characteristics.

Employee Appraisal Interview

It is a friendly dialogue between an employee and the manager or supervisor.
The employee gets the chance to improve their efficiency and change work manners.
It assures a good environment and professional development.

Description

This quiz tests your understanding of performance appraisal, its purposes, and various methods. It covers creating performance criteria, comparing appraisal methods, and their advantages and disadvantages.