Performance Appraisal Chapter 13: The Performance Appraisal Debate

What are the costs of performance appraisal?

• Time

• Energy

• Setup

• Administrative

• Psychological

Why do performance appraisals have limited benefits to orgs?

• Little evidence of impact on org productivity or profitability

• Individual benefits are uneven and often small

• Range restrictions can lead to limited benefits

What are the uses of performance appraisals in orgs?

• Distinguishing between people

• Distinguishing individual strengths and weaknesses

• Supporting other HR systems in orgs

• Documentation

How can using performance appraisals for multiple purposes lead to conflicts?

Can lead to conflict in pay administration and training and development

What are possible alternatives to traditional performance ratings?

• More frequent, informal, and immediate feedback from supervisors

• Use “big data” to address problems in HR management

What are the drawbacks to replacing performance appraisals with frequent feedback?

• Feedback is not always accepted

• Increased feedback might not be regarded as credible

• Doesn’t provide firm basis for evaluating individuals

When appraisal systems are challenged in equal employment litigations, courts rely on what?

• Whether performance appraisals are clearly related to the content of the job being performed

• Whether there were due process considerations in appraisals and the decisions based on appraisals

Other legal pitfalls:

• negligence

• Defamation

In order for appraisal systems to be saved, orgs need to embrace what three principles?

• Performance appraisal is different from performance management

• Hard decisions need to be made about the purpose of performance appraisal, and they need to be carried out

• The benefits of appraisal to employees must exceed and must be seen as exceeding the costs

Performance appraisal is not ______. It is a ______ tool

Measurement; management

Why do merit pay systems often fail?

• Distrust

• Rating inflation

• Underinvestment

• Bonuses vs merit increases

  • Both should be tied to behavior that increases profitability

What are the benefits of decoupling pay?

• protects the rater

• Decreases threat of reduced raises

• Reduces anxiety and makes people more willing to to take and act on feedback

What does it mean to decouple pay?

To separate an employee’s compensation from their performance evaluation

What is a solution to the rating problem in performance appraisal?

• Collect info from many sources

• Report info as a single aggregate