Chap 7 - Performance Appraisal

Define ‘Performance Appraisal’.

Evaluating an employee’s current/past performance relative to his or her performance standards.

Define ‘Performance Management’.

The process employers use to make sure employees are working towards organisational goals.

E.g: Termination, promotion, reward etc.

Elaborate ‘Performance Appraisal’.

• The success or failure of performance appraisal program depends on the philosophy underlying it.

• E.g: Connection with business goals, attitudes and skills of those responsible for its administration.

State the 4 purposes for ‘Performance Appraisal’.

(A/T/R/T)

• Admin

• Training

• Rewards

• Termination/penalty

Elaborate ‘Admin Purpose’ under ‘Purpose of Performance Appraisal’.

• Provide performance feedback to employees.

• Recognise individual performance.

• Improve communication to share opinions.

• Document personal decisions.

Elaborate ‘Training Purpose’ under ‘Purpose of Performance Appraisal’.

• Identify individual strengths and weaknesses.

• Identify training needs.

Elaborate ‘Rewards Purpose’ under ‘Purpose of Performance Appraisal’.

• Determine promotion candidates.

• Personnel planning (Retention & motivation)

• Basis for salary and benefits.

Elaborate ‘Termination Purpose’ under ‘Purpose of Performance Appraisal’.

• Identify poor performance

• Decide on lay-offs

State the criteria to conduct a fair and just performance appraisal.

• Appraisal based solely on work-related issues.

• Workers are made known of what is expected from them.

• Standardisation of the performance system for the entire organisation.

• Qualified and knowledgable appraiser.

• Open communication between appraiser and apraisee.

• Employee is given a chance to discuss about their performances and issues related to it.

Who does the appraisal?

(M/Se/Su/P/T)

• Manager appraisal: Manager use daily work records and direct observation of employees to complete the appraisal review.

• Self-appraisal: Increase employee’s involvement in the appraisal process. // Problem when appraisers may evaluate their performance higher than their supervisor would.

• Subordinate appraisal: Seek feedback on how subordinates view them. Employees should be in a good position to evaluate the leadership/communication/planning of managers.

• Peer appraisal: Individuals of equal rank working together are asked to evaluate each other. // Good for certain jobs, must ensure confidentiality of the review form.

• Team appraisal: Designed to evaluate the performance of the team as a whole.

What are the 3 ‘Designing Appraisal Tool’?

(T/B/R)

• Traits method:
  - Measure the extent to which an employee possesses certain characteristics.
  - E.g: Graphic rating scales, mixed standard scales, forced-choice method, essay method
  

• Behavioural method:
  - Specifically described which actions should or should not be exhibited on the job.
  - E.g: Critical incident method, behavioural checklist method, behaviourally anchored rating scale.
  

• Results method:
  - Objective and less open to bias.
  - Productivity measures (sales volume, productivity, profit)
  - E.g: Management by objectives, balance scorecards.

What are the 5 ‘Issues in Performance Appraisal’?

(US/HE/CT/SL/B)

• Unclear standards: Too open to interpretation.

• Halo effect: Rating is based on one trait only instead on other traits too.

• Central tendency: Rate all employees the same way, average.

• Strictness/Leniency: Supervisor has a tendency to rate all subordinates either high or low.

• Bias: Tendency to allow individual differences such as race, and sex to affect the appraisal ratings.

How to avoid problems in ‘Performance Appraisal’?

• Learn and understand the potential problems and the solutions for problems.

• Use the right appraisal tool. Each tool has it own pros and cons.

• Train supervisors to reduce rating errors (halo, leniency etc.)

• Have raters compile positive and negative critical incidents as they occur.