Industrial Psychology: Chapter 9

Performance criteria

• Trait-based criteria – Focus on personal qualities (e.g. loyalty, creativity, communication).

• Behaviour-based criteria – Focus on actions that lead to job success (e.g. teamwork, cooperation).

• Results/outcome-based criteria – Focus on what was achieved or produced, not how it was done (e.g. sales targets)

What are the main objectives of performance appraisals

1. Evaluative Objectives – Past performance focus

   • Used for decisions on pay, promotion, transfers, and retention.

   • Help evaluate staffing and selection systems.

2. Developmental Objectives – Future improvement focus

   • Provide feedback to help employees grow and enhance skills.

   • Identify training and development needs.

   • Encourage motivation and goal-setting for better future performance.

What are the key steps in the performance appraisal process?

1. Determine performance requirements – Define what tasks, goals, and results will be evaluated.

2. Choose an appraisal method – Select the most suitable technique (e.g., rating scales, checklists).

3. Train supervisors – Ensure they can appraise fairly and accurately to avoid bias or errors.

4. Discuss methods with employees – Explain what will be assessed and why, ensuring transparency.

5. Appraise according to standards – Evaluate performance objectively using pre-set standards.

6. Discuss results with employees – Review strengths, weaknesses, and achievements. Encourage open dialogue.

7. Set future performance goals – Establish clear objectives for improvement and development.

What is rater bias in performance appraisal?

Error that occurs when a rater’s values or prejudices distort the rating. Often stems from personal characteristics like age, race, or friendship with management.

What is stereotyping in performance appraisal?

Judging an employee based on group characteristics rather than individual performance — whether positive or negat

What is the halo effect in performance appraisal?

When one strong aspect of an employee’s performance influences all other ratings (e.g. good in one area → rated high in all areas)

What is central tendency error in performance appraisal?

When raters score everyone near the average, avoiding high or low ratings — often due to uncertainty or lack of familiarity.

What is leniency error in performance appraisal?

When a supervisor consistently gives undeservedly high ratings to avoid conflict or to keep employees happy.

What is strictness error in performance appraisal?

When a supervisor rates employees too harshly or critically, even if performance is adequate.

What is the recency/primacy effect in performance appraisal?

When ratings are based on recent (recency) or first (primacy) events rather than the employee’s overall performance.

What is the overall ratings error in performance appraisal?

When the rater gives one overall score that may not accurately reflect specific aspects of performance — often influences pay and promotions.

Who does performance appraisals

1. Supervisors

2. Peer Evaluations

3. Customer/Client Evaluations

4. Self-Ratings

5. Reverse Appraisals

6. Team Portfolio Appraisals

7. Human Asset Accounting Method
   

Why are supervisors commonly used for performance appraisals?

Supervisors best understand employee goals and performance. They observe daily work and are responsible for fair and accurate evaluations, which are a core part of supervision.

What are peer evaluations in performance appraisal?

Coworkers rate each other’s performance, especially in non-competitive environments. Peers can offer unique insights but may lack objectivity.

What are customer/client evaluations in performance appraisal?

Customers assess employee service quality (e.g. through surveys). Common in service industries and part of the 360° feedback system.

What are self-ratings in performance appraisal?

Employees assess their own performance. Encourages reflection and self-awareness but may lead to inflated ratings.

What are reverse appraisals?

Employees evaluate their supervisors. Promotes feedback and openness but requires trust and confidentiality to avoid retaliation.

What are team portfolio appraisals?

Teams collectively assess individual and group performance. Encourages collaboration and shared accountability.

What is the human asset accounting method?

Links an employee’s value to income or sales they generate. Treats employee skills and knowledge as human capital that contributes to organisational profit.

Training Appraisers – Modern Approaches

Training helps appraisers make fair, accurate evaluations and reduces errors (e.g. bias, halo effect, central tendency).
Training topics include:

• Purpose of performance appraisal

• Common rating errors

• Conducting non-discriminatory appraisals

• Effective appraisal interviews

What is impression management in performance appraisal?

Employees attempt to influence raters to create a favourable image during appraisals. It can affect fairness and accuracy.

What are demotion-preventive strategies in impression management?

Used to avoid blame for poor performance. Examples:

1. Apologies/excuses – “I couldn’t finish; the work was late.”

2. Causal claims – “It wasn’t my fault.”

What are promotion-enhancing strategies in impression management?

Used to appear more competent or successful. Examples:

1. Entitlements – Taking credit for success (“It was my idea.”)

2. Enhancements – Exaggerating achievements (“Morale improved because of me.”)

3. Obstacle disclosure – Emphasising challenges overcome.

4. Association – Linking oneself to powerful or successful people.

What is the main goal of the appraisal interview?

To discuss performance feedback, set goals, and address salary information. Helps improve motivation and performance when done constructively.

What are common problems with appraisal interviews?

• Playing God: Supervisors act as judges, not coaches.

• Inability to give criticism: Fear of offending employees.

• Personality bias: Rating personality instead of performance.

• Ineffective feedback: Vague or unhelpful comments.

What are the main steps in a performance appraisal interview?

1. Prepare for the interview.

2. Identify good and weak performance.

3. Review goals and problems.

4. Invite employee participation.

5. Agree on an action or development plan.

What are objectives and skills needed for a problem-solving interview?

Objectives: Communicate evaluation, identify weaknesses, promote growth.
Skills: Active listening, patience, empathy, and summarising key points.

What are the three types of appraisal interviews?

1. Tell and sell – Manager persuades employee to improve.

2. Tell and listen – Manager gives feedback and listens.

3. Problem-solving – Jointly identify and fix performance issues.

What are the gains, risks, and results of different interview types?

• Tell & Sell: + Respect and compliance; – May block employee input.

• Tell & Listen: + Builds trust; – May lack clear direction.

• Problem-Solving: + Shared learning, real change; – Employee may lack ideas.