Module 8: Evaluating Employee Performance

Performance appraisal review

A meeting between a supervisor and a subordinate for the purpose of discussing performance appraisal results.

Determine the reason for evaluating employee performance

The first step in the performance appraisal process: deciding why the organization wants to evaluate employees.

Providing employee training and feedback

By far the most important use of performance evaluation.

Common uses of performance appraisal

Training and feedback, salary increases, promotion decisions, termination decisions, personnel research.

Forced-choice rating scale

A method of performance appraisal in which a supervisor is given several behaviors and is forced to choose which of them is most typical of the employee.

Peter Principle

The idea that organizations tend to promote good employees until they reach the level at which they are not competent (their highest level of incompetence).

Training-needs analysis

Using performance appraisal data to decide whether training should change for all employees or only for individuals.

Identify environmental and cultural limitations

The second step of the appraisal process, which considers factors like overworked supervisors, no merit-pay money, or very cohesive employees.

360-degree feedback

A performance appraisal system in which feedback is obtained from multiple sources such as supervisors, subordinates, and peers.

Multiple-source feedback

A performance appraisal strategy in which an employee receives feedback from sources (e.g., clients, subordinates, peers) other than just his or her supervisor.

Supervisor rating

The most common source of performance appraisal; sees the results of an employee's efforts rather than every behavior.

Peers

Raters who see the actual behavior of an employee; reliable only when similar to and well acquainted with the person rated.

Subordinate feedback

Feedback from subordinates about a supervisor's behavior; also called upward feedback.

Secret shoppers

Current customers enlisted by a company to periodically evaluate the service they receive.

Self-appraisal

An employee evaluating her own behavior and performance; tends to suffer from leniency.

Criteria

Ways of describing employee success, such as attendance, quality of work, and safety.

Trait-focused performance dimensions

Dimensions that concentrate on attributes such as dependability, honesty, and courtesy; not recommended because they give poor feedback.

Competency-focused performance dimensions

Dimensions that concentrate on the employee's knowledge, skills, and abilities, making it easy to suggest corrections.

Task-focused performance dimensions

Dimensions organized by the similarity of tasks performed (e.g., radio procedures, court testimony); easier to evaluate but harder to suggest corrections.

Goal-focused performance dimensions

Dimensions organized by the goals to be accomplished, helping employees understand why certain behaviors are expected.

Contextual performance

The effort an employee makes to get along with peers, improve the organization, and perform needed tasks that are not officially part of the job description.

Weighting dimensions

Making some performance dimensions count more than others, which may also reduce racial and other biases.

Rank order

A method of performance appraisal in which employees are ranked from best to worst.

Paired comparison

A form of ranking in which a group of employees to be ranked are compared one pair at a time.

Formula for paired comparisons

n(n − 1) / 2, where n is the number of employees.

Forced distribution method

A performance appraisal method in which a predetermined percentage of employees are placed into a number of performance categories.

Rank and yank

Another name for the forced distribution method, favored by Jack Welch of General Electric.

Objective measures

Performance measures such as quantity, quality, attendance, and safety; also called hard criteria.

Quantity

A type of objective criterion used to measure job performance by counting the number of relevant job behaviors that occur.

Quality

A type of objective criterion used to measure job performance by comparing a job behavior with a standard.

Error

Deviation from a standard of quality, including work that is higher than the standard.

Attendance

An objective criterion separated into absenteeism, tardiness, and tenure.

Tenure

How long an employee stays with a company; used mostly for research on the success of selection decisions.

Safety

An objective criterion based on following safety rules and having no occupational accidents.

Graphic rating scale

A method of performance appraisal that involves rating employee performance on an interval or ratio scale, usually anchored by words like excellent and poor.

Behavioral checklist

A list of behaviors, expectations, or results for each dimension that forces the supervisor to concentrate on relevant behaviors.

Behavior-focused statements

Checklist statements such as 'Properly greets each customer' that give more specific feedback.

Result-focused statements

Checklist statements that concentrate on what an employee accomplished, such as 'Distributed at least 25 Visa applications each month.'

Contamination

The condition in which a criterion score is affected by things other than those under the control of the employee.

Comparison with other employees

Rating approach using anchors such as below average, average, and above average.

Rating approach using anchors

Rating approach using anchors such as always, almost always, often, seldom, and never.

Frequency of desired behaviors

Extent to which organizational expectations are met

Frame-of-reference training

A method of training raters in which the rater is provided with job-related information, a chance to practice ratings, examples of ratings made by experts, and the rationale behind the expert ratings.

Critical incidents

A method of performance appraisal in which the supervisor records employee behaviors observed on the job (examples of excellent and poor performance) and rates the employee based on that record.

Critical incident log

Formal written accounts of excellent and poor employee performance observed by the supervisor.

Employee Performance Record

A standardized use of the critical-incident technique developed at General Motors by Flanagan and Burns (1955).

Primacy effect

The tendency to remember our first impression of someone more than later behaviors.

Recency effect

The tendency to give recent behaviors more weight in the performance evaluation than earlier behaviors.

Dynamic performance

The idea that performance can change, so the top performer one year may not be the top performer another year.

Distribution errors

Rating errors in which a rater will use only a certain part of a rating scale when evaluating employee performance.

Leniency error

A type of rating error in which a rater consistently gives all employees high ratings, regardless of their actual levels of performance.

Central tendency error

A type of rating error in which a rater consistently rates all employees in the middle of the scale, regardless of their actual levels of performance.

Strictness error

A type of rating error in which a rater consistently gives all employees low ratings, regardless of their actual levels of performance.

Halo error

A rating error in which a single attribute or an overall impression of an individual affects the ratings made on each relevant job dimension.

Proximity error

A rating error in which a rating on one dimension affects the rating on the dimension that immediately follows it on the rating form.

Contrast error

A rating error in which the rating one person receives is influenced by the performance of a previously evaluated person.

Assimilation

A type of rating error in which raters base their rating of an employee during one rating period on the ratings the rater gave during a previous period.

Infrequent observation

The idea that supervisors do not see most of an employee's behavior.

Prototype

Each rater's own idea of the ideal employee, which can cause two raters to rate the same behavior differently.

Stress

Perceived psychological pressure, which increases rating errors.

Affect

Feelings or emotion.

Tell and sell

An approach to appraisal interviews in which the supervisor tells the employee everything done poorly and then persuades her on ways to improve; it accomplishes little.

Feedback sandwich

Giving positive feedback first, then negative feedback, then more positive feedback.

Fundamental attribution error

The tendency to attribute others' failure or poor performance to personal rather than situational factors.

Employment-at-will doctrine

The opinion of courts in most states that employers have the right to hire and fire an employee at will and without any specific cause.

Employment-at-will statements

Statements in employment applications and company manuals reaffirming an organization's right to hire and fire at will.

Only for cause

The condition under which public-sector employees can be fired.

Public policy/interest

A limitation on at-will employment that protects employees who exercise a legal duty (like jury duty) or refuse to violate the law or professional ethics.

Implied contract

A limitation on at-will employment created when an employer suggests an employee 'has a job for life' or can be fired only for certain reasons.

Covenant of good faith and fair dealing

A limitation on at-will employment requiring employers to act in good faith and deal fairly, based on the Uniform Commercial Code.

Probationary period

A period, usually three to six months, in which new employees prove they can perform well and can be terminated more easily.

Progressive discipline

Providing employees with punishments of increasing severity, as needed, in order to change behavior.

Reduction in force

Terminating employees because it is in the best economic interests of the organization; more commonly called layoffs.

WARN Act (Worker Adjustment and Retraining Notification Act)

The law requiring at least 60 days' notice for large layoffs or plant closings.

Termination meeting timing

The best days to hold a termination meeting are Monday or Tuesday.

Monitor the legality and fairness of the appraisal system

The final step of the appraisal process, which checks for gender, race/ethnicity, or age differences in ratings and decisions.

Behaviorally anchored rating scale (BARS)

A rating scale developed by Smith and Kendall (1963) that uses critical incidents to give meaning to the numbers on the scale.

Mixed-standard scale

A scale developed by Blanz and Ghiselli (1972) in which raters mark +, 0, or - against shuffled statements of excellent, average, and poor performance.

Logical rating errors

Rating patterns on mixed-standard scales that make no logical sense, which can be scored using Saal's (1979) revised method.

Behavioral observation scale (BOS)

A scale developed by Latham and Wexley (1977) that measures how frequently an employee performs desired behaviors.