Chapters 7-9

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Human Resource Management: Functions, Applications, Skill

Development by Robert N. Lussier and John R. HendonChapter 8

Performance Management and Appraisal

Performance Management vs.

Performance Appraisal

� Performance management is the process of

identifying, measuring, managing, and developing

the performance of human resources.

� Performance appraisal is the ongoing process of

evaluating employee performance.

Performance Management and Appraisal

Accurate Performance Measures must be:

� Valid and reliable.

� Acceptable and feasible.

� Specific.

� Based on the mission and objectives.

Performance Management and Appraisal

Why Conduct Performance Appraisals? � Communicate employee’s performance strengths and

improvement needs: managers and employees should have a formal 2-way conversation that allows employees to respond.

� Make employment-related decisions: managers can use objective criteria to decide employee raises, promotions, demotions, training, development, termination.

� Motivate—Develop: managers and employees can discuss tools and opportunities that can help employees improve their performance (and thereby improve organizational performance).

Performance Management and Appraisal

Two Parts of an Effective Performance Appraisal Process

� Evaluate: try to avoid evaluating problems (which cause employees to “tune out” the manager) by coaching employees as needed between performance evaluations.

� Motivate: focus on positive future potential results by giving employees opportunities to fix problems and offering them additional tools and training.

Performance Management and Appraisal

What Can Be Assessed?

� Traits (physical or psychological characteristics)

� Behaviors (actions)

� Results/Outcomes (how well goals were achieved)

� Traits, behaviors and outcomes being evaluated

should have a direct relationship to the essential job

functions and be accurate (reliable and valid)

measures.

Performance Management and Appraisal

Performance Appraisal Measurement Methods

and Forms–Critical Incidents

� Manager keeps a written record of positive

and negative employee performance.

� Typically used for making developmental and

evaluative decisions.

Performance Management and Appraisal

Performance Appraisal Measurement Methods

and Forms–Management by Objectives (MBO)

� Manager and employee jointly set employee

objectives (goals); manager periodically gives

feedback and evaluates performance; rewards

employee as merited.

� Typically used for employee development and

rewards.

Performance Management and Appraisal

Performance Appraisal Measurement Methods

and Forms–Narrative Method or Form

� Manager writes statements about employee

performance.

� Typically used for ongoing feedback; also for

employee development planning.

Performance Management and Appraisal

Performance Appraisal Measurement Methods

and Forms–Graphic Rating Scale Forms

� Manager uses an appraisal checklist to rate

employee performance on a continuum, often

expressed as a numerical scale.

� Typically used for evaluative decisions but

should also be used to steer development

decisions.

Performance Management and Appraisal

Performance Appraisal Measurement Methods and Forms–Behaviorally Anchored Rating Scales (BARS) Forms

� Manager uses a behaviorally-based continuum to rate employee performance. The continuum is often expressed as a numerical scale.

� Typically used for evaluative decision making but should also be used to steer development decisions.

Performance Management and Appraisal

Performance Appraisal Measurement Methods

and Forms–Ranking

� Manager ranks a group of employees by

making comparisons from best to worst.

� Typically used for evaluative decision making

and development.

Performance Management and Appraisal

Who Should Assess Performance?

While managers (supervisors) typically evaluate

their employees’ performance, inviting peers,

subordinates, customers and/or the employee

him/herself to evaluate the employee’s own

performance reduces bias and offers a more

comprehensive picture of the employee’s

performance (as in 360 Degree Evaluations).

Performance Management and Appraisal

How to Choose Who We Choose to Conduct an Evaluation

� Conduct a cost-benefit analysis to determine when the benefits of increasing performance feedback outweigh the cost to give the organization a return on its investment.

� The goal is to maximize performance while minimizing the total cost of the appraisal process.

Performance Management and Appraisal

Avoid Performance Appraisal Process Problems

� Develop Accurate Performance Measures

� Use multiple criteria.

� Minimize the use of trait-based Evaluations.

� Give the measures the OUCH and Blanchard tests.

� Train Evaluators

� to overcome the common problems of assessment.

� to use the measurement methods and forms.

� Use Multiple Raters

Performance Management and Appraisal

Debriefing the Appraisal

� Managers prepare for and communicate the analysis

of each employee’s performance with the employee.

� Conduct two interviews:

1. For evaluative decisions.

2. For development.

Performance Management and Appraisal