Personal Bias (Stereotyping) Managers allow individual differences such as gender, race or age to affect ratings they give Effects of cultural bias, or stereotyping, can influence appraisals Other factors – Example: mild-mannered employees may be appraised more harshly simply because they do not seriously object to results © 2008 by Prentice Hall

Manipulating the Evaluation Sometimes, managers control virtually every aspect of appraisal process and are in position to manipulate system Example: Want to give pay raise to certain employee. Supervisor may give employee a undeserved high performance evaluation © 2008 by Prentice Hall

Employee Anxiety Evaluation process may create anxiety for appraised employee Opportunities for promotion, better work assignments, and increased compensation may hinge on results © 2008 by Prentice Hall

Reasons for Intentionally Inflating Ratings Believe accurate ratings would damage subordinate’s motivation and performance. Improve employee’s eligibility for merit raises. Avoid airing department’s “dirty laundry.” Avoid creating negative permanent record that might haunt employee in future. Protect good workers whose performance suffered because of personal problems. Reward employees displaying great effort even when results were relatively low. Avoid confrontation with hard-to-manage employees. Promote a poor or disliked employee up and out of department. © 2008 by Prentice Hall

Reasons for Intentionally Lowering Ratings Scare better performance out of employee. Punish difficult or rebellious employee. Encourage problem employee to quit. Create strong record to justify planned firing. Minimize amount of merit increase a subordinate receives. Comply with organizational edict that discourages managers from giving high ratings. © 2008 by Prentice Hall

Characteristics of Effective Appraisal System Job-related criteria Performance expectations Standardization Trained appraisers Continuous open communication Conduct performance reviews Due process © 2008 by Prentice Hall

Job-Related Criteria Most basic criterion needed in employee performance appraisals Uniform Guidelines and court decisions quite clear on this point © 2008 by Prentice Hall

Performance Expectations Managers and subordinates must agree on performance expectations in advance of appraisal period If employees clearly understand expectations, they can evaluate own performance and make timely adjustments © 2008 by Prentice Hall

Standardization Firms should use same evaluation instrument for all employees in same job category who work for same supervisor © 2008 by Prentice Hall

Trained Appraisers Common deficiency in appraisal systems -evaluators seldom receive training on how to conduct effective evaluations Training should be ongoing How to rate employees and how to conduct appraisal interviews © 2008 by Prentice Hall

Continuous Open Communication Employees have strong need to know how well they are performing Good appraisal system provides highly desired feedback on continuing basis Should be few surprises in performance review © 2008 by Prentice Hall

Conduct Performance Reviews Special time should be set for formal discussion of employee’s performance Withholding appraisal results is absurd Performance review allows them to detect any errors or omissions in appraisal, or employee may simply disagree with evaluation and want to challenge it © 2008 by Prentice Hall

Due Process Provide employees opportunity to appeal appraisal results Must have procedure for pursuing grievances and having them addressed objectively © 2008 by Prentice Hall