Chapter 7: Performance Management Learning Objectives Understand the concept of performance management. Understand how performance appraisal contributes to performance management. Know the attributes of a legally defensible performance appraisal system. Understand the concept of person perception. Understand the three major rating errors. Know the various types of rating scales. Explain the purpose of rater training. Understand the bases of rater motivation. Understand the basis of contextual performance. Understand peer assessment, self-assessment, and 360-degree feedback. Explain the use of performance appraisal interviews. 1

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Chapter Summary Performance management is the process of aligning all of the organization’s components to achieve high organizational performance. Performance appraisal is the evaluation of the organization’s personnel component. Performance appraisal is used to make important personnel decisions (such as retention and advancement) and as such is governed by fair employment laws. How employees are evaluated is related to how they are perceived in the workplace, which may include factors that have little to do with their performance. Supervisor ratings are the most common form of performance appraisal. I/O psychologists have developed various types of rating scales to evaluate job performance and have identified rating errors that occur with their use. Individuals can be trained to make higher-quality ratings; thus the judgment of employees is a learnable skill. 11

Chapter Summary (continued) An organization may have inhibiting factors that influence a rater’s decision to give accurate and honest evaluations of employees. Appraisals of performance can be made by peers and subordinates (as well as oneself ) in addition to supervisors. 360-degree feedback is an approach to performance evaluation based on a confluence of ratings from people at multiple organizational levels. The technique is used for both developmental and administrative purposes. In some cultures it is not acceptable to solicit evaluations from any source except the supervisor. 12