PERFORMANCE APPRAISAL Chapter 12 PERFORMANCE APPRAISAL

Chapter Outcomes Describe the three purposes of the performance appraisal. Differentiate formal and informal performance appraisals. Describe key legal concerns in performance appraisals. Identify the three most popular sets of criteria that supervisors appraise. Contrast absolute and relative standards. List human errors that can distort performance appraisal ratings. Describe what is meant by term 360-degree appraisal. Describe the purpose of employee counseling.

Performance appraisal defined A review of past performance that emphasizes positive accomplishments as well as deficiencies; a means for helping employees improve future performance.

Performance appraisers Supervisor Peers Self

Review guidelines Prepare for and schedule the appraisal Create a supportive environment Describe the purpose of the appraisal Involve the employee in the appraisal Focus discussion on work behaviors Support evaluation with specific examples Provide positive feedback and feedback for improvement Ensure that employees understand what was discussed Generate a development plan

Legality Performance appraisal policies set forth in organizational handbooks are increasingly construed as a binding unilateral contract. Do everything possible to avoid the appearance of prejudice and discrimination.

Absolute-standards measurements Written essays Critical incidents Checklists Adjective rating scales (see page 302) Behaviorally Anchored Rating Scales (BARS)

Relative standards Group-order ranking Individual ranking

Objectives Objectives must be: Tangible Verifiable Measurable

EXHIBIT 12–2 Sample items from a checklist appraisal form.

EXHIBIT 12-3 Example of adjective rating scale items.

Sample BARS for an employee relations specialist. EXHIBIT 12–4 Sample BARS for an employee relations specialist. Source: Reprinted from Business Horizons, August 1976. Copyright 1976 by The Foundation for the School of Business at Indiana University.

EXHIBIT 12–5 Group-order ranking distribution.

Potential problems in performance appraisals Leniency error Halo error Similarity error Recency error Central tendency error Inflationary pressures

Overcoming hurdles Continually document employee performance Use behaviorally-based measures Combine absolute and relative standards Use multiple raters Rate selectively Participate in appraisal training Conduct performance appraisals of teams

EXHIBIT 12–6 The counseling process.