1. Performance Appraisal – Key Definitions CriteriaThe basis for judgement or evaluations. Performance CriteriaCriteria for evaluating job performance. Job Performance The degree to which one meets expectations of supervisors or others in authority. Performance StandardA specific level of performance that is expected. Minimum StandardA level of performance that just meets expectations. Performance JudgementA person’s private estimation of how well another individual performs. Performance RatingA public or observable account of a person’s estimation of how well another performs. Performance RaterA person who provides a public estimation of well another’s meeting expectations. Performance FeedbackInformation on past performance. ProductivityThe ratio of outputs over inputs. Efficiency.

2. Functions for Which Appraisal is Used Merit increases Performance results/feedback/job counseling Promotion Termination or layoff Performance potential Succession planning Career planning Transfer Manpower planning Bonuses Development and evaluation of training programs Internal communication Criteria for selection procedure validation Expense control

3. Comparison of Performance Appraisal Systems CharacteristicTraditional Review Continuous Improvement Review (CIR) OrientationThe boss is the primary customer-the person who evaluates the employee The real customer-the person who receives work form the employee- does the evaluation Primary goalPlease the bossPlease the customer Aim of RewardsMotivating individuals to perform better. Rating depends on how well the employee does the job, meets individual objectives and the boss’ expectations. Improving the process to make the system work better-employee rating depends on how well employee cooperates with customers and meets joint objectives Lessons LearnedManipulate the evaluationManipulate the elements that affect quality and productivity BenchmarkingInternal: Employees compete against each other to achieve ratings. External: Employees compete against outside standards to establish superior processes Team OrientationAnti-Teamwork: “Making my number”-not in employee’s self-interest to cooperate, share information or work across boundaries Pro-Teamwork: employee’s self- interest served by cooperating, setting mutual goals and crossing boundaries AssumptionIndividual performance is the root cause of productivity increases or decreases The system and its processes are the root causes of productivity increases or decreases Feedback FocusOn point-in-time objectives of an individual’s job. Feedback is secondhand; informs boss whether employee is working effectively On explicit process objectives that link jobs. Feedback is direct; informs employee and customer whether solutions are working effectively RolePuts the boss in the evaluator role-takes employee out of the role of problem solver with customer Puts the employee in the role of partner and problem solver with customer; puts boss in role of facilitator Target for Change The employee and his or her deficiencies.The process and its deficiencies ObjectivesEliminate variability within categories of job performance-no real incentive to cross boundaries and deal directly with customers Eliminate variability within processes and sub-processes-strong incentive to cross boundaries and deal directly with customers

4. Performance Appraisal Systems in the Context of Organizations 1.Performance appraisal should be viewed as a systematic process that is integrated with other organizational processes 2.A performance appraisal system should be integrated with: Organization, department, and personal goals Reward systems Management systems On-going operations Training systems Organizational value systems

5. Performance Appraisal Systems in the Context of Organizations (cont.) 3.Good Communication Rapport between supervisors and subordinates Train supervisors to communicate Effective channels of communication

6. A Systems View of Performance Feedback Desired Goal Behavior Feedback Corrective Action if necessary Continuation Of Behavior Attained Goal

7. Different Sources of Performance Appraisal Information Source of AppraisalAdvantagesDisadvantages Immediate SupervisorMakes decisions on rewards Has perspectives on all subordinates Personal bias possible Supervisor may be removed from subordinates SelfUnique perspective A useful basis for comparison Useful for self-insight Likely to be too lenient PeersGreater exposure to appraises More accurate assessment Competitive atmosphere confounds usage SubordinatesCan give diagnostic-type feedback Can subvert the leader’s authority Superiors of other units Can be less subjectiveToo removed form the individual Customers or clientsGives input from immediate client group Only sees limited facet or appraise ConsultantsComplete, thorough appraisalToo expensive for use with all employees

8. Increasing the Legal Soundness of a Performance Appraisal System 1.Formal and standardized Written Policy Done in the same manner for all employees 2.Based on job analysis and leads to clear standards and fixed measures of performance 3.Appraisers are trained 4.Promotion or termination is documented with substantial evidence 5.The performance measurement instrument focuses on critical job behaviors

9. Legal Issues In Performance Appraisal 1.1978 Guidelines – any and all personnel decisions affecting an employee’s status in any organization are defined as test. 2.A test must be valid if there is adverse impact.