1. Morgan Stanley - Firm-wide 360˚ Performance Evaluation
Managers and professionals selected pertinent data
360˚ feedback: superiors, peers, subordinates, internal clients
Self-assessment
Broad evaluation criteria/detailed feedback
Market/professional skills
Management and leadership
Commercial orientation
Teamwork/One Firm contribution (cross-selling)

2. Strategic Importance of Performance Assessment
Consistency between organizational strategy, values and job behavior
Including:
Defining performance
Appraisal process
Measuring performance
Feedback and coaching

3. Figure 10.1 Performance Management Cycle

4. Table 10.1 Multiple Organizational Uses for Performance Appraisal Information
Source: J.N. Cleveland, K.R. Murphy, and R.E. Williams, “Multiple Uses of Performance Appraisal: Prevalence and Correlates,” Journal of Applied Psychology, Vol , pp Copyright © 1989 by the American Psychological Association. Adapted with permission.

5. Functions of Performance Assessment
Performance Assessment as an Administrative Tool
Linking Rewards to Performance
Salary & bonuses
Promotion/layoff/transfer/discipline
Evaluation of HRM Policies and Programs

6. Functions of Performance Assessment
Performance Assessment as an Employee Development Tool
Goal Setting
Reinforcing and Sustaining Performance
Improving Performance
Determining Career Progression Goals
Determining Training Needs

7. Criteria for a Good Appraisal System
Validity
Content: measures important parts of job
Construct: actually measures performance
Relevance: measures important characteristics
Contamination: not influenced by extraneous factors
Deficiency: encompasses whole job

8. Criteria for a Good Appraisal System
Reliability
Inter-rater (more likely when raters come from same level of organization)
For subjective measures, know:
What type of measure was used?
Who used it?

9. “Just” Appraisal Systems
Distributive: rewards and punishments fairly distributed
Procedural:
Consistency: consistent across persons, time
Bias suppression
Accuracy: correct information
Correctability: decisions can be modified
Ethicality: based on prevailing moral and ethical standards

10. Criteria for a Good Appraisal System
Freedom from Bias
Legal Issues of Fairness
Race Differences
Age Differences
Freedom from Rating Errors
Leniency Errors
Severity Errors
Central Tendency Errors
Halo Errors
Why Do Rating Errors Occur?
Unintentional Errors
Cognitive Information Processing (CIP)
Schemas
Practicality: costs must outweigh benefits

11. Criteria for Avoiding Discrimination
Rating content must be:
Job related (valid)
Developed from thorough job analysis
Raters must observe job performance
Rater’s evaluations are based on objective, specific factors
Ratings are collected and scored under standardized conditions

12. Table 10.2 Why Supervisors Inflate and Deflate Ratings
Source: Based on C.O. Longnecker, H.P. Sims, and D.A. Gioia, “Behind the Mask: The Politics of Employee Appraisal,” Academy of Management Executive, Vol. 1, 1987, pp

13. Deciding What Types of Performance to Measure
Trait-Based Appraisals
Abilities
Personal characteristics
Behavior-Based Appraisals
Specific, well-defined job behaviors
Results-Based Appraisals
“Bottom-line”
Outcomes/outputs (quantity)
Quality

14. Methods of Appraising Performance
Objective Measures
Production Measures
Dollar Sales
Opportunity Bias
Personnel Data
Personnel Measures
Contamination
Performance Tests
Business Unit Performance Measures
Overall Value

15. Methods of Appraising Performance (cont’d)
Subjective Measures
Comparative Procedures
Ranking
Straight Ranking
Alternate Ranking
Paired-Comparison Ranking
Forced Distribution
Advantages and Disadvantages of Comparative Procedures
Absolute Standards
Graphic Rating Scales
Mixed Standard Scales

16. Figure 10.6 Examples of Typical Graphic Rating Scales

17. Methods of Appraising Performance (cont’d)
Subjective Measures (cont’d)
Weighted Checklists
Critical-Incident Technique
Behaviorally Anchored Rating Scales (BARS)
Behavioral Observation Scales (BOS)
Management by Objectives

18. Raters of Employee Performance
Self-Evaluation
Peer Evaluation
Subordinate Evaluation
Customer Evaluation
360-Degree Assessment
Self-Managed Teams

19. Enhancing the Measurement of Employee Performance
Training Evaluators
Rater Error Training (RET)
Frame-of-Reference (FOR) Training
Information-Processing Approaches
Observation Training
Decision-Making Training
Which Training Method is Best?
Feedback to Evaluators

20. Feedback of Results: The Performance Appraisal Interview
Types of Feedback Interviews
Tell and Sell
Tell and Listen
Problem Solving
Problems with the Appraisal Interview
Disagreement and Defensiveness
Multiple Purposes
Impression Management in the Feedback Process

21. Feedback of Results: The Performance Appraisal Interview
Improving the Performance Appraisal Interview
Feedback Specificity
Subordinate Acceptance
Setting Clear Goals

22. Performance Feedback (Hill and Gabarro)
Timely
Descriptive/specific
Without subjective, general attributes (i.e., objective and specific)
Oriented toward problem solving and action

23. Coaching (Hill and Gabarro)
Be as specific as possible
Take advantage of critical incidents
Identify specific developmental agendas
Identify resources available
Adapt coaching style to the individual

24. Managing Performance (Hill and Gabarro)
Show interest in long-term career development
Provide supportive autonomy
Set high, attainable goals
Hold subordinates accountable
Give problem-solving feedback
Serve as a role model