Discuss the difference between performance
management and performance appraisals.
Performance management identifies, measures,
manages, and develops the performance of people
in the organization. It is designed to improve worker
performance over time. Performance appraisal is the
part of the performance management process that
identifies, measures, and evaluates the employee’s
performance and then discusses that performance
with the individual.
8-2 Identify the necessary characteristics of accurate
performance management tools.
The performance management tools and measures
that we use need to be valid, reliable, acceptable/
feasible, and specific. A valid tool measures the
process that you want it to measure. A reliable tool
works in a generally consistent way each time you
use it. Acceptability and feasibility deal with the
tool being satisfactory and reasonable to the people
who use it and also capable of being successfully
applied in a particular situation. Finally, a specific
measure defines the performance well enough that
we understand the current level of performance
achieved and what, if anything, the employees need
to do to improve their performance to comply with
standards.
8-3 List and briefly discuss the purposes of performance
appraisals.
Communication is the first purpose. Appraisals
need to provide an opportunity for formal twoway
communication between management and
the employee concerning how the organization
feels the employee is performing. The second purpose
is to gain information for evaluative decisions.
We need good information on how employees are
performing so that we can take fair and equitable
actions with our workforce, to improve organizational
productivity. Providing motivation for development
is the last major purpose. Used correctly,
appraisals can motivate by providing opportunities
for the employees to improve their performance
over time.
8-4 Identify and briefly discuss the options for what to
evaluate in a performance appraisal.
Our three primary options for what to evaluate are
traits, behaviors, and results. There is some evidence
that particular types of traits are valuable in jobs that
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308 PART III: DEVELOPING AND MANAGING
require management and leadership skills, but many
traits have been shown to have very little bearing on
job performance, meaning they are not valid measures
of performance. We can also use behaviors to
evaluate our workers. Measuring behaviors is usually
a much better appraisal option because physical
actions or behaviors can be directly observed, and as
a result, they are more likely to be a valid assessment
of the individual’s performance. Finally, we can
evaluate performance based on results. Results are a
concrete measure of what has happened in the organization.
However, results may be skewed based on
factors that are outside the control of the individual
who is being evaluated.
8-5 Briefly discuss the commonly used performance
measurement methods and forms.
The critical incidents method utilizes records of
major employee actions over the course of the
appraisal period to complete the employee evaluation.
MBO uses objectives jointly set by the manager
and employee to gauge employee performance
during the evaluation period. In the narrative
method, the manager writes either a structured or
unstructured paragraph about the employee’s performance.
Graphic rating scales provide a numerical
scale so that the manager can check off where
an employee falls on the continuum. BARS forms
provide a description of the behaviors that make up
acceptable performance at each level on the scale.
Finally, ranking creates a hierarchy of employees,
from best to worst.
8-6 Identify and briefly discuss available options for the
rater/evaluator.
It is logical to choose supervisors as evaluators
when they have ongoing contact with the subordinate
and know the subordinate’s job. When the
supervisor may not spend lots of time with the individual
employee, peers may make better evaluators
because they may know the job of the individual
employee better than the supervisor does and may
be more directly affected by the employee’s actions.
Subordinate evaluations can give us good insight
into the managers who control employees in our
organization. We may want to use customers as
evaluators when the individual being evaluated has
frequent contact with those customers, because we
need to know how customers feel about their interactions
with our employees. Self-evaluation is valuable
in a number of management processes, from
training and development to counseling and disciplinary
measures, among others.
8-7 Briefly discuss the value and the drawbacks of a
360-degree evaluation.
The 360-degree evaluation gives us the best overall
analysis of any employee in the firm, because it
looks at an employee’s performance in the eyes of
all others who are affected by that individual. The
360-degree evaluation format is more useful for individual
development than it is for administrative purposes.
The biggest downside is that the process takes
a lot of time, which means that it also costs the company
a lot of money.
8-8 Identify some of the common problems with the
performance appraisal process.
Personal biases and stereotyping are two of the
most significant appraisal problems. Other problems
include halo error, distributional errors (either
the grading is too harsh or too lenient, or everyone
is judged to be average), similarity error, proximity
error, recency error, contrast error, and attribution
error.
8-9 Identify the major steps we can take to avoid
problems with the appraisal process.
The first step would be to develop accurate performance
measures. Accurate performance measures
use multiple criteria, minimize trait-based evaluations,
and can be analyzed using the OUCH test
and the Blanchard test. Next, we should train the
evaluators, because as soon as they know some of
the common errors, those errors will become less
pronounced. We can also use multiple raters to mitigate
any potentially biased evaluations and minimize
other errors such as similarity, contrast, and
attribution errors. Finally, don’t evaluate what you
don’t know. Find someone in the organization who
does know the job, and have that person evaluate the
individual performing the job.
8-10 Briefly discuss the differences between evaluative
performance reviews and developmental
performance reviews.
The evaluative interview is a review of the individual
employee’s performance over a certain period.
The evaluation needs to be fair and equitable, not
based on bias. The employee must be given the
opportunity to talk as well as listen to the critique
of their performance. The developmental interview,
on the other hand, focuses on areas for improvement
over time. You should have employees come
up with their own objectives and strategies for
improvement, and you should develop your own
objectives for them.
8-11 8- 11 Define the key terms found in the chapter
margins and listed following the Chapter Summary.
Complete the Key Terms Review to test your understanding
of this chapter’s key terms.
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