Human Resource Management
Sixteenth Edition, Global Edition
Chapter 9
Performance Management
and Appraisal
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Learning Objectives (1 of 2)
9.1 Describe the performance appraisal process.
9.2 Discuss the pros and cons of at least eight traditional
performance appraisal methods.
9.3 Give examples of how to deal with potential appraisal
error problems.
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Learning Objectives (2 of 2)
9.4 List steps to take in the appraisal interview.
9.5 Explain key points in how to use the appraisal interview
to boost employee engagement.
9.6 Explain how you would take a performance
management approach to appraisal.
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Learning Objective 9.1: Describe the
Performance Appraisal Process
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Basics of Performance Appraisal
• The performance appraisal process
1. Sets work standards
2. Assesses performance
3. Provides feedback to the employee
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Why Appraise Performance?
Five reasons:
1. Used for pay, promotion, and retention decisions
2. Links performance management to company goals
3. The manager can correct deficiencies and reinforce
strengths
4. With appraisals employees can review career plans
5. Training needs are identified
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Defining the Employee’s Goals and
Performance Standards
1. Goals
2. Job dimensions or Traits
3. Behaviors or Competencies
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Improving Performance: HR as a Profit
Center
Setting Performance Goals at Ball Corporation
Let’s talk about it…
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Improving Performance: HR Tools for
Line Managers and Small Businesses
How to set Effective Goals
Let’s talk about it…
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Who Should Do the Appraising?
1. Peer Appraisals
– Crowd appraisals
– Virtual games
2. Rating Committees
3. Self Ratings
4. Appraisal by Subordinates
5. 360-Degree Feedback
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Learning Objective 9.2: Discuss the Pros
and Cons of at Least Eight Traditional
Performance Appraisal Methods
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Traditional Tools for Appraising
Performance (1 of 2)
1. Graphic Rating Scale
2. Alternation Ranking Method
3. Paired Comparison Method
4. Forced Distribution Method
5. Critical Incident Method
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Traditional Tools for Appraising
Performance (2 of 2)
6. Narrative Forms
7. Behaviorally Anchored Rating Scale (BARS)
8. Management by Objectives (MBO)
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Appraisal in Practice
• Using Forms, Installed Software, or Cloud-Based Systems
• Computerization expedites appraisals
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Electronic Performance Monitoring
• Electronic performance monitoring (EPM) systems
– use computer network technology to allow managers
to monitor their employees’ computers.
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Additional Techniques
• Conversation days
• Using multiple methods
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Trends Shaping HR: Customized Talent
Management
Customizing of Appraisals
Let’s take a look…
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Learning Objective 9.3: Give Examples
of How to Deal with Potential Appraisal
Error Problems
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Dealing with Rater Error Appraisal
Problems
• Potential rating problems
– Unclear standards
– Halo Effect
– Central Tendency
– Leniency or Strictness
– Recency Effects
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Diversity Counts the Problem of Bias
Bias
The tendency for individual differences to affect judgments
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The Need for Fairness (1 of 4)
Figure 9-10: Checklist of Best Practices for Administering
Fair Performance Appraisals
• Base the performance review on duties and standards
from a job analysis.
• Try to base the performance review on observable job
behaviors or objective performance data.
• Make it clear ahead of time what your performance
expectations are.
• Use a standardized performance review procedure for all
employees.
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The Need for Fairness (2 of 4)
• Make sure whoever conducts the reviews has frequent
opportunities to observe the employee’s job performance.
• Either use multiple raters or have the rater’s supervisor
evaluate the appraisal results.
• Include an appeals mechanism.
• Document the appraisal review process and results.
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The Need for Fairness (3 of 4)
• Discuss the appraisal results with the employee.
• Let the employees know ahead of time how you’re going
to conduct the reviews.
• Let the employee provide input regarding your
assessment of him or her.
• Indicate what the employee needs to do to improve.
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The Need for Fairness (4 of 4)
• Train the supervisors who will be doing the appraisals.
Make sure they understand the procedure to use, how
problems (like leniency and strictness) arise, and how to
deal with them.
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Know Your Employment Law
Appraising Performance
Let’s take a look…
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Learning Objective 9.4: List Steps to
Take in the Appraisal Interview
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Managing the Appraisal Interview
• Appraisal Interview – an interview in which the
supervisor and subordinate review the appraisal and
make plans to remedy deficiencies and reinforce
strengths.
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How to Conduct the Appraisal Interview
• Preparation
• Planning
– Steps to Take
– Measure Success
– Date to Complete
• Coaching
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Guidelines to Conducting the Appraisal
Interview
• Objective data
• Don’t get personal
• Encouragement
• Agreement
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How to Handle a Defensive Subordinate
• Recognize behavior
• Never attack defenses
• Postpone action
• Recognize limitations
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How to Criticize a Subordinate
• Maintain his or her dignity
• Discuss in private
• Provide constructive criticism
• Provide examples
• Give feedback periodically
• Be objective and free of personal bias
• Get agreement on a plan
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How to Handle a Formal Written
Warning
• Weak performance may require a formal written warning.
• Serve two purposes:
– to shake your employee out of his or her bad habits,
and
– to help you defend your rating to your own boss and
(if needed) to the courts.
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Learning Objective 9.5: Explain Key Points in
How to Use the Appraisal Interview to Boost
Employee Engagement
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Employee Engagement Guide for
Managers
• Use the Appraisal Interview to Build Engagement
– Show how efforts contribute to the “big picture”
– Emphasize the meaningfulness
– Be candid and objective
– Share what he or she needs to do a good job
– Don’t unnecessarily emphasize the negatives
– Listen to their ideas
– Discuss in the context of his or her career
– Ensure interviewee views the appraisal as fair
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Learning Objective 9.6: Explain How You
Would Take a Performance Management
Approach to Appraisal
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Performance Management
• Performance appraisal is fine in theory, but in practice,
appraisals don’t always go smoothly.
• Performance Management
– the continuous process of identifying, measuring, and
developing the performance of individuals and teams
and aligning their performance with the organization’s
goals.
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Total Quality Management and
Performance Appraisal
• Maximizing customer satisfaction through continuous
improvements
– Cease Dependence
– Continuous Improvement
– Extensive Training
– Drive out Fear
– Remove Barriers
– Self Improvement
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What is Performance Management?
• Performance management is the continuous process of
identifying, measuring, and developing the performance of
individuals and teams and aligning their performance with
the organization’s goals.
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Trends Shaping HR: Digital and Social
Media
Technology to Support Performance Management
Let’s take a look…
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The Manager’s Role in Performance
Management
• Having the right philosophy
• Having the right on-the-job behaviors
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Chapter 9 Review
What you should now know….
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