Human Resource Management

Fifteenth Edition

Chapter 9
Performance
Management and
Appraisal

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Learning Objectives (1 of 2)
9-1. Describe the performance appraisal process.
9-2. Define the pros and cons of at least eight
performance appraisal methods.

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Learning Objectives (2 of 2)
9-3. Give examples of potential appraisal problems
and how to deal with them.
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.

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 I.
Describe the appraisal process.

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Basics of Performance Appraisal
• The performance appraisal process steps
1. Sets work standards
2. Assesses performance
3. Provides feedback to the employee

Effective appraisals actually begin

before the actual appraisal, with the
manager defining the employee’s job
and performance criteria.

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 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 employee’s can review career
plans
5. Training needs are identified
Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Defining the Employee’s Goals and
Performance Standards
1. Goals
2. Job dimensions or Traits
3. Behaviors or Competencies

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Improving Performance: HR as a
Profit Center

Setting Performance Goals at Ball Corporation

Let’s talk about it…

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Improving Performance: HR Tools for
Line Managers and Small Businesses

How to set Effective Goals

Let’s talk about it…

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Who Should Do the Appraising?
 Appraisals by the immediate supervisor are still the heart of
most appraisal processes.
 Getting a supervisor’s appraisal is relatively straightforward
and makes sense.
 The supervisor is usually in the best position to observe and
evaluate the subordinate’s performance, and is responsible
for that person’s performance

1. Peer Appraisals
2. Rating Committees
3. Self Ratings
4. Appraisal by Subordinates
5. 360-Degree Feedback
Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 II.
Discuss the pros and cons of at
least eight performance
appraisal methods.

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Techniques for Appraising
Performance (1 of 2)
Many employers use digital tools to automate the appraisal/performance
management process. With their digital dashboards, these tools monitor,
report, and correct performance deviations in real time

1. Graphic Rating Scale

2. Alternation Ranking
3. Paired Comparison
4. Forced Distribution
5. Critical Incident Method

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Techniques for Appraising
Performance (2 of 2)
6. Narrative Forms
7. Behavior Anchored Rating
Scale
8. Mixed Standards Scales
9. Management by
Objectives (MBO)

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Computerized and Web-Based
Performance Appraisal

Many employers today

make use of computerized
or online appraisals for
evaluating employee
performance.

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Electronic Performance Monitoring

(EPM) systems use computer network technology to allow managers to

monitor their employees’ computers. They allow managers to monitor the
employees’ rate, accuracy, and time spent working online.
EPM can improve productivity, but also seems to raise employee stress.
Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Additional Techniques
• Conversation Days
• Appraisal in Practice

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Trends Shaping HR: Customized
Talent Management

Appraisal Methods being Customized

Let’s take a look…

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Improving Performance: The Strategic
Context

TRW’s New Global Performance Appraisal /

Management System

Let’s take a look…

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 III.
Give examples of potential
appraisal problems and how to
deal with them.

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Dealing with Rater Error Appraisal
Problems
• Potential appraisal problems
‒ Unclear standards
‒ Halo Effect
‒ Central Tendency
‒ Leniency or Strictness
‒ Recency Effects
Halo Effect
Occurs when a manager generalizes one positive OR negative
performance feature or incident to all aspects of employee performance
Recency Effects
Means letting what the employee has done recently blind you to what
his or her performance has been over the year
Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Diversity Counts The Problem of Bias

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 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.
Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 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.

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 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.

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 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.

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Know Your Employment Law

Appraising Performance

Let’s take a look…

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 IV.
List steps to take in the
appraisal interview.

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 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.

These interviews are often uncomfortable. Few people like to

receive—or give—negative feedback. Adequate preparation and
effective implementation are essential.

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 How to Conduct the Appraisal
Interview
• Prepare
• Plan
• Measure Success
• Date to Complete
• Coach
 Manager will watch the employee to see what he or she is doing,
review productivity data, and observe the workflow
 Planning the solution is next. This requires reaching agreement on the
problem, and laying out a change plan in the form of steps to take,
measures of success, and date to complete.
 With agreement on a plan, the manager can then start the actual coaching.
Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Guidelines to Conducting the
Appraisal Interview
• Objective data
• Don’t get personal
• Encouragement
• Agreement

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 How to Handle a Defensive
Subordinate
When a supervisor tells someone his or her performance is poor, the first
reaction is often denial. Denial is a defense mechanism. By denying the fault,
the person avoids having to question his or her own competence. Therefore,
dealing with defensiveness is an important appraisal skill.

Psychologist Mortimer
Feinberg suggests the
following:
• Recognize behavior
• Never Attack defenses
• Postpone Action
• Recognize Limitations
Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 How to Criticize a Subordinate
 When necessary, criticize in a
manner that lets the person
maintain his or her dignity
 Never say the person is “always”
wrong. Criticism should be objective
and free of personal bias
 The aim is to improve unsatisfactory
performance (and/or to reinforce
exemplary performance). The
appraisal should therefore result in
a plan for what the employee must
do to improve his or her efforts.

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 How to Handle a Formal Written
Warning

Written warnings should list the

employee’s standards, make it clear that
the employee was aware of the
standard, specify any deficiencies
relative to the standard, and show the
employee had an opportunity to correct
his or her performance.

Such warnings 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
Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 V.
Explain key points in how to
use the appraisal interview to
boost employee engagement.

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Employee Engagement Guide for
Managers
• Use the Appraisal Interview to Build Engagement

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 VI.
Explain how you would take a
performance management
approach to appraisal.

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 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.

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Total Quality Management and
Performance Appraisal
TQM programs are built on a philosophy
encapsulated by several principles, such as:
• Cease dependence on inspection to
achieve quality
• Aim for continuous improvement
• Institute extensive training; drive out fear
so that everyone may work effectively
• Remove barriers that rob employees of
their pride of workmanship (in particular,
the annual merit rating) and institute a
vigorous program of self-improvement
Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 What is Performance Management?

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Trends Shaping HR: Digital and
Social Media

Digital Technology use in Performance

Management

Let’s take a look…

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Improving Performance: HR
Practices Around the Globe

Performance Management at General Dynamic

Armament Systems (GDAS)

Let’s talk about it…

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 The Managers Role in Performance
Management

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Chapter 9 Review

What you should now know….

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
 Copyright

Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved