CH 10 BSAD 310 Fall 2019

Chapter 10
Performance
Appraisal and
Career Management
Copyright ©2020 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

LEARNING OUTCOMES
2
Copyright © 2020 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly
accessible website, in whole or in part. HR5 | CH10
1. Describe the purposes of performance
appraisal in organizations
2. Summarize the performance-appraisal
process in organizations
3. Identify and describe the most common
methods that managers use for performance
appraisal
4. Discuss other general issues involving
performance appraisal in organizations

3
LEARNING OUTCOMES (Continued)
5. Describe the nature of careers in
organizations
6. Discuss human resource management and
career management
7. Identify and discuss basic career-development
issues and challenges

4
Performance Appraisal and Performance
Management
• Performance appraisal
• Specific and formal evaluation of an employee
to determine the degree to which the employee
is performing his or her job effectively
• Also called performance evaluation,
performance review, annual review, employee
appraisal, or employee evaluation
• Performance management
• General set of activities carried out by the
organization to change (improve) employee
performance

5
Importance of Performance Appraisal
• Provides a benchmark to assess the
adequacy of recruitment and selection
processes
• Important for legal reasons
• Organizations must be able to demonstrate that
their promotions, transfers, terminations, and
reward allocations are based on merit
• Plays a role as part of the larger
performance-management process
• Basis of incentive pay systems designed to
improve motivation and performance
LO 1

6
Goals of Performance Appraisal
• Providing a valid and reliable measure of
employee performance along relevant
dimensions
• Documentation
• Improving job performance, which requires
that employees receive:
• Accurate feedback
• Guidance
LO 1

7
Steps in the Performance-Appraisal Process
• Establish job duties
• Establish and communicate performance
standards
• Inspect or observe performance
• Document or record observed performance
• Rate performance
LO 2

8
Roles in the Performance-Appraisal Process
• Role of the organization
• Develop the appraisal process
• Determine the timing of appraisals
• Ensure the availability of clear and specific
standards
• Role of the rater
• Observe performance and process information
gained from observation
• Communicate results and consequences to the
ratee
• Prepare the ratee to perform at desired levels
LO 2

9
Roles in the Performance-Appraisal Process
(Continued)
• Role of the ratee
• Maintain a clear and unbiased view of his or her
performance
• Collect adequate information to avoid
disagreements during the process
• Be receptive to feedback from the rater
LO 2

10
Sources of Information for Performance
Appraisal
• Supervisor
• Peers
• Subordinates
• Self-appraisal
• Customers
LO 2

11
Decisions Regarding the Design of Appraisal
Systems
• What should be rated
• Should be based more on the needs of the
organization than on the choice of rating
instrument and include three main factors:
- Traits
- Behaviors
- Outcomes
• Who should be rated in work teams
• Organization must decide whether to evaluate
individual performance or team performance
LO 2

12
Methods for Appraising Performance
• Simple ranking method
• Manager gives a rank-order to each member of
a particular work group from top to bottom or
from best to worst
• Paired-comparison method
• Each individual employee is compared with
every other individual employee, two at a time
• Forced-distribution method
• Groups employees into predefined frequencies
of performance ratings
• Results in a normal distribution of rating
LO 3

13
Methods for Appraising Performance (Continued 1)
• Specific rating methods
• Graphic rating scale: Statement or question
about some aspect of an individual’s job
performance
• Critical incident method: Relies on instances of
especially good or poor performance on the part
of the employee
• Behaviorally anchored rating scale (BARS):
Combination of the graphic rating scale and the
critical incident method
LO 3

14
Methods for Appraising Performance (Continued 2)
• Behavioral observation scale (B O S):
Developed from critical incidents like a BARS but
uses more critical incidents to define specifically
all measures necessary for effective
performance
• Management-by-objectives (M B O): Based
largely on the extent to which individuals meet
their personal performance objectives
LO 3

15
Rating Errors in Performance Appraisal
• Contrast error: Occurs when people are
compared against one another instead of
against an objective standard
• Distributional error: Occurs when a rater
tends to use only one part of the rating
scale
• May be:
- Severity
- Leniency
- Central tendency
LO 4

16
Rating Errors in Performance Appraisal
(Continued)
• Halo error: Occurs when one positive
performance characteristic causes the
manager to rate all other aspects of
performance positively
• Horns error: Occurs when the manager
downgrades other aspects of an employee’s
performance because of a single
performance dimension
LO 4

17
Contextual Performance
• Tasks an employee does on the job that are
not required as part of the job but that still
benefit the organization in some way
• Known as organizational citizenship behaviors,
which include:
- Willingness to stay late at work to finish
deadlines
- Helping coworkers get their work done
- Performing tasks that benefit the general
good of the organization
LO 4

18
Evaluating the Performance-Appraisal
Process
• Most firms claim to have dropped
performance appraisal since the usage of
stack ratings, which have led to:
• Backstabbing
• Low levels of teamwork
• Feelings of frustration
• New performance management
technologies enable the collection of real-
time performance data that is presumably
less prone to traditional biases and errors
LO 4

19
Legal Issues in Performance Appraisal
• Appraisals showing evidence of disparate
impact must be validated in the same
manner as any selection technique
• Organization can demonstrate that:
- Rating is job related
- Raters can observe rated behaviors
- Raters receive training to help them appraise
performance better
LO 4

20
Career
• Set of experiences and activities that people
engage in related to their job and livelihood
over the course of their working life
• Specific jobs performed by a person
• Responsibilities and activities that constitute the
job
• Movements and transitions between jobs
• Individual’s overall assessment of and feelings of
satisfaction with the various components of her
or his career
LO 5

21
Traditional Career Stages
• Suggests that a typical individual progresses
through four career stages
• Exploration: Involves identifying interests and
opportunities
• Establishment: Involves creating a meaningful
and relevant role in the organization
• Maintenance: Involves optimizing talents or
capabilities
• Disengagement: Involves the individual
gradually beginning to pull away from work in
the organization
LO 5

22
Older Workers and Decision to Retire
• Curvilinear relationship exists between age
and performance
• Performance is highest when workers are
youngest and older
• Individuals are most likely to retire when:
• Adequate financial resources are available
• Health makes it difficult to continue work
• Individuals may face many problems
adjusting to retirement
LO 5

23
Figure
10.6 Individual and Organizational
Perspectives on Career Planning
LO 6

24
Steps in Career Planning
• Individuals assess their own abilities,
competencies, skills, and goals
• Organizations specify career paths and
opportunities
• Organizations communicate career paths
and integrate their performance-
management system with their career-
management system
• Line managers or HR managers provide
career counseling
LO 6

25
Career-Development Issues and Challenges
• Career-counseling programs
• Address a wide variety of career-related issues
• Readily accessible to people in the organization
• Dual-career and work-family issues
• Concern over family-friendly work practices
• Balancing family needs with work demands
• Connectedness between work stress and family
stress
LO 7

26
Evaluating Career-Management Activities
• Career-management activities can be
judged only by their success at any one
point in time
• Successful management of one’s career
depends on the employee’s efforts to:
• Assess his or her own abilities and interests
accurately
• Formulate a plan for what a successful career
should look like
LO 7

KEY TERMS
27
• Performance appraisal
• Performance
management
• 360-degree appraisal
• Simple ranking
method
• Paired-comparison
method
• Forced-distribution
method
• Graphic rating scale
• Critical incident
method
• Behaviorally anchored
rating scale (BARS)
• Behavioral
observation
scale (B O S)
• Goal-based or
management-by-
objectives (M B O)

KEY TERMS
28
• Contrast error
• Distributional error
• Halo error
• Horns error
• Contextual
performance
• Career
• Exploration
• Establishment
• Maintenance
• Disengagement
• Individual assessment
phase
• Career counseling

SUMMARY
29
• Firms are focusing more on performance
management than on performance
appraisal
• Performance-appraisal process requires
several tasks for it to be successful and
involves many issues
• Firms use various methods to appraise
performance
• Organizations and Individuals have different
perspectives on careers

CH 10 BSAD 310 Fall 2019

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CH 10 BSAD 310 Fall 2019