1. Performance Appraisal
Training Module
Joseph Feldman
Brandman University
Training and Development
HRCU 646
October 3, 2015

2. Goals
 Successful organizations are a product of good employees.
 One factor in maintaining good employees is establishing expectations based on the needs of the
organization.
 “Performance appraisals are a good way to let your employees know what is expected from
them and how well they are meeting those expectations” (Teckchandani & Pichler, 2015, p. 16).
 The key to performance appraisals is understanding the effectiveness of it and determining how
to successfully conduct an appraisal.

3. Goals
 Successfully prepare, conduct, and implement an annual performance appraisal
 Teach managers how to administer performance appraisals for the purpose of (1) performance
management, (2) promotions, (3) and termination.
 To maintain an environment of employee satisfaction.
 Discuss and analyze knowledge and skills required to administer performance appraisal.
1. Impact on new and existing employees in relations to engagement, transparency, and
relevant value to work.
2. Understand relationship and impact of appraisal in relation to employee growth,
promotion within organization, and gaps in skills
 Incorporate the principles of an Instructional Systems Design (ISD) in the creation of the
performance appraisal.

4. Objectives
 “Behavioral objectives have served HRD professionals extremely well for the past fifty
years, because they put the focus squarely on what the trainee is expected to do at the
completion of training” (Werner & DeSimone, 2012, p. 146).
 Ability to provide feedback that is connects with organization’s mission, vision, and/or
objectives.
 Ability to provide feedback (effective communication) that is relevant to employees
and their job duties.
 Provide an effective employee rating system that goes beyond rating employees with
mere numbers (e.g. narrative performance appraisal).

5. Perceived Fairness
 “[T]he acceptance or rejection of the performance appraisal system may
depend on perceptions of its fairness” (Harington & Lee, 2015, p. 215).
 Studies show that employees' perceived fairness of performance reviews is an important
part of a positive performance review.
 “Perceived fairness of appraisal system is a multidimensional process, encompassing
distributive, procedural, and interactional justice components” (Harington & Lee, p. 219).
 In 2012 The U.S. Office of Personnel Management (OPM) designed a performance
appraisal for 82 different agencies with three major components that includes (1)
relational contracts (2) transactional process and (3) perceived supervisory support which
helps to ensure perceived fairness (Harington & Lee, p. 220).

6. Example of Relational Contract, Transactional Process,
and Perceived Supervisory Support
Relational Contract- “I am given a real opportunity to improve my
skills in my organization” (Harington & Lee, p. 222).
Transactional Process- “Promotions in my work unit are based
on merit” (Harington & Lee, p. 222).
Perceived Supervisory Support- “Supervisors/team leaders in my
work unit support employee development” (Harington & Lee, p.
222).

7. Effective Performance Management (EPM)
 According to Becom & Insler (2013) “An effective
performance management process is a critical
characteristic that sets high-performing organizations
apart from low-performing organizations” (p. 43).
 Despite these findings, a majority of executives believe
their performance management programs are
ineffective.
 Data from a State of Performance Management study
reveals that 3 to 5 % of organizations rate their
performance management programs with an “A”
(Becom & Insler, p. 43).
 “High performing organizations consider performance
management as a true dynamic business process that
enables performance and drives organizational and
individual success — not as a static yearly appraisal
process” (Becom & Insler, p. 43).
Leadership
Execution
Effective
Performance
Management
Program
Design

8. Effective Performance Management (EPM)
 Effect leadership includes the CEO being part of the performance process.
 Aligning goals to not just the “job description, function, or department, but the
organization” at large (Becom & Insler, p. 44).
 According to Becom & Insler, “leaders set performance norms in terms of what they expect
as a distribution of performance” (p. 44).
 Setting norms is accomplished as a general guidelines format, and not a stack and rank
format which compensates for the majority of employees being rated in the middle or
average (Becom & Insler, p. 44).
 Becom & Insler suggest that the rating system uses descriptive words (in addition to the
preferred 5 star rating scales method) to differentiate employees that are rated as “average”
(p. 44).

9. Narrative Performance Appraisal
 According to David (2013) “A difficulty with using numerical feedback is that
often very little context is given; hence it can be unclear to an employee why he
or she received a particular score” (p. 431).
 Quality feedback includes language that is aimed at “(1) specific goals for improvement and
(2) increased motivation and self-efficacy” (David, p. 432).
 “Although providing direction for employees through specific, lengthy, and goal-oriented
comments is a fundamental component of quality feedback, it is just as crucial that it contain
a motivational element that inspires effort as well as instills self-efficacy” (David, p. 433).
 Data suggests that HR management has to be cautious when using negative feedback only as
it tends to bring out negative emotions within the reviewed employee (e.g. anger towards
employer, low self-esteem, and lower performance) (David, p. 433).

10. Narrative Performance Appraisal
 A study on narrative performance appraisal was conducted in 2008-2010 that included 1019
nurses from an unnamed hospital in the southern part of the United States.
 The following describes the performance appraisal methodology includes (David, p. 435):
i. “Employees were first given the opportunity to perform a self-evaluation by
providing numerical ratings and narrative comments for each of the individual
categories.”
ii. “Managers began their evaluations (also including numerical ratings and
narrative comments) of the individual items.”
iii. “The managers were able to see the employee self-evaluations as they completed
their own ratings, and they were able to incorporate this information into their
assessment as they saw fit.”
iv. “Managers were also asked to indicate an overall numerical performance rating.”
v. “The managers then scheduled individual meetings discuss the reviews with the
employees.”
vi. “As a final step, the employees were then encouraged to add overall comments and
reactions into the system.”

11. Narrative Performance Appraisal
 In assessing the nurse study, David used a “deductive approach to qualitative analysis” (p. 436).
 Part of the nurse study reveals (David, p. 436):
 Six raters were analyzed that includes employee negative emotion, employee positive feedback,
favorability, specificity, goal content, and interactional justice (David, p. 436).
 Despite the allowance of employee input and feedback, which usually supports “favorable
outcomes,” the study showed a few lack luster results (David, p. 443).
Managerial Responses
7- 460 words
Mean
110.50 words
Standard Deviation
78.77 words
Employee Responses
1-3235 words
Mean
51.81 words
Standard Deviation
120.80 words

12. Nurse Study Results
Negative
1. A low number, “45% of employees
received any precise goals for the
future” (Davis, p. 443).
2. Only “41% were left without any
specific examples regarding their
behavior over the past year” (Davis, p.
443).
3. “44% of the employees received
roughly five sentences of text or fewer
regarding their performance for the
entire preceding year” (Davis, p. 443).
4. “Only 14% of manager comments
contained any area of improvement at
all.”
Positive
1. “73% of all feedback given to
employees was delivered in a
considerate and respectful manner”
(Davis, p. 443).
2. This suggests that there was a high
score in in the interactional justice
category.
3. Further studies illustrate that
interactional justice is achieved at higher
levels when there is a “face-to-face
appraisal review, and desired word
choice, body language, and voice tone
are used” (Davis, p. 444).

13. Nurse Study Results
 Davis suggests that poor year end performance ratings was in part caused by poor
feedback (p. 443).
 The following depicts employees performance changes from Year 1 to Year 2 (after the
performance appraisal was conducted (Davis, p. 443):
11.1%
Decline
63.8%
Unchanged
25.1%
Improved
 Davis argues that HR can implement changes to improve
employee performance.
i. One step a manager can take is to conduct a face-to-face
meetings throughout the year (Davis, p. 444).
ii. A second step would include “ongoing coaching
throughout the year” (Davis. p. 444).

14. Nurse Study Results
 One limitation found within the study is that many participants cited working in departments
that were “short-staffed.” (Davis, p. 444).
 Working under short-staffed conditions may vary from organizations to organization, and
external factors may induce this setting (e.g. reduction in staff due to economic downturn)
 In agreement with Kirkpatrick Evolution Framework, “the most effective way to improve
employee performance is through a continuous performance review cycle that included
gathering evidence to support the appraisal, providing the appraisal in an interview,
formulating a performance improvement plan, and providing continuous guidance and
coaching throughout the year” (Davis, p. 444).
 Continuous coaching creates “self-awareness,, rewards positive behavior, and ensures the
performance improvement plan is being implemented” (Davis, p. 444).
 “Coaches also serve as a source of social and task support to help the employees meet their
goals” (Davis, p. 444).
 Data also shows that the combination of coaching and feedback leads to “higher levels of job
satisfaction and turnover intention, than feedback alone” (Davis, p. 444).

15. Deloitte Study
 In a recent study Deloitte exposed how “executives questioned (58%) believe
that their current performance management approach drives neither employee engagement
nor high performance” (Buckingham & Goodall, 2015, p. 42).
 Deloitte calculated that their firm was spending over 2 million hours per year in processing
performance reviews for their 65,000 plus workforce (Buckingham & Goodall, p. 42).
 According to Deloitte, “Once-a-year goals are too “batched” for a real-time world, and
conversations about year-end ratings are generally less valuable than conversations conducted
in the moment about actual performance” (Buckingham & Goodall, p. 43).
 Deloitte attempted to design a new performance management program that incorporated
findings from a “1990s Gallop poll of 1.4 million employees, 50,000 teams, and 192
organizations” (Buckingham & Goodall, p. 43).

16. Deloitte Study
 The Gallop asked high and low performing teams “questions on numerous subjects, from
mission and purpose to pay and career opportunities, and isolated the questions on which the
high-performing teams strongly agreed and the rest did not” (Buckingham & Goodall, p. 44).
 According to Buckingham & Goodall, the question that offered the most powerful variation
between high and low performing groups was “at work, I have the opportunity to do what
I do best every day” (Buckingham & Goodall, p. 44).
 Employers who “strongly agreed” with the above question had “higher customer satisfaction
rates (44%), lower employee turnover rates (50%), and more likely to be productive (38%)”
(Buckingham & Goodall, p. 44).
 In a controlled case study at Deloitte, the most meaningful question that had the most impact
on employees was “I have the chance to use my strengths every day” (Buckingham &
Goodall, p. 44).

17. Deloitte Study
 Three Deloitte management objectives in redesigning their performance management system
includes (1) recognizing performance , (2) how to see performance and (3) how to fuel
performance ” (Buckingham & Goodall, p. 45).
 In agreement with the Nurse Study, Deloitte believes in leadership proactively engaging
employees with weekly coaching and input.
 A major finding that Deloitte implements is asking team leaders not to evaluate the individual
employee's skills, but to “ask what the team leader's own future actions will be with respect to
that person” (Buckingham & Goodall, p. 46).
 A second major finding includes the concept “it’s not the particular number we assign to a
person that’s the problem; rather, it’s the fact that there is a single number” (Buckingham &
Goodall, p. 46).

18. Deloitte Study
 Additional key questions that are asked to Deloitte managers in what the company describes
as a “performance snapshot” are measured on standard x and axis chart.
The question of whether the manager would offer the highest possible
compensation to the employee is asked in conjunction with the following
questions (Buckingham & Goodall, p. 46).
• “I would always want this person on my team?”
• “Is there enough variation among people to fairly allocate pay?”
• “Is this person ready for promotion today?”
• ”Is this person at risk for low performance?”
Criteria Rater Testing Frequency Transparency
Overall Process

19. Performance Appraisal
 As organizations vary (e.g. size, industry), management must decide what type of
performance appraisal best fits their company.
 In Deloitte's case, management sought a plan that involved constant feedback on a weekly
basis.
 According to Schumacher (2011), a few advantages of giving feedback throughout the year
includes (1) not relying on your memory for an end of year performance review and (2)
employees hearing “positive and corrective feedback” in the present moment (p. 29).
 “The end-of-year performance review should be nothing new [as] it’s simply formalizing
what you’ve told them already” (Schumacher, p. 29).
 Schumacher corroborates the use of narrative performance as he argues that “rating
employees with numbers (e.g. 1 or 5) may be more confusing than using simple terminology
that includes “meets, exceeds or does not meet” expectations (Schumacher, p. 28).

20. Performance Appraisal
 “A survey by Ed Lawler and colleagues at the Center for Effective Organizations (CFEO)
found that almost every organization uses performance appraisals, yet only 6 percent
perceive appraisals as being effective” (Teckchandani, & Pichler, 2015, p. 17).
 The CFEO case study revealed employee performance declined by 60% after a performance
review was conducted.
 Recall the nurse case study had similar findings where employees performance was mostly
the same or had declined.
 These two studies suggest that the design of performance appraisals will have an impact on
employee performance.
 The following describes a suggested practice in enhancing employee performance
(Teckchandani, & Pichler, p. 17):
TRUST
SUPPORT
Relationship
Quality
Appraisal
Reaction
Performance
Appraisal
Effectivenes
s

21. Performance Appraisal
 As detailed by Teckchandani & Pichler, five strategies that can help develop high quality
relationships with employees includes “finding common ground, practicing reciprocity,
understanding employees, being accessible, and giving informal feedback” (p. 19).
Finding common
ground
• “Seek out opportunities to have informal conversations with
your staff to learn about their interests.”
Practice reciprocity
• “Trigger the virtuous cycle of reciprocity by offering help to
help an employee with a work-related challenge.”
Understanding
employees
• “Seek to understand what it is like to be in your employee's
shoes by having one-on-one meetings, setting up a way to
receive anonymous feedback, and facilitating cross-
departmental meetings to share information.”
Being accessible
• “Show your employees that you truly care about their success
and well by having an open-door policy and getting to know
each employee on an individual basis.”
Giving informal
feedback
• “Don’t wait for the annual performance appraisal; give your
employees feedback year-round. Make sure the feedback is
tailored to their unique needs and preferences.”

22. Performance Appraisal
 At minimum, management may want to consider the following steps in conducting a
performance appraisal.
i. Plan the meeting: Set up a meeting timeframe. Ask the employee to appraise their own
performance with a determined appraisal method. Collect previous performance
feedback/appraisals, if applicable.
ii. Evaluate each employee’s previous year’s performance: Rate employees’ demonstration
of competencies. Rate employee’s performance of goals. Determine overall rating.
iii.Establish objectives for upcoming year: Define the goals with the employee and the
measurements and objectives in which they should be determined. Work with them on
professional development and goals in their plan.
iv.Throughout the year, provide feedback and coaching. Collect data and assess any
perceived gaps.

23. Promotions
 “When organizations implement an evaluative performance appraisal, employees perceive
that their relationship with the organization is a type of economic-interest exchange
relationship” (Qui, Hu, Zhang, & Li, 2015, p. 1102).
 Most employees have a desire to get ahead in life and in their organization.
 In order for such promotions, they need to understand what is expected of them in the
organization.
 By conducting performance appraisals, the organization, the supervisor and the employee
have an understanding of how the employee measures to warrant any type of promotions
within the organization.

24. Promotions
 In an on-going performance appraisal, an employee can be assessed on their continual skill
level and whether they are continually meeting or exceeding expectations.
 If an employee stays stagnant in their skill level, and they don’t perform to upper-level
positions, then the performance appraisals can clearly define their level and can be used as
the reasoning for not being promoted.
 Supervisors need to be able to see that the employee is capable of handling higher level
positions to warrant such promotions.

25. Termination
 If consistent feedback to improve skills are not being heard, then the employer is not suited
for the position they are in.
 “When poor performance is identified, managers must try to identify contributory factors”
(Ellis, 2008, p. 29).
 A system should be put in place to determine that termination is the only and last resort for
the employee.
 The following table describes a few examples of failed performance that have been identified
by the Department of Health (Ellis, p. 29):

26. Termination
 If an employee does not perform at the level that is needed in that position, for the
organization, then it could be cause for termination.
 Ellis suggests progressive discipline when handling employees who do not meet
expectations.
 The progression of discipline may be viewed in four stages that includes a verbal warning,
written warning, suspension and ultimately termination.
i. Verbal/oral warning: Should be conducted in private, between the employee and the
supervisor. Should be presented calmly and objectively.
ii. Written Warning: Should be given after a verbal warning and in writing to the employee.
Re-iterate what was discussed in the verbal warning, the misconduct, cause of action and
understanding of not being repeated, and if it is, there could be a cause for termination. If
necessary, develop and action plan.
iii.Suspension: Can vary in time and is determined by employer and organization.
iv.Termination: Review employee’s file and determine that termination is the only means of
action. Should be done with sensitivity and outline the cause of termination.

27. Conclusion
 A variety of performance appraisal approaches have been discussed in this Power Point.
 One common theme amongst the different approaches includes being flexible and proactive
 Data suggest that high performance is achieved when management takes an active role in
listening to employees.
 Data also suggests that employees are more receptive to constant feedback and narrative
ratings that accompany numerical ratings.
 Employers can enhance employee performance by showing support and building trusting
relations with their employees.

28. References
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29. References
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30. References
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20.
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