1 Performance Management and Appraisal Chapter 8 Lussier, Human Resources Management 3e. © SAGE Publications, 2019. 2 2 Performance Management Versus Performance Appraisal Performance management Identifying, measuring, managing, and developing HR performance. Serves as systematic measurement of performance. Performance appraisal Evaluating individual employee performance. Vital component of performance management process. Lussier, Human Resources Management 3e. © SAGE Publications, 2019. 3 Performance management versus performance appraisal Performance management is the process of identifying, measuring, managing, and developing the performance of human resources throughout an organization. When used correctly, it serves as a systematic measurement of worker performance. Performance appraisal is the ongoing process of evaluating individual employee performance. This is a vital component of the Performance Management Process. 3 The Performance Appraisal Process Lussier, Human Resources Management 3e. © SAGE Publications, 2019. 4 Accurate Performance Measures Must be: Valid and reliable Acceptable and feasible Specific and pertinent to the job itself Based on the mission and objectives Lussier, Human Resources Management 3e. © SAGE Publications, 2019. 5 Why Conduct Performance Appraisals? To communicate employee’s strengths and needs and to motivate performance. To make employment-related decisions (i.e., salaries, promotions, demotions, training, development, termination). Lussier, Human Resources Management 3e. © SAGE Publications, 2019. 6 Two Factors of an Effective Appraisal Evaluate Avoid problems by coaching employees between performance evaluations. Motivate Focus on positive future results by offering tools, training, and opportunities to fix problems. Positive communication should prevent any surprises. Lussier, Human Resources Management 3e. © SAGE Publications, 2019. 7 Without appearing passive/aggressive, always try to praise before criticizing. For any area of improvement you should as the manager praised the employee 10 times. 7 Behavioral Appraisals Evaluated employees should have recourse to question outcome of their appraisals. Managers should provide examples and transition to a coaching mode. The following example should never occur: Video: George Costanza--Was that wrong? https://www.youtube.com/watch?v=-RvNS7JfcMM Lussier, Human Resources Management 3e. © SAGE Publications, 2019. 8 Employees who are being evaluated should always have some recourse to question the outcome of their appraisals.   If you ask the question “what could I have done differently or better to earn a higher appraisal” the manager should be able to provide examples and transition to a coaching mode. 8 What Can Be Assessed? Traits Behaviors and actions Results and outcomes Direct relationship to job functions Accurate, reliable, and valid measures Lussier, Human Resources Management 3e. © SAGE Publications, 2019. 9 ...

1. 1
Performance Management and Appraisal
Chapter 8
Lussier, Human Resources Management 3e. © SAGE
Publications, 2019.
2
2
Performance Management Versus
Performance Appraisal
Performance management
Identifying, measuring, managing, and developing HR
performance. Serves as systematic measurement of performance.
Performance appraisal
Evaluating individual employee performance. Vital component
of performance management process.
Lussier, Human Resources Management 3e. © SAGE
Publications, 2019.
3

2. Performance management versus performance appraisal
Performance management is the process of identifying,
measuring, managing, and developing the performance of human
resources throughout an organization. When used correctly, it
serves as a systematic measurement of worker performance.
Performance appraisal is the ongoing process of evaluating
individual employee performance. This is a vital component of
the Performance Management Process.
3
The Performance Appraisal Process
Lussier, Human Resources Management 3e. © SAGE
Publications, 2019.
4
Accurate Performance Measures
Must be:
Valid and reliable
Acceptable and feasible
Specific and pertinent to the job itself
Based on the mission and objectives
Lussier, Human Resources Management 3e. © SAGE
Publications, 2019.
5
Why Conduct Performance Appraisals?
To communicate employee’s strengths and needs and to
motivate performance.
To make employment-related decisions (i.e., salaries,
promotions, demotions, training, development, termination).
Lussier, Human Resources Management 3e. © SAGE

3. Publications, 2019.
6
Two Factors of an Effective Appraisal
Evaluate
Avoid problems by coaching employees between performance
evaluations.
Motivate
Focus on positive future results by offering tools, training, and
opportunities to fix problems.
Positive communication should prevent any surprises.
Lussier, Human Resources Management 3e. © SAGE
Publications, 2019.
7
Without appearing passive/aggressive, always try to praise
before criticizing.
For any area of improvement you should as the manager praised
the employee 10 times.
7
Behavioral Appraisals
Evaluated employees should have recourse to question outcome
of their appraisals. Managers should provide examples and
transition to a coaching mode.
The following example should never occur:
Video: George Costanza--Was that wrong?
https://www.youtube.com/watch?v=-RvNS7JfcMM
Lussier, Human Resources Management 3e. © SAGE
Publications, 2019.
8

4. Employees who are being evaluated should always have some
recourse to question the outcome of their appraisals.
If you ask the question “what could I have done differently or
better to earn a higher appraisal” the manager should be able to
provide examples and transition to a coaching mode.
8
What Can Be Assessed?
Traits
Behaviors and actions
Results and outcomes
Direct relationship to job functions
Accurate, reliable, and valid measures
Lussier, Human Resources Management 3e. © SAGE
Publications, 2019.
9
Traits (physical or psychological characteristics)
Behaviors (actions)
Results/outcomes (how well goals were achieved)
Traits, behaviors and outcomes being evaluated should have a
direct relationship to the essential job functions and be accurate
(reliable and valid) measures.
What are traits and behaviors?
Traits are a notable feature or quality found in a person:
Honesty, patience, independence, persistence, humility,
optimism, and so on.
Behaviors are the way in which a person, organism, or group
responds to a specific set of conditions:
Employees who meet deadlines, are conscientious, well
organized and responsible.

5. Appraising for results/outcomes
That which gets measured gets done!
Traits are not easily measured but behaviors and results are
easily quantified.
Results represent a tangible confirmation of acceptable actions.
If all members of a department or business unit are evaluated as
“Exceptional” or “Outstanding” but the results indicate
“Underperforming” then there is a serious DISCONNECT which
can be detrimental to the organization.
9
What Are Traits and Behaviors?
Traits
Such as honesty, patience, independence, persistence, humility,
optimism, and so on.
Behaviors
How an employee or team respond to conditions.
For example, employees or teams who meet deadlines and who
are conscientious, well organized, and responsible.
Lussier, Human Resources Management 3e. © SAGE
Publications, 2019.
10
Appraising for Results and Outcomes
Traits are not easily measured, but behaviors and results are
easily quantified.
Results represent a tangible confirmation of acceptable actions.
If employees of a department are evaluated as “exceptional” or
“outstanding,” but the results indicate “underperforming,” then
there is a detrimental disconnect.
Lussier, Human Resources Management 3e. © SAGE

6. Publications, 2019.
11
Performance Appraisal
Measurement Methods and Forms
Lussier, Human Resources Management 3e. © SAGE
Publications, 2019.
12
Performance appraisal measurement methods and forms–critical
incidents
Manager keeps a written record of positive and negative
employee performance.
The concept was developed from military flight training. There
are certain actions that MUST be taken and others that MUST
NEVER occur.
Typically used for making developmental and evaluative
decisions.
12
Management by Objectives (MBO)
Managers and employees jointly set employee objectives.
Managers give feedback, evaluate performance, and reward as
merited.
Not unusual to see misappropriation of resources used to fulfill
MBOs. Misuse of MBOs can foster a “me first” mentality.
Lussier, Human Resources Management 3e. © SAGE
Publications, 2019.

7. 13
Manager and employee jointly set employee objectives (goals);
manager periodically gives feedback and evaluates performance;
rewards employee as merited.
Typically used for employee development and rewards.
It is not unusual to see misappropriation of resources being used
late in the year to fulfill MBOs. The misuse of MBOs can
foster a “me first” mentality.
13
Narrative Method or Form
Managers keep written records about employees’ performance.
Used for ongoing feedback and employee development
planning.
Narratives capture employees’ values and contributions.
Lussier, Human Resources Management 3e. © SAGE
Publications, 2019.
14
Manager writes statements about employee performance.
Typically used for ongoing feedback; also for employee
development planning.
If an evaluator is skilled at communicating one’s contributions
to the organization a narrative is better able to capture the
essence of their value. Many times, however, a lesser skilled
manager will resort to “boilerplate” standard templates.
14

8. Graphic Rating Scale Forms
Managers use appraisal checklists to rate employee
performance, often expressed as a numerical scale.
Typically used for evaluative decisions, but should also steer
development decisions.
An effective rating is possible using a 1-5 Likert-type scale, but
examples provide greater clarity.
Lussier, Human Resources Management 3e. © SAGE
Publications, 2019.
15
Behaviorally Anchored Rating Scales (BARS)
Managers use behaviorally based continuum to rate employee
performance, often expressed as a numerical scale.
Perhaps best and most effective appraisal measurement.
Typically used for evaluative decision making, but should also
steer development decisions.
Lussier, Human Resources Management 3e. © SAGE
Publications, 2019.
16
Perhaps the best and most effective appraisal measurement, this
is typically used for evaluative decision making but should also
be used to steer development decisions.
16

9. Ranking
Managers rank employees by comparing best to worst.
Forced distribution ranking of best to worst is the most used
measure when companies resort to downsizing and layoffs.
Typically used for evaluative decision making and development.
Lussier, Human Resources Management 3e. © SAGE
Publications, 2019.
17
Who Should Assess Performance?
While managers typically evaluate employees’ performance,
they may invite peers, subordinates, customers, and/or
employees themselves to evaluate performance.
This reduces bias and offers a comprehensive picture of
employee’s performance (as in 360 Degree Evaluations).
Lussier, Human Resources Management 3e. © SAGE
Publications, 2019.
18
How to Choose Who We Select
to Conduct an Evaluation
Conduct a cost-benefit analysis.
Do the benefits of increasing performance feedback outweigh
cost to give the organization a return on its investment?
Goal is to maximize performance while minimizing appraisal
cost.
Lussier, Human Resources Management 3e. © SAGE

10. Publications, 2019.
19
Performance Appraisal Problems and Avoiding Them
Lussier, Human Resources Management 3e. © SAGE
Publications, 2019.
20
Avoid performance appraisal process problems
Develop accurate performance measures
Use multiple criteria.
Minimize the use of trait-based Evaluations.
Give the measures the OUCH and Blanchard tests.
Train evaluators
to overcome the common problems of assessment.
to use the measurement methods and forms.
Use multiple raters
20
How to Avoid Appraisal Process Problems
Develop accurate performance measures
Use multiple criteria.
Minimize use of trait-based evaluations.
Give measures the OUCH and Blanchard tests.
Train evaluators
Overcome common problems of assessment.
Use measurement methods and forms.
Use multiple raters
Lussier, Human Resources Management 3e. © SAGE
Publications, 2019.
21

11. Debriefing the Appraisal
Managers prepare for and communicate analysis of each
employee’s performance with the employee.
Conduct two interviews:
1. For evaluative decisions.
2. For development.
Lussier, Human Resources Management 3e. © SAGE
Publications, 2019.
22
Evaluative Performance Appraisal Interview
Lussier, Human Resources Management 3e. © SAGE
Publications, 2019.
23
Developmental Performance Appraisal Interview
Lussier, Human Resources Management 3e. © SAGE
Publications, 2019.
24