Performance appraisals are the formal periodic evaluation of employee performance. They are used for pay raises, promotions, determining who gets fired, and increasing efficiency. However, they are opposed by labor unions and employees who dislike being judged. Managers also dislike the extra work and potential for conflict. There are objective and judgmental appraisal methods, each with benefits and drawbacks. Biases can influence evaluations, so rater training and feedback are important to improve the process. The post-appraisal interview should focus on job issues and goal setting in a positive manner.

1. Performance Appraisals
• The periodic, formal
evaluation of
employee performance
• Applications
– Pay raises
– Promotions
– Who gets fired?
– Increase efficiency
– Validate selection
techniques
– Training requirements

2. Who Dares Oppose?
• Labor Unions
• Employees: who likes
to be judged or to
receive negative
feedback?
• Managers: Want to
avoid extra work and
conflict

3. Objective Methods
• Quantity and quality - Is it used to improve
of output: environ. work quality?
factors, job difficulty - Many believe that it
– Good for assembly line makes evaluations
type jobs more objective
• Electronic - 80% still find it
Performance stressful!
Monitoring • Job Related Personal
– ½ of workers are Data: Absenteeism,
currently monitored
continuously accidents, tardiness

4. Judgmental Appraisal Methods
• Written Narrative Appraisals: may be
ambiguous or misleading
• Ratings Scales
• Ranking Techniques: workers are all ranked
from best to worst
– Doesn’t work for large #’s of employees
– Less information than ratings
– What if they are all horrible (or all good!)

5. More Methods
• Forced Distribution Technique: Rate
employees on curve
– What if all workers deserve good ratings?
• Forced Choice Scales: Must choose from
equally favorable/unfavorable statements
(only one of which is correlated with job
performance)

6. Methods with Initials
• BARS (Behaviorally Anchored Rating
Scales): evaluate performance in terms of
critical employee behaviors
• BOS (Behavioral Observation Scales): rate
the frequency of critical employee
behaviors
• MBO (Management by Objective):
Mutually agreed upon goals
– Often become unrealistic over time

7. Revenge! Appraisal of Managers
• Assessment Center: simulated job activities
• Evaluation by Superiors
• Peer Ratings: Good predictors of promotion
• Self-Evaluation: Leniency is a concern
• Evaluation by Sub-ordinates: upward
feedback. Good predictor of managerial
success. Must be anonymous
• 360 Degree Feedback: Combines
evaluations from a number of sources.

8. Potential Biases in Evaluation
• Halo Effect
• Systematic Bias
• Most-Recent Performance Error
• Inadequate Information Error
• Central Tendency Effect
• Fundamental Attribution Error

9. Can We Improve Performance
Appraisals?
• Training
– What to look for
– Objectivity
– Normal Curve
• Provide Feedback to
Raters

10. Post Appraisal Interview
• Usually hated by all involved
• Suggestions for improvement
– Active participation of employees in the whole
process
– Interviewer should adopt a positive and
supportive attitude
– Interviewer should focus on specific job issues,
not personality characteristics
– Should try to establish joint and specific goals

11. Suggestions: Part Two
• Employee should have right to question,
challenge, and rebut evaluation without fear
of retribution
• Discussion of salary and rank changes
should be linked directly to performance
appraisal criteria