Performance management involves systematically evaluating employee job performance and providing feedback to improve performance. It includes performance appraisals that measure performance relative to standards, as well as developmental feedback. Effective performance management benefits employees through improved performance, fairness, and motivation. It also provides administrative benefits to organizations and legal protections when implemented properly.

1. Performance Management
Performance Appraisal is a
systematic description of job relevant
strengths and development needs of
an employee’s actual performance
relative to established standards.

2. Performance Management …
is a process to control
employee work behaviors and
outputs through providing
feedback on performance.

3. Performance Management …
Benefits: An Employee Perspective
Improved Performance requires
Assessment and Feedback
Fairness results when performance is
measured objectively and outcomes are
equitable
Recognition of performance can
motivate employee improvement

4. Performance Management …
 Administrative/Evaluative
pay, promotions, layoffs
 Developmental
training, career development, HR research
 Legal (minimize exposure to EEO)
Job related appraisal
Avoid vague/subjective performance criteria
Implement a review and appeals process
Respect employee privacy and confidentiality

5. Performance Management
 Uses of Performance Appraisal Systems
Rewards
Staffing/Career Decisions
Training/Development Assessment
Motivation
Validate HR Research

6. Performance Management
 Requirements for an Effective
Performance Appraisals
Relevant
Acceptable (Evaluators and Employees)
Practical (Organization and Evaluators)
Reliable
Sensitive to Employee Issues and Needs

8. Performance Management
 Performance Appraisal Criteria
 Traits (focus on the Person)
 Observable personality dimensions
 Reliable, decisive, loyal
 Ambiguous and open to bias
 Behavioral (focus on worker behaviors)
 Behaviors required to accomplish the job
 More legally defensive (than Traits), expensive, time consuming
and limits application across jobs (more job specific)
 Outcomes
 Clear, Unambiguous Criteria
 Eliminates subjective rater error ~ subject to criteria
contamination and deficiency

9. Performance Management
 Comparative Methods
Ranking, Forced Distribution, Essay
 Advantage
Differentiates employees
 Disadvantages
Degree of differences unclear
Difficult to compare across groups
May cause conflict among workers
Vague feedback-difficult to defend

10. Performance Management
 Adjective Descriptor Methods
Behavioral Checklist, Graphic Rating Scale
 Advantages
Avoids conflict
Allows comparison across work groups
Feedback of Specific performance dimensions
 Disadvantages
Open to Rater Error
Inconsistency Across Raters

11. Sample Trait Scales Using
Absolute Standards
Rate each worker using the scales below.
Decisiveness:
1 2 3 4 5 6 7
Very low Moderate Very high
Reliability:
1 2 3 4 5 6 7
Very low Moderate Very high
Energy:
1 2 3 4 5 6 7
Very low Moderate Very high
Loyalty:
1 2 3 4 5 6 7
Very low Moderate Very high
Fig. 7-4 © 1998 by Prentice Hall

13. Performance Management
 Expected Outcome Methods
Management by Objectives, Behavioral
Anchored Rating Scales (BARS)
 BARS measures actual performance
behaviors exhibited by an employee
relative to pre-defined behaviors of a
critical performance dimension.
 MBO is a mutual goal setting process
comparing actual performance to agreed
upon performance objectives.

15. Performance Management
 Effective Performance Evaluators should be
Knowledgeable of job requirements
Able to observe performance
Accurate, unbiased, able to differentiate
performance levels

16. Performance Management
Sources of Evaluators
Peers
Self appraisals (Employee)
Subordinates
Outside personnel
Computer monitoring
§The 360 degree method
§Choice Depends on Objectives

17. Performance Management
 Evaluator Error (Bias)
Halo/horn
Harshness/strictness
Leniency
Central Tendency
Recency
Contrast- similar or dissimilar to me
Anchoring- biased by prior appraisal

18. Performance Management
 Scheduling (Timing) of Performance Appraisal
 Intermittent v. Continuous (Formal v. Informal)
 Purpose: Developmental v. Pay Adjustment
 Intermittent v. Continuous
 Formal ~ usually intermittent (monthly, semi-annual,
annual)
 Informal ~ should be continuous (daily if necessary)
 Communicate when required – support positive results or
correct developmental (deficient) performance areas
 Development v. Pay (Two separate Appraisal Interviews)
 First discuss performance strengths and developmental
needs
 Second discuss pay issues

19. Performance Management
 Improving Performance Appraisal Process
 Give daily not once a year
 Have employee’s rate their performance
 Encourage the employee to participate
 Emphasize Constructive criticism
 Provide constant Feedback
 Focus on behavior (performance) not the person
 Mutually agree on specific goals, timelines, and
developmental programs/assignments