C9 Dessler Fhrm2 Inppt008 Nou

Fundamentals of
Human Resource
Management
2e
Gary Dessler
Performance and Talent
Management
Chapter 7
7-2
Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall
Basic Concepts in Performance
Appraisal and Management
Performance Appraisal
Evaluating an employees current and/or past
performance relative to his or her performance
standards
7-5
Requires that supervisors set performance

standards
Requires that the employee receives the
training, feedback, and incentives needed to
eliminate performance deficiencies
7-6
The Three-Step Performance Appraisal
Cycle: Figure 7.2
7-7
Why Appraise Performance?
1. Most employers still base pay, promotion,

and retention decisions on the employees
appraisal.
2. Appraisals play a central role in the
employers performance management
process.
3. An appraisal lets you and the subordinate
develop a plan for correcting any
deficiencies.
7-8
Why Appraise Performance?
4. Appraisals provide an opportunity to review

the employees career plans in light of his or
her exhibited strengths and weaknesses.
5. Supervisors use appraisals to identify
employees training and development needs.
7-9
Motivation and performance
appraisal
Performance ? pay
appraisal ? promotion
? career plans
? training
TIME 7-10
Motivation : Expectancy theory
7-11
Performance Management
Performance management
The continuous process of identifying,
measuring, and developing the performance of
individuals and teams, and aligning their
performance with the organizations goals
7-12
Who Should Do the Appraising?
The supervisor is usually in the best position

to observe and evaluate a subordinates
performance.
Authority vs. Responsibility

Psychological response?
7-13
Peer Appraisal
Peer appraisals have a positive impact on

improving perception of:
Open communication
Task motivation
Social loafing
Group viability
Cohesion
Satisfaction
7-14
Social loafing for student teams
Tendency of certain members of a group to get by with less

effort than what they would have put when working alone. Its
two common manifestations are :
(1) Free-rider effect, where some members do not put in
their share of work under the assumption that others'
efforts will cover their shortfall, and thus cause
(2) Sucker effect, where the other (fully performing)
members lower their efforts in response to the free-
riders' attitude.
Source: http://www.businessdictionary.com/definition/social-
loafing.html#ixzz457KExLbl
7-15
Rating Committee
Composed of immediate supervisor and

three or four other supervisors
Can help cancel out problems such as bias on
the part of individual raters
Can include the different facets of an
employees performance observed by
different appraisers
7-16
Self-Ratings
One problem with self-ratings

is that employees usually rate
themselves higher than their
supervisors or peers would
rate them.
40% of employees in jobs of

all types placed themselves in
the top 10%.
7-17
Appraisal by Subordinates
Upward feedback
Subordinates
evaluate their
supervisors
performance
Usually for
developmental
rather than pay
purposes
7-18
Cartoon: Upward feedback
7-19
Cartoon: Confidentiality
7-20
Practical Example
Evaluation of superiors will be performed by a minimum of 7

subordinates. If the number of direct subordinates is less
than 7, the evaluation will involve the subordinates from the
next levels.
If the number of subordinates, with the next levels, is less
than 7 people, only the evaluation from the hierarchical
superior will be taken into consideration, with a weight of
100%.

Practical Example
Employees who are in kinship up to 3rd grade, cant be

selected as evaluators of the hierarchical superior.
Employees who had less than 3 months of last year, under

the assessed, may not be selected as evaluators of the
hierarchical superior.

360-Degree Feedback
Performance information is collected from

supervisors, subordinates, peers, and
internal/external customers
More candid when subordinates know rewards or
promotions are not involved
7-23
Basic Appraisal Methods
Graphic Rating Scale Forced Distribution

Alternation Ranking Method
Method Critical Incident
Paired Comparison Method
Method BARS
Management by
Objectives
7-26
Appraisal Methods
Graphic Rating Scale

Lists a number of traits and a range of
performance for each.
The supervisor rates each subordinate by circling
or checking the score that best describes the
subordinates performance for each trait, and
then totals the scores for all traits.
7-27
Sample Graphic Rating Form with
Behavioral Examples: Figure 7.4
7-28
Sample Graphic Rating Form with
Behavioral Examples: Figure 7.4
7-29
Sample Graphic Rating Form
7-30
Appraisal Methods
Alternation Ranking Method

Ranking employees from best to worst on a trait
Alternates between highest and lowest until all
employees to be rated have been addressed
7-31
Alternation Ranking Method:
Figure 7.5
7-32
Appraisal Methods
Paired Comparison Method

Every subordinate to be rated is paired with and
compared to every other subordinate on each
trait
7-33
Paired Comparison Method: Figure 7.6
7-34
Appraisal Methods
Forced Distribution Method

Manager places predetermined percentages of
subordinates in performance categories
Prevents supervisors from leniently rating most
employees satisfactory
Makes top and bottom performers stand out
7-35
7-36
At Sun Microsystems, managers appraise

employees in groups of about 30.
There is a top 20%, a middle 70%, and a
bottom 10%.
The bottom 10% can either take a quick exit
package or embark on a 90-day performance
improvement action plan.
7-37
Appraisal Methods
Critical Incident Method

Keeping an anecdotal record of uncommonly
good or undesirable examples of an employees
work-related behavior, and reviewing it with the
employee at predetermined times
Examples: refuse to cooperate, refuse to obey direct

orders, unwilling to attend future training, got angry over
colleague's
7-38
Example: Appraisal Form with critical
incident recording
7-39
Appraisal Methods
Behaviorally Anchored Rating Scale (BARS)

Combines the benefits of narrative critical
incidents and quantitative ratings by anchoring a
quantified scale with specific narrative examples
of good and poor performance
7-40
Behaviorally
Anchored
Rating Scale:
Figure 7.7
7-41
BARS - Example
7-42
Electronic Performance Monitoring
Electronic Performance Monitoring

(EPM)
Uses computer technology to allow managers to
monitor their employees rate, accuracy, and
time spent working online or just on their
computers
7-46
Selected Best Practices for Fair
Performance Appraisals: Figure 7.9
7-47
Dealing with Appraisal Problems
Ensure fairness
Clarify standards
Avoid halo effect ratings
Avoid the middle
Dont be lenient or strict
Avoid bias
7-48
Unclear Standards
7-49
Common Appraisal Problems
Halo effect
The rating of a subordinate on one trait
influences the way you rate the subordinate on
other traits
7-50
Central tendency
The tendency to rate all employees about
average
7-51
Leniency or strictness
Rating all subordinates consistently high or low
7-52
Recency effect
(Overemphasis on recent behavior)
7-53
Handling the Appraisal Interview
Appraisal interview
Supervisor and
subordinate review
the appraisal and
formulate plans to
remedy deficiencies
and reinforce
strengths.
7-56
Preparing for the Appraisal Interview
1. Give the subordinate at least a weeks notice

to review his or her work
2. Compare the employees performance to his
or her standards
3. Find a private area for the interview
4. Find a mutually agreeable time for the
interview and leave enough time
7-57
Conducting the Interview
1. Talk in terms of objective work data

2. Get agreement before the subordinate leaves
on how things will improve and in what time
frame
3. Ensure that the process is fair
4. Know how to deal with defensiveness
7-58
Cartoon: No feedback
Irrelevant criteria
Improper or
destructive feedback
Lack of engagement
and demotivation
7-59
Performance Management vs.
Performance management means continuous,
daily, or weekly interactions and feedback to
ensure continuous improvement.
Performance management is always goal-
directed.
Performance management means continuously
re-evaluating and (if need be) modifying how
the employee and team get their work done.
7-60
Performance Managements Basic
Elements
Ongoing
Direction Goal
performance
sharing alignment
monitoring
Coaching and
Recognition Ongoing
developmental
and rewards feedback
support
7-61
Performance assessment, goal
alignment and rewards
Implicit or explicit
demands for:
More difficult
objectives
More difficult tasks
Personal change
Greater effort
7-62
Copyright
All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
7-66

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Fundamentals of

Requires that supervisors set performance

1. Most employers still base pay, promotion,

4. Appraisals provide an opportunity to review

The supervisor is usually in the best position

Authority vs. Responsibility

Peer appraisals have a positive impact on

Tendency of certain members of a group to get by with less

Composed of immediate supervisor and

One problem with self-ratings

40% of employees in jobs of

Evaluation of superiors will be performed by a minimum of 7

Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall

Employees who are in kinship up to 3rd grade, cant be

Employees who had less than 3 months of last year, under

Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall

Performance information is collected from

Graphic Rating Scale Forced Distribution

Graphic Rating Scale

Alternation Ranking Method

Paired Comparison Method

Forced Distribution Method

At Sun Microsystems, managers appraise

Critical Incident Method

Examples: refuse to cooperate, refuse to obey direct

Behaviorally Anchored Rating Scale (BARS)

Electronic Performance Monitoring

Avoid halo effect ratings

Avoid the middle

Dont be lenient or strict

1. Give the subordinate at least a weeks notice

1. Talk in terms of objective work data

All rights reserved. No part of this publication may be reproduced, stored in a

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