Dessler, Cole, Goodman, and Sutherland

In-Class Edition
Management of Human Resources
Canadian Edition

Chapter Seven

Performance Appraisal:
The Key to Effective
Performance Management

Pearson Education Canada 7-1

 Performance Management

entire process affecting how well an employee

performs
foundation is performance appraisal

Pearson Education Canada 7-2

The Performance Appraisal Process

Three steps:
1. Defining performance expectations
2. Appraising performance
3. Providing feedback to employee
regarding performance

Pearson Education Canada 7-3

The Performance Appraisal Process

Performance Appraisal Problems

lack of standards; irrelevant, subjective,

unrealistic standards
poor measures of performance
rater errors
poor feedback to employees; eg. arguing
failure to use evaluation results for decision
making

Pearson Education Canada 7-4

 Step 1: Defining Performance
Expectations

quantifiable and measurable standards of

performance required
more specific than job descriptions
ensure employees clearly understand
expectations

Pearson Education Canada 7-5

Step 2: Appraising Performance

Performance Appraisal Methods

1. Graphic rating scale

2. Forced distribution
3. Critical incident
4. Behaviourally anchored rating scale
5. Management by objectives
6. Technology-based

Pearson Education Canada 7-6

 Appraisal Methods

Graphic Rating Scale

Trait: _____ ____ Outstanding

____ Very Good
____ Good
____ Improvement Needed
____ Unsatisfactory
____ Not Rated

Pearson Education Canada 7-7

 Appraisal Methods

Critical Incident Method

keep a record of:

uncommonly good
undesirable
work-related behaviours
review with employee at predetermined times

Pearson Education Canada 7-8

 Appraisal Methods

Management by Objectives (MBO)

1. Set the organizations objectives
2. Allocate objectives to departments
3. Set objectives for business units
4. Define expected results (individual)
5. Define action plans for individuals
6. Implement action plans
7. Performance reviews: measure the results
8. Provide rewards for meeting objectives
Pearson Education Canada 7-9
 Appraisal Methods

Management by Objectives (MBO)

Problems

1. Setting unclear, unmeasurable objectives

2. Time consuming
3. Tug of war between manager and employee

Pearson Education Canada 7-10

 Appraisal Methods

Technology-based Methods

New software programs enable employees to

check their own performance against prescribed
criteria

Pearson Education Canada 7-11

Performance Appraisal Problems

Validity: criteria must be relevant,

specific and cover all aspects of the job
in order to be accurate
Reliability: criteria must provide consistent
measures of performance across many
employees and many raters
Unclear performance standards

Pearson Education Canada 7-12

Performance Appraisal Problems

Who Should Do the Appraisal?

immediate supervisor
peers
rating committees
self
employees/subordinates
360-degree appraisal (all of the above)

Pearson Education Canada 7-13

 Performance Appraisal

Dealing with Rater Errors

halo effect
central tendency
leniency or strictness
appraisal bias
recency effects
similar-to-me bias

Pearson Education Canada 7-14

 Performance Appraisal

Avoiding Rater Errors

Ensure that
Ensure rater Train
appraisals are
awareness supervisors
reviewed by
of problems to eliminate
the supervisors
rating errors
immediate boss

Pearson Education Canada 7-15

 Step 3: Providing Feedback

Appraisal Interview

An interview in which the supervisor and

employee review the appraisal and make
plans to remedy deficiencies and reinforce
strengths

Pearson Education Canada 7-16

 The Appraisal Interview

How to Conduct an Appraisal Interview

be direct and specific

focus on job-related behaviours
encourage the person to talk
develop an action plan

Pearson Education Canada 7-17

 The Appraisal Interview

How to Handle a Defensive Employee

recognize that defensive behaviour is normal

never attack a persons defenses
postpone action
recognize human limitations

Pearson Education Canada 7-18

 The Appraisal Interview

constructive criticism within a dignified

context
ensure the interview leads to improved
performance
consider appropriate use of formal written
warnings

Pearson Education Canada 7-19

 Legal and Ethical Issues

use rating instruments based on specific job

behaviours
provide an honest assessment of performance
requires raters to have regular contact with
employees
accurate feedback is critical to defend charges
of biases based on prohibited grounds

Pearson Education Canada 7-20