2. Advantages of this method include: (1) evaluating performance in this specific way
gives employees feedback about what they do well and what they do poorly, and (2)
the manager can relate the incidents to how the employee is helping the company
achieve its goals. Disadvantages include: (1) keeping a daily or weekly log of critical
incidents requires significant effort and managers may resist this requirement, and (2)
critical incidents may be unique so they may not support comparisons among
employees.
3. A behaviorally anchored rating scale (BARS) builds on the critical-incidents
approach. The BARS method is intended to define performance dimensions
specifically, using statements of behavior that describe different levels of
performance. The statements are anchors of the performance levels.
4. Figure 10.5, Task-BARS Rating Dimension: Patrol Officer, shows various
performance levels for the behavior of “preparing for duty.”
5. Although BARS can improve interrater reliability, this method can bias the manager’s
memory.
6. A behavioral observation scale (BOS) is a variation of a BARS. It is developed
from critical incidents. A BOS uses many examples to define all behaviors necessary
for effective performance. Also a BOS asks the manager to rate the frequency with
which the employee has exhibited the behavior during the rating period.
7. Figure 10.6, Example of a Behavioral Observation Scale, provides a simplified
example of a BOS for measuring the behavior “overcoming resistance to change.”
8. A major drawback of this method is the amount of information required. Even so,
compared to BARS and graphic rating scales, managers and employees have said
they prefer BOS for ease of use, providing feedback, maintaining objectivity, and
suggesting training needs.
9. Another approach to assessment builds directly on a branch of psychology called
behaviorism, which holds that individuals’ future behavior is determined by their past
experiences, specifically, the ways in which past behaviors have been reinforced.
10.Applied to behavior in organizations, organizational behavior modification (OBM)
is a plan for managing the behavior of employees through a formal system of
feedback and reinforcement. Specific OBM techniques vary, but most have four
components:
a. Define a set of key behaviors necessary for job performance
b. Use a measurement system to assess whether the employee exhibits the key
behaviors
c. Inform employees of the key behaviors
c. Provide feedback and reinforcement based on employees’ behavior
11.OBM techniques have been used in a variety of settings.
12.Behavioral approaches such as organizational behavior modification and rating scales
can be very effective. Thee methods can link the company’s goals to the specific
behavior required to achieve those goals. Behavioral methods also can generate
specific feedback along with guidance in areas requiring improvements. As a result
these methods tend to be valid. When raters are well trained, reliability also tends to
be high. However, behavioral methods do not work well for complex jobs where it is
difficult to see a link between behavior and results or where there is more than one
good way to achieve success.
E. Measuring Results
1. Performance measurement can focus on managing the objective, measurable results
of a job or work group. Two of the most popular methods for measuring results are
measurement of productivity and management by objectives.
2. Productivity is an important measure of success because getting more done with a
smaller amount of resources increases the company’s profits. This type of
performance measurement can be time-consuming to set up, but research suggests it
can improve productivity.
3. Management by objectives is a system in which people at each level of the
organization set goals in a process that flows from top to bottom so that employees at
all levels are contributing to the organization’s overall goals. These goals become the
standards for evaluating each employee’s performance. An MBO system has three
components:
a. Goals are specific, difficult, and objective
b. Managers and their employees work together to set the goals
c. The manager gives objective feedback through the rating period to monitor
progress toward the goals
4. Table 10.2 provides an example of Management By Objectives for a banking
institution.
5. MBO can have a very positive effect on an organization’s performance. In general,
evaluation of results can be less subjective than other kinds of performance
measurement.
D. Total Quality Management
1. The principles of total quality management provide methods for performance
measurement and management. Total quality management (TQM) differs from
traditional performance measurement in that it assesses both individual performance
and the system within which the individual works. The focus on continuously
improving customer satisfaction is intended to avoid the pitfall of rating individuals on
outcomes over which they do not have complete control.
2. With TQM, performance measurement essentially combines measurements of
attributes and results. The feedback in TQM is of two kinds: (1) subjective feedback
from managers, peers, and customers about the employee’s personal qualities such
as cooperation and initiative and (2) objective feedback based on the work process.
3. Objective feedback comes from a variety of methods called statistical quality control.
These methods use charts to detail causes of problems, measures of performance, or
relationships between work-related variables.
4. Because of the focus on systems, this feedback may result in changes to a work
process rather than assuming that a performance problem is the fault of an employee.
The systems focus has practical benefits, but it does not serve as well to support
decisions about work assignments, training, or compensation.
VI. Sources of Performance Information
1. All methods of performance measurement require decisions about who will collect and
analyze the performance information. The traditional approach is for managers to
gather information about their employees’ performance and arrive at performance
ratings. However, many sources are possible.
2. Using one person as a source of information poses certain problems such as: (1) bias
and (2) only see the employee in a limited number of situations.
3. To get as complete an assessment as possible, some organizations combine
information from most or all of the possible sources. This is called a 360-degree
performance appraisal.
A. Managers
1. The most used source of performance information is the employee’s manager.
2. Advantages of using managers as the source of information include: (1) they
possess the basic qualifications for this responsibility, (2) their own success
depends so much on their employees’ performance, and (3) their feedback can
improve performance and employees tend to perceive the appraisal as accurate.
3. Disadvantages of using managers as the source of information include: (1) they do
not have the opportunity to observe the employees performing job duties and (2)
they cannot observe how employees perform at all times.
B. Peers
1. Peers are an excellent source of information about performance in a job where the
supervisor does not often observe the employee. Peers have expert knowledge of
job requirements. They also bring a different perspective to the evaluation and can
provide extremely valid assessments of performance.
2. Disadvantages of peer evaluations include: (1) friendships causing bias and (2)
uncomfortable with rating employees in decisions that may affect themselves.
C. Subordinates
1. For evaluating the performance of managers, subordinates are an especially
valuable source of information. Subordinates – the people reporting to the
manager- often have the best chance to see how well a manager treats employees.
2. Potential problems with subordinate evaluations include: (1) problems because of
the power relationships and (2) managers tend to emphasize employee satisfaction
even at the expense of productivity.
3. Subordinate evaluations are most appropriate for developmental purposes.
d. To protect employees, the process should be anonymous and use at least three
employees to rate each manager.
HRM Social
Crowdsourcing: Performance Reviews
The collaborative tools of social media can allow individuals to work together by contributing
small pieces to a bigger project. Especially when this is done on a large scale, it is known as
crowdsourcing. An employer might conduct a research project quickly by inviting many people
to complete small portions of it simultaneously. Or a travel website might invite travelers to post
reviews of hotels and airlines to create an online travel guide. With regard to performance
management, crowdsourcing can apply to gathering and using data from all of an employee’s
coworkers or all of a manager’s employees to develop an appraisal. Some companies open up
comments from everyone in the company so the employee can get feedback from anyone.
There are some drawbacks to crowdsourcing: employees may not be motivated to provide
careful feedback, there could be some legal issues regarding discrimination or favoritism.
Courts want to see objective, not subjective appraisals.
Discussion Questions with Possible Responses
1. Suppose you work for a company that is crowdsourcing its appraisals. Would you
consider the feedback fairer if your supervisor’s feedback were combined with the
crowdsourced feedback or if it were presented separately? Why?
Answers will vary/
2. Do you think the advantaged of crowdsourcing apprisalls outweigh the disadvantages?
Why or Why not?
Answers will vary.
D. Self
1. Self-rating are rarely used alone, but they can contribute valuable information.
2. The obvious problem with self-ratings is that individuals have a tendency to inflate
assessments of their performance. Supervisors can soften this tendency by
providing frequent feedback.
3. Self-appraisals are not appropriate as the basis for administrative decisions.
E. Customers
1. The customer may be the best source of performance information.
2. Using customer evaluations of employee performance is appropriate in two
situations: (1) when an employee’s job requires direct service to the customer and
(2) when the organization is interested in gathering information to determine what
products and services the customer wants.
3. The weakness of customer surveys for performance measurement is their expense.
VII. Errors in Performance Measurement
1. Fairness in rating performance and interpreting performance appraisals requires that
managers understand the kinds of distortion that commonly occur.
A. Types of Rating Errors
1. Several kinds of errors and biases commonly influence performance
measurements.
2. Similar to Me: A common human tendency is to give a higher evaluation to people
we consider similar to ourselves. This is called the similar-to-me error. One
unfortunate result of this type of error is possible discrimination.
3. Contrast: Sometimes, instead of comparing an individual’s performance against an
objective standard, the rater compares that individual with other employees.
4. Errors in Distribution: Raters often tend to use only one part of a rating scale.
When a rater inaccurately assigns high ratings to all employees, the resulting error
is called leniency. When the rater incorrectly gives low ratings to all employees,
this error is called strictness. Rating all employees in the middle of the scale is
called central tendency.
5. Theses errors pose two problems: (1) they make it difficult to distinguish among
employees rated by the same person and (2) create problems in comparing the
performance of individuals rated by different raters.
6. Halo and Horns: Another common problem is that raters often fail to distinguish
among different aspects of performance. When the rater reacts to one positive
performance aspect by rating the employee positively in all areas of performance,
the bias is called the halo error. When the rater responds to one negative aspect
by rating an employee low in other aspects, the bias is called the horns error.
7. When raters make halo and horns errors, the performance measurement cannot
provide the specific information needed for useful feedback.
B. Ways to Reduce Errors
1. Providing training for raters can reduce rating errors.
C. Political Behavior in Performance Appraisals
1. Sometimes the people rating performance distort an evaluation on purpose, to
advance their personal goals. This kind of appraisal politics is unhealthy because
the resulting feedback does not focus on helping employees contribute to the
organization’s goals.
2. Several characteristics of appraisal systems and company culture tend to
encourage appraisal politics. Appraisal politics are most likely to occur: (1) when
raters are accountable to the employee being rated, (2) the goals of rating are not
compatible with one another, (3) the performance appraisal is directly linked to
highly desirable rewards, (4) when top executives tolerate or ignore distorted
ratings, and (5) senior employees tell newcomers company folklore that includes
stories about distorted ratings.
3. Political behavior occurs in every organization. However, organizations can
minimize appraisal politics by establishing an appraisal system that is fair. Some
ways to promote fairness include: (1) hold a calibration meeting, in which
managers discuss employee performance ratings and provide evidence supporting
their ratings, (2) use consistent standards for evaluating different employees, (3)
train managers on how to use the appraisal process, encouraging them to recognize
accomplishments that the employees themselves have not identified (4) foster a
climate of openness in which employees feel they can be honest about their
weaknesses.
VIII. Giving Performance Feedback
1. Once the manager and others have measured an employee’s performance, that
information must be given to the employee.
A. Scheduling Performance Feedback
1. Performance feedback should be a regular, expected management activity. Providing
feedback more than once a year is most beneficial to the employee and the
organization.
2. Employees are motivated and directed by regular feedback; they want to know if
they are on the right track.
B. Preparing for a Feedback Session
1. Managers should be well prepared for each formal feedback session and should
create the right context for the meeting. The location should be neutral.
2. Managers should also enable the employee to be well prepared and should ask the
employee to complete a self-assessment ahead of time.
C. Conducting the Feedback Session
1. During the feedback session, managers can take any of three approaches:
a. Tell and sell approach: managers tell the employees their ratings and then
justify those ratings.
b. Tell and listen approach: managers tell the employees their ratings and then let
the employees explain their side of the story.
c. Problem-solving approach: managers and employees work together to solve
performance problems in an atmosphere of respect and encouragement.
3. The problem-solving approach is superior. Managers can improve employee satisfaction
with the feedback process by letting employees voice their opinions and discuss
performance goals.
IX. Finding Solutions to Performance Problems
1. When performance evaluation indicates that an employee’s performance is below
standards, the feedback process should launch an effort to correct the problem.
2. The final stage of performance management involves identifying areas for improvement
and ways to improve performance in those areas.
3. Figure 10.7 shows that the most effective ways to improve performance varies
according to the employee’s ability and motivation.
4. To determine an employee’s ability level, the manager should consider whether the
employee has the knowledge, skills, and abilities needed to perform the job effectively.
5. To determine an employee’s level of motivation, managers need to consider whether
the employee is holding a job he or she wants.
X. Legal and Ethical Issues in Performance Management
1. In developing and using performance management systems, human resource
professionals need to ensure that these systems meet legal requirements such as the
avoidance of discrimination.
A. Legal Requirements for Performance Management
1. Because performance measures play a central role in decisions about pay,
promotion, and discipline, employment-related lawsuits often challenge an
organization’s performance management systems. Lawsuits related to performance
management usually involve charges of discrimination or unjust dismissal.
2. The Supreme Court has held that the selection guidelines in the federal
government’s Uniform Guidelines on Employee Selection Procedures also apply to
performance measurement.
3. To protect against both kinds of lawsuits, it is important to have a legally defensible
performance management system. Such a system would be based on valid job
analyses with the requirements for job success clearly communicated to employees.
4. Performance measurement should evaluate behaviors or results, rather than traits.
The organization should use multiple, well-trained raters and provide for a review of
all performance ratings by upper-level managers, as well as setting up a system for
employee appeals. The system should include a process for coaching or training
employees to help them improve rather than simply dismissing poor performers.
B. Electronic Monitoring and Employee Privacy
1. Computer technology now supports many performance management systems.
Organizations often store records of employees’ performance ratings, disciplinary
actions, and work-rule violations in electronic databases. Many companies use
computers to monitor productivity and other performance measures electronically.
2. A company called E22 Alloy has developed a service that collects data about
employees’ activities on their computers, smart phones, and other devices and
stores the data in the “cloud.”
3. Although electronic monitoring can improve productivity, it also generates
privacy concerns. Electronic systems should not be a sub