8-1        Summarize the necessary characteristics of accurate performance management tools.

The performance management tools and measures that we use need to be valid, reliable, acceptable/feasible, and specific. A valid tool measures the pro­cess that you want it to measure. A reliable tool works in a generally consistent way each time you use it. Acceptability and feasibility deal with the tool being satisfactory and reasonable to the people who use it and also capable of being successfully applied in a par­ticular situation. Finally, a specific measure defines the performance well enough that we understand the current level of performance achieved and what, if anything, the employees need to do to improve their performance to comply with standards.

8-2        Identify and briefly discuss the purposes of performance appraisals.

Communication is the first purpose. Appraisals need to provide an opportunity for formal two-way communication between management and the employee concerning how the organization feels the employee is performing. The second purpose is to gain information for evaluative decisions. We need good information on how employees are performing so that we can take fair and equitable actions with our workforce to improve organizational productiv­ity. Providing motivation for development is the last major purpose. Used correctly, appraisals can moti­vate by providing opportunities for the employees to improve their performance over time.

8-3        Discuss the options for what to evaluate in a performance appraisal.

Our three primary options for what to evaluate are traits, behaviors, and results. There is some evidence that particular types of traits are valuable in jobs that require management and leadership skills, but many traits have been shown to have very little bearing on job performance, meaning they are not valid mea­sures of performance. We can also use behaviors to evaluate our workers. Measuring behaviors is usu­ally a much better appraisal option because physical actions or behaviors can be directly observed, and as a result, they are more likely to be a valid assessment of the individual’s performance. Finally, we can evaluate performance based on results. Results are a concrete measure of what has happened in the orga­nization. However, results may be skewed based on factors that are outside the control of the individual who is being evaluated.

8-4        List the commonly used performance measurement methods and forms.

The critical incidents method utilizes records of major employee actions over the course of the appraisal period to complete the employee evaluation. MBO uses objectives jointly set by the manager and employee to gauge employee performance during the evaluation period. In the narrative method, the man­ager writes either a structured or unstructured para­graph about the employee’s performance. Graphic rating scales provide a numerical scale so that the manager can check off where an employee falls on the continuum. BARS forms provide a description of the behaviors that make up acceptable performance at each level on the scale. Finally, ranking creates a hierarchy of employees, from best to worst.

8-5        Describe the available options for the rater/evaluator.

It is logical to choose supervisors as evaluators when they have ongoing contact with the subor­dinate and know the subordinate’s job. When the supervisor may not spend lots of time with the indi­vidual employee, peers may make better evaluators because they may know the job of the individual employee better than the supervisor does and may be more directly affected by the employee’s actions. Subordinate evaluations can give us good insight into the managers who control employees in our organization. We may want to use customers as evaluators when the individual being evaluated has frequent contact with those customers, because we need to know how customers feel about their inter­actions with our employees. Self-evaluation is valu­able in a number of management processes, from training and development to counseling and disci­plinary measures, among others.

8-6        Name some of the common problems with the performance appraisal process.

Personal biases and stereotyping are two of the most significant appraisal problems. Other prob­lems include halo error, distributional errors (either the grading is too harsh or too lenient, or everyone is judged to be average), similarity error, proximity error, recency error, and contrast error.

8-7        Contrast evaluative performance reviews and developmental performance reviews.

The evaluative interview is a review of the individual employee’s performance over a certain period. The evaluation needs to be fair and equitable, not based on bias. The employee must be given the opportunity to talk as well as listen to the critique of their perfor­mance. The developmental interview, on the other hand, focuses on areas for improvement over time. You should have employees come up with their own objectives and strategies for improvement, and you should develop your own objectives for them.

8-8        Define the key terms found in the chapter margins and listed following the Chapter Summary.

Complete the Key Terms Review to test your understanding of this chapter’s key terms.