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Introduction
As a person who has always considered myself seeking constant improvement,
I became interested in the use and application of performance appraisals.
Originally, I looked at the performance appraisal as an opportunity to find
out how I was doing compared to my boss's expectations. I later found, after
I had a department of 19 people to supervise and write appraisals for, that
the performance appraisal was a once a year nightmare if I didn't take notes
on my employees during the year.
The observations and understanding of the performance appraisal process helped
reduce a monumental task into something much more manageable. Also, performing
performance appraisals on highly technical people is much more difficult
than doing them for employees that are performing routine or production oriented
tasks. For production employees, developmental aspects and expectations for
job growth are typically not as great. This is not always the rule. There
are always a few employees who come along who want and need developmental
planning.
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Terms
Terms used to describe the various type of rating systems as well as a definition
for performance appraisal is as follows:
Behavioral Anchored Rating Scales. - The term used to describe a
performance rating that focused on specific behaviors or sets as indicators
of effective or ineffective performance, rather than on broadly stated adjectives
such as "average, above average, or below average". Other variations were:
-
Behavioral observation scales
-
Behavioral expectations scales
-
Numerically anchored rating scales
Checklists. - The term used to define a set of adjectives or descriptive
statements. If the rater believed the employee possessed a trait listed,
the rater checked the item; if not, the rater left the item blank. rating
score from the checklist equaled the number of checks.
Critical Incident Technique. - The term used to describe a method
of performance appraisal that made lists of statements of very effective
and very ineffective behavior for employees. The lists have been combined
into categories, which vary with the job. Once the categories had been developed
and statements of effective and ineffective behavior had been provided, the
evaluator prepared a log for each employee. During the evaluation period,
the evaluator recorded examples of critical behaviors in each of the categories,
and the log has been use to evaluate the employee at the end of the evaluation
period.
Forced Choice Method. - This appraisal method has been developed to
prevent evaluators from rating employees to high. Using this method, the
evaluator has to select from a set of descriptive statements, statements
that apply to the employee. The statements have been weighted and summed
to at, effectiveness index.
Forced Distribution. - The term used to describe an appraisal system
similar to grading on a curve. The evaluator had been asked to rate employees
in some fixed distribution of categories. One way to do this has been to
type the name of each employee on a card and ask the evaluators to sort the
cards into piles corresponding to rating.
Graphic Rating Scale. - The term used to define the oldest and most
widely used performance appraisal method. The evaluators are given a graph
and asked to rate the employees on each of the characteristics. The number
of characteristics can vary from one to one hundred. The rating can be a
matrix of boxes for the evaluator to check off or a bar graph where the evaluator
checked off a location relative to the evaluators rating.
Narrative or Essay Evaluation. - This appraisal method asked the evaluator
to describe strengths and weaknesses of an employee's behavior. Some
companies still use this method exclusively, whereas in others, the method
has been combined with the graphic rating scale.
Management by Objectives. - The management by objectives performance
appraisal method has the supervisor and employee get together to set objectives
in quantifiable terms. The appraisal method has worked to eliminate communication
problems by the establishment of regular meetings, emphasizing results, and
by being an ongoing process where new objectives have been established and
old objectives had been modified as necessary in light of changed conditions.
Paired Comparison. - The term used to describe an appraisal method
for ranking employees. First, the names of the employees to be evaluated
have been placed on separate sheets in a pre-determined order, so that each
person has been compared with all other employees to be evaluated. The evaluator
then checks the person he or she felt had been the better of the two on the
criterion for each comparison. Typically the criterion has been the employees
over all ability to do the present job. The number of times a person has
been preferred is tallied, and the tally developed is an index of the number
of preferences compared to the number being evaluated.
Performance Appraisal. - The term performance appraisal has been called
by many names, including performance review, performance evaluation, personnel
rating, merit rating, employee appraisal or employee evaluation. A performance
appraisal has been defined as any personnel decision that affects the status
of employee regarding their retention, termination, promotion, transfer,
salary increase or decrease, or admission into a training program.
Ranking. - The term ranking has been used to describe an alternative
method of performance appraisal where the supervisor has been asked to order
his or her employees in terms of performance from highest to lowest.
Weighted Checklist. - The term used to describe a performance appraisal
method where supervisors or personnel specialists familiar with the jobs
being evaluated prepared a large list of descriptive statements about effective
and ineffective behavior on jobs.
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Approaches to Performance Appraisals
There have been two prevalent approaches to performance appraisal. The first
approach has been the traditional approach. This approach has also
been known as the organizational or overall approach. The traditional approach
has been primarily concerned with the overall organization and has been involved
with past performance.
The second approach to performance appraisal has been the developmental approach.
This approach viewed the employees as individuals and has been forward looking
through the use of goal setting.
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Purposes of Traditional Performance Appraisals
Performance appraisal for evaluation using the traditional approach has served
the following purposes:
-
Promotion, separation, and transfer decisions
-
Feedback to the employee regarding how the organization viewed the employee's
performance
-
Evaluations of relative contributions made by individuals and entire departments
in achieving higher level organization goals
-
Criteria for evaluating the effectiveness of selection and placement decisions,
including the relevance of the information used in the decisions within the
organization
-
Reward decisions, including merit increases, promotions, and other rewards
-
Ascertaining and diagnosing training and development decisions
-
Criteria for evaluating the success of training and development decisions
-
Information upon which work scheduling plans, budgeting, and human resources
planning can be used
Two serious flaws in the traditional approach to performance appraisal exist.
The flaws are:
-
Organizational performance appraisal is typically primarily concerned with
the past rather than being forward looking through the use of setting objectives
or goals.
-
Performance appraisal is usually tied to the employees' salary review. Dealing
with salary generally overwhelmed and blocked creative, meaningful, or
comprehensive consideration of performance goals.
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Developmental Performance Appraisal Purposes
The developmental approach to performance appraisal has been related to employees
as individuals. This approach has been concerned with the use of performance
appraisal as a contributor to employee motivation, development, and human
resources planning. The development approach contained all of the traditional
overall organizational performance appraisal purposes and the following
additional purposes:
1. Provided employees the opportunity to formally indicate the direction
and level of the employee's ambition
2. Show organizational interest in employee development, which was cited
to help the enterprise retain ambitious, capable employees instead of losing
the employees to competitors
3. Provided a structure for communications between employees and management
to help clarify expectations of the employee by management and the employee
4. Provide satisfaction and encouragement to the employee who has been trying
to perform well.
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Expectations of a Manager in doing a Performance Appraisal
The following is typically expected from company managers when doing performance
appraisals:
-
Translate organizational goals into individual job objective.
-
Communicate management's expectations regarding employee performance.
-
Provide feedback to the employee about job performance in light of management's
objectives.
-
Coach the employee on how to achieve job objectives/requirements.
-
Diagnose the employee's strengths and weaknesses.
-
Determine what kind of development activities might help the employee better
utilize his or her skills improve performance on the current job.
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The Performance Appraisal Process
The performance appraisal process typically consists of four inter-related
steps as follows:
-
Establish a common understanding between the manager (evaluator) and employee
(evaluatee) regarding work expectations; mainly, the work to be accomplished
and how that work is to be evaluated.
-
Ongoing assessment of performance and the progress against work expectation.
Provisions should be made for the regular feedback of information to clarify
and modify the goals and expectations, to correct unacceptable performance
before it was too late, and to reward superior performance with proper praise
and recognition.
-
Formal documentation of performance through the completion of a performance
and development appraisal form appropriate to the job family.
-
The formal performance and development appraisal discussion, based on the
completed appraisal form and ending in the construction of a Development
Plan.
Performance and Development Appraisal Forms
For those interested in the Performance and Development Appraisal Forms I
am use as a reference for this web page, I have two PDF downloads. The first
is a sample performance appraisal
that only
has a two-point rating scale, "satisfactory" and "unsatisfactory". The
second PDF file
contains
both a copy of a paper I wrote as a graduate student and a more complex form
with a rating system.
Tip: When having performance appraisals done, it's a good idea to
send along a form to have the manager identify the training needs for
the next year. This will tie the developmental aspect of the performance
appraisal to the training needs and get your training needs out of the way
for your Sarbanes-Oxley Act / ISO / QS9000 requirements, if you have them.
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How Traditional Performance Appraisals Can Hurt Quality
and Teamwork
From a Total Quality Management (TQM) perspective, there are a several reasons
that traditional performance appraisals can hurt quality and teamwork. For
those unfamiliar with the TQM concept, visit the
TQM Tutorial/Help
Page.
One negative aspect of traditional individual performance appraisals is that
they can make employees compete against one another. How can this be done?
If the ratings are known (or assumed, based on the employees rating
given by the manager and their perceptions of where they stand relative to
others), it can create discord in the work group. TQM is based
on teamwork, however, if an employee asks for help, they can be penalized
on their appraisals. When trying to encourage a TQM environment, the
performance ratings should contain elements relating to teamwork (i.e. rated
between teams instead of individuals).
The use of a rating system incorrectly can be a problem. When the rating
system is forcing the overall performance for the various elements to fit
a Normal Distribution or Student-T Curve, problems can occur. While
statistically, for a large organization, this may sound reasonable. At
the work group level, where the groups are small, it forces managers to have
one employee rated extremely high and another rated extremely low. The reason
for forcing entire employee population to fit the curve is that it keeps
managers from rating everyone at the top end of the curve.
Traditional appraisals reinforce the traditional hierarchy and managers are
expected to support their employees. In the traditional performance
appraisal the manager sets (or approves) the goals and in effect, become
a judge rather than working as a coach. Another negative is that managers
are not always the best person to provide feedback on employees day to day
activities as they spend less time with the employees than there lateral
peers. In the instances where peers and/or customers actually are asked
to provide input, their answers are tempered or screened by the managers,
thereby constraining the sources of feedback.
Another danger of formalizing the performance appraisals into a highly
structured, tightly defined process using rigid criteria tied to merit increases
is that in the actual work world, goals are a moving target. Goals
are constantly changing to meet a changing, dynamic work environment
and never seem to fit an annual appraisal period. This can make it
difficult for managers to assign a specific monetary value on employee
contributions, particularly if they don't match the scale for allowable merit
increases.
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Adjusting for TQM
In order to counteract the impact of traditional performance appraisals,
trying to obtain feedback from the employee's peers and customers (a.k.a.
an open appraisal). Providing a means for employees to provide feedback
to the manager on the manager's performance can also improve the process.
From a TQM perspective, it's recommended to merge planning and feedback
into team meetings rather than one on one meetings. Appraisal periods
should align with the timing of the work (i.e. provide feedback at the end
of a major program or project rather than wait for an annual point in time).
Team meetings should ask open ended, thought provoking questions (i.e.
What would you do if you were running the operation and/or business?). The
idea here during a team meeting on performance is not to set goals, but
to come up with ideas to improve performance. Once a way
for improving performance is developed, goals can be set.
Some quality experts even recommend getting rid of individual rating
all together, however, others have came to a middle ground and recommend
providing both individual and team feedback. It's difficult to develop employees
without two-way communications between the manager and employee. Having
experience in both doing performance appraisal, receiving performance appraisal,
having been through the TQM process and being a quality manager, I prefer
to think of quality and team work as different facets of an employee's
performance. By soliciting feedback from the employee, the work group
and customers, the employee receives a well-rounded perspective of how they
are perceived and should help them in choosing a developmental plan to help
them improve.
One problem with getting team feedback is that getting too many comments
from the team may create problems if there are too many areas to improve
in. In most cases, the recipients will have problems if they try to fix them
all. The question of where to start improving first comes to
mind. Team feedback should be limited to one focused area.
Teams should also be asked to provide an example
of what specifically can be done by the recipient to improve.
When getting team feedback, be sure to solicit feedback on the recipient's
strengths or accomplishments.
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Use of Books and Software for Performance Appraisals
There are a number of low cost paper backs that can be handed out to the
managerial staff to help them with thier appraisals. See the list on
in the left hand column for books from Amazon.
Since the advent of the use of computers, a number of educational organizations
are now using Performance Appraisal software.
Performance
Now Enterprise is a software tool for logging events, tracking goals,
providing effective feedback, and writing employee reviews that maximize
the potential of your team. Flexible enough to adapt to your present review
system, Performance Now helps you become a better manager and get the best
from your employees. For a lttle more upscale package,
Performance
Impact Workplace is easy to use to set goals for employees, but are having
trouble following up on those goals.
Another software package , with an intuative graphic interface, geared towards
the business environment is
MINDSOLVE (MVP). MVP is
designed as an enterprise level performance management software, incorporating
appraisal, development resources, 360 degree feedback, performance logging,
etc.. While the use of configurable software based tools are certainly
making life easier, the use of such tools are much more valuable, if the
user has an understanding of the basis for which they were written. I
hope the information provide in this web site is useful in the understanding
of Performance Appraisals.
There is also Reactive360. They
offer a free 360 feedback process (online) for managers this includes the
full graphical report in PDF generated at the end.
Reactive360 is free to use 360 Feedback
/ 360 Degree Appraisal and they offer low cost fully flexible systems for
employee appraisals. With instant access. they allow you to create your own
questionnaires and brand the process.
For those needing help with other areas, visit other related web sites by
the author as follows:
Flowcharting Help
Page at
http://www.flowhelp.com/flowchart/flowchart.htm
Job Descriptions
Help Page at
http://www.flowhelp.com/jobs/descriptions.html
Integrating SOX-404 Internal Controls
Auditing into ISO9001 at
http://www.flowhelp.com/sox-404/
Program Management Tips
at
http://www.flowhelp.com/iso/program.html
Total Quality Management (TQM)
Tutorial/Help Page at
http://www.flowhelp.com/tqm/tqm.html
Procedure
/ Process Writing Tips at
http://www.flowhelp.com/writing/procedure_writing.html
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References
References are listed in the second PDF
file
listed above. Sorry, downloading the file is
a requirement to obtain them.
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This page is linked to Amazon.com. Click on items of interest for additional
information or to order.
Performance Appraisal Tips Help Page List of Recommended Performance
Appraisal Books and Software.
Books:
2600
Phrases for Effective Performance Reviews: Ready-to-Use Words and Phrases
That Really Get
Results -- by Paul Falcone; Paperback
Perfect
Phrases for Performance Reviews : Hundreds of Ready-to- Use Phrases That
Describe Your Employees' Performance -- Douglas Max; Paperback
The
#1 Guide to Performance Appraisals: Doing It Right! --James E. Neal;
Paperback
Performance
Appraisal Phrase Book: Effective Words, Phrases, and Techniques for Successful
Evaluations --Corey Sandler; Paperback
101
Sample Write-Ups for Documenting Employee Performance Problems -- Paul
Falcone; Paperback
Effective
Letters for Business, Professional and Personal Use: A Guide to Successful
Correspondence -- James E. Neal; Paperback
Powerful
Performance Appraisals: How to Set Expectations and Work Together to Improve
Performance -- Karen McKirchy; Paperback
Effective
Phrases for Performance Appraisals : A Guide to Successful Evaluations
-- James E. Neal; Paperback
The
Complete Guide to Performance Appraisal -- Richard C. Grote, Dick Grote;
Hardcover
The
Basics of Performance Measurement -- Jerry L. Harbour; Paperback
360
Degree Feedback : The Powerful New Model for Employee Assessment &
Performance Improvement Mark R. Edwards, Ann J. Ewen (Contributor)
/ Hardcover / Published 1996
Catalytic
Coaching : The End of the Performance Review Garold L. Markle / Hardcover
/ Published 2000
Competence
at Work : Models for Superior Performance Lyle M., Jr, Phd Spencer, Signe
Spencer (Contributor) / Hardcover / Published 1993
First
Things Fast : A Handbook for Performance Analysis Allison Rossett / Hardcover
/ Published 1998
Increasing
Productivity Through Performance Appraisal (Addison Wesley Series on Managing
Human Resources) Gary P. Latham, Kenneth N. Wexley / Paperback / Published
1994
Performance
Appraisal : State of the Art in Practice (Siop Professional Practice
Series) James W. Smither(Editor) / Hardcover / Published 1998
Powerful
Performance Appraisals : How to Set Expectations and Work Together to Improve
Performance Karen McKirchy / Paperback / Published 1998
Employee
Performance Measurement Workbook Jack Zigon / Perfect / Published 1998
Quality
Control and Performance Appraisal
Software:
Employee
Appraiser Deluxe 4.0 /by Austin-Hayne / Platform: Windows 95, Windows
98, Windows NT / Media: CD-ROM
Performance
Now 4.0
by Knowledge Point
Windows 98, Windows ME, Windows NT, 2000 License
Performance
Impact Workplace
by KnowledgePoint
Windows 98, Windows ME, Windows NT, 2000 License
Policies
Now 5.0 by Knowledge Point Windows 3.x, CD-ROM and 3.5" disk
(Job)
Descriptions Now 4.0 by Knowledge Point Windows 3.x, CD-ROM and 3.5"
disk
People
Manager 2.0 by Knowledge Point Windows 95, Windows 98, Windows NT, CD-ROM
Ultimate
Employer by Knowledge Point Windows 95, Windows 98, Windows NT, CD-ROM
Didn't find your book? Type in the name of the author, title
or subject to search the
Amazon.com
selections.
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