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.
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 predetermined 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.
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.
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.
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.
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.
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.
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.
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.
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 their appraisals. Click here for performance appraisal books from Amazon.
For those needing help with other areas, visit other related web sites by the author as follows:
Performance Appraisal Tips Help Page
Total Quality Management (TQM) Tutorial/Help Page
Procedure / Process Writing Tips
References
References are listed in the second PDF file listed above. Sorry,
downloading the file is a requirement to obtain them.
Performance Appraisal Tips Help Page List of Recommended Performance Appraisal Books.
Effective Phrases for
Performance Appraisals: A Guide to Successful
Evaluations
by Jr. Neal, James E. | Apr 1, 2020 Spiral-bound
The Quick and Easy
Performance Appraisal Phrase Book: 3,000+ Powerful
Phrases for Successful Reviews, Appraisals and
Evaluations
by Patrick Alain | Jun 24, 2013 Kindle Paperback
2600 Phrases for
Effective Performance Reviews: Ready-to-Use Words
and Phrases That Really Get Results by Paul
Falcone | Jun 10, 2005 Kindle Paperback Audiobook
Employee Performance
Appraisal Forms Book: Employee Job Performance
Review and Evaluation Form | 50 Forms
by Guibi.Ta Publishing | Jun 30, 2023 Paperback
by Paul Falcone and Winston Tan | May 15, 2013
Kindle Paperback
Performance Appraisal Phrase Book: The Best Words, Phrases, and Techniques for Performance Reviews by Corey Sandler and Janice Keefe | Nov 1, 2003b Kindle Paperback
How To Say It Performance Reviews: Phrases and Strategies for Painless and Productive Performance Reviews (How to Say It)
by Meryl Runion and Janelle Brittain | Dec 5, 2006 Kindle Paperback
