Performance Management and Appraisal: After You Have Read This Chapter, You Should Be Able To

CHAPTER 12
Performance
Management
and Appraisal
After you have read this chapter, you should be able to:
● Distinguish between job criteria and performance
standards and discuss criterion contamination and
deficiency.
● Identify the two major uses of performance appraisal.
● Explain several rater errors by giving examples of them.
● Describe both the advantages and disadvantages of

multisource (360°) appraisal.
● Identify the nature of behavioral approaches to

performance appraisal and management by objectives
(MBO).
● Discuss several concerns about appraisal feedback

interviews.
● Identify the characteristics of a legal and effective

performance appraisal system.
379
379
HR TRANSITIONS
360° Performance Appraisal

The latest attempt to improve perfor- provider that has designed a 360° pro- but that did not eliminate the paper
mance appraisal—multisource assess- gram around a web-based approach. problem.
ment, or 360° performance appraisal The company’s internally developed The new web-based system allows
(PA)—has found favor with a growing system can be customized to the per- employees to select from a database
number of organizations. Unlike tradi- son being rated, eliminates much of those questions that apply to them
tional performance appraisals, which the paperwork, and solves data entry and their jobs. For example, a nurse
typically come from superiors, 360° problems. will select different questions than will
appraisal uses feedback from “all For years, employees at IMHC were someone in marketing. Once the ques-
around” the appraisee. Superiors, sub- evaluated in a traditional way by their tions are selected, they are approved
ordinates, peers, customers—and per- supervisors. However, it became clear by the supervisor. The employee and
haps a self-appraisal as well—provide that due to the nature of the work, supervisor answer the evaluation ques-
input for the performance appraisal supervisors were not able to observe tions, as does a “team” of other evalu-
process. Factors driving the use of workers in enough situations to evalu- ators agreed to by the employee and
360° PA include the increased use of ate them accurately. Therefore, it was supervisor. Then, each team member
teams and an emphasis on customer decided that it was more appropriate is e-mailed the list of evaluation ques-
satisfaction that comes from quality for employees to be appraised by a tions, and they respond by e-mail. The
enhancement operations. Use of 360° team consisting of internal customers, surveys are kept anonymous, but both
PA with teams presents a problem, coworkers, and direct reports. Thus, employee and supervisor receive
however. Should managers even do
performance appraisals, should team
leaders do them, or should team mem- Unlike traditional performance appraisals, which
bers evaluate each other?
There also are several other poten-
typically come from superiors, 360° appraisal uses
tial problems with 360° assessment: feedback from “all around” the appraisee.
● The process generates a great deal
of paper, with evaluations done by
the 360° approach to performance copies of the evaluations.
many people.
appraisal was adopted. The system is relatively new, but so
● Confidentiality is an issue. If people
This approach was sound, given far IMHC employees and supervisors
do not believe their comments will
the nature of the jobs, but a serious seem pleased with the way it is work-
be anonymous, they are not as hon-
workflow problem was created: ing. Feedback occurs quickly with a
est as they otherwise would be.
how to collect and input into the minimum amount of paper and
● Determining who will be selected
computer all of the evaluations of hassle.1 Much is left to learn about
for assessment is important.
each employee who is evaluated by 360° performance appraisal, but with
Friends, enemies, or both?
a group of as many as 10 other this new human resource approach,
Intermountain Health Care (IMHC), employees? IMHC tried scanning there is great potential to provide bet-
in Salt Lake City, is a health-care the paper evaluations into a database, ter feedback where appropriate.
380 Section 3 Training and Developing Human Resources
“ Maximizing performance is a priority for most organizations today.
”
BOB CARDY
Employees’ job performance is an important issue for all employers. However,

satisfactory performance does not happen automatically; therefore, it is more
Performance management likely with a good performance management system. A performance man-
system agement system consists of the processes used to identify, encourage, measure,
Processes used to identify, evaluate, improve, and reward employee performance at work. In this chapter the
encourage, measure, focus is on identifying, measuring, and evaluating performance. The other remain-
evaluate, improve, and ing elements are covered in other chapters. Figure 12—1 shows performance man-
reward employee agement as part of the link between organizational strategy and results. The
performance. figure illustrates common performance management practices and outcomes.
FIGURE 12—1 Linkage between Strategy, Outcomes, and Organizational

Results
Organizational
Strategy
Performance
Management Practices
• Identify expected
performance levels
• Measure individual perfor-
mance; then evaluate
• Provide feedback on
individual performance
• Provide assistance as needed
• Reward or discipline
based on performance
Employee
Performance
Performance
Management Outcomes:
• Development
• Productivity
• Advancement
• Discipline
• Pay raises
• Termination
• Other
Organizational Results:
Goals met or not met

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CHAPTER 12

● Identify the two major uses of performance appraisal.

● Explain several rater errors by giving examples of them.

● Describe both the advantages and disadvantages of

● Identify the nature of behavioral approaches to

● Discuss several concerns about appraisal feedback

● Identify the characteristics of a legal and effective

360° Performance Appraisal

“ Maximizing performance is a priority for most organizations today.

Employees’ job performance is an important issue for all employers. However,

FIGURE 12—1 Linkage between Strategy, Outcomes, and Organizational

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