EVALUATING

EMPLOYEE PERFORMANCE
WHY DO WE NEED TO EVALUATE
EMPLOYEE PERFORMANCE?
 HOW TO CONDUCT
PERFORMANCE APPRAISAL?
 STEP 1: DETERMINE THE REASON FOR EVALUATING
EMPLOYEE PERFORMANCE

 Providing employee training and feedback

By far, the most important use of performance evaluation is to improve
employee performance by providing feedback about what employees are
doing right and wrong. Even though employee training should be an ongoing
process, the semiannual performance appraisal review is an excellent time to
meet with employees to discuss their strengths and weaknesses. But more
important, it is the time to determine how weaknesses can be corrected.
 STEP 1: DETERMINE THE REASON FOR EVALUATING
EMPLOYEE PERFORMANCE

 Determining salary increases

A job’s worth is determined by many factors, including the degree of
responsibility and level of education required to perform the job. But the
difference in compensation between two individuals within the same job is a
function of both tenure and job performance. That is, it would not seem fair to
pay a poor-performing employee the same amount as an excellently performing
one. Thus, one important reason for evaluating employee performance is to
provide a fair basis on which to determine an employee’s salary increase.
 STEP 1: DETERMINE THE REASON FOR EVALUATING
EMPLOYEE PERFORMANCE

 Making promotion decisions

Another reason for evaluating performance is to determine which
employees will be promoted. Although it would seem only fair to promote
the best employee, this often does not occur. For example, the policy in
some organizations is to promote employees with the most seniority. This
is especially true of organizations whose employees belong to unions.
 STEP 1: DETERMINE THE REASON FOR EVALUATING
EMPLOYEE PERFORMANCE

 Making promotion decisions

Even though promoting employees on the basis of performance or tenure
seems fair, it may not always be smart. The best employee at one level is
not always the best at the next level. Promoting the best or most senior
employee often results in the so-called Peter Principle—the promotion of
employees until they reach their highest level of incompetence.
 SALES LADY MANAGER

 sales  accuracy of paperwork

 communication skills  communication skills
 accuracy of paperwork  motivational ability
 client rapport  employee rapport
 responsibility
 SALES LADY MANAGER

 sales  communication skills

 communication skills  accuracy of paperwork
 accuracy of paperwork  motivational ability
 client rapport  employee rapport
 responsibility
 STEP 1: DETERMINE THE REASON FOR EVALUATING
EMPLOYEE PERFORMANCE

 Making termination decision

Unfortunately, providing feedback, counseling, and training to employees
does not always increase performance or reduce discipline problems.
When performance management techniques are not successful, the
results of a performance review might suggest that the best course of
action is to terminate the employee.
 STEP 1: DETERMINE THE REASON FOR EVALUATING
EMPLOYEE PERFORMANCE

 Conducting Personnel Research

A final reason for evaluating employees is for personnel research.
Employment tests must be validated, and one way this can be done is by
correlating test scores with some measure of job performance. To do this,
however, an accurate and reliable measure of job performance must be
available. The same is true in evaluating the effectiveness of training
programs. To determine effectiveness, an accurate measure of
performance must be available for use in determining whether
performance increases as a result of training.
 STEP 2: IDENTIFY ENVIRONMENTAL AND
CULTURAL LIMITATIONS

The second step in the performance appraisal process is to identify the

environmental and cultural factors that could affect the system. For
example, if supervisors are highly overworked, an elaborate, time-
consuming performance appraisal system will not be successful. In an
environment in which there is no money available for merit pay,
developing a numerically complex system will become frustrating, and the
results of the evaluation may not be taken seriously. In an environment in
which employees are very cohesive, the use of peer ratings might reduce
the cohesiveness.
 STEP 3: DETERMINE WHO WILL EVALUATE PERFORMANCE

Traditionally, employee performance has

been evaluated solely by supervisors.
Organizations, however, have realized
that supervisors see only certain aspects
of an employee’s behavior.

Multiple-source Feedback / 360-degree Feedback

A performance appraisal system in which feedback is obtained from
multiple sources such as supervisors, subordinates, and peers.
STEP 3: DETERMINE WHO WILL EVALUATE PERFORMANCE
 Supervisors
By far the most common source of performance appraisal
is the supervisor rating. In fact, a 2013 Survey by the
Society for Human Resource Management (SHRM) found
that in 74% of organizations, the direct supervisor is the
sole source of an employee’s evaluation. Though
supervisors may not see every minute of an employee’s
behavior, they do see the end result. A supervisor may not
actually see a teller sign up customers for Visa cards but
will review the daily sales totals. Likewise, a professor
does not see a student actually research and write a
paper but infers the levels of these behaviors by viewing
the results—the finished term paper.
STEP 3: DETERMINE WHO WILL EVALUATE PERFORMANCE
 Peers
Whereas supervisors see the results of an employee’s efforts, peers often see the
actual behavior. Peer ratings usually come from employees who work directly
with an employee; a bank teller could be rated by other bank tellers.

 However, other employees in the

organization, those who often come in
contact with the employee, can also
provide useful information. For
example, our teller could be rated by
employees from the loan support or
Visa card departments.
STEP 3: DETERMINE WHO WILL EVALUATE PERFORMANCE

 Subordinates
Subordinate feedback (also called upward
feedback) is an important component of 360-
degree feedback, as subordinates can provide a
very different view about a supervisor’s behavior.
Subordinate ratings can be difficult to obtain
because employees fear a backlash if they
unfavorably rate their supervisor, especially when
a supervisor has only one or two subordinates.
STEP 3: DETERMINE WHO WILL EVALUATE PERFORMANCE
 Customers
Although it would be unlikely that an organization
would ask customers to fill out a performance
appraisal instrument on an employee, organizations
do value customer feedback. Informally, customers
provide feedback on employee performance by filing
complaints or complimenting a manager about one of
her employees.

Organizations also seek customer feedback in the

form of secret shoppers— current customers who
have been enlisted by a company to periodically
evaluate the service they receive.
STEP 3: DETERMINE WHO WILL EVALUATE PERFORMANCE
STEP 3: DETERMINE WHO WILL EVALUATE PERFORMANCE
 Self
Research on self-appraisal has found what we might
expect to find: Employee self-appraisals tend to suffer
from leniency and correlate only moderately with
actual performance and poorly with subordinate and
management ratings. However, when evaluations are
made with clear rating standards and social comparison
information, agreement is increased between self- and
supervisor-ratings. When peer ratings are lower than
self-ratings, employees react negatively to, and
question the accuracy of, negative feedback.
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 FOCUS OF THE APPRAISAL DIMENSIONS

1. Trait-focused Performance Dimensions
A trait-focused system concentrates on such employee attributes as
dependability, honesty, and courtesy. Though commonly used, trait-focused
performance appraisal instruments are not a good idea because they provide poor
feedback and thus will not result in employee development and growth.
2. Competency-focused Performance Dimensions
- Competency-focused dimensions concentrate on the employee’s knowledge,
skills, and abilities. For example, competency-focused dimensions might include
writing skills, oral presentation skills, and driving skills. The advantage to
organizing dimensions by competencies is that it is easy to provide feedback and
suggest the steps necessary to correct deficiencies.
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 FOCUS OF THE APPRAISAL DIMENSIONS

3. Task-focused Performance Dimensions
Task-focused dimensions are organized by the similarity of tasks that are
performed. For a police officer, such dimensions might include following radio
procedures or court testimony. Note that a task-focused dimension usually includes
several competencies. For example, to receive a high rating on the dimension of court
testimony, the officer would need the competencies of public speaking, organization,
and knowledge of the law. The advantage of this approach is that because supervisors
are concentrating on tasks that occur together and can thus visualize an employee’s
performance, it is often easier to evaluate performance than with the other
dimensions. The disadvantage is that it is more difficult to offer suggestions for how
to correct the deficiency if an employee scores low on a dimension. That is, is the low
score on court testimony due to a lack of knowledge or to poor public speaking skills?
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 FOCUS OF THE APPRAISAL DIMENSIONS

4. Goal-focused Performance Dimensions
The fourth type of performance dimension is to organize the appraisal on
the basis of goals to be accomplished by the employee. Sticking with our police
officer example, goals might include preventing crimes from occurring, finishing
the shift without personal injury, and minimizing the number of citizen
complaints. The advantage of a goal-focused approach is that it makes it easier for
an employee to understand why certain behaviors are expected.
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 FOCUS OF THE APPRAISAL DIMENSIONS

5. Contextual Performance
Contextual performance is the effort an employee makes to get along with
peers, improve the organization, and perform tasks that are needed but are not
necessarily an official part of the employee’s job description. Many organizations
include rating scales addressing the technical aspects of the job as well as the
contextual aspects. That is, they want employees who will be not only effective
performers but good organizational citizens as well. In academia, it is not uncommon to
deny tenure to a faculty member who is technically competent but does not “play well
with others.” Contextual performance is important because not only are these
prosocial organizational behaviors important to the success of an organization, but they
also tend to be similar across jobs, whereas the dimensions involved in task
performance differ across jobs.
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 SHOULD DIMENSIONS BE WEIGHTED

Once the type of dimension has been determined, the next decision is
whether the dimensions should be weighted so that some are more
important than others. For example, the dimension of patient care would be
more important for a nurse than would be keeping a professional
appearance. Though both are important parts of the job, providing poor
patient care has more of an impact for the organization than not wearing
the proper clothing.
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 USE OF EMPLOYEE COMPARISONS, OBJECTIVE MEASURES, OR

RATINGS

Once the types of dimensions have been considered, the next

decision is whether to evaluate performance by comparing employees with
one another (ranking), using objective measures such as attendance and
number of units sold, or having supervisors rate how well the employee has
performed on each of the dimensions.
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 USE OF EMPLOYEE COMPARISONS, OBJECTIVE MEASURES, OR

RATINGS
Employee Comparisons
To reduce leniency, employees can be compared with one another instead
of being rated individually on a scale. The easiest and most common of these
methods is the rank order. In this approach, employees are ranked in order by
their judged performance for each relevant dimension. Rank orders are easily
used when there are only a few employees to rank, but they become difficult to
use with larger numbers. To make this process easier, paired comparisons can be
used. This method involves comparing each possible pair of employees and
choosing which one of each pair is the better employee.
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 USE OF EMPLOYEE COMPARISONS, OBJECTIVE MEASURES, OR

RATINGS
Employee Comparisons
To reduce leniency, employees can be compared with one another instead
of being rated individually on a scale. The easiest and most common of these
methods is the rank order. In this approach, employees are ranked in order by
their judged performance for each relevant dimension. Rank orders are easily
used when there are only a few employees to rank, but they become difficult to
use with larger numbers. To make this process easier, paired comparisons can be
used. This method involves comparing each possible pair of employees and
choosing which one of each pair is the better employee.
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 USE OF EMPLOYEE COMPARISONS, OBJECTIVE MEASURES, OR

RATINGS
Employee Comparisons
The final type of employee comparison system is called the forced distribution
method. With this method, a predetermined percentage of employees are placed in
each of the five categories. Though such systems seem harsh, some research suggests
that rank-and-yank systems result in increased levels of organizational productivity,
especially during the first few years in which the system is in place. Employees,
however, consider forced distribution scales to be the least fair method of
performance appraisal. Forced distribution systems are much easier to use than the
other two employee comparison methods, but they also have a drawback – it
assumes that employee performance is normally distributed.
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 USE OF EMPLOYEE COMPARISONS, OBJECTIVE MEASURES, OR

RATINGS

Objective Measures
A second way to evaluate performance
is to use what are commonly called objective,
or hard, criteria. Common types of objective
measures include quantity of work, quality of
work, attendance, and safety
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 USE OF EMPLOYEE COMPARISONS, OBJECTIVE MEASURES, OR

RATINGS

Objective Measures
 Quantity of Work
Evaluation of a worker’s performance in terms of
quantity is obtained by simply counting the number of
relevant job behaviors that take place. For example, we might
judge a salesperson’s performance by the number of units
she sells, an assembly line worker’s performance by the
number of bumpers she welds, or a police officer’s
performance by the number of arrests she makes.
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 USE OF EMPLOYEE COMPARISONS, OBJECTIVE MEASURES, OR

RATINGS
Objective Measures
 Quality of Work
Another method to evaluate performance is by measuring the quality of the
work that is done. Quality is usually measured in terms of errors, which are defined as
deviations from a standard. Thus, to obtain a measure of quality, there must be a
standard against which to compare an employee’s work. For example, a seamstress’s
work quality would be judged by how it compares with a “model” shirt; a secretary’s
work quality would be judged by the number of typos (the standard being correctly
spelled words); and a cook’s quality might be judged by how her food resembles a
standard as measured by size, temperature, and ingredient amounts.
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 USE OF EMPLOYEE COMPARISONS, OBJECTIVE MEASURES, OR

RATINGS
Objective Measures
 Quality of Work
Kentucky Fried Chicken, for example, evaluates the quality of its franchises’
food by undercover inspectors. These inspectors purchase food, drive down the
road, and after parking, use a thermometer to see whether the food has been
served at a standard acceptable temperature and also a scale to determine
whether the weight of the mashed potatoes is within the acceptable range.
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 USE OF EMPLOYEE COMPARISONS, OBJECTIVE MEASURES, OR

RATINGS
Objective Measures
 Quality of Work
Note that the definition of an error is any deviation from a standard. Thus,
errors can even be work quality that is higher than a standard. Why is this an error?
Suppose a company manufactures shirts that are sold for $20. To keep down the
manufacturing cost of its shirts, the company probably uses cheaper material and has
its workers spend less time per shirt than does a company that manufactures $150
shirts. Thus, if an employee sews a shirt with 15 stitches per inch instead of the
standard 10, the company will lose money because of higher quality!
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 USE OF EMPLOYEE COMPARISONS, OBJECTIVE MEASURES, OR

RATINGS
Objective Measures
 Attendance
Attendance can be separated into three distinct criteria: absenteeism,
tardiness, and tenure. Both absenteeism and tardiness have obvious implications
for the performance appraisal process. The weight that each has in the overall
evaluation of the employee largely depends on the nature of the job.
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 USE OF EMPLOYEE COMPARISONS, OBJECTIVE MEASURES, OR

RATINGS
Objective Measures
 Safety
Another method used to evaluate the success of an employee is safety.
Obviously, employees who follow safety rules and who have no occupational
accidents do not cost an organization as much money as those who break rules,
equipment, and possibly their own bodies. As with tenure, safety is usually used for
research purposes, but it can also be used for employment decisions such as
promotions and bonuses.
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 USE OF EMPLOYEE COMPARISONS, OBJECTIVE MEASURES, OR

RATINGS
Ratings of Performance
 Graphic Rating Scale
The most common rating scale is the graphic rating scale. As you can see,
such scales are fairly simple, with 5 to 10 dimensions accompanied by words such
as excellent and poor anchoring the ends of the scale.

The obvious advantage of graphic rating scales is their ease of construction

and use, but they have been criticized because of their susceptibility to such rating
errors as halo and leniency, which are discussed later in this chapter.
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 USE OF EMPLOYEE COMPARISONS, OBJECTIVE MEASURES, OR

RATINGS
Ratings of Performance
 Behavioral Checklist
Behavioral checklists consist of a list of behaviors, expectations, or results for
each dimension. This list is used to force the supervisor to concentrate on the relevant
behaviors that fall under a dimension.
Behavioral checklists are constructed by taking the task statements from a
detailed job description (e.g., “Types correspondence”) and converting them into
behavioral performance statements representing the level at which the behavior is
expected to be performed (e.g., “Correspondence is typed accurately and does not
contain spelling or grammatical errors”).
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 USE OF EMPLOYEE COMPARISONS, OBJECTIVE MEASURES, OR

RATINGS
Ratings of Performance
 Behavioral Checklist
 Behavior-focused - “Properly greets each customer,”
“Knows customers’ names,”
“Thanks customer after each transaction.”
 Result-focused - “Distributed at least 25 Visa applications each month,”
“Teller drawer was not short at the end of the day,”
“Completed annual report on time.”
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 USE OF EMPLOYEE COMPARISONS, OBJECTIVE MEASURES, OR

RATINGS
Ratings of Performance
 Behavioral Checklist
A problem with result-focused statements is that an employee can do everything
asked of her by an organization and still not get the desired results due to factors
outside of her control. These factors are referred to as contamination. In banking,
a teller not be successful in getting customers to sign up for Visa cards because the
bank’s interest rate is not competitive. In law enforcement, a police officer might
not write many traffic citations because she patrols an area in which there are few
cars. In retail, a salesperson has poor sales because of her geographic location.
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 USE OF EMPLOYEE COMPARISONS, OBJECTIVE MEASURES, OR

RATINGS
Ratings of Performance
 Comparison with Other Employees
Supervisors can rate performance on a dimension by comparing the
employee’s level of performance with that of other employees. It is important to
note that when such scale anchors as “below average,” “average,” and “above
average” are used, the evaluation involves rating employee performance in
comparison with other employees. Though this approach will reduce such
problems as overly lenient or overly strict ratings, it potentially forces a supervisor
to rate employees who are performing well as being worse than other employees.
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 USE OF EMPLOYEE COMPARISONS, OBJECTIVE MEASURES, OR

RATINGS
Ratings of Performance
 Frequency of Desired Behavior
Behaviors can be rated based on the frequency with which they occur. For
example, we expect our production workers to follow safety guidelines. As part of
our performance appraisal system, supervisors are asked to decide whether their
employees “always,” “almost always,” “often,” “seldom,” or “never” follow the
rules. As you can imagine, it is often difficult for a supervisor to distinguish
between levels such as “almost always” and “often.”
 STEP 4: SELECT THE BEST APPRAISAL METHOD

 USE OF EMPLOYEE COMPARISONS, OBJECTIVE MEASURES, OR

RATINGS
Ratings of Performance
 Extent to which Organizational Expectations are Met
Perhaps the best approach is to rate employees on the extent to which their
behavior meets the expectations of the organization. Such an approach allows for high
levels of feedback and can be applied to most types of employee behavior. Some
behaviors, however, are not suitable for such a scale. Take, for example, the
expectation that a police officer always wear her seatbelt. If she wears it all the time,
she has met expectations (a rating of 3): There is no way to get a higher rating because
one cannot wear a seat belt more often than always and thus cannot ever exceed
expectations.
 STEP 5: TRAIN RATERS

Although training supervisors to evaluate performance is essential to a sound

and legal performance appraisal system This lack of training is surprising
given that research has indicated that training supervisors to become aware
of the various rating errors and how to avoid them often increases accuracy
and reduces rating errors, increases the validity of tests validated against
the ratings, and increases employee satisfaction with the ratings. This is
especially true when the training technique uses discussion, practice in
rating, and feedback about rating accuracy rather than lecture.
 STEP 5: TRAIN RATERS

Frame-of-reference training - A method of training raters in which the rater

is provided with job-related information, a chance to practice ratings,
examples of ratings made by experts, and the rationale behind the expert
ratings.

Though training raters is certainly important, it is also important to explain

the performance appraisal system to employees. Not surprisingly, the better
that employees understand the performance appraisal system, the greater is
their satisfaction with the system.
 STEP 6: OBSERVE AND DOCUMENT PERFORMANCE

WHY IS DOCUMENTATION IMPORTANT?

 forces a supervisor to focus on employee behaviors rather than traits and
provides behavioral examples
 documentation helps supervisors recall behaviors when they are evaluating
performance
 provides examples to use when reviewing performance ratings with employees
 helps an organization defend against legal actions taken against it by an
employee who was terminated or denied a raise or promotion
 STEP 6: OBSERVE AND DOCUMENT PERFORMANCE

WHAT DO SUPERVISORS REMEMBER?

 First impressions. We remember our first impression of someone (primacy
effect) more than we remember later behaviors. Consequently, supervisors
recall behaviors that are consistent with their first impression of an employee.
 Recent behaviors. In addition to first impressions, supervisors tend to recall the
most recent behavior that occurred during the evaluation period.
 Unusual or extreme behaviors (e.g. an average-performing police officer
captures an important criminal, a good officer who makes a terrible mistake)
 Behavior consistent with the supervisor’s opinion. Once we form an opinion of
someone, we tend to look for behaviors that confirm that opinion.
 STEP 6: OBSERVE AND DOCUMENT PERFORMANCE

A. Critical incidents - A method of performance appraisal in which the

supervisor records employee behaviors that were observed on the job
and rates the employee on the basis of that record.

Critical incidents are examples of excellent and poor employee performance.

Such documentation is usually written in a critical incident log—formal
accounts of excellent and poor employee performance that were observed
by the supervisor. Critical incidents should be communicated to the
employee at the time they occur.
 STEP 6: OBSERVE AND DOCUMENT PERFORMANCE

B. Employee Performance Record- This method consists of a two-color

form. Half of the sheet is used to record examples of good behaviors, and
the other half to record examples of poor behaviors. On each side, there
are columns for each of the relevant performance dimensions.
Supervisors have a separate record for each employee and at the end of
the day can record the observed behaviors.
 STEP 7: EVALUATE PERFORMANCE

 Obtaining and Reviewing Objective Data

 Reading Critical Incident Logs

 Completing the Rating Form

Once critical-incident logs have been read and objective data reviewed, the
supervisor is ready to assign performance appraisal ratings. While making these
ratings, the supervisor must be careful not to make common rating errors involving
distribution, halo, proximity, and contrast.
 STEP 7: EVALUATE PERFORMANCE

Distribution Errors
Errors in distributing ratings in a rating scale

 Leniency error - A type of rating error in which a rater consistently gives all
employees high ratings, regardless of their actual levels of performance.
 Central tendency error A type of rating error in which a rater consistently
rates all employees in the middle of the scale, regardless of their actual
levels of performance.
 Strictness error A type of rating error in which a rater consistently gives all
employees low ratings, regardless of their actual levels of performance.
 STEP 7: EVALUATE PERFORMANCE

Halo Errors
A halo error occurs when a rater allows either a single attribute or an
overall impression of an individual to affect the ratings that she makes on each
relevant job dimension. For example, a teacher might think that a student is highly
creative. Because of that, the teacher might rate the student as being intelligent
and industrious when, in fact, the student’s grades are below average. In this case,
the instructor has allowed the student’s creativity to cloud her judgment of the
student’s other abilities.
 STEP 7: EVALUATE PERFORMANCE

Proximity Errors
Proximity errors occur when a rating made on one dimension affects
the rating made on the dimension that immediately follows it on the rating
scale. For example, a supervisor gives an employee a rating of 5 on the first
dimension. Because the second dimension is physically located on the rating
form next to the first, there is a tendency to provide the same rating on both
the first and second dimensions.
 STEP 7: EVALUATE PERFORMANCE

Contrast Errors
The performance rating one person receives can be influenced by the
performance of a previously evaluated person. For example, a bank manager has six
employees who are evaluated twice a year—on February 5 and again on August 5. The
manager makes the evaluations in alphabetical order, starting with Joan Carr and then
going to Donna Chan. Joan Carr is the best employee the bank has ever had, and she
receives the highest possible rating on each dimension. After evaluating Carr, the
manager then evaluates Chan. When compared with Carr, Chan is not nearly as
effective an employee. Thus, Chan receives lower ratings than she might normally
receive simply because she has been evaluated immediately after Carr. Her
performance has been contrasted to Carr’s performance rather than to some
objective standard.
 STEP 7: EVALUATE PERFORMANCE

Assimilation
A type of rating error in which raters base their rating of an employee
during one rating period on the ratings the rater gave during a previous
period.

If a new supervisor reads that an employee’s previous evaluations were

excellent but she observes poor performance by the employee, she will
probably continue to give excellent ratings—even though the employee’s
performance deteriorated.
 STEP 7: EVALUATE PERFORMANCE

Low Reliability Across Raters

 Sampling Problems – Recency Effect, Infrequent Observation (supervisors do
not see most of an employee’s behavior.)
 Cognitive Processing of Observed Behavior - just because an employee’s
behavior is observed does not guarantee that it will be properly remembered or
recalled during the performance appraisal review
 Emotional State - The amount of stress under which a supervisor operates also
affects her performance ratings
 Bias - Raters who like the employees being rated may be more lenient and less
accurate
 STEP 8: COMMUNICATE APPRAISAL RESULT TO EMPLOYEES

The most important use of performance-evaluation data is to provide feedback to

the employee and assess her strengths and weaknesses so that further training
can be implemented. Although this feedback and training should be an ongoing
process, the semiannual evaluation might be the best time to formally discuss
employee performance. Furthermore, holding a formal review interview places
the organization on better legal ground in the event of a lawsuit.

Normally, in most organizations a supervisor spends a few minutes with employees

each year to tell them about the scores they received during the most recent
evaluation period. This process is probably the norm because most managers do
not like to judge others; because of this dislike, they try to complete the evaluation
process as quickly as possible