PERFORMANCE APPRAISAL

 

Performance appraisals take place in every organization whether there is a formal program or not. Managers are constantly ob­serving the way their employees carry out their assignments and thereby forming impres­sions about the relative worth of these employees to the organization. Most organizations, however, do seem to use a formal program.
The success or failure of a performance appraisal program depends on the philosophy underlying it and the attitudes and skills of those responsible for its administration. Many different methods can be used to gather information about employee performance. However, gathering information is only the first step in the appraisal process. The information must then be evaluated in the context of organizational needs and communicated to em­ployees so that it will result in high levels of performance.

Performance Appraisal Programs

Formal programs for performance appraisal and merit ratings are by no means new to organizations. The federal government began evaluating employees in 1842, when Congress passed a law mandating yearly performance reviews for de­partment clerks. From this early beginning, performance appraisal programs have spread to large and small organizations in both the public and private sec­tors. Advocates see these HR programs as among the most logical means to ap­praise, develop, and thus effectively utilize the knowledge and abilities of employees. However, a growing number of observers point out that performance appraisals frequently fall short of their potential.
Recent interest in total-quality management (TQM), for example, has caused numerous organizations to rethink their approach to performance ap­praisal. The late W. Edward Deming, a pioneer in TQM, identified performance appraisal as one of seven deadly diseases of U.S. management. While most man­agers still recognize the benefits of performance appraisal, TQM challenges some long-standing assumptions about how it should be conducted. Motorola, General Motors, and Digital, for example, have modified their appraisal systems to better acknowledge quality of performance (in addition to quantity), teamwork (in addi­tion to individual accomplishments), and process improvements (in addition to performance outcomes).

 

Purposes of Performance Appraisal

A performance appraisal program can serve many purposes that benefit both the organization and the employee. The Trav­elers Insurance Company has the following objectives for its performance ap­praisal program. They are similar to the objectives of other organizations.

1.    To give employees the opportunity to discuss performance and performance standards regularly with their supervisor
2.    To provide the supervisor with a means of identifying the strengths and weaknesses of an employee's performance
3.    To provide a format enabling the supervisor to recommend a specific program designed to help an employee improve performance
4.    To provide a basis for salary recommendations

The list below shows the most common uses of performance appraisals. In gen­eral, these can be classified as either administrative or developmental.

USES OF PERFORMANCE APPRAISAL

RANKING 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

Salary administration Performance feedback Identification of individual strengths and weaknesses Documentation of personnel decisions Recognition of individual performance Determination of promotion Identification of poor performance Assistance in goal identification Decision in retention or termination Evaluation of goal achievement Meeting legal requirements Determination of transfers and assignments Decision on layoffs Identification of individual training needs Determination of organizational training needs Personnel planning Reinforcement of authority structure Identification of organizational development needs Establishment of criteria for validation research Evaluation of personnel systems

 

Administrative Purposes
                                                                                                  
From the standpoint of administration, appraisal programs provide input that can be used for the entire range of HRM activities. For example, research has shown that performance appraisals are used most widely as a basis for compensa­tion decisions.  The practice of “pay-for-performance” is found in all types of or­ganizations.
Performance appraisal is also directly related to a number of other major HR functions, such as promotion, transfer, and layoff decisions. Perfor­mance appraisal data may also be used in HR planning, in determining the rela­tive worth of jobs under a job evaluation program, and as criteria for validating selection tests.
Performance appraisals also provide a “paper trail” for document­ing HRM actions that may result in legal action. Because of government EEO/AA directives, employers must maintain accurate, objective records of employee performance in order to defend themselves against possible charges of discrimi­nation in connection with such HRM actions as promotion, salary determina­tion, and termination.
Finally, it is important to recognize that the success of the entire HR program depends on knowing how the performance of employees compares with the goals established for them. This knowledge is best derived from a carefully planned and administered HR appraisal program. Appraisal systems have the capability to influence employee behavior, thereby leading di­rectly to improved organizational performance.

 

Developmental Purposes

From the standpoint of individual development, appraisal provides the feedback essential for discussing strengths and weaknesses as well as improving perfor­mance. Regardless of the employee’s level of performance, the appraisal process provides an opportunity to identify issues for discussion, eliminate any potential problems, and set new goals for achieving high performance.
Newer approaches to performance appraisal emphasize training as well as development and growth plans for employees. A developmental approach to appraisal recognizes that the purpose of a manager is to improve job behavior, not simply to evaluate past per­formance. Having a sound basis for improving performance is one of the major benefits of an appraisal program.

 

Reasons Appraisal Programs Sometimes Fail

In actual practice, and for a number of reasons, formal performance appraisal programs sometimes yield disappointing results. The pri­mary culprits include lack of top-management information and support, unclear performance standards, rater bias, too many forms to complete, and use of the program for conflicting purposes.
For example, if an appraisal program is used to provide a written appraisal for salary action and at the same time to motivate employees to improve their work, the administrative and developmental purposes may be in conflict. As a result, the appraisal interview may become a discussion about salary in which the manager seeks to justify the action taken. In such cases, the discussion might have little influence on the employee's future job performance.

TOP 10 REASONS PERFORMANCE APPRAISALS CAN FAIL

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Manager lacks information concerning an employee’s actual performance. Standards by which to evaluate an employee’s performance are unclear. Manager does not take the appraisal seriously. Manager is not prepared for the appraisal review with the employee. Manager is not honest/sincere during the evaluation. Manager lacks appraisal skills. Employee does not receive ongoing performance feedback. Insufficient resources are provided to reward performance. There is ineffective discussion of employee development. Manager uses unclear/ambiguous language in the evaluation process.

 

Other reasons why performance appraisal programs can fail to yield the desir­ed results include the following:

• Managers feel that little or no benefit will be derived from the time and energy spent in the process.
• Managers dislike the face-to-face confrontation of appraisal interviews.
• Managers are not sufficiently adept in providing appraisal feedback.
• The judgmental role of appraisal conflicts with the helping role of developing employees.

 

Performance appraisal at many organizations is a once-a-year activity in which the appraisal interview becomes a source of friction for both managers and employees. An important principle of performance appraisal is that continual feedback and employee coaching must be a positive “daily” activity. The annual or semiannual performance review should simply be a logical extension of the day-to-day supervision process.
One of the main concerns of employees is the fairness of the performance appraisal system, since the process is central to so many HRM decisions. Em­ployees who believe the system is unfair may consider the appraisal interview a waste of time and leave the interview with feelings of anxiety or frustration. Also, they may view compliance with the appraisal system as perfunctory and thus play only a passive role during the interview process. By addressing these employee concerns during the planning stage of the appraisal process, the orga­nization will help the appraisal program to succeed in reaching its goals.

Developing an Effective Appraisal Program

The HR department ordinarily has the primary responsibility for overseeing and coordinating the appraisal program. Managers from the operating departments must also be actively involved, particularly in helping to establish the objectives for the program. Furthermore, employees are more likely to accept and be satisfied with the performance appraisal program when they have the chance to par­ticipate in its development. Their concerns about fairness and accuracy in determining raises, promotions, and the like tend to be alleviated somewhat when they have been involved at the planning stage and have helped develop the performance standards themselves.

 

Establishing Performance Standards

Before any appraisal is conducted, the standards by which performance is to be evaluated should be clearly defined and communicated to the employee. These standards should be based on job-related require­ments derived from job analysis and reflected in the job descriptions and job specifications. When performance standards are properly established, they help translate organizational goals and objectives into job requirements that convey acceptable and unacceptable levels of performance to employees.
In establishing performance standards, there are four basic considerations: strategic relevance, criterion deficiency, criterion contamination, and reliability.

 

Strategic Relevance

This refers to the extent to which standards relate to the strategic objectives of the organization. For example, if a TQM program has established a standard that “95 percent of all customer complaints are to be resolved in one day,” then it is relevant for the customer service representatives to use such a standard for their evaluations. Companies such as 3M and Rubbermaid have strategic objectives that 25 to 30 percent of their sales are to be generated from products developed within the past five years. These objectives are translated into performance standards for their employees.

 

Criterion Deficiency

A second consideration in establishing performance standards is the extent to which the standards capture the entire range of an employee’s responsibilities. When performance standards focus on a single criterion (e.g., sales revenues) to the exclusion of other important but less quantifiable performance dimensions (e.g., customer service), then the appraisal system is said to suffer from criterion deficiency.

 

Criterion Contamination

Just as performance criteria can be deficient, they can also be contaminated. There are factors outside an employee's control that can influence his or her per­formance. A comparison of performance of production workers, for example, should not be contaminated by the fact that some have newer machines than others. A comparison of the performance of traveling salespersons should not be contaminated by the fact that territories differ in sales potential.

 

Reliability

Reliability refers to the stability or consistency of a standard, or the extent to which individuals tend to maintain a certain level of performance over time. In ratings, reliability may be measured by correlating two sets of ratings made by a single rater or by two different raters. For example, two managers may rate the same individual and estimate his or her suitability for a promotion. Their ratings could be compared to determine interrater reliability.
Performance standards will permit managers to specify and communicate precise information toemployees regarding quality and quantity of output. Therefore, when performance standards are written, they should be defined in quantifiable and measurable terms.
For example, “ability and willingness to handle customer orders” is not as good a performance standard as “all customer orders will be filled in 4 hours with a 98 percent accuracy rate.” When standards are expressed in specific, measurable terms, comparing the employee's perfor­mance against the standard results in a more justifiable appraisal.

 

Complying with the Law

Since performance appraisals are used as one basis for HRM actions, they must meet certain legal requirements. Performance appraisals are subject to the same validity criteria as se­lection procedures. As the courts have made clear, a central issue is to have carefully defined and measurable performance standards.
In light of recent court rulings, perfor­mance appraisals should meet the following legal guidelines:

• Performance ratings must be job-related, with performance standards developed through job analysis.
• Employees must be given a written copy of their job standards in advance of appraisals.
• Managers who conduct the appraisal must be able to observe the behavior they are rating. This implies having a measurable standard with which to compare employee behavior.
• Supervisors should be trained to use the appraisal form correctly. They should be instructed in how to apply appraisal standards when making judgments.
• Appraisals should be discussed openly with employees and counseling or corrective guidance offered to help poor performers improve their performance.
• An appeals procedure should be established to enable employees to express disagreement with the appraisal.

 

To comply with the legal requirements of performance appraisals, employers must ensure that managers and supervisors document appraisals and reasons for subsequent HRM actions. This information may prove decisive should an employee take legal action. An employer’s credibil­ity is strengthened when it can support performance appraisal ratings by docu­menting instances of poor performance.

 

Deciding Who Should Appraise Performance

Just as there are multiple standards by which to evaluate performance, there are also multiple candidates for appraising performance. Given the complexity of to­day’s jobs, it is often unrealistic to presume that one person can fully observe and evaluate an employee’s performance. Companies such as US West, Westing­house, and The Walt Disney Company have begun to use multiple-rater ap­proaches to performance evaluation. These raters may include supervisors, peers, team members, self, subordinates, and customers.

 

Manager/Supervisor Appraisal

Manager and/or supervisor appraisal has traditionally been the method of evalu­ating a subordinate’s performance. In most instances they are in the best position to perform this function, although it may not always be possible for them to do so. Managers often complain that they do not have the time to fully observe the performance of employees. The result is a less-than-objective appraisal. These managers must then rely on performance records or on the observations of others to complete the appraisal.

Manager and/or supervisor appraisal
Performance appraisal done by an employee’s
manager and often reviewed by a
manager one level higher

Where a supervisor appraises employees independently, provision is often made for a review of the appraisals by the supervisor’s superior. Having appraisals reviewed by a supervisor’s superior reduces the chance of superficial or biased evaluations. Reviews by superiors generally are more objective and provide a broader perspective of employee performance than do appraisals by immediate supervisors.

 

Self-Appraisal

Sometimes employees are asked to evaluate themselves on a self-appraisal form.  Self-appraisals are beneficial when managers seek to increase employees’ in­volvement in the review process. A self-appraisal system requires an employee to complete the appraisal form prior to the performance interview. At a minimum, this gets the employee thinking about his or her strengths and weaknesses and may lead to discussions about barriers to effective performance.

Self-appraisal
Performance appraisal done by the employee being
evaluated, generally on an appraisal form completed by
the employee prior to the performance interview

During the performance interview, the manager and the employee discuss job performance and agree on a final appraisal. This approach also works well when the manager and the employee jointly establish future performance goals or employee development plans.
Critics of self-appraisal argue that self-raters are more lenient than managers in their assessments and tend to present themselves in a highly favorable light. For this reason, self-appraisals may be best for developmental purposes rather than for administrative decisions. Used in conjunction with other methods, self-appraisals can be a valuable source of appraisal information.

 

Subordinate Appraisal

Subordinate appraisal has been used in companies such as Xerox and IBM to give managers feedback on how their subordinates view them. Subordinates are in a good position to evaluate their managers since they are in frequent contact with their superiors and occupy a unique position from which to observe many performance-related behaviors. Those performance dimensions judged most ap­propriate for subordinate appraisals include leadership, oral communication, delegation of authority, coordination of team efforts, and interest in subordi­nates. However, dimensions related to managers’ specific job tasks, such as plan­ning and organizing, budgeting, creativity, and analytical ability, are not usually seen as appropriate for subordinate appraisal.

Subordinate appraisal
Performance appraisal of a superior by an employee,
which is more appropriate for developmental than
for administrative purposes

Since subordinate appraisals give employees power over their bosses, the managers themselves may be hesitant to endorse such a system, particularly when it might be used as a basis for compensation decisions. However, when the infor­mation is used for developmental purposes, managers tend to be more open to the idea. Nevertheless, to avoid potential problems, subordinate appraisals should be submitted anonymously and combined across several individual raters.

 

Peer Appraisal

Individuals of equal rank who work together are increasingly asked to evaluate each other. A peer appraisal provides information that differs to some degree from ratings by a superior, since peers often see different dimensions of perfor­mance. Peers can readily identify leadership and interpersonal skills along with other strengths and weaknesses of their co-workers. A superior asked to rate a patrol officer on a dimension such as “dealing with the public” may not have had much opportunity to observe it. Fellow officers, on the other hand, have the op­portunity to observe this behavior regularly.

Peer appraisal
Performance appraisal done by one’s fellow employees,
generally on forms that are compiled into a single profile
for use in the performance interview conducted by
the employee’s manager

One advantage of peer appraisals is the belief that they furnish more accu­rate and valid information than appraisals by superiors. The supervisor often sees employees putting their best foot forward, while those who work with their fel­low employees on a regular basis may see a more realistic picture. With peer ap­praisals, co-workers complete an evaluation on the employee. The forms are then usually compiled into a single profile, which is given to the supervisor for use in the final appraisal.
Despite the evidence that peer appraisals are possibly the most accurate method of judging employee behavior, there are reasons why they have not been used more frequently. The reasons commonly cited include the following:

1.    Peer ratings are simply a popularity contest.
2.    Managers are reluctant to give up control over the appraisal process.
3.    Those receiving low ratings might retaliate against their peers.
4.    Peers rely on stereotypes in ratings.

When peers are in competition with one another, such as with sales associ­ates, peer appraisals may not be advisable for administrative decisions such as salary or bonuses. Employers using peer appraisals must also be sure to safeguard confidentiality in handling the review forms. Any breach of confidentiality can create interpersonal rivalries or hurt feelings and bring about hostility among fellow employees.

 

Team Appraisal

An extension of the peer appraisal is the team appraisal. While peers are on equal standing with one another, they may not work closely together. In a team setting, it may be nearly impossible to separate out an individual’s contribution. Advocates of team appraisal argue that, in such cases, individual appraisal can be dysfunctional since it detracts from the critical issues of the team. To address this issue, organizations such as General Foods, General Motor’s Cadillac divi­sion, and Digital have begun developing team appraisals to evaluate the performance of the team as a whole.

Team appraisal
Performance appraisal, based on TQM concepts, that
recognizes team accomplishment rather
than individual performance

A company’s interest in team appraisals is frequently driven by its commit­ment to TQM principles and practices. At its root, TQM is a control system that involves setting standards (based on customer requirements), measuring perfor­mance against those standards, and identifying opportunities for continuous im­provement. In this regard TQM and performance appraisal are perfectly complementary.
A basic tenet of TQM is that performance is best un­derstood at the level of the system as a whole, whereas performance appraisal traditionally has focused on individual performance. Team appraisals represent one way to break down barriers between individuals and encourage their collec­tive effort. Frequently, the system is complemented by use of team incentives or group variable pay.

 

Customer Appraisal

Also driven by TQM concerns, an increasing number of organizations use internal and external customer appraisal as a source of performance appraisal infor­mation. External and internal customers' evaluations are used for some time to appraise personnel. This evalu­ation incorporates salespeople, customer service, and the support departments.

Customer appraisal
Performance appraisal, which, like team
appraisal, is based on TQM concepts and seeks
evaluation from both external and internal customers

In contrast to external customers, internal customers include anyone inside the organization who depends upon an employee’s work output. For example managers who rely on the HR department for selection and training services would be candidates for conducting internal customer evaluations. For both developmental and administrative reasons, internal customers can provide extremely useful feedback about the value added by an employee or team of employees.

 

Training Appraisers

A weakness of many performance appraisal programs is that managers and su­pervisors are not adequately trained for the appraisal task and provide little meaningful feedback to subordinates. Because they lack precise standards for appraising subordinates' performance and have not developed the necessary ob­servational and feedback skills, their appraisals often become nondirective and meaningless. Therefore, training appraisers can vastly improve the performance appraisal process.

 

Establishing an Appraisal Plan

Training programs are most effective when they follow a systematic process that begins with an explanation of the objectives of the performance appraisal sys­tem. It is important for the rater to know the purpose for which the appraisal is to be used. For example, using the appraisal for compensation decisions rather than development purposes may affect how the rater evaluates the employee, and it may change the rater’s opinion of how the appraisal form should be completed.
The mechanics of the rating system should also be explained, including how fre­quently the appraisals are to be conducted, who will conduct them, and what the standards of performance are. In addition, appraisal training should alert raters to the weaknesses and problems of appraisal systems so they can be avoided.

 

Eliminating Rater Error

Appraisal training should focus on eliminating the subjective errors made by managers in the rating process.
With any rating method, certain types of errors can arise that should be considered. The “halo error” is also common with respect to rating scales, especially those that do not include carefully developed descrip­tions of the employee behaviors being rated. Provision for comments on the rat­ing form tends to reduce halo error.
Some types of rating errors are distributional errors in that they involve a group of ratings given across various employees. For example, raters who are re­luctant to assign either extremely high or extremely low ratings commit the error of central tendency. In this case, all employees are rated about average. To such raters it is a good idea to explain that, among large numbers of employees, one should expect to find significant differences in behavior, productivity, and other characteristics.

Error of central tendency
Performance-rating error in
which all  employees are rated
about average

In contrast to central tendency errors, it is also common for some raters to give unusually high or low ratings. For example, a manager may erroneously as­sert, “All my employees are excellent” or “None of my people are good enough.” These beliefs give rise to what is called leniency or strictness error. One way to reduce this error is to clearly define the characteristics or dimensions of perfor­mance, and to provide meaningful descriptions of behavior, known as anchors, on the scale.

Leniency or strictness error
Performance-rating error in which the
appraiser tends to give employees either
unusually high or unusually low ratings

Another approach is to require ratings to conform to a forced distribution. Managers appraising employees under a forced-distribution system would be required to place a certain percentage of employees into various performance categories. For example, it may be required that 10 percent of ratings be poor (or excellent). This is similar to the requirement in some schools that instructors grade on a curve.
Some rating errors are temporal in that the performance review is biased either favorably or unfavorably, depending on the way performance information is selected, evaluated, and organized by the rater over time.  For example, when the appraisal is based largely on the employee’s recent behavior, good or bad, the rater has committed the recency error.

Recency error
Performance-rating error in which the appraisal
is based largely on the employee’s most recent
behavior rather than on behavior throughout
the appraisal period

Managers who give higher ratings be­cause they believe an employee is “showing improvement” may unwittingly be committing recency error. Without work-record documentation for the entire appraisal period, the rater is forced to recall recent employee behavior to estab­lish the rating. The recency error can be minimized by having the rater routinely document employee accomplishments and failures throughout the whole ap­praisal period. Rater training also will help reduce this error.
Contrast error occurs when an employee’s evaluation is biased either up­ward or downward because of another employee’s performance who was just evaluated previously. For example, an average employee may appear especially productive when compared with a poor performer. However, that same employee may appear unproductive when compared with a star performer.

Contrast error
Performance-rating error in which an employee’s
evaluation is biased either upward or downward because
of comparison with another employee just previously evaluated

Contrast errors are most likely when raters are required to rank employees in order from the best to the poorest. Employees are evaluated against one another, usually on the basis of some organizational standard or guideline. For example, they may be compared on the basis of their ability to meet production standards or their “overall” ability to perform their job. As with other types of rating error, contrast error can be reduced through training that focuses on using objective standards and behavioral anchors to appraise performance.
Similar-to-me error occurs when appraisers inflate the evaluations of people with whom they have something in common. For example, if both the manager and the employee are from small towns, the manager may unwittingly have a more favorable impression of the employee. The effects of a similar-to-me error can be powerful, and when the similarity is based on race, religion, gender, or some other protected category, it may result in discrimination.

Similar-to-me error
Performance-rating error in which an appraiser
inflates the evaluation of an employee because
of a mutual personal connection

A host of organizations such as Sears, Weyerhauser, and Allied Chemical have developed formal training programs to reduce the subjective errors com­monly made during the rating process. This training can pay off, particularly when participants have the opportunity to (1) observe other managers making errors, (2) actively participate in discovering their own errors, and (3) practice job-related tasks to reduce the errors they tend to make.

 

Providing Feedback

Finally, a training program for raters should provide some general points to con­sider for planning and conducting the feedback interview. The interview not only provides employees with knowledge of results of their evaluation, but it al­lows the manager and employee to discuss current problems and set future goals. Training in specific skills should cover at least three basic areas: (1) communi­cating effectively, (2) diagnosing the root causes of performance problems, and (3) setting goals and objectives.
A checklist can be used to assist supervisors in preparing for the appraisal interview. A checklist suggested by AT&T is shown below. The AT&T checklist reflects the growing tendency of organizations to have employees assess their own performance prior to the ap­praisal interview.

SUPERVISOR’S CHECKLIST FOR PERFORMANCE APPRAISAL

Scheduling 1.  Schedule the review and notify the employee ten days or two weeks in advance. 2.  Ask the employee to prepare for the session by reviewing his or her performance, job objectives, and development goals. 3.  Clearly state that this will be the formal annual performance appraisal.

Preparing for the Review 1.  Review the performance documentation collected throughout the year. Concentrate on work patterns that have developed. 2.  Be prepared to give specific examples of above- or below-average performance. 3.  When performance falls short of expectations, determine what changes need to be made. If performance meets or exceeds expectations, discuss this and plan how to reinforce it. After the appraisal is written, set it aside for a few days and then review it again. Follow whatever steps are required by your organization's performance appraisal system.

Conducting the Review 1.  Select a location that is comfortable and free of distractions. The location should encourage a frank and candid conversation. 2.  Discuss each item in the appraisal one at a time, considering both strengths and shortcomings. 3.  Be specific and descriptive, not general or judgmental. Report occurrences rather than evaluating them. 4.  Discuss your differences and resolve them. Solicit agreement with the evaluation. 5.  Jointly discuss and design plans for taking corrective action for growth and development. 6.  Maintain a professional and supportive approach to the appraisal discussion.

 

Performance Appraisal Methods

Since the early years of their use by the federal government, methods of evaluat­ing personnel have evolved considerably. Old systems have been replaced by new methods that represent technical improvements and legal requirements and are more consistent with the purposes of appraisal.
Performance appraisal methods can be broadly classified as measuring traits, behaviors, or results. Trait approaches continue to be the more popular systems despite their inherent subjectivity. Behavioral approaches provide more action-oriented infor­mation to employees and therefore may be best for development. The results­-oriented approach is gaining popularity because it focuses on the measurable contributions that employees make to the organization.

 

Trait Methods

Trait approaches to performance appraisal are assigned to measure the extent to which an employee possesses certain characteristics—such as dependability, creativity, initiative, and leadership—that are viewed as important for the job and the organization in general. The fact that trait methods are the most popular method is due in large part to the ease with which they are developed. However, if not designed carefully on the basis of job analysis, trait appraisals can be noto­riously biased and subjective.

 

Graphic Rating Scales

In the graphic rating scale method, each trait or characteristic to be rated is rep­resented by a scale on which a rater indicates the degree to which an employee possesses that trait or characteristic. An example of this type of scale is shown below. There are many variations of the graphic rating scale. The differences are to be found in (1) the characteristics or dimensions on which individuals are rated, (2) the degree to which the performance dimension is de­fined for the rater, and (3) how clearly the points on the scale are defined. In the example below, the dimensions are defined briefly, and some attempt is made to define the points on the scale. Subjectivity bias is reduced somewhat when the dimensions on the scale and the scale points are defined as precisely as possible. This can be achieved by training raters and by including descriptive appraisal guidelines in a performance appraisal reference book developed by the organization.

Graphic rating scale method
A trait approach to performance appraisal
whereby each employee is rated according
to a scale of characteristics

Also, the rating form should provide sufficient space for comments on the behavior associated with each scale. These comments improve the accuracy of the appraisal since they require the rater to think in terms of observable em­ployee behaviors while providing specific examples to discuss with the employee during the appraisal interview.

GRAPHIC RATING SCALE WITH PROVISION FOR COMMENTS
Appraise employee’s performance in PRESENT ASSIGNMENT. Check (√) most appropriate square. Appraisers are urged to freely use the “Remarks” sections for significant comments descriptive of the individual.
1.	KNOWLEDGE OF WORK: Understanding of all phases of his/her work and related matters	Needs instruction or guidance ¨	¨	Has required knowledge of own and related work ¨	þ	Has exceptional knowledge of own and related work ¨
		Remarks: Is particularly good on gas engines
2.	INITIATIVE: Ability to originate or develop ideas and to get things started	Lacks imagination ¨	þ	Meets necessary requirements ¨	¨	Unusually resourceful ¨
		Remarks: Has good ideas when asked for an opinion, but otherwise will not offer them. Somewhat lacking in self-confidence.
3.	APPLICATION: Attention and application to his/her work	Wastes time Needs close supervision ¨	¨	Steady and willing worker þ	¨	Exceptionally industrious ¨
		Remarks: Accepts new jobs when assigned.
4.	QUALITY OF WORK: Thoroughness, neatness, and accuracy of work	Needs improvement   ¨	¨	Regularly meets recognized standards ¨	¨	Consistently maintains highest quality þ
		Remarks: The work he turns out is always of the highest possible quality.
5.	VOLUME OF WORK: Quantity of acceptable work	Should be increased   ¨	¨	Regularly meets recognized standards þ	¨	Unusually high output ¨
		Remarks: Would be higher if he did not spend so much time checking and rechecking his work.

 

Mixed Standard Scales

The mixed standard scale method is a modification of the basic rating scale method. Rather than evaluating traits according to a single scale, the rater is given three specific descriptions of each trait. These descriptions reflect three levels of performance: superior, average, and inferior. After the three descrip­tions for each trait are written, they are randomly sequenced to form the mixed standard scale. Supervisors evaluate em­ployees by indicating whether their performance is better than, equal to, or worse than the standard for each behavior.

Mixed standard scale method
A trait approach to performance appraisal
similar to other scale methods but based on comparison
with (better than, equal to, or worse than) a standard

 

MIXED STANDARD SCALE
DIRECTIONS: Please indicate whether the individual’s performance is above (+), equal to (0), or lower (-) than each of the following standards.
1.		Employee uses good judgment when addressing problems and provides workable alternatives; however, at times does not take actions to prevent problems. (medium PROBLEM SOLVING)
2.		Employee lacks supervisory skills; frequently handles employees poorly and is at times argumentative. (low LEADERSHIP)
3.		Employee is extremely cooperative; can be expected to take the lead in developing cooperation among employees; completes job tasks with a positive attitude. (high COOPERATION)
4.		Employee has effective supervision skills; encourages productivity, quality, and employee development. (medium LEADERSHIP)
5.		Employee normally displays an argumentative or defensive attitude toward fellow employees and job assignments. (low COOPERATION)
6.		Employee is generally agreeable but becomes argumentative at times when given job assignments; cooperates with other employees as expected. (medium COOPERATION)
7.		Employee is not good at solving problems; uses poor judgment and does not anticipate potential difficulties. (low PROBLEM SOLVING)
8.		Employee anticipates potential problems and provides creative, proactive alternative solutions; has good attention to follow-up. (high PROBLEM SOLVLING)
9.		Employee displays skilled direction; effectively coordinates unit activities; is generally a dynamic leader and motivates employees to high performance. (high LEADERSHIP)

 

Forced-Choice Method

 

The forced-choice method requires the rater to choose from statements, often in pairs, that appear equally favorable or equally unfavorable. The statements, however, are designed to distinguish between successful and unsuccessful perfor­mance. The rater selects one statement from the pair without knowing which statement correctly describes successful job behavior. For example, forced-choice pairs might include the following:

     1a.     Works hard
1b.     Works quickly
2a.     Is responsive to customers
2b.     Shows initiative
3a.     Produces poor quality
3b.     Lacks good work habits.

Forced-choice method
A trait approach to performance appraisal that requires
the rater to choose from statements designed to distinguish
between successful and unsuccessful performance

The forced-choice method is not without limitations, the primary one being the cost of establishing and maintaining its validity.  The fact that it has been a source of frustration to many raters has sometimes caused the method to be eliminated from appraisal programs. In addition, it cannot be used as effectively as some of the other methods to help achieve the commonly held objective of using appraisals as a tool for developing employees by such means as the appraisal interview.

 

Essay Method

Unlike rating scales, which provide a structured form of appraisal, the essay method requires the appraiser to compose a statement that best describes the employee being appraised. The appraiser is usually instructed to describe the employee’s strengths and weaknesses and to make recommendations for his or her development. Often the essay method is combined with other rating methods. Essays may provide additional descriptive information on performance that is not obtained with a structured rating scale, for example.

Essay method
A trait approach to performance appraisal
that requires the rater to compose a statement
describing employee behavior

The essay method provides an excellent opportunity to point out the unique characteristics of the employee being appraised. This aspect of the method is heightened when a supervisor is instructed to describe specific points about the employee’s promotability, special talents, skills, strengths, and weaknesses.
A major limitation of the essay method is that composing an essay that attempts to cover all of an employee’s essential characteristics is a very time-consuming task (though when combined with other methods, this method does not require a lengthy statement). Another disadvantage of the essay method is that the qual­ity of the performance appraisal may be influenced by the supervisor’s writing skills and composition style. Good writers may simply be able to produce more-favorable appraisals. A final drawback of this appraisal method is that it tends to be subjective and may not focus on relevant aspects of job performance.

 

Behavioral Methods

As mentioned above, one of the potential drawbacks of a trait-oriented perfor­mance appraisal is that traits tend to be vague and subjective. We discussed ear­lier that one way to improve a rating scale is to have descriptions of behavior along a scale, or continuum. These descriptions permit the rater to readily iden­tify the point where a particular employee falls on the scale.
Behavioral methods have been developed to specifically describe which actions should (or should not) be exhibited on the job. They are frequently more useful for providing em­ployees with developmental feedback.

 

Critical Incidents Method

The critical incident method is also used as a method of appraisal. Recall, a critical incident occurs when employee behavior results in unusual success or unusual failure on some part of the job. A favorable critical incident is illustrated by the janitor who ob­served that a file cabinet containing classified documents had been left unlocked at the close of business. The janitor called the security officer, who took the nec­essary action to correct the problem. An unfavorable incident is illustrated by the mail clerk who failed to deliver an Express Mail package immediately, instead putting it in with regular mail to be routed two hours later.

Critical incident
Unusual event that denotes superior
or inferior employee performance
in some part of the job

One advantage of the critical incident method is that it covers the entire appraisal period (and therefore may guard against recency error). And because the behavioral inci­dents are specific, they can facilitate employee feedback and development. How­ever, unless both favorable and unfavorable incidents are discussed, employees who are appraised may have negative feelings about this method. Some em­ployees have been known to refer to it as the “little black book” approach. Perhaps its greatest contribution is in developing job specifications and in con­structing other types of appraisal procedures.

 

Behavioral Checklist Method

One of the oldest appraisal techniques is the behavioral checklist method. It consists of having the rater check those statements on a list that the rater be­lieves are characteristic of the employee’s performance or behavior. A checklist developed for computer salespersons might include a number of statements like the following:

_________ Is able to explain equipment clearly
_________ Keeps abreast of new developments in technology
_________ Tends to be a steady worker
_________ Reacts quickly to customer needs
_________ Processes orders correctly

 

 

Behaviorally Anchored Rating Scale (BARS)

A behaviorally anchored rating scale (BARS) consists of a series of five to ten vertical scales--one for each important dimension of performance identified through job analysis. These dimensions are anchored by behaviors identified through a critical incidents job analysis. The critical incidents are placed along the scale and are assigned point values according to the opinions of experts.

Behaviorally anchored rating scale (BARS)
A behavioral approach to performance appraisal
That consists of a series of vertical scales, one for
Each important dimension of job performance

A BARS is typically developed by a committee that includes both subordi­nates and managers. The committee’s task is to identify all the relevant charac­teristics or dimensions of the job. Behavioral anchors in the form of statements are then established for each of the job dimensions. Several participants are asked to review the anchor statements and indicate which job dimension each anchor illustrates. The only anchors retained are those which at least 70 percent of the group agree belong with a particular dimension. Finally, anchors are at­tached to their job dimensions and placed on the appropriate scales according to values that the group assigns to them.
At present there is no strong evidence that a BARS reduces all of the rating errors mentioned previously. However, some studies have shown that scales of this type can yield more-accurate ratings. One major advantage of a BARS is that personnel outside of the HR department participate with HR staff in its de­velopment. Employee participation can lead to greater acceptance of the perfor­mance appraisal process and of the performance measures that it uses.

 

Results Method: Management by Objectives

Management by objectives (MBO) is a philosophy of management first proposed by Peter Drucker in 1954. MBO seeks to judge the performance of employees on the basis of their success in achieving the objectives they established through consultation with their superiors. Performance-improvement efforts under MBO focus on the goals to be achieved by employees rather than on the activities they perform or the traits they exhibit in connection with their as­signed duties.

Management by objectives (MBO)
Philosophy of management that rates performance
on the basis of employee achievement of goals set by
mutual agreement of employee and manager

MBO is a system involving a cycle (see below) that begins with setting the organization’s common goals and objectives and ultimately returns to that step. The system acts as a goal-setting process whereby objectives are established for the organization (step 1), departments (step 2), and individual managers and employees (step 3).

 

 

A significant feature of the cycle is the estab­lishment of specific goals by the employee, but those goals are based on a broad statement of employee responsibilities prepared by the supervisor. Employee-established goals are discussed with the supervisor and jointly reviewed and modified until both parties are satisfied with them (step 4).
The goal statements are accompanied by a detailed account of the actions the employee proposes to take in order to reach the goals. During periodic reviews, as objective data are made available, the progress that the employee is making toward the goals is then assessed (step 5). Goals may be changed at this time as new or additional data are received. At the conclusion of a period of time (usually six months or one year), the employee makes a self-appraisal of what she or he has accom­plished, substantiating the self-appraisal with factual data wherever possible.
The “interview” is an examination of the employee’s self-appraisal by the super­visor and the employee together (step 6). The final step (step 7) is reviewing the connection between individual and organizational performance.

 

Requirements for a Successful MBO Program

If they are to succeed, MBO programs should meet several requirements. First objectives set at each level of the organization should be quantifiable and measurable for both the long and short term. Second, the expected results must be under the employee’s control, and goals (e.g., profit, cost of product made, sale per product, quality control) must be consistent for each level (top executive, manager, and employee). Third, managers and employees must establish specific times when goals are to be reviewed and evaluated. Finally, each employee goal statement must be accompanied by a description of how that goal will be accomplished.
The form below presents a goal-setting worksheet used by many firms. Note that this worksheet contains sections for the setting of goals and the evaluation of goal achievement.

EXAMPLE OF A GOAL-SETTING WORKSHEET
UNIVERSAL SERVICE CORPPORATION Employee’s Rating Record
Name ________________________________________			Date _______________________________________
Job Title ______________________________________			Department __________________________________
Appraised by ___________________________________			Date Started _________________________________
Summary of Appraisal
Development Needs
MAJOR RESPONSIBILITIES AND PERIOD GOALS		EVALUATION OF ATTAINMENT OF GOALS
Responsibility
Goal
Responsibility
Goal
Responsibility
Goal

 

        The success of an MBO program depends heavily on a behavioral change by both the supervisor and the subordinate. Both individuals must be willing to mutually establish goals and measurable standards for employee performance. Furthermore, MBO must be viewed as part of a system of managing, not as merely an addition to the manager’s job. Managers who adopt MBO as a system of managing must be willing to delegate responsibility for reaching goals to their subordinates.

Advantages of MBO

 

A major advantage of MBO is that it requires the setting of employee-established goals. Goal setting has been shown to improve employee perfor­mance, thereby leading to increased productivity. Measurable increases in job performance typically range from 10 to 25 percent, and in some cases they have been even higher.
Goal setting works because it allows employees to focus their efforts on important job tasks and makes them accountable for completing these tasks. Furthermore, goal setting establishes an automatic feedback system, since employees can regularly evaluate their performance against their goals. Goal set­ting has been of benefit to groups as diverse as clerical personnel, scientists, maintenance employees, computer analysts, and engineers.

 

Criticisms of MBO

The MBO system is not without its critics. MBO is a lengthy and costly appraisal system. Another criticism of MBO is that since performance data are designed to measure results, they may be affected by factors out of an indi­vidual’s control. This raises the issue of criterion contamination.
MBO systems may inadvertently encourage employees to “look good” on a short-term basis, while ignoring the long-term ramifications. Line supervisors, for example, may let their equipment suffer to reduce maintenance costs. If the MBO program focuses on a narrow set of results criteria to the exclusion of other important process issues, the system may suffer from criterion deficiency and may unintentionally foster the attitude that “what gets measured gets done.”
In fact, in any job involving interaction with others, it is not enough to meet certain production or sales objectives. Factors such as cooperation, adaptability, initia­tive, and concern for human relations may be important to job success. If these factors are important job standards, they should be added to the appraisal review. Thus, to be realistic, both the results and the method used to achieve them should be considered.

 

Which Performance Appraisal Method to Use?

The choice of method should be based largely on the purpose of the appraisal. The comparison below lists some of the strengths and weaknesses of trait, behavior, and results approaches to appraisal. Note that the simplest and least expensive techniques often yield the least-accurate information.

 

SUMMARY OF VARIOUS APPRAISAL METHODS
	ADVANTAGES	DISADVANTAGES
Trait Methods	Are inexpensive to develop Use meaningful dimensions Are easy to use	Have high potential for rating errors Are not useful for employee counseling Are not useful for allocating rewards Are not useful for promotion decisions
Behavioral Methods	Use specific performance dimensions Are acceptable to employees and superiors Are useful for providing feedback Are fair for reward and promotion decisions	Can be time-consuming to develop/use Can be costly to develop Have some potential for rating error
Results Method	Has less subjectivity bias Is acceptable to employees and superiors Links individual performance to organizational performance Encourages mutual goal setting Is good for reward and promotion decisions	Is time-consuming to develop/use May encourage short-term perspective May use contaminated criteria May use deficient criteria

 

 
However, research has not always supported a clear choice among appraisal methods. While researchers and HR managers generally believe that the more sophisticated and more time-consuming methods offer more useful information, this may not always be the case. Managers must make cost-benefit decisions about which methods to use.

 

Appraisa1 Interviews

The appraisal interview is perhaps the most important part of the entire per­formance appraisal process. The appraisal interview gives a manager the op­portunity to discuss a subordinate’s performance record and to explore areas of possible improvement and growth. It also provides an opportunity to identify the subordinate’s attitudes and feelings more thoroughly and thus to improve communication.
Unfortunately, the interviewer can become overburdened by attempting to discuss too much, such as the employee’s past performance and future develop­ment goals. Dividing the appraisal interview into two sessions, one for the per­formance review and the other for the employee's growth plans, can alleviate time pressures. Moreover, by separating the interview into two sessions, the in­terviewer can give each session the proper attention it deserves. It can be diffi­cult for a supervisor to perform the role of both evaluator and counselor in the same review period. Dividing the sessions may also improve communication be­tween the parties, thereby reducing stress and defensiveness.
The format for the appraisal interview will be determined in large part by the purpose of the interview, the type of appraisal system used, and the organiza­tion of the interview form. Most appraisal interviews attempt to give feedback to employees on how well they are performing their jobs and on planning for their future development. Interviews should be scheduled far enough in advance to al­low the interviewee, as well as the interviewer, to prepare for the discussion. Usually ten days to two weeks is a sufficient amount of lead time.

 

Three Types of Appraisal Interviews

The individual who has probably studied different approaches to performance ap­praisal interviews most thoroughly is Norman R. F. Maier. In his classic book The Appraisal Interview, he analyzes the cause-and-effect relationships in three types of appraisal interviews: tell-and - sell, tell -and-listen, and problem solving.

·      Tell-and-sell interview. The skills required in the tell-and-sell interview include the ability to persuade an employee to change in a prescribed manner. This may require the development of new behaviors on the part of the employee and skillful use of motivational incentives on the part of the appraiser/supervisor.
·      Tell-and-listen interview. In the tell-and-listen interview the skills required include the ability to communicate the strong and weak points of an employee's job performance during the first part of the interview.
During the second part of the interview, the employee's feelings about the appraisal are thoroughly explored. The supervisor is still in the role of appraiser, but the method requires listening to disagreement and coping with defensive behavior without attempting to refute any statements. The tell-and-listen method assumes that the opportunity to release frustrated feelings will help to reduce or remove those feelings.
·      Problem-solving interview. The skills associated with the problem-solving interview are consistent with the nondirective procedures of the tell-and-listen method in that listening, accepting, and responding to feelings are essential.
However, the problem-solving method goes beyond an interest in the employee's feelings. It seeks to stimulate growth and development in the employee by discussing the problems, needs, innovations, satisfactions, and dissatisfactions the employee has encountered on the job since the last appraisal interview. Maier recommends this method, since the objective of appraisal is normally to stimulate growth and development in the employee.

Managers should not assume that only one type of appraisal interview is ap­propriate for every review session. Rather, they should be able to use one or more of the interview types, depending on the topic being discussed or on the behavior of the employee being appraised. The interview should be seen as requiring a flexible approach.

 

Conducting the Appraisal Interview

While there are probably no hard-and-fast rules for how to conduct an appraisal interview, there are some guidelines that may increase the employee's acceptance of the feedback, satisfaction with the interview, and intention to improve in the future. Many of the principles of effective job interviewing apply to performance appraisal interviews as well. Here are some other guidelines that should also be considered.

·   Ask for a self assessment. It is useful to have employees evaluate their own performance prior to the appraisal interview. Even if this information is not used formally, the self-appraisal starts the employee thinking about his or her accomplishments.
Self-appraisal also ensures that the employee knows against what criteria he or she is being evaluated, thus eliminating any potential surprises. When the employee has evaluated his or her own performance, the interview can be used to discuss those areas where the manager and the employee have reached different conclusions.

·   Invite participation. The core purpose of a performance appraisal interview is to initiate a dialogue that will help an employee improve her or his performance. To the extent that an employee is an active participant in that discussion, the more likely it is that the root causes and obstacles to performance will be uncovered, and the more likely it is that constructive ideas for improvement will be raised.
In addition, research evidence suggests that participation is strongly related to an employee's satisfaction with the appraisal feedback as well as her or his intention to improve performance. As a rule of thumb, supervisors should spend only about 30 to 35 percent of the time talking during the interview. The rest of the time they should be listening to employees respond to questions.

·   Express appreciation. Praise is a powerful motivator, and in an appraisal interview, particularly, employees are seeking out positive feedback. It is frequently beneficial to start the appraisal interview by expressing appreciation for what the employee has done well. In this way, he or she may be less defensive and more likely to talk about aspects of the job that are not going so well.
However, try to avoid obvious use of the “sandwich technique,” in which positive statements are followed by negative ones, which are then followed by positive statements. This approach may not work for several reasons. Praise often alerts the employee that criticism will be coming. Positive comments following the criticism then suggest to the employee that no more negative comments will come for a while. If managers follow an appraisal form, the problem of the sandwich technique will oftentimes be avoided.

·   Minimize criticism. Employees who have a good relationship with their managers may be able to handle criticism better than those who do not. However, even the most stoic employees can absorb only so much criticism before they start to get defensive. If an employee has many areas in need of improvement, managers should focus on those few objective issues that are most problematic or most important to the job.

·   Change the behavior, not the person. Managers frequently try to play psychologist, to “figure out” why an employee has acted a certain way. However, when dealing with a problem area, in particular, remember that it is not the person who is bad, but the actions they have exhibited on the job. Avoid suggestions about personal traits to change; instead suggest more acceptable ways of performing.
For example, instead of focusing on a person’s “unreliability,” a manager might focus on the fact that the employee “has been late to work seven times this month.” It is difficult for employees to change who they are; it is usually much easier for them to change how they act.

·   Focus on solving problems. In addressing performance issues, it is frequently tempting to get into the “blame game” in which both manager and employee enter into a potentially endless discussion of why a situation has arisen. Frequently, solving problems requires an analysis of the causes, but ultimately the appraisal interview should be directed at devising a solution to the problem.

·   Be supportive. One of the better techniques for engaging an employee in the problem-solving process is for the manager to ask, “What can I doto help?” Employees frequently attribute performance problems to either real or perceived obstacles (such as bureaucratic procedures or inadequate resources). By being open and supportive, the manager conveys to the employee that he or she will try to eliminate external roadblocks and work with the employee to achieve higher standards.

·   Establish goals. Since a major purpose of the appraisal interview is to make plans for improvement, it is important to focus the interviewee’s attention on the future rather than the past. In setting goals with an employee, the manager should observe the following points:

• Emphasize strengths on which the employee can build rather than weaknesses to overcome.
• Concentrate on opportunities for growth that exist within the framework of the employee's present position.
• Limit plans for growth to a few important items that can be accomplished within a reasonable period of time.
• Establish specific action plans that spell out how each goal will be achieved. These action plans may also include a list of contacts, resources, and timetables for follow-up.

 

·      Follow up day to day. Ideally, performance feedback should be an ongoing part of a manager’s job. Feedback is most useful when it is immediate and specific to a particular situation. Unfortunately, both managers and employees are frequently happy to finish the interview and file away the appraisal form. A better approach is to have informal talks periodically to follow up on the issues raised in the appraisal interview. This practice may also help the manager adopt more of a coaching role and less a judging role.

 

Summary

Performance appraisal programs serve many purposes, but in general those pur­poses can be clustered into two categories: administrative and developmental. The administrative purposes include decisions about who will be promoted, transferred, or laid off. They can also include compensation decisions and the like. Developmental decisions include those related to improving and enhancing an individual’s capabilities. These include identifying a person’s strengths and weaknesses, eliminating external performance obstacles, establishing training needs, and so on. The combination of administrative and developmental pur­poses of performance appraisal reflect, in a specific way, human resources man­agement's larger role of integrating the individual with the organization.
In many organizations, performance appraisals are seen as a necessary evil. Man­agers frequently avoid conducting appraisals because managers dislike playing the role of judge. Further, if managers are not adequately trained, subjectivity and organizational politics can distort the reviews. This situation tends to be self-defeating in that such managers frequently do not develop good feedback skills and are often not prepared to conduct an appraisal. As a consequence, the appraisal is done begrudgingly once a year and then forgotten about.
The success of an organization depends largely on the performance of its human resources. To determine the contributions of each individual, it is neces­sary to have a formal appraisal program with clearly stated objectives. Carefully defined performance standards that are reliable, strategically relevant, and free from either criterion deficiency or contamination are essential foundations for evaluation. Appraisal systems must also comply with the law. Appraisals should be treated with the same concerns for validity as are selection tests. For example, ratings must be job-related, employees must understand their performance stan­dards in advance, appraisers must be able to observe job performance, appraisers must be trained, feedback must be given, and an appeals procedure must be established.
Using multiple raters is frequently a good idea because different individuals see different facets of an employee's performance. The supervisor, for example, has legitimate authority over an employee and is in a good position to discern whether he or she is contributing to the goals of the organization. Peers and team members, on the other hand, often have an unfiltered view of an employee’s work activity, particularly related to issues such as cooperation and dependability.
Subordinates often provide good information about whether an employee is facilitating their work, and customers (both internal and external) can convey the extent to which an employee adds value and meets their requirements. Self-appraisal is useful, if for no other reason than it encourages employees to think about their strengths, weaknesses, and future goals. Regardless of the source of appraisal information, appraisers should be thoroughly trained in the particular methods they will use in evaluating their subordinates. Participation in develop­ing rating scales automatically provides such training.
There are several methods that can be used for performance appraisal. These include trait approaches (such as graphic rating scales, mixed standard scales, forced-choice forms, and essays), behavioral methods (such as critical in­cidents ratings and checklists), and results method (MBO). The choice of method depends on the purpose of the appraisal. Trait appraisals are simple to develop and complete, but they have problems of subjectivity and are not useful for feedback. Behavioral methods provide more-specific information for giving feedback but can be time-consuming and costly to develop. Results ap­praisals are more objective and can link individual performance to the organiza­tion as a whole, but they may encourage a short-term perspective (e.g., annual goals) and may not include subtle yet important aspects of performance.
The degree to which the performance appraisal program benefits the orga­nization and its members is directly related to the quality of the appraisal inter­views that are conducted. Interviewing skills are best developed through instruction and supervised practice. Although there are various approaches to the interview, research suggests that employee participation and goal setting lead to higher satisfaction and improved performance. Discussing problems, showing support, minimizing criticism, and rewarding effective performance are also beneficial practices. In the interview, deficiencies in employee performance can be discussed and plans for improvement can be made.

KEY TERMS
Behaviorally anchored rating scale (BARS) Behavior observation scale (BOS) Contrast error Critical incident Customer appraisal Error of central tendency Essay method Forced-choice method Graphic rating scale method Leniency or strictness error	Management by objectives (MBO) Manager/supervisor appraisal Mixed standard scale method Peer appraisals Recency error Self-appraisal Similar-to-me error Subordinate appraisal Team appraisal