Supervisor Evaluation Essay

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Introduction

“How am I doing?” Nearly all employees want an answer to this question.

Who in your business now knows how they are doing? Employers/supervisors in small businesses too often answer in one or more of the following ways:

  1. No one.
  2. Some do, some don’t.
  3. They can all figure it out.
  4. The ones who most need to improve.
  5. No one - I don’t want them asking for more money.
  6. Everyone. I tell others, and the word gets back to them.
  7. They all know they are doing well because I tell them when they aren’t.

Employee performance reviews answer the “how am I doing?” question for each employee on a continuous basis. Feedback to employees helps improve their performance, decreases turnover, motivates self-improvement, builds trust, and creates a paper trail useful in litigation.

Several often-heard reasons for not doing employee evaluations need to be dismissed. Examples of such faulty reasoning include:

  • Good employees know they are good.
  • Poor employees don’t want to know how they are doing.
  • Employee reviews interfere with personal relations.
  • They make people unhappy and jealous of each other.
  • Some things are better not said.
  • They take too much time.
  • Supervisors don’t want to do it.
  • I don’t know how to do it.

Each of these objections contains a bit of truth. None makes the case for ignoring an important management tool.

This article targets managers in small businesses wanting to start or improve employee performance reviews. The focus is on small businesses because organizations with many employees almost all have formal performance appraisal systems. Most employees in small businesses receive less feedback than they want and feel powerless to get more. Managers have the feedback responsibility. The article is organized around eight questions to help managers follow through on their responsibility and gain the benefits of employee reviews.

Before considering the specifics that follow, managers will benefit from making a strong commitment to actually do reviews, not just talk or think about doing them. The commitment should include making the reviews timely in the face of great time pressure to postpone, being honest, and thinking about helping employees. The commitment should reinforce the paradigm of “what is right with the best people rather than what is wrong with the poorest people.”

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Decisions to Guide Employee Evaluations

Eight questions guide the decisions for effective employee reviews. The questions outline the discussion that follows.

  1. What are my objectives for employee performance reviews?
  2. Who will be reviewed?
  3. What will be the mix of individual and group reviews?
  4. Will the reviews be formal or informal?
  5. What will be the mix of objective and subjective measures of performance?
  6. How often will the reviews be done?
  7. Who will conduct the reviews?
  8. What review processes will be used?

Objectives of Employee Performance Reviews

The specific reasons for doing employee performance reviews vary among small businesses. Objectives should help build a commitment to do the reviews, build enthusiasm for the reviews within the management team, and gain support from employees. Possible objectives include:

  1. Help employees improve their performance.
  2. Help employees with their career planning.
  3. Take advantage of employee insights for improving the business.
  4. Identify training and retraining needs.
  5. Encourage and motivate employees.
  6. Promote teamwork and employee cohesiveness.
  7. Provide information for compensation decisions.
  8. Increase supervisor satisfaction with their human resource accomplishments.
  9. Identify needed changes in human resource management practices.
  10. Provide information for the redesign of jobs.
  11. Eliminate legally indefensible personnel actions.

Such a list can be a starting point for discussion in the management team and with key employees. Their support will be critical to success with employee reviews. Facing misunderstanding, skepticism, fear, and outright rejection comes most easy early in the planning process. Consensus building on objectives can be used to promote honest discussion.

Who Is Reviewed?

Few people complain about having too much information about their performance. Few people complain about receiving too many sincere compliments and too much thanks. Therefore, everyone should be reviewed including members of the management team.

Starting with reviews at the top of the organization is best. Set an example. It helps for the person being reviewed to know that the person doing the review has already had his or her review. Even in the smallest of businesses with only one manager, a spouse, customer, key lieutenant, or manager of a neighboring business can provide a helpful review.

If reviews for everyone are ruled impractical, first focus attention on new employees. They deserve more attention than other employees. Feedback can help immensely in helping them grow into the potential they demonstrated when hired. They will appreciate feedback at the end of the first day, end of the first week, at regular intervals during the probationary period, and several times during the first year. Employees having learned the value of feedback during their first year will expect it to continue. Employee reviews thus become less of a chore and more of an opportunity to benefit everyone.

Long-term, dedicated employees who have never had reviews must be handled with care. An unexpected review out of the blue is likely to cause fear and loss of trust. Even the best employees will ponder and worry over questions such as: “Why now?”; “Why me?”; “What have I done wrong?”; “What are you really trying to tell me?” Carefully build the case for reviews. Aim for understanding of how everyone will benefit. Starting only with new employees is one way of handling the potential problem of suspicious experienced employees. Simply wait for experienced employees to hint at their desire to also benefit from reviews.

Individual or Group?

Employee review typically is person by person. Keying on the individual can detract from teamwork and cooperation among employees. Employees easily see the dilemma created by promoting teamwork while reviewing and rewarding individual effort.

When teamwork is the backbone of a business, reviews must first be done at the team level. A second step can be a review of individuals with emphasis on contribution to team success, increased ability to contribute to team goals, and fitting into the team. No matter what is done in individual reviews, teamwork increases peer pressure. In true teamwork environments, satisfying teammates becomes more important than satisfying a supervisor.

Formal or Informal?

Formal reviews occur on a regular schedule, e.g., twice per year. They usually include filling out a form or providing some other type of written report to employees. Employees usually have a chance to comment or respond to the evaluator's assessment. They often include discussion of needed changes in performance. Helping the employee think through career interests and opportunities can be incorporated into supervisor/employee discussions. With formal reviews, an employee’s file contains a paper trail of training, progress, retraining, development, and, in some cases, disciplinary action.

Informal reviews occur on an as-needed basis. They reflect a commitment to continuous and open communication with employees. The supervisor and employee confront problems as they occur. Praise is given as it is earned. Questions are asked as they arise. Both supervisors and employees work to create an open environment that emphasizes mutual support. Little or no paper trail is generated.

For most small businesses, a combination of formal and informal reviews of performance works best. Depending exclusively on one or the other means some objectives of employee performance reviews mentioned earlier are unlikely to be accomplished.

Objective and/or Subjective Measures of Performance?

With an objective approach, performance is evaluated against specific standards, e.g., number of new customers per month, times tardy for work, days worked without injury, returned orders, customers trying a new product, and yields. Job requirements dictate the standards of performance. If it isn’t important to the job, why should it be measured? Objective standards can be explained, measured, adjusted as the job changes, and used to identify training needs.

Subjective measures of performance are based on the evaluator’s judgment, intuition, and feelings, e.g., attitude, cooperativeness, initiative, aggressiveness, flexibility, friendliness, and openness. Informal performance reviews depend primarily on subjective measures. In small businesses, where supervisors and employees know each other well and interact often, feelings toward each other often override objective measures of performance.

Employees not receiving regular formal reviews of their performance are still being judged subjectively by their supervisors and co-workers. They are simply missing the benefit of concrete measures of how they are doing, which parts of their work are best, and which parts most need improvement.

Realistically, subjective measures cannot be avoided. The challenge, therefore, is to effectively combine objective and subjective measures. All jobs can have some objective measures of performance.

Frequency?

Formal evaluations should be conducted at least once each year. A supervisor can designate a period of time, e.g., the first two weeks of February, in which all reviews will be done. An alternative is to spread reviews throughout the year by doing each person’s review on the anniversary of their employment.

When starting a formal review process, employers often promise reviews more often than is feasible, e.g., every three months. Formal evaluations more than two times a year are not feasible in most organizations. Sticking to the announced schedule is much more important than how often the review is done. Some employees, e.g., the best performers, may eagerly look forward to their reviews. Postponing the reviews, or worse, simply letting the date pass without scheduling the reviews, may be disheartening to the employees most valued in the business.

Who Conducts the Evaluation?

Employees’ immediate supervisors are most often in the best position to do performance reviews. Employees will not take seriously evaluations from people who are not well acquainted with what actually happens day to day in the workplace. Supervisors can seek supplementary information from co-workers, other supervisors, customers, and, in some cases, people supervised by the person being reviewed.

Process to Be Used?

How to do it? A manager can design a review process that is complex and time consuming with long forms and detailed data. The process can also be simple. For managers just getting started, first mastering a simple approach makes most sense. Detail, complexity, and sophistication can be added later.

Designing a review process starts with the job, not the employee. Ideally, each job has tasks, duties, and responsibilities understood by the supervisor and employee through a job description. The job description provides standards against which performance can be measured. The standards dictate the data that need to be collected, what the supervisor needs to be looking for and documenting between performance reviews, and judgments that need to be made.

Whatever the process, the supervisor and employee need to have two-way communication that leads to understanding and agreement. The agreement covers what has been accomplished since the last review, the corrective action (if any) that is needed, and the employee’s longer-run aspirations and plans.

The simplest approach for getting started with a process of formal employee reviews proceeds along the following general lines:

  1. Analyze the job to have a basis for a job description and performance standards, i.e., expected outcomes.
  2. Observe performance, collect performance data, and make judgments to be able to say to the employee, “I see your three most important strengths (contributions, accomplishments) as . . ."
  3. Ask the employee, “What do you see as your most important strengths (contributions, accomplishments)?”
  4. Say to the employee, “I see this (these two things) as most important for improving during the next six months.”
  5. Ask the employee, “What would you like to improve?”
  6. Move to needed follow-up by discussing possible training, retraining, needed equipment, useful information, and whatever else may be necessary for the employee to meet performance standards.
  7. Summarize with, “I want to summarize what we have agreed to.”
  8. Conclude with a positive note, and assure the employee that there will be opportunity for follow-up including the next scheduled performance review.

This approach has several advantages for getting a review process started. No forms are required. It builds on already established positive relations with employees. Emphasis is on helping the employee improve. Compliments exceed criticisms, hopefully by at least a three-to-one margin. Reviewers can tailor it to individual employees, i.e., the discussions with new employees and experienced employees can differ as needed.

An alternative is a widely used process that incorporates a graphic rating scale. This alternative is built around a brief form (note the generic example on the last page of the article.) The form is easy to develop and modify. It is easy to understand because it reflects the key performance standards that come from a job description. The form is designed to identify specific strengths and areas for improvement. It also provides an overall assessment of performance, i.e., a score.

A form needs to be tailored to each job. Note in the attached sample form that items 1, 2, 5, and 6 (quality, quantity, reliability, attendance, and punctuality) can be objective measures. Standards can be set and performance data collected for comparison to the standards. Items 3 and 4 (adaptability and cooperation) are subjective measures requiring judgment by the supervisor. A form could include more or fewer than these six performance measures. Performance measures quite different from these could be chosen as dictated by the job, e.g., technical knowledge, sales volume, and responsiveness to customers.

The form instructs the evaluator to rate the employee on each of the six performance areas and provide supportive details or comments. Critical incidents (specific examples of excellence or mediocrity with date and setting) can add insight about what the supervisor expects. The critical incidents can lead to training needs or adjustments in how the employee is doing the job.

The form incorporating the graphic rating scale helps most in employee performance reviews when incorporated into open and honest two-way communication between the supervisor and employee. A supervisor may choose to omit the employee comment and signature section if the section decreases trust. The section, however, can provide the employee an opportunity to make clear whatever concerns, commitments, and plans that came out of the review. The employee’s acceptance of the evaluation can be invaluable in legally defending compensation, discipline, and discharge decisions.

Tips for Starting Employee Reviews

Working through the eight questions that have been the focus of this article gives a manager an excellent foundation for employee reviews. The following tips and practical guidelines will help organizations succeed with their employee reviews.

  1. Train all supervisors to do employee reviews before they start doing them.
  2. Strive for a positive attitude toward employee reviews among all supervisors.
  3. Tell employees when their reviews will be done; don’t surprise them.
  4. Stick to the announced schedule.
  5. Explain the review procedures to all employees.
  6. Ask employees to think about their own performance, their questions, and their career aspirations before discussion with their supervisors.
  7. Discuss performance in private.
  8. View employee reviews as an opportunity for open and honest communication.
  9. Make the review communication two-way.
  10. Make the annual or semi-annual formal evaluation a supplement to continuous informal communication.
  11. Be prepared to deal with strong emotional responses from employees.
  12. Spend some time on career implications.
  13. End the review on a positive note.
  14. Ask employees how the review process can be improved.

And Now?

Employees and employers like performance reviews when they are win-win for both parties. Employees will respond positively to well-planned and well-conducted reviews. The ball, therefore, rests firmly in the employer’s court.

This article has discussed the basics for getting started. From these basics, managers need to develop their own insights, preferences, and techniques for successful reviews. No matter how frustrating the early going may be, the results will be well worth the effort.

Performance Appraisal Document

Performance Appraisal Document

Author Information

Bernard L. Erven
Department of Agricultural, Environmental, and Development Economics
Ohio State University

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Learning Objective

  1. Be able to describe the various appraisal methods.

It probably goes without saying that different industries and jobs need different kinds of appraisal methods. For our purposes, we will discuss some of the main ways to assess performance in a performance evaluation form. Of course, these will change based upon the job specifications for each position within the company. In addition to industry-specific and job-specific methods, many organizations will use these methods in combination, as opposed to just one method. There are three main methods of determining performance. The first is the trait method, in which managers look at an employee’s specific traits in relation to the job, such as friendliness to the customer. The behavioral method looks at individual actions within a specific job. Comparative methods compare one employee with other employees. Results methods are focused on employee accomplishments, such as whether or not employees met a quota.

Within the categories of performance appraisals, there are two main aspects to appraisal methods. First, the criteria are the aspects the employee is actually being evaluated on, which should be tied directly to the employee᾿s job description. Second, the rating is the type of scale that will be used to rate each criterion in a performance evaluation: for example, scales of 1–5, essay ratings, or yes/no ratings. Tied to the rating and criteria is the weighting each item will be given. For example, if “communication” and “interaction with client” are two criteria, the interaction with the client may be weighted more than communication, depending on the job type. We will discuss the types of criteria and rating methods next.

Graphic Rating Scale

The graphic rating scale, a behavioral method, is perhaps the most popular choice for performance evaluations. This type of evaluation lists traits required for the job and asks the source to rate the individual on each attribute. A discrete scale is one that shows a number of different points. The ratings can include a scale of 1–10; excellent, average, or poor; or meets, exceeds, or doesn’t meet expectations, for example. A continuous scale shows a scale and the manager puts a mark on the continuum scale that best represents the employee’s performance. For example:

PoorExcellent

The disadvantage of this type of scale is the subjectivity that can occur. This type of scale focuses on behavioral traits and is not specific enough to some jobs. Development of specific criteria can save an organization in legal costs. For example, in Thomas v. IBM, IBM was able to successfully defend accusations of age discrimination because of the objective criteria the employee (Thomas) had been rated on.

Many organizations use a graphic rating scale in conjunction with other appraisal methods to further solidify the tool’s validity. For example, some organizations use a mixed standard scale, which is similar to a graphic rating scale. This scale includes a series of mixed statements representing excellent, average, and poor performance, and the manager is asked to rate a “+” (performance is better than stated), “0” (performance is at stated level), or “−” (performance is below stated level). Mixed standard statements might include the following:

  • The employee gets along with most coworkers and has had only a few interpersonal issues.
  • This employee takes initiative.
  • The employee consistently turns in below-average work.
  • The employee always meets established deadlines.

An example of a graphic rating scale is shown in Figure 11.1 “Example of Graphic Rating Scale”.

Essay Appraisal

In an essay appraisal, the source answers a series of questions about the employee’s performance in essay form. This can be a trait method and/or a behavioral method, depending on how the manager writes the essay. These statements may include strengths and weaknesses about the employee or statements about past performance. They can also include specific examples of past performance. The disadvantage of this type of method (when not combined with other rating systems) is that the manager’s writing ability can contribute to the effectiveness of the evaluation. Also, managers may write less or more, which means less consistency between performance appraisals by various managers.

Checklist Scale

A checklist method for performance evaluations lessens the subjectivity, although subjectivity will still be present in this type of rating system. With a checklist scale, a series of questions is asked and the manager simply responds yes or no to the questions, which can fall into either the behavioral or the trait method, or both. Another variation to this scale is a check mark in the criteria the employee meets, and a blank in the areas the employee does not meet. The challenge with this format is that it doesn’t allow more detailed answers and analysis of the performance criteria, unless combined with another method, such as essay ratings. A sample of a checklist scale is provided in Figure 11.3 “Example of Checklist Scale”.

Figure 11.1 Example of Graphic Rating Scale

Figure 11.2 Example of Essay Rating

Figure 11.3 Example of Checklist Scale

Critical Incident Appraisals

This method of appraisal, while more time-consuming for the manager, can be effective at providing specific examples of behavior. With a critical incident appraisal, the manager records examples of the employee’s effective and ineffective behavior during the time period between evaluations, which is in the behavioral category. When it is time for the employee to be reviewed, the manager will pull out this file and formally record the incidents that occurred over the time period. The disadvantage of this method is the tendency to record only negative incidents instead of postive ones. However, this method can work well if the manager has the proper training to record incidents (perhaps by keeping a weekly diary) in a fair manner. This approach can also work well when specific jobs vary greatly from week to week, unlike, for example, a factory worker who routinely performs the same weekly tasks.

Work Standards Approach

For certain jobs in which productivity is most important, a work standards approach could be the more effective way of evaluating employees. With this results-focused approach, a minimum level is set and the employee’s performance evaluation is based on this level. For example, if a sales person does not meet a quota of $1 million, this would be recorded as nonperforming. The downside is that this method does not allow for reasonable deviations. For example, if the quota isn’t made, perhaps the employee just had a bad month but normally performs well. This approach works best in long-term situations, in which a reasonable measure of performance can be over a certain period of time. This method is also used in manufacuring situations where production is extremely important. For example, in an automotive assembly line, the focus is on how many cars are built in a specified period, and therefore, employee performance is measured this way, too. Since this approach is centered on production, it doesn’t allow for rating of other factors, such as ability to work on a team or communication skills, which can be an important part of the job, too.

Ranking Methods

In a ranking method system (also called stack ranking), employees in a particular department are ranked based on their value to the manager or supervisor. This system is a comparative method for performance evaluations.The manager will have a list of all employees and will first choose the most valuable employee and put that name at the top. Then he or she will choose the least valuable employee and put that name at the bottom of the list. With the remaining employees, this process would be repeated. Obviously, there is room for bias with this method, and it may not work well in a larger organization, where managers may not interact with each employee on a day-to-day basis.

To make this type of evaluation most valuable (and legal), each supervisor should use the same criteria to rank each individual. Otherwise, if criteria are not clearly developed, validity and halo effects could be present. The Roper v. Exxon Corp case illustrates the need for clear guidelines when using a ranking system. At Exxon, the legal department attorneys were annually evaluated and then ranked based on input from attorneys, supervisors, and clients. Based on the feedback, each attorney for Exxon was ranked based on their relative contribution and performance. Each attorney was given a group percentile rank (i.e., 99 percent was the best-performing attorney). When Roper was in the bottom 10 percent for three years and was informed of his separation with the company, he filed an age discrimination lawsuit. The courts found no correlation between age and the lowest-ranking individuals, and because Exxon had a set of established ranking criteria, they won the case (Grote, 2005).

Another consideration is the effect on employee morale should the rankings be made public. If they are not made public, morale issues may still exist, as the perception might be that management has “secret” documents.

Fortune 500 Focus

Critics have long said that a forced ranking system can be detrimental to morale; it focuses too much on individual performance as opposed to team performance. Some say a forced ranking system promotes too much competition in the workplace. However, many Fortune 500 companies use this system and have found it works for their culture. General Electric (GE) used perhaps one of the most well-known forced ranking systems. In this system, every year managers placed their employees into one of three categories: “A” employees are the top 20 percent, “B” employees are the middle 70 percent, and “C” performers are the bottom 10 percent. In GE’s system, the bottom 10 percent are usually either let go or put on a performance plan. The top 20 percent are given more responsibility and perhaps even promoted. However, even GE has reinvented this stringent forced ranking system. In 2006, it changed the system to remove references to the 20/70/10 split, and GE now presents the curve as a guideline. This gives more freedom for managers to distribute employees in a less stringent manner1.

The advantages of a forced ranking system include that it creates a high-performance work culture and establishes well-defined consequences for not meeting performance standards. In recent research, a forced ranking system seems to correlate well with return on investment to shareholders. For example, the study (Sprenkel, 2011) shows that companies who use individual criteria (as opposed to overall performance) to measure performance outperform those who measure performance based on overall company success. To make a ranking system work, it is key to ensure managers have a firm grasp on the criteria on which employees will be ranked. Companies using forced rankings without set criteria open themselves to lawsuits, because it would appear the rankings happen based on favoritism rather than quantifiable performance data. For example, Ford in the past used forced ranking systems but eliminated the system after settling class action lawsuits that claimed discrimination (Lowery, 2011). Conoco also has settled lawsuits over its forced ranking systems, as domestic employees claimed the system favored foreign workers (Lowery, 2011). To avoid these issues, the best way to develop and maintain a forced ranking system is to provide each employee with specific and measurable objectives, and also provide management training so the system is executed in a fair, quantifiable manner.

In a forced distribution system, like the one used by GE, employees are ranked in groups based on high performers, average performers, and nonperformers. The trouble with this system is that it does not consider that all employees could be in the top two categories, high or average performers, and requires that some employees be put in the nonperforming category.

In a paired comparison system, the manager must compare every employee with every other employee within the department or work group. Each employee is compared with another, and out of the two, the higher performer is given a score of 1. Once all the pairs are compared, the scores are added. This method takes a lot of time and, again, must have specific criteria attached to it when comparing employees.

Human Resource Recall

How can you make sure the performance appraisal ties into a specific job description?

Management by Objectives (MBO)

Management by objectives (MBOs) is a concept developed by Peter Drucker in his 1954 book The Practice of Management (Drucker, 2006). This method is results oriented and similar to the work standards approach, with a few differences. First, the manager and employee sit down together and develop objectives for the time period. Then when it is time for the performance evaluation, the manager and employee sit down to review the goals that were set and determine whether they were met. The advantage of this is the open communication between the manager and the employee. The employee also has “buy-in” since he or she helped set the goals, and the evaluation can be used as a method for further skill development. This method is best applied for positions that are not routine and require a higher level of thinking to perform the job. To be efficient at MBOs, the managers and employee should be able to write strong objectives. To write objectives, they should be SMART (Doran, 1981):

  1. Specific. There should be one key result for each MBO. What is the result that should be achieved?
  2. Measurable. At the end of the time period, it should be clear if the goal was met or not. Usually a number can be attached to an objective to make it measurable, for example “sell $1,000,000 of new business in the third quarter.”
  3. Attainable. The objective should not be impossible to attain. It should be challenging, but not impossible.
  4. Result oriented. The objective should be tied to the company’s mission and values. Once the objective is made, it should make a difference in the organization as a whole.
  5. Time limited. The objective should have a reasonable time to be accomplished, but not too much time.

Setting MBOs with Employees

(click to see video)

An example of how to work with an employee to set MBOs.

To make MBOs an effective performance evaluation tool, it is a good idea to train managers and determine which job positions could benefit most from this type of method. You may find that for some more routine positions, such as administrative assistants, another method could work better.

Behaviorally Anchored Rating Scale (BARS)

A BARS method first determines the main performance dimensions of the job, for example, interpersonal relationships. Then the tool utilizes narrative information, such as from a critical incidents file, and assigns quantified ranks to each expected behavior. In this system, there is a specific narrative outlining what exemplifies a “good” and “poor” behavior for each category. The advantage of this type of system is that it focuses on the desired behaviors that are important to complete a task or perform a specific job. This method combines a graphic rating scale with a critical incidents system. The US Army Research Institute (Phillips, et. al., 2006) developed a BARS scale to measure the abilities of tactical thinking skills for combat leaders. Figure 11.4 “Example of BARS” provides an example of how the Army measures these skills.

Figure 11.4 Example of BARS

Figure 11.5 More Examples of Performance Appraisal Types

How Would You Handle This?

Playing Favorites

You were just promoted to manager of a high-end retail store. As you are sorting through your responsibilities, you receive an e-mail from HR outlining the process for performance evaluations. You are also notified that you must give two performance evaluations within the next two weeks. This concerns you, because you don’t know any of the employees and their abilities yet. You aren’t sure if you should base their performance on what you see in a short time period or if you should ask other employees for their thoughts on their peers’ performance. As you go through the files on the computer, you find a critical incident file left from the previous manager, and you think this might help. As you look through it, it is obvious the past manager had “favorite” employees and you aren’t sure if you should base the evaluations on this information. How would you handle this?

How Would You Handle This?

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The author discusses the How Would You Handle This situation in this chapter at: https://api.wistia.com/v1/medias/1360849/embed.

Table 11.3 Advantages and Disadvantages of Each Performance Appraisal Method

Type of Performance Appraisal MethodAdvantagesDisadvantages
Graphic Rating ScaleInexpensive to developSubjectivity
Easily understood by employees and managersCan be difficult to use in making compensation and promotion decisions
EssayCan easily provide feedback on the positive abilities of the employeeSubjectivity
Writing ability of reviewer impacts validity
Time consuming (if not combined with other methods)
Checklist scaleMeasurable traits can point out specific behavioral expectationsDoes not allow for detailed answers or explanations (unless combined with another method)
Critical IncidentsProvides specific examplesTendency to report negative incidents
Time consuming for manager
Work Standards ApproachAbility to measure specific components of the jobDoes not allow for deviations
RankingCan create a high-performance work culturePossible bias
Validity depends on the amount of interaction between employees and manager
Can negatively affect teamwork
MBOsOpen communicationMany only work for some types of job titles
Employee may have more “buy-in”
BARSFocus is on desired behaviorsTime consuming to set up
Scale is for each specific job
Desired behaviors are clearly outlined

Key Takeaways

  • When developing performance appraisal criteria, it is important to remember the criteria should be job specific and industry specific.
  • The performance appraisal criteria should be based on the job specifications of each specific job. General performance criteria are not an effective way to evaluate an employee.
  • The rating is the scale that will be used to evaluate each criteria item. There are a number of different rating methods, including scales of 1–5, yes or no questions, and essay.
  • In a graphic rating performance evaluation, employees are rated on certain desirable attributes. A variety of rating scales can be used with this method. The disadvantage is possible subjectivity.
  • An essay performance evaluation will ask the manager to provide commentary on specific aspects of the employee’s job performance.
  • A checklist utilizes a yes or no rating selection, and the criteria are focused on components of the employee’s job.
  • Some managers keep a critical incidents file. These incidents serve as specific examples to be written about in a performance appraisal. The downside is the tendency to record only negative incidents and the time it can take to record this.
  • The work standards performance appraisal approach looks at minimum standards of productivity and rates the employee performance based on minimum expectations. This method is often used for sales forces or manufacturing settings where productivity is an important aspect.
  • In a ranking performance evaluation system, the manager ranks each employee from most valuable to least valuable. This can create morale issues within the workplace.
  • An MBO or management by objectives system is where the manager and employee sit down together, determine objectives, then after a period of time, the manager assesses whether those objectives have been met. This can create great development opportunities for the employee and a good working relationship between the employee and manager.
  • An MBO’s objectives should be SMART: specific, measurable, attainable, results oriented, and time limited.
  • A BARS approach uses a rating scale but provides specific narratives on what constitutes good or poor performance.

Exercise

  1. Review each of the appraisal methods and discuss which one you might use for the following types of jobs, and discuss your choices.

    1. Administrative Assistant
    2. Chief Executive Officer
    3. Human Resource Manager
    4. Retail Store Assistant Manager

1“The Struggle to Measure Performance,” BusinessWeek, January 9, 2006, accessed August 15, 2011, http://www.businessweek.com/magazine/content/06_02/b3966060.htm.

References

Doran, G. T., “There’s a S.M.A.R.T. Way to Write Management’s Goals and Objectives,” Management Review 70, no. 11 (1981): 35.

Drucker, P., The Practice of Management (New York: Harper, 2006).

Grote, R., Forced Ranking: Making Performance Management Work (Boston: Harvard Business School Press, 2005).

Lowery, M., “Forcing the Issue,” Human Resource Executive Online, n.d., accessed August 15, 2011, http://www.hrexecutive.com/HRE/story.jsp?storyId=4222111&query=ranks.

Phillips, J., Jennifer Shafter, Karol Ross, Donald Cox, and Scott Shadrick, Behaviorally Anchored Rating Scales for the Assessment of Tactical Thinking Mental Models (Research Report 1854), June 2006, US Army Research Institute for the Behavioral and Social Sciences, accessed August 15, 2011, http://www.hqda.army.mil/ari/pdf/RR1854.pdf.

Sprenkel, L., “Forced Ranking: A Good Thing for Business?” Workforce Management, n.d., accessed August 15, 2011, http://homepages.uwp.edu/crooker/790-iep-pm/Articles/meth-fd-workforce.pdf.

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