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Methods of Appraisal Performance

The performance measures currently in use can be characterized aseither objective or subjective. Objective measures are typicallyresult-based measures of physical output, whereas subjectivemeasures can used to assess traits, behaviours, or results.

Objective Measures

Objective measures assess performance in terms of numbers, suchas the amount of a product an employee produces or sells, thenumber of defensive products produced, the number of times an

employee is absent or late to work, or some other direct numericalindex of how well or quickly an employee can perform certaintasks. There are five major types of objective:(1) Production Measures:The manufacturing industry has used production measures for at

least the last 100 years. These measures simply involve countingthe number of items produced by an employee or the number of defective units made, or obtaining some other quantitative index of

production. For a production measure to be a valid measure of performance, three conditions must be met: (1) production should be on a repetitive basis, (2) the amount of product should bemeasurable, and (3) the employee should be primarily responsiblefor the amount produced.(2) Sales Performance:Sales performance is usually measured by the amount of salesmade in a given period of time. Typically, some minimumacceptable level of sales is defined, and performance beyond thatquota is rewarded more highly. Sales measures are also results

based and suffer from many of the same shortcomings as production measures. The sales measure is contaminated by thisdifference in sales territory, which creates a so-called opportunity

bias. Thus, it is appropriate to use money sales as an index of performance only when individuals have substantial control over

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their sales performance or when it is possible to adjust for contaminants, such as differences is sales territory.(3) Personnel Data:Information from an employees personnel file is sometimes usedin performance assessment. Personnel measures would includesuch particulars as the number of times an employee has beenabsent or large to work and the number of reprimands or disciplinary actions taken against the individual.If an employee is habitually late to work but consistently producesmore and better-quality products than co-workers, is the employeea poor performer? Personnel measures may also be unreliable,since some supervisors record absenteeism or tardiness more

carefully that others. Personnel data should be used as a measure of performance only when a clear link can be made between themeasure (for example, tardiness) and actual job effectiveness, suchas the delay of the start of business as a result of an employeestardiness.(4) Performance TestsPerformance tests are work samples or simulations under standardized conditions. For example, telephone operators may all

receive the same set of scripted calls and be evaluated pm speed,accuracy, and courtesy of service. Performance tests are usefulwhen it is difficult to collect comparable or uncontaminated

performance data in any other way, but they suffer from threemajor problems. First, they tend to be deficient, since only someaspects of a job can be realistically simulated. Second, if employees know that they are being tested on their jobeffectiveness, they are likely to work very hard to perform the testwell. Performance tests then become a measure not typical

performance but of maximum employee capability. The final problem is that of practically. Many jobs simply do not lendthemselves to this kind of assessment, and for those that do,

performance tests are generally expensive and time consuming todevelop and implement.(5) Business Unit Performance Measure

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The above objective measures are seldom useful for managers.However, the performance of upper-level managers and executivesis sometimes assessed by objective measure of the performance of the business unit that they head. Measures might include stock

price, return on equity, profit, or market share. Clearly, thesemeasures can be contaminated by economic factors beyond themanagers control.

Raters of Employment Performance

In most organization, subjective ratings of employee performanceare provided by supervisors.

Self-Evaluation

Employees are sometimes asked to evaluate themselves. It seemslogical that individuals would be the best judges of their own

performance, particularly if supervisors cannot observe them on aregular basis. If employees are asked to evaluate themselves, theymay respond by becoming more motivated and involved in the

evaluation process.Self-ratings tend to show more leniency error than supervisorsratings, although halo errors are lower. Self-evaluation seems mostappropriate when it is used as an employee development tool rather than to make administration decisions. It may also serve as animportant input in to a supervisory appraisal. An employees self-appraisal may provide important information of which thesupervisor was not aware.

Peer Evaluation

Peer ratings may be the most accurate evaluations of employee performance. Peer evaluations can be particularly useful whensupervisors do not have the opportunity to observe an individuals

performance, but fellow employees do.

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Peers sometimes resist evaluating one another. An individual maynot want to give a fellow employee a favourable evaluation for fear of looking inferior in comparison. Friendship bias may lead anemployee to rate his or her friends higher than other employees.When teamwork, participation, and cohesiveness are part of theorganizations culture, peer evaluations can work well. Inorganization that are competitive and have a low level of trustamong employees, peer evaluations may be little more than a wayfor employees to enhance themselves by belittling their fellowemployees.

Subordinate Evaluation

Evaluation by subordinates may provide valuable information.They know how well a supervisor performs with respect toleading, organizing, planning, delegating and communicating.Subordinate, however, may inflate their rating of a supervisor,especially if they think that the supervisor will be able to discernwho has given a particular rating. Complete anonymity is essentialif this technique is to provide valid ratings. Like self-and peer evaluations, subordinates evaluation is useful for development but

has historically not been widely used for making administrativedecisions.

Customer evaluation

Another source of appraisal information comes from customer or clients. Such appraisals are popular in the context of servicedelivery, where there is a high degree of client involvement andwhen the service employee is relatively removed from other employees or supervisors. This feedback could be obtainedthrough a phone interview with the customer or a formal survey.

Enhancing the Measurement of Employee Performance

Training Evaluators

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Several rater training programs have been developed that aim tohelp evaluators produce reliable and accurate performance ratings.Programs can generally be classified in to three types : rater error training, frame-of-reference training, and information processingtraining.

Rater Error Training

People can be taught how to reduce rating errors, such as leniencyseverity, central tendency, and halo errors. In rater error training(RET), evaluators view examples of the common errors andreceive suggestions on how to avoid them. RET has argued that

error reduction often comes at the expenses of rating accuracy.

Frame-of Reference Training

Attempts have been made to reduce errors by developing acommon frame of reference among raters for evaluating

performance. Examples of actual employee behaviour in theorganization are used to develop norms of good and poor

performance. Raters are then trained to observe these behavioursand use them as the standard against which to judge the performance of employees.

Information Processing Approaches

Some training efforts focus on how performance raters observe,store, recall and use information. Observation training (similar tothe approach used in the 1980 study) focused on helping raters toimprove the way they observed the behaviour of employees and toidentify important performance activities. Decision-makingtraining introduced raters to good strategies for use in decisionmaking and helped them identify mistakes in inference thatsupervisors often make when appraising performance.

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