Detriments of the PA system include the possible hindrance of qualitycontrol, stress for both employees and management, errors in judgment, legal issues arising from improper evaluations, and the implementation of inappropriate performance goals.
There are three basic ways to collect PA data: judgmental evaluation, objective production, and personnel measures.
Judgmental evaluations typically rate employees in certain set performance areas by rating them for how much of a desired quality they posses.
Objective performance refers to hard data such as sales statistics and concrete performance monitoring. The data is objective and are not subject to interpretation.
Personnel measures include assessing "withdrawal behaviors," which are thought to be related to performance.
Performance appraisal bias in which a manager or rater rate an employee too positively.
Performance appraisal or performance evaluation refers to the ongoing, organized process of evaluating the job performance of individual employees according to set standards of the organization. This process generally takes the form of judgmental evaluation of the employee and objective performance measures. This performance appraisal (PA) usually happens yearly and gives the opportunity for both employer and employee to assess the relationship and provide feedback. As a result of the PA process, employees can be subject to promotion, termination, or a variety of measures to improve performance. Employers must be careful how they conduct such evaluations to avoid legal pitfalls.
Benefits of Performance Appraisals
Benefits of the PA system include increased employee effectiveness, higher likelihood of improved employee performance, the prompting of feedback, enhanced communication between employers and employees, fostering of trust, promotion of goal setting, and assessment of educational and other training needs. Detriments of the PA system include the possible hindrance of quality control, stress for both employees and management, errors in judgment, legal issues arising from improper evaluations, and the implementation of inappropriate performance goals.
PA is situated at both the individual employee level and the organizational level because HR conducts evaluations of individuals in light of organizational goals with the object of improving achievement of these goals. HR relies upon a strong performance management policy; a proper PA should be able to educate employees on the organization, its goals, and its expectations in legal ways. This means that anti-discrimination and other employment laws need to shape the PA policy.
Collecting Performance Appraisal Data
There are three basic ways in which PA data must be collected: judgmental evaluation, objective production, and personnel measures.
Judgmental evaluation is generally the biggest part of the PA process. The most common problems in this area are leniency errors, halo effect errors, and central tendency errors. The best way to counteract such issues is rater training. Raters might be motivated to be too lenient to avoid negative interactions in the workplace, to reflect better on their own leadership, or for other reasons. Proper training and organizational support can help mitigate these trends.
Judgmental evaluations typically rate employees in certain set performance areas by rating them on a numerical scale for how much of a desired quality they possess. This is often referred to as a graphic rating scale.
Employee comparison methods attempt to evade the leniency and central tendency errors. In this realm of evaluation, employees are compared to each other rather than to set criteria. The rank-order method sees employees ranked from best to worst in any given performance area. This carries with it the problem of not having a more specific ranking of how good or bad any one employee's performance is. The paired comparison method asks raters to choose the two best employees in each performance area, and then employees are ranked based on their overall number of "two bests" that they received. This latter method works best in large organizations.
Judgmental assessments can also be self-evaluations done by employees or peer assessments done by employees on their peers. These both carry positive leniency as a major risk.
Objective performance refers to hard data such as sales statistics and concrete performance monitoring. The main characteristic of this area is that the data is objective and not subject to interpretation.
However, this type of evaluation is subject to two main flaws: criterion contamination and deficiency. Criterion contamination means that parts of even objective production can be out of the employee's control. Criterion deficiency refers to the fact that quantitative data does not include qualitative evaluation. Each of these two factors are relevant to the PA process, so their absence is problematic.
Personnel measures include assessing "withdrawal behaviors," which are thought to be related to performance. One example is the use of totals of absentee days to assess performance and commitment.