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Chapter 6
Performance Measurement
Copyright © The McGraw-Hill Companies, Inc.
Royalty-Free/CORBIS
2
Module 1: Basic Concepts in Performance Measurement
• Uses for performance information• Criterion data
• Employee development
• Motivation/satisfaction
• Rewards
• Promotion
• Layoff
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Types of Performance Data
• Objective
• Personnel
• Judgmental
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Performance Measurement (cont'd)
• Relationships among performance measures
• Hands-on performance measures– Include carefully constructed simulations– Walk-through testing
• Employee describes in detail how to do a job
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Performance Measurement (cont'd)
• Electronic performance monitoring
– Attaining positive employee feedback
– Improving performance
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Performance Management
• Emphasizes link between individual behavior & organizational strategies & goals
• Components– Definition of performance
– Actual measurement process
– Communication between supervisor & subordinate about individual behavior & organ. expectations
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Perceptions of Fairness in Performance Measurement
• Factors associated with fairness measurement– Appraisal frequency “+” related to fairness perceptions
– Joint planning with supervisor to eliminate weaknesses enhances fairness perception
– Supervisor’s knowledge of duties of person being measured
– Supervisor’s knowledge of actual performance of person being rated
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Perceptions of Fairness in Performance Measurement (cont'd)
• Distributive justice• Fairness of outcomes related to decisions
• Procedural justice• Fairness of process by which ratings are assigned &
a decision is made
• Interpersonal justice• Respectfulness & personal tone of communications
surrounding evaluation
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Module 2: Performance Rating—Substance
• Theories of performance rating– Process model
• Addresses various factors comprising rating process
– Content model• Addresses content input to supervisory ratings
– Rating context• Includes both announced purpose & other, non-
announced agendas surrounding ratings
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Focus on Performance Ratings
• Overall performance ratings– Influenced by 3 factors
• Task performance
• Contextual performance
• Counter-productive performance
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Performance Ratings (cont'd)
• Trait ratings – a warning
• Task-based ratings– Effectiveness of employee
in accomplishing duties– Most easily defended in court
• Critical incidents method– Examples of critical behaviors that influence
performance
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Performance Ratings (cont'd)
• Structural characteristics of performance rating scale
– Extent to which duty/characteristic being rated is behaviorally defined
– Extent to which meaning of response categories is defined
– Degree that person interpreting ratings can understand response that rater intended
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Rating Formats
• Graphic rating scales
– Graphically display performance scores running from high to low
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Rating Formats (cont'd)
• Checklist– List of behaviors presented to rater who places
a check next to items that best (or least) describe the ratee
– Weighted checklist• Included items have assigned values or weights
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Rating Formats (cont'd)
• Behaviorally anchored rating scales (BARS)
• Rating format that includes behavioral anchors describing what worker has done, or might be expected to do, in a particular duty area
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Figure 6.4Behaviorally AnchoredRating Scale for Firefighters
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Behavioral Rating (cont'd)
• Mixed standard scale (MSS)– Like checklist, but includes behavioral
expectation statements like in BARS scales– Includes 3 statements for each dimension that
describe good, average, & poor performance– Not apparent to rater which dimensions are
being measured
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Employee Comparison Methods
• Involve direct comparison of 1 person w/another
• Simple ranking– Employees ranked from top to bottom according to
assessed proficiency
• Paired comparison– Each employee in a group is compared with each other
individual in the group
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Employee Comparison Methods
• Useful in making layoff or downsizing decisions
• Feedback is difficult because there is no clear standard of performance
• Difficulty in comparing individuals in different groups
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Module 3: Performance Rating—Process
• Rating sources– Supervisors
• Most common information source
• Many actively avoid evaluation & feedback
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Rating Sources (cont'd)
• Peers
– More likely to know about a worker’s typical performance
– Conflict of interest likely when competing for fixed resources
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Self-Ratings
– Discussion of ratings with supervisor increases perceptions of procedural fairness
– Potential for distortion & inaccuracy• Minimized with supervisor discussion
– Conflict of interest if used for administrative purposes
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Rating Sources
• Subordinate ratings– Critical that subordinate feedback be kept
anonymous
• Customer & supplier ratings– Important from business strategy vantage
point
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Rating Sources
• 360 degree systems– Collect & provide an employee with
feedback that comes from many sources
– Often used for feedback & employee development
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Potential Sources for 360 Degree Feedback
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Figure 6.5 Potential Sources for360 Degree Feedback
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Rating Distortions
• Central tendency error– Raters choose mid-point on scale to describe
performance when more extreme point is more appropriate
• Leniency-severity error– Raters are unusually easy or harsh in their
ratings
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Rating Distortions (cont'd)
• Halo error
– Same rating is assigned on a series of dimensions causing them all to be similar
• A “halo” surrounds the ratings
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Rater Training
• Some distortions (errors) may be corrected through training
• Administrative training– Important for uncommon rating systems
(e.g., BARS) or if 1 or more structural characteristics are deficient
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Rater Training (cont'd)
• Psychometric training
– Makes raters aware of common rating errors in hopes of reducing such errors
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Frame of Reference Training
• Based on assumption that rater needs context for providing rating– Basic steps
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1. Provide information about multidimensional nature of performance
2. Ensure raters understand meaning of scale anchors3. Engage in practice rating exercises of standard
performance4. Provide feedback on practice exercise
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Reliability & Validity of Perf. Ratings
• Reliability– Currently the subject of lively debate– Inter-rater reliability considered poor but this
isn’t necessarily bad considering each rater relies on a different perspective
• Validity– Depends on manner by which rating scales
were conceived & developed
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Module 4: Social & Legal Context of Performance Evaluation
• Motivation to rate– Suggestion that raters use process as a
means to an end, either personal or organizational
– Performance appraisal as a goal-directed activity with 3 stakeholders
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Motivation to Rate (cont'd)
• Rater goals– Task performance
– Interpersonal
– Strategic
– Internalized
• Ratee goals– Information
gathering
– Information dissemination
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Motivation to Rate (cont'd)
• Organizational goals– Between-person uses
– Within-person uses
– Systems-maintenance uses
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Goal Conflict
• When single system is used to satisfy multiple goals from different stakeholders, rater must choose which goal to satisfy before assigning a rating
• Possible solutions– Use multiple performance evaluation systems– Obtain involvement of stakeholders in
developing the system– Reward supervisors for accurate ratings
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Performance Feedback
• Problematic when same information is used for multiple purposes
• Feedback (especially negative) should be stretched over several sessions
• “Praise-criticism-praise sandwich”
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Performance Feedback
• Employee more likely to accept negative feedback if he/she believes:
• Supervisor has sufficient “sample” of subordinate’s actual behavior
• Supervisor & subordinate agree on subordinate’s job duties
• Supervisor & subordinate agree on definition of good & poor performance
• Supervisor focuses on ways to improve performance
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“Destructive” Criticism
– Feedback that is cruel, sarcastic, & offensive– Usually general rather than specific– Often directed toward personal characteristics
of employee– Leads to anger, tension, & resentment on part
of employee– Apology best to repair damage of such criticism
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Implementing 360 Degree Feedback
• Ensure anonymity of sources
• Rater & ratee should jointly identify the evaluator
• Use for developmental & growth purposes
• Train information sources & those giving feedback
• Follow up feedback session with regular opportunities for progress assessment
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Performance Evaluation & Culture
• Hofstede’s 5 dimensions of culture might affect performance evaluations
• Modesty bias– When raters give themselves lower ratings than
warranted– Prevalent in cultures with high power distance
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Performance Evaluation & the Law
• Ford Motor Company & its forced distribution rating system– Evaluators were required to place
managers into performance categories based on predetermined percentages
– Ford sued by managers & eventually paid over $10 million to litigants
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Performance Evaluation & the Law (cont'd)
• Review of court cases from 1980-1995– Judges primarily concerned with issues
of fairness rather than technical characteristics of the system
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C. Sherburne/PhotoLink/Getty Images
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Performance Evaluation & the Law (cont'd)
• Relationship between court decisions & the substance of rating
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Appraisal Criteria
• Should be objective rather than subjective
• Should be job related or based on job analysis
• Should be based on behaviors rather than traits
• Should be within the control of the ratee
• Should relate to specific functions, not global assessments
• Should be communicated to the employee
Adapted fromTable 6.9The Relationshipbetween Court Decisions and theSubstance of RatingSource: Malos (1998).
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Performance Evaluation& the Law
• Lawsuits most often brought against trait-based systems
• Arguments– Ratings unduly subjective & decisions based on those
ratings are unreliable or invalid– Ratings have no basis in actual behavior due to
subjectivity– Little evidence of such unfairness has been found
– Research suggests performance evaluations do not systematically discriminate against protected subgroups
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Permissions
Slide 1: McGraw-Hill Education Digital Image Library, Royalty-Free/CORBIS, Source Image ID: CSL2008, Filename: CSL2008.JPG
Slide 11: McGraw-Hill Education Digital Image Library, PhotoLink/Getty Images, Source Image ID: SP000029, Filename: 1063.JPG
Slide 17: Adapted from Table 6.8 from Latham, G. P., & Wexley, K. N. (1981). Increasing productivity through performance appraisal, Fig. 3-8 on p. 56. Copyright 1981, Addison-Wesley Publishing Co., Inc. Reprinted by permission of Pearson Education, Inc., Upper Saddle River, NJ.
Slide 20: McGraw-Hill Education Digital Image Library, Ryan McVay/Getty Images, Source Image ID: AA026387, Filename: 86154.JPG
Slide 42: McGraw-Hill Education Digital Image Library, C. Sherburne/PhotoLink/Getty Images, Source Image ID: SO000477, Filename: 25057.JPG
Slide 43: Adapted from Table 6.9 from Malos, S. B. (1998). Current legal issues in performance appraisal. In J. W. Smither (Ed.), Performance appraisal: State of the art in practice, Table 2.2, p. 80, & Table 2.3, p. 83. San Francisco: Jossey-Bass. This material is used by permission of John Wiley & Sons, Inc.
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