Make performance appraisal relevant

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1、MAKE PERFORMANCE APPRAISAL RELEVANTWinston Oberg FOREWORDThe authors position is that performance appraisal programs can be made considerably more effective if management will fit practice to purpose when setting goals and selecting appraisal techniques to achieve them. He presents a catalog of the

2、strengths and weaknesses of nine of these techniques; then he shows how they can be used singly and in combination with different performance appraisal objectives. He maintains that if management will undertake this matching effort, many familiar pitfalls of appraisal programs can be avoided. Mr. Ob

3、erg is Professor of Management at the Graduate School of Business Administration, Michigan State University.IntroductionThese frequently voiced goals of performance appraisal programs underscore the importance of such programs to any ongoing business organization: Help or prod supervisors to observe

4、 their subordinates more closely and to do a better coaching job. Motivate employees by providing feedback on how they are doing. Provide back-up data for management decisions concerning merit increases, transfers, dismissals, and so on. Improve organization development by identifying people with pr

5、omotion potential and pin-pointing development needs. Establish a research and reference base for personnel decisions. It has been estimated that over three fourths of U.S. companies now have performance appraisal programs. (1) In actual practice, however, formal performance appraisal programs have

6、often yielded unsatisfactory and disappointing results, as the growing body of critical literature attests. (2) Some critics even suggest that we abandon performance appraisal as a lost hope, and they point to scores of problems and pitfalls as evidence. But considering the potential of appraisal pr

7、ograms, the issue should not be whether to scrap them; rather, it should be how to make them better. I have found that one reason for failures is that companies often select indiscriminately from the wide battery of available performance appraisal techniques without really thinking about which parti

8、cular technique is best suited to a particular appraisal objective. For example, the most commonly used appraisal techniques include: Essay appraisal. Graphic rating scale. Field review. Forced-choice rating. Critical incident appraisal. Management-by-objectives approach. Work-standards approach. Ra

9、nking methods. Assessment centers. Each of these has its own combination of strengths and weaknesses, and none is able to achieve all the purposes for which management institutes performance appraisal systems. Nor is any one technique able to evade all of the pitfalls. The best anyone can hope to do

10、 is to match an appropriate appraisal method to a particular performance appraisal goal. In this article, I shall attempt to lay the groundwork for such a matching effort. First, I shall review some familiar pitfalls in appraisal programs; then, against this background, I shall assess the strengths

11、and weaknesses of the nine commonly used appraisal techniques. In the last section, I shall match the organizational objectives listed at the outset of this article with the techniques best suited to achieving them. Some common pitfallsObstacles to the success of formal performance appraisal program

12、s should be familiar to most managers, either from painful personal experience or from the growing body of critical literature. Here are the most troublesome and frequently cited drawbacks: Performance appraisal programs demand too much from supervisors. Formal performance appraisals obviously requi

13、re at least periodic supervisor observation of subordinates performance. However, the typical first-line supervisor can hardly know, in a very adequate way, just what each of 20, 30, or more subordinates is doing. Standards and ratings tend to vary widely and, often, unfairly. Some raters are tough,

14、 others are lenient. Some departments have highly competent people; others have less competent people. Consequently, employees subject to less competition or lenient ratings can receive higher appraisals than equally competent or superior associates. Personal values and bias can replace organization

15、al standards. An appraiser may not lack standards, but the standards he uses are sometimes the wrong ones. For example, unfairly low ratings may be given to valued subordinates so they will not be promoted out of the raters department. More often, however, outright bias dictates favored treatment fo

16、r some employees. Because of lack of communication, employees may not know how they are rated. The standards by which employees think they are being judged are sometimes different from those their superiors actually use. No performance appraisal system can be very effective for management decisions,

17、 organization development, or any other purpose until the people being appraised know what is expected of them and by what criteria they are being judged. Appraisal techniques tend to be used as performance panaceas. If a worker lacks the basic ability or has not been given the necessary training fo

18、r his job, it is neither reasonable to try to stimulate adequate performance through performance appraisals, nor fair to base salary, dismissal, or other negative decisions on such an appraisal. No appraisal program can substitute for sound selection, placement, and training programs. Poor performan

19、ce represents someone elses failure. In many cases, the validity of ratings is reduced by supervisory resistance to making the ratings. Rather than confront their less effective subordinates with negative ratings, negative feedback in appraisal interviews, andbelow-average salary increases, supervis

20、ors often take the more comfortable way out and give average or above-average ratings to inferior performers. Performance appraisal ratings can boomerang when communicated to employees. Negative feedback (i.e., criticism) not only fails to motivate the typical employee, but also can cause him to per

21、form worse . Only those employees who have a high degree of self-esteem appear to be stimulated by criticism to improve their performance. Performance appraisals interfere with the more constructive coaching relationship that should exist between a superior and his subordinates. Performance appraisa

22、l interviews tend to emphasize the superior position of the supervisor by placing him in the role of judge, thus countering his equally important role of teacher and coach. This is particularly damaging in organizations that are attempting to maintain a more participative organizational climate. A l

23、ook at methodsThe foregoing list of major program pitfalls represents a formidable challenge, even considering the available battery of appraisal techniques. But attempting to avoid these pitfalls by doing away with appraisals themselves is like trying to solve the problems of life by committing sui

24、cide. The more logical task is to identify those appraisal practices that are (a) most likely to achieve a particular objective and (b) least vulnerable to the obstacles already discussed. Before relating the specific techniques to the goals of performance appraisal stated at the outset of the artic

25、le, I shall briefly review each, taking them more or less in an order of increasing complexity. The best-known techniques will be treated most briefly. 1. Essay appraisalIn its simplest form, this technique asks the rater to write a paragraph or more covering an individuals strengths, weaknesses, po

26、tential, and so on. In most selection situations, particularly those involving professional, sales, or managerial positions, essay appraisals from former employers, teachers, or associates carry significant weight. The assumption seems to be that an honest and informed statement -either by word of m

27、outh or in writing- from someone who knows a man well, is fully as valid as more formal and more complicated methods. The biggest drawback to essay appraisals is their variability in length and content. Moreover, since different essays touch on different aspects of a mans performance or personal qua

28、lifications, essay ratings are difficult to combine or compare. For comparability, some type of more formal method, like the graphic rating scale, is desirable. 2. Graphic rating scaleThis technique may not yield the depth of an essay appraisal, but it is more consistent and reliable. Typically, a g

29、raphic scale assesses a person on the quality and quantity of his work (is he outstanding, above average, average, or unsatisfactory?) and on a variety of other factors that vary with the job but usually include personal traits like reliability and cooperation. It may also include specific performan

30、ce items like oral and written communication. The graphic scale has come under frequent attack, but remains the most widely used rating method. In a classic comparison between the old-fashioned graphic scale and the much more sophisticated forced-choice technique, the former proved to be fully as va

31、lid as the best of the forced-choice forms, and better than most of them. (4) It is also cheaper to develop and more acceptable to ratters than the forced-choice form. For many purposes there is no need to use anything more complicated than a graphic scale supplemented by a few essay questions. 3. F

32、ield reviewWhen there is reason to suspect rater bias, when some ratters appear to be using higher standards than others, or when comparability of ratings is essential, essay or graphic ratings are often combined with a systematic review process. The field review is one of several techniques for doi

33、ng this. A member of the personnel or central administrative staff meets with small groups of ratters from each supervisory unit and goes over each employees rating with them to (a) identify areas of inter-ratter disagreement, (b) help the group arrive at a consensus, and (c) determine that each rat

34、ter conceives the standards similarly. This group-judgment technique tends to be more fair and more valid than individual ratings and permits the central staff to develop an awareness of the varying degrees of leniency or severity -as well as bias- exhibited by ratters in different departments. On t

35、he negative side, the process is very time consuming. 4. Forced-choice ratingLike the field review, this technique was developed to reduce bias and establish objective standards of comparison between individuals, but it does not involve the intervention of a third party. Although there are many vari

36、ations of this method, the most common one asks ratters to choose from among groups of statements those which best fit the individual being rated and those which least fit him. The statements are then weighted or scored, very much the way a psychological test is scored. People with high scores are,

37、by definition, the better employees; those with low scores are the poorer ones. Since the ratter does not know what the scoring weights for each statement are, in theory at least, he cannot play favorites. He simply describes his people, and someone in the personnel department applies the scoring we

38、ights to determine who gets the best rating. The rationale behind this technique is difficult to fault. It is the same rationale used in developing selection test batteries. In practice, however, the forced-choice method tends to irritate ratters, who feel they are not being trusted. They want to sa

39、y openly how they rate someone and not be second-guessed or tricked into making honest appraisals. A few clever ratters have even found ways to beat the system. When they want to give average employee Harry Smith a high rating, they simply describe the best employee they know. If the best employee i

40、s Elliott Jones, they describe Jones on Smiths forced-choice form. Thus, Smith gets a good rating and hopefully a raise. An additional drawback is the difficulty and cost of developing forms. Consequently, the technique is usually limited to middle- and lower-management levels where the jobs are suf

41、ficiently similar to make standard or common forms feasible. Finally, forced-choice forms tend to be of little value- and probably have a negative effect- when used in performance appraisal interviews. 5. Critical incident appraisalThe discussion of ratings with employees has, in many companies, pro

42、ved to be a traumatic experience for supervisors. Some have learned from bitter experience what General Electric later documented; people who receive honest but negative feedback are typically not motivated to do better - and often do worse - after the appraisal interview.(5) Consequently, superviso

43、rs tend to avoid such interviews, or if forced to hold them, avoid giving negative ratings when the ratings have to be shown to the employee. One stumbling block has no doubt been the unsatisfactory rating form used. Typically, these are graphic scales that often include rather vague traits like ini

44、tiative, cooperativeness, reliability, and even personality. Discussing these with an employee can be difficult. The critical incident technique looks like a natural to some people for performance review interviews, because it gives a supervisor actual, factual incidents to discuss with an employee.

45、 Supervisors are asked to keep a record, a little black book, on each employee and to record actual incidents of positive or negative behavior. For example: Bob Mitchell, who has been rated as somewhat unreliable, fails to meet several deadlines during the appraisal period. His supervisor makes a no

46、te of these incidents and is now prepared with hard, factual data: Bob, I rated you down on reliability because, on three different occasions over the last two months, you told me you would do something and you didnt do it. You remember six weeks ago when I. . . Instead of arguing over traits, the d

47、iscussion now deals with actual behavior. Possibly, Bob has misunderstood the supervisor or has good reasons for his apparent unreliability. If so, he now has an opportunity to respond. His performance, not his personality, is being criticized. He knows specifically how to perform differently if he

48、wants to be rated higher the next time. Of course, Bob might feel the supervisor was using unfairly high standards in evaluating his performance. But at least he would know just what those standards are. There are, however, several drawbacks to this approach. It requires that supervisors jot down in

49、cidents on a daily or, at the very least, a weekly basis. This can become a chore. Furthermore, the critical incident rating technique need not, but may, cause a supervisor to delay feedback to employees. And it is hardly desirable to wait six months or a year to confront an employee with a misdeed

50、or mistake. Finally, the supervisor sets the standards. If they seem unfair to a subordinate, might he not be more motivated if he at least has some say in setting, or at least agreeing to, the standards against which he is judged? 6. Management by objectivesTo avoid, or to deal with, the feeling th

51、at they are being judged by unfairly high standards, employees in some organizations are being asked to set - or help set - their own performance goals. Within the past five or six years, MBO has become something of a fad and is so familiar to most managers that I will not dwell on it here. It shoul

52、d be noted, however, that when MBO is applied at lower organizational levels, employees do not always want to be involved in their own goal setting. As Arthur N. Turner and Paul R. Lawrence discovered, many do not want self-direction or autonomy. As a result, more coercive variations of MBO are beco

53、ming increasingly common, and some critics see MBO drifting into a kind of manipulative form of management in which pseudo-participation substitutes for the real thing. Employees are consulted, but management ends up imposing its standards and its objectives.Some organizations, therefore, are introd

54、ucing a work-standards approach to goal setting in which the goals are openly set by management. In fact, there appears to be something of a vogue in the setting of such work standards in white-collar and service areas. 7. Work-standards approachInstead of asking employees to set their own performan

55、ce goals, many organizations set measured daily work standards. In short, the work standards technique establishes work and staffing targets aimed at improving productivity. When realistically used, it can make possible an objective and accurate appraisal of the work of employees and supervisors. To

56、 be effective, the standards must be visible and fair. Hence a good deal of time is spent observing employees on the job, simplifying and improving the job where possible, and attempting to arrive at realistic output standards. It is not clear, in every case, that work standards have been integrated

57、 with an organizations performance appraisal program. However, since the work-standards program provides each employee with a more or less complete set of his job duties, it would seem only natural that supervisors will eventually relate performance appraisal and interview comments to these duties.

58、I would expect this to happen increasingly where work standards exist. The use of work standards should make performance interviews less threatening than the use of personal, more subjective standards alone. The most serious drawback appears to be the problem of comparability. If people are evaluate

59、d on different standards, how can the ratings be brought together for comparison purposes when decisions have to be made on promotions or on salary increases? For these purposes some form of ranking is necessary. 8. Ranking methodsFor comparative purposes, particularly when it is necessary to compar

60、e people who work for different supervisors, individual statements, ratings, or appraisal forms are not particularly useful. Instead, it is necessary to recognize that comparisons involve an overall subjective judgment to which a host of additional facts and impressions must somehow be added. There

61、is no single form or way to do this. Comparing people in different units for the purpose of, say, choosing a service supervisor or determining the relative size of salary increases for different supervisors, requires subjective judgment, not statistics. The best approach appears to be a ranking tech

62、nique involving pooled judgment. The two most effective methods are alternation ranking and paired comparison ranking. Alternation ranking: In this method, the names of employees are listed on the left-hand side of a sheet of paper - preferably in random order. If the rankings are for salary purpose

63、s, a supervisor is asked to choose the most valuable employee on the list, cross his name off, and put it at the top of the column on the right-hand side of the sheet. Next, he selects the least valuable employee on the list, crosses his name off, and puts it at the bottom of the right-hand column.

64、The ranker then selects the most valuable person from the remaining list, crosses his name off and enters it below the top name on the right-hand list, and so on. Paired-comparison ranking: This technique is probably just as accurate as alternation ranking and might be more so. But with large number

65、s of employees it becomes extremely time consuming and cumbersome. To illustrate the method, let us say we have five employees: Mr. Abbott, Mr. Barnes, Mr. Cox, Mr. Drew, and Mr. Eliot. We list their names on the left-hand side of the sheet. We compare Abbott with Barnes on whatever criterion we have chosen, say, present value to the organization. If we feel Abbott is more valuable than Barnes, we put a tally beside Abbotts name. We then compare Abbott with Cox, with Drew, and with Eliot. The proc