Methods of Appraisal Performance

The performance measures currently in use can be characterized as

either objective or subjective. Objective measures are typically
result-based measures of physical output, whereas subjective
measures can used to assess traits, behaviours, or results.

Objective Measures

Objective measures assess performance in terms of numbers, such

as the amount of a product an employee produces or sells, the
number of defensive products produced, the number of times an
employee is absent or late to work, or some other direct numerical
index of how well or quickly an employee can perform certain
tasks. 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 counting
the 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 be
measurable, and (3) the employee should be primarily responsible
for the amount produced.
(2) Sales Performance:
Sales performance is usually measured by the amount of sales
made in a given period of time. Typically, some minimum
acceptable level of sales is defined, and performance beyond that
quota 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 this
difference 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
their sales performance or when it is possible to adjust for
contaminants, such as differences is sales territory.
(3) Personnel Data:
Information from an employee’s personnel file is sometimes used
in performance assessment. Personnel measures would include
such particulars as the number of times an employee has been
absent 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 produces
more and better-quality products than co-workers, is the employee
a 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 the
measure (for example, tardiness) and actual job effectiveness, such
as the delay of the start of business as a result of an employee’s
tardiness.
(4) Performance Tests
Performance 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 useful
when it is difficult to collect comparable or uncontaminated
performance data in any other way, but they suffer from three
major problems. First, they tend to be deficient, since only some
aspects of a job can be realistically simulated. Second, if
employees know that they are being tested on their job
effectiveness, they are likely to work very hard to perform the test
well. 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 lend
themselves to this kind of assessment, and for those that do,
performance tests are generally expensive and time consuming to
develop and implement.
(5) Business Unit Performance Measure
The above objective measures are seldom useful for managers.
However, the performance of upper-level managers and executives
is 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, these
measures can be contaminated by economic factors beyond the
manager’s control.

Raters of Employment Performance

In most organization, subjective ratings of employee performance

are provided by supervisors.

Self-Evaluation

Employees are sometimes asked to evaluate themselves. It seems

logical that individuals would be the best judges of their own
performance, particularly if supervisors cannot observe them on a
regular basis. If employees are asked to evaluate themselves, they
may respond by becoming more motivated and involved in the
evaluation process.
Self-ratings tend to show more leniency error than supervisors
ratings, although halo errors are lower. Self-evaluation seems most
appropriate when it is used as an employee development tool rather
than to make administration decisions. It may also serve as an
important input in to a supervisory appraisal. An employee’s self-
appraisal may provide important information of which the
supervisor was not aware.

Peer Evaluation

Peer ratings may be the most accurate evaluations of employee

performance. Peer evaluations can be particularly useful when
supervisors do not have the opportunity to observe an individual’s
performance, but fellow employees do.
Peers sometimes resist evaluating one another. An individual may
not want to give a fellow employee a favourable evaluation for fear
of looking inferior in comparison. Friendship bias may lead an
employee to rate his or her friends higher than other employees.
When teamwork, participation, and cohesiveness are part of the
organization’s culture, peer evaluations can work well. In
organization that are competitive and have a low level of trust
among employees, peer evaluations may be little more than a way
for employees to enhance themselves by belittling their fellow
employees.

Subordinate Evaluation
Evaluation by subordinates may provide valuable information.
They know how well a supervisor performs with respect to
leading, 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 discern
who has given a particular rating. Complete anonymity is essential
if 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 administrative
decisions.

Customer evaluation

Another source of appraisal information comes from customer or

clients. Such appraisals are popular in the context of service
delivery, where there is a high degree of client involvement and
when the service employee is relatively removed from other
employees or supervisors. This feedback could be obtained
through a phone interview with the customer or a formal survey.

Enhancing the Measurement of Employee Performance

Training Evaluators
Several rater training programs have been developed that aim to
help 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 processing
training.

Rater Error Training

People can be taught how to reduce rating errors, such as leniency

severity, central tendency, and halo errors. In rater error training
(RET), evaluators view examples of the common errors and
receive 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 a

common frame of reference among raters for evaluating
performance. Examples of actual employee behaviour in the
organization are used to develop norms of good and poor
performance. Raters are then trained to observe these behaviours
and 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 to
the approach used in the 1980 study) focused on helping raters to
improve the way they observed the behaviour of employees and to
identify important performance activities. Decision-making
training introduced raters to good strategies for use in decision
making and helped them identify mistakes in inference that
supervisors often make when appraising performance.