week 4

Question 1

What is Performance
Management? Why do
we want to manage
performance?
3

Answer 1

• To Increase Motivation
• Strategic Imperatives
• Innovation

Question 2

How do we know
how organisations
and individuals are
performing?
4

Answer 2

Measuring performance (week 2)
• Performance Management Systems (week 3)
• Performance Appraisal (week 4)
• Quality of measurement and feedback (week 5)

Question 3

How do we
improve
performance?
6

Answer 3

• Fostering Innovation (week 6)
• Human Resource Development (week 7)
• Rewards (week 8)
• Talent Management (week 9)
• Managing underperformance and employee
absence (week 10)
• Strategic HRM practices (week 11)

Question 4

What is Performance Appraisal?

Answer 4

• “performance appraisal is the depiction
of the strengths and weaknesses of
employees in a noncontinuous manner,
typically just once a year.” (Aguinis, Joo
and Gottfredson, 2011, p 504)

Question 5

Key Elements of the Formal Appraisal
Process
5

Answer 5

• Measurement – assessing performance against agreed targets
• Feedback – providing individuals with information about past performance and
what is needed for future performance
• Positive reinforcement – emphasising what has been done well
• An exchange of views – an open exchange of views about performance
• Agreement – all parties jointly agreeing what needs to be done to improve and sustain
performance

Question 6

Benefits of Performance Appraisal 4

Answer 6

Provides information to employees about their current and future performance
Motivates and maintains high performance through recognition and rewards
Links employee goals with organisational goals
Builds equity formally into decision making processes

Question 7

why is Provides information to employees about their current and future performance good
4

Answer 7

Provides feedback
• Identifies training and development needs
• Opportunity for career counselling
• Determines forms of support needed for underperformers

Question 8

why is Motivates and maintains high performance through recognition and rewards good
3

Answer 8

• Motivational tool
• Provides recognition
• Performance related reward decisions

Question 9

why is Links employee goals with organisational goals

3

Answer 9

Builds identification with and commitment to organisation’s goals and objectives
• Facilitates communication
• Enhances employee involvement

Question 10

why is Builds equity formally into decision making good processes good 2

Answer 10

Ensures consistency of treatment

• Provides data to meet legal requirements

Question 11

Evaluative v Developmental Approaches

Answer 11

Evaluative:
Traditional, ‘harder’ approach. Backward looking
(assessing past performance against
predetermined performance criteria). Often
associated with top down, more judgemental
forms of PM, and the allocation of reward.
Developmental:
‘Softer’ approach – emphasis on communicating gaps in performance expectations, clarifying job
objectives, training and development.

Question 12

• Problems with combining an evaluative

and developmental approach:

Answer 12

• Rating processes and strategies
• Role conflict/power
• Issue if performance appraisal is used to determine
rewards.

Question 13

Criticisms of Performance Appraisal (1)

5

Answer 13

• Conflicting aims - evaluative and developmental objectives may conflict
• Too few raters - can be practical difficulties in getting
raters (e.g. small businesses or senior managers)
• Subjectivity and bias – we will be examining perceptual issues in next weeks lecture
• Control – performance appraisal is a means for management to control and increase surveillance of
employees
• Reliance on subjective measures

Question 14

Criticisms of Performance Appraisal (2)

7

Answer 14

Management behaviour – managers
frequently dislike performance
appraisal and vary in how and whether
they carry them out
• Bureaucracy - creates a time
consuming process
• Ambiguous feedback - Understanding
ratings in relation to performance can
be difficult
• Supervision by untrained managers
• Inconsistency in reward allocation
• Lack of top management support
• Disregard for individual performance
objectives

Question 15

strengths of Line manager or immediate
supervisor (Downward
appraisal) doing performance evaluation 3

Answer 15

•Line Manager should be
familiar with work and
constraints
•strengthens relationship
between line manager and
employee
•facilitates communication.

Question 16

weaknesses of of Line manager or immediate
supervisor (Downward
appraisal) doing performance evaluation 3

Answer 16

•relies on good
management skills and
mutual trust
•subject to bias
•not suitable for all
cultures.

Question 17

strengths of Employee themselves (Self

appraisal) doing performance evaluation 3

Answer 17

•forces a person to reflect
on own performance
•gives employee a voice
•suited to jobs with high
levels of discretion,
specialised skills or work in
isolation from manager.

Question 18

weaknesses of Employee themselves (Self

appraisal) doing performance evaluation 5

Answer 18

•inaccurate assessment
•prone to over rating or
under rating
•problems if difference
between self and others.
•Lack of training
•Gender differences

Question 19

strengths of Subordinates

(Upward appraisal) doing performance evaluation 4

Answer 19

• involving employees can improve
motivation and commitment
•employees in close and regular contact
with their manager
•supports an open style culture
•if multiple raters then less prone to bias.

Question 20

weaknesses of Subordinates

(Upward appraisal) doing performance evaluation 4

Answer 20

•employees may feel intimated and may
not give an accurate response
•can be undermining/threatening for
manager.
•Managers may make popular v/s best
decisions
•Cultural context

Question 21

strengths of Peers (Peer assessment) 5

Answer 21

•suited to team working environment.
•Can provide more accurate review than
supervisors
•positive peer pressure to improve
performance
•increase team members’ commitment and
productivity
•Used in academic world – peer
reviews

Question 22

weaknesses of Peers (Peer assessment) 3

Answer 22

•colleague may not understand
individual’s job
•reluctance to be honest
•may be influenced by jealousy or rivalry
(‘Screw your buddy’).

Question 23

strengths of customer appraisals 1

Answer 23

•helpful in customer facing environment.

Question 24

weaknesses of customer appraisal 2

Answer 24

•high surveillance and control
•cannot take account of all aspects of
performance

Question 25

360-Degree Appraisal 6

Answer 25

A focal person completes a self appraisal of behaviours,
later rated by a number of other people
• Commonly used by Fortune 500 companies (in US)
• Not widely used in Australia(only 14% companies using it).
• Results compiled by HR and fed back to employee
• Employee uses information to identify areas that need to
be improved
• Affected by system factor

Question 26

Benefits of 360-Degree Appraisal 5

Answer 26

It provides a more balanced and
accurate view of performance.
Different raters can report on different behaviours.
It offers the opportunity for
improved self-awareness.
Employees have a ‘voice’.
It is useful if Line Manager is not
familiar with job and in service
sector.

Question 27

Problemsof 360-Degree Appraisal 5

Answer 27

Issues with practicality (Time
consuming, costly, and too few raters
in practice)
Analysis of information is complex
Does having multiple assessors create greater objectivity?
Different interpretations of
measures
If linked to reward may be prone to
bias
Person being rated chooses whether
to respond to feedback.

Question 28

how to improve Performance Appraisal
Quality and Effectiveness
8

Answer 28

Clarity of processes
• Highly participative process
• Take care with rating
• Meaningful performance standards and rewards
• Perceived as fair
• Evaluate and improve the performance appraisal system itself
• Practically feasible
• Maintain records

Question 29

Clarity of processes

4

Answer 29

– objectives of the process must be clear
– keep simple and clear
– should be clear definitions of performance criteria
– alignment of organisational and individual goals

Question 30

• Highly participative process3

Answer 30

senior management commitment including time and resources available
– high level of communication and information flows
– all participants are given a voice in designing and implementing system

Question 31

• Take care with rating

7

Answer 31

rater errors and biases, and rating accuracy as well as the psychometric properties of the measurement instruments being used
– training for all raters (in particular the value of frame-of-reference
training )
– more than one rater
– hold appraisers accountable for ratings
– Measurement of performance based on behaviours and results
– Reliable – scores are consistent and free of errors
– Valid – include all relevant elements of performance and no irrelevant
ones

Question 32

• Meaningful performance standards and rewards

2

Answer 32

– performance criteria must be relevant to the job

– Allocating rewards that are meaningful.

Question 33

• Evaluate and improve the performance appraisal system itself 3

Answer 33

Monitor performance appraisal system regularly
– Good system has no secrets
– Correctable – appeals process because no system is error free