Section

1

The Environment
of Human Resource
Management 1

Section
Jobs and
Labor 121

C h a p t e r

10

2

Section

3

Talent
Development 279

Section
Compensation
399

4

Section

5

Employee
Relations 527

Performance
­Management
and Appraisal

Learning Objectives
After you have read this
chapter, you should be
able to:
LO1 Identify why
performance
management is
necessary.

LO2 Distinguish among
three types of
performance
information.

LO3 Explain the
differences between
administrative and
developmental uses of
performance appraisal.

LO4 Describe the
advantages and
disadvantages
of multisource
(360-degree)
appraisals.

LO5 Discuss the importance
of training managers
and employees on
performance appraisal
and give examples of
rater errors.

LO6 Identify several
concerns about
appraisal feedback and
ways to make it more
effective.

What’s Trending in

Performance Management
and Appraisal

An organization’s HR professionals and managers must work together to
develop business approaches that bring out the best in employees. More
specifically, they must evaluation processes that enable managers to
provide employees feedback so that they can improve their job performance.
The management of employees’ actions through these ongoing appraisals
presents a number of challenges and opportunities, so organizational leaders must think strategically about performance management. Given these
issues, here’s what’s currently trending in the area of performance management and appraisal:
1. Some managers consider performance management to be a ­useful
tool, while others believe it is a waste of time. It is important for HR
­professionals to understand current opinions regarding this process so
that useful partnerships can be developed in organizations. Some companies have eliminated formal appraisals in favor of ongoing feedback
for employees.
2. The development of engaging performance appraisal policies is
an ­opportunity to build excellence in companies. Gamification
and ­multisource ratings are approaches that can be used to make
­performance evaluations more fun and accurate.
3. Ratings, rankings, and other approaches used to assess employees’ job
performance are always subject to discussion and debate. Managers
need to understand the current applications associated with any one
(or more) of these approaches.
4. Goal setting is an important part of managing employee performance.
Organizations are using new paradigms to more effectively
...

...
erformance appraisals can
contribute to the effectiveness of a performance
management system.
Many performance appraisal problems are
caused by a number of different rater errors.
The appraisal feedback interview is a vital
part of any appraisal system, and the reactions
of both managers and employees must be
considered when evaluating the system.

Critical Thinking Challenges 
1. Describe how organizational culture and the
use of performance criteria and standards affect
the remaining components of a performance
management system.
2. Suppose you are a supervisor. What errors
might you make when preparing the
performance appraisal on a clerical employee?
How might you avoid those errors?
3. Based on your experiences, as well as the
chapter information, what are some good
“rules of thumb” for conducting successful
performance appraisal interviews?
4. Review the performance appraisal process
and appraisal form used by a current or
former employer and compare it with those
provided by other students. Also review
other appraisal issues by going to www.
workforce.com and searching for articles on
performance appraisals. Develop a report
suggesting changes to make the performance

appraisal form and process you reviewed
more effective.
5. As the new HR Director of a company in
the behavioral health industry, you have
the responsibility to develop a performance
management system. You need to present a
business case to senior utives that the
performance management system does not stand
alone and must be integrated into the company’s
strategic plan, business needs, and measurements.
For information on performance management
best practices, review various publications in the
articles tab at www.insala.com.
A. Given several key practices for a successful
performance management system, which
ones should be implemented first?
B. Identify key measurements to transition the
company from the current system of looking
at personality factors to a new system of
looking at performance factors.

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