Looking to Benchmark Pay?
Performance Appraisal
For most jobs in most organizations, employee performance is appraised rather than measured. Performance appraisal is a formal method of evaluating employees. This method assumes that employee performance can be observed and assessed, even when it cannot be objectively measured.
Typically, the performance that is evaluated includes:
- attainment of the job’s essential functions
- achievement of goals and objectives
- recognition of strengths and areas of development
- statement of training and development opportunities
In order to appreciate the complexity of performance management, we’ll discuss several factors:
- Which employees are appraised?
- Appraisal methods
- Performance standards
- Rating scales
- Employee comparison systems
Which employees are appraised?
Most organizations have some form of performance appraisal. But some employee groups are more likely than others to be covered.
| Likely | Less Likely |
|---|---|
|
|
Performance appraisal is used less among blue-collar workers due to the use of:
- job-rate pay plans
- rate ranges where movement is based upon seniority
- incentive plans
Union jobs are often not subject either, as unions typically do not like the use of performance appraisal.
Appraisal methods
There are a variety of performance appraisal methods. However, they can be divided into two basic types.
Types of appraisal methods
Comparison with:
- a standard
OR - another person
Comparison with a standard. This approach requires a well-developed performance standard and allows direct comparisons to this standard throughout the organization.
Comparison with another person. This approach does not require a strong performance standard and, under certain conditions, can provide more reliable results.
Performance standards
If you are going to use standards, you should follow these steps.
Step 1. Review the job description
A well-written job description tells you the important performance standards for the job. The job description should state 6-8 essential functions required by the job and the HOW, WHAT, and WHY each of those essential functions are expected to be performed for competent performance.
(To learn how to write reliable job descriptions, see DLC Course 33: Job Analysis and Job Descriptions.)
Step 2. Define acceptable performance
Define how well each essential function must be performed to represent acceptable performance. Depending upon the type of appraisal or measurement system used, this may be done through:
- employee-supervisor meetings
- analysis of reports and records
- committee work
- work measurement, standards, or settings
The more objective the standard, the easier the ratings.
Memory Jogger
A performance standard within an essential function from a job description comes from: