Requirements of Effective Appraisal Systems

Requirements of Effective Appraisal Systems

Legally and scientifically, the key requirements of any appraisal system are relevance, sensitivity, and reliability. In the context of ongoing operations, the key requirements are acceptability and practicality. 19 Let’s consider each of these.

Relevance

Relevance implies that there are clear links between the performance standards for a particular job and organizational objectives and between the critical job elements identified through a job analysis and the dimensions to be rated on an appraisal form. In short, relevance is determined by answering the question “What really makes the difference between success and failure on a particular job, and according to whom?” The answer to the latter question is simple: the customer. Customers may be internal (e.g., your immediate boss, workers in another department) or external (those who buy your company’s products or services). In all cases, it is important to pay attention to the things that the customer believes are important (e.g., on-time delivery, zero defects, information to solve business problems).

Ethical Dilemma: Performance-Appraisal Decisions

Performance appraisal actually encompasses two distinct processes: observation and judgment. Managers must observe performance, certainly a representative sample of an employee’s performance, if they are to be competent to judge its effectiveness. a Yet some managers assign performance ratings on the basis of small (and perhaps unrepresentative) samples of their subordinates’ work. Others assign ratings based only on the subordinate’s most recent work. Is this ethical? And further, is it ethical to assign performance ratings (either good or bad) that differ from what a manager knows a subordinate deserves?

aAguinis, H. (2009). Performance Management(2nd Ed.). Upper Saddle River, NJ: Pearson Prentice Hall. See also Moser, K., Schuler, H., and Funke, U. (1999). The moderating effect of raters’ opportunities to observe ratees’ job performance on the validity of an assessment center. International Journal of Selection and Assessment 7(3), pp. 355–367.

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Performance standards translate job requirements into levels of acceptable or unacceptable employee behavior. They play a critical role in the job analysis-performance appraisal linkage, as Figure 9–3 indicates. Job analysis identifies what is to be done. Performance standards specify how well work is to be done. Such standards may be quantitative (e.g., time, errors) or qualitative (e.g., quality of work, ability to analyze market research data or a machine malfunction).

Figure 9–3 Relationship of performance standards to job analysis and performance appraisal.

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Relevance also implies the periodic maintenance and updating of job analyses, performance standards, and appraisal systems. Should the system be challenged in court, relevance will be a fundamental consideration in the arguments presented by both sides.

Sensitivity

Sensitivity implies that a performance-appraisal system is capable of distinguishing effective from ineffective performers. If it is not, and the best employees are rated no differently from the worst employees, then the appraisal system cannot be used for any administrative purpose. It certainly will not help employees to develop, and it will undermine the motivation of both supervisors (“pointless paperwork”) and subordinates.