TE
AM
FL
Y
The
PERFORMANCE
APPRAISAL
QUESTION and
ANSWER BOOK:
A SURVIVAL GUIDE
FOR MANAGERS
Dick Grote
AMACOM
More Praise for . . .
The Performance Appraisal Question and Answer Book:
‘‘An enlightening, practical, and valuable tool. Dick has taken the sometime
confusing and frightening problem of performance appraisal and provided
effective approaches and answers that can be adapted to any organization.
It is a MUST for the human resources professional’s library.’’
—William K. Hill
Human Resources Director
City of Winston-Salem (NC)
‘‘Dick Grote clearly and eloquently presents a very practical guide for navi
gating the often-murky waters of the performance appraisal process. The
Performance Appraisal Question and Answer Book is a must-read for all who
are captivated with the notion that the development, administration, and
oversight of an effective performance management system is not only possi
ble, but indispensable to the organizational life of any business.’’
—Michael S. Sorrells
Deputy Commissioner for Human Resources
Georgia Department of Juvenile Justice
‘‘Much has been written and debated about the value of performance man
agement systems. However, the fact remains that top-performing compa
nies have rigorous performance management systems. The Performance
Appraisal Question and Answer Book is a must-have handbook for every
manager’s most complex issue: performance.’’
—Don Langewisch
Performance Systems Manager
ChevronTexaco Corporation
The
PERFORMANCE
APPRAISAL
QUESTION and
ANSWER BOOK
A SURVIVAL GUIDE
FOR MANAGERS
Dick Grote
American Management Association
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Library of Congress Cataloging-in-Publication Data
Grote, Richard C.
The performance appraisal question and answer book: survival guide
for managers / Dick Grote.
p. cm.
Includes index.
ISBN 0-8144-0747-1 (hardcover)
ISBN 0-8144-7151-X (paperback)
1. Employees—Rating of. 2. Performance standards. I. Title.
HF5549.5 .R3 G642 2002
658.3�125—dc21
2002002171
2002 Dick Grote.
All rights reserved.
Printed in the United States of America.
This publication may not be reproduced,
stored in a retrieval system,
or transmitted in whole or in part,
in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise,
without the prior written permission of AMACOM,
a division of American Management Association,
1601 Broadway, New York, NY 10019.
Printing number
10 9 8 7 6 5 4 3 2 1
Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
xv
1. The Importance of Performance Appraisal . . . . . . . .
1
1.1 What is ‘‘performance appraisal’’? . . . . . . . . . . . . . . . . . . . . . . .
1
1.2 Where did performance appraisals come from? . . . . . . . . . . . . . .
2
1.3 What is the purpose of performance appraisal? . . . . . . . . . . . . . .
4
1.4 The performance management process in our organization has
conflicting purposes. We use it to determine merit increases and
performance feedback for work done during the previous twelve
months, to determine training needs, and as a key tool in succession
planning. Can one procedure really serve all those functions well?
7
1.5 How many meetings should I have with an employee to talk about
performance? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
1.6 All these meetings take too much time. Why should I spend all this
time doing performance appraisal when I’ve got much better things
to do? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
1.7 If performance appraisal is truly important, why is it the butt of so
many jokes and the target of Dilbert cartoons? . . . . . . . . . . . . . . .
9
1.8 W. Edwards Deming, the quality guru, said that performance
appraisals were an organizational evil that should be abolished. Was
he wrong? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
1.9 Even if they try to be objective, managers can’t help but
discriminate on the basis of race, sex, age, and other illegal
considerations. Isn’t performance appraisal actually a very biased
process? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
1.10 What are the legal requirements for a performance appraisal
system? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
1.11 How do I make sure that our performance appraisal system is legally
defensible? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
v
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Contents
1.12 Is performance appraisal really necessary? Can’t the benefits that
the system provides to organizations and the people in them be
obtained any other way? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
2. Performance Planning . . . . . . . . . . . . . . . . . . . . . . . . .
21
2.1 What is ‘‘performance planning’’? . . . . . . . . . . . . . . . . . . . . . . .
2.2 What are the manager’s responsibilities in the performance
planning phase of the process? . . . . . . . . . . . . . . . . . . . . . . . . . .
2.3 What are the employee’s responsibilities for performance planning?
2.4 When is the best time to set and review expectations? . . . . . . . . .
2.5 I have never held a performance-planning meeting. How do I get
the planning meeting off to a good start? . . . . . . . . . . . . . . . . . . .
2.6 What is the difference between ‘‘results’’ and ‘‘behaviors’’? . . . . .
2.7 How do you determine someone’s key job responsibilities? . . . . .
2.8 Some big rocks may be bigger than others; some key job
responsibilities are more critical than others. How do you determine
the most important items? . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.9 How do you determine a method for evaluating someone’s
performance in meeting their key responsibilities? . . . . . . . . . . . .
2.10 Descriptive measures seem subjective. Don’t we have to be
objective when we evaluate someone’s performance? . . . . . . . . .
2.11 Where does goal setting fit into the performance-planning process?
2.12 How do I pick the right goals? Where should an individual look to
find goals and objectives? . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.13 How should a goal statement be written? . . . . . . . . . . . . . . . . . .
2.14 What are SMART objectives? . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.15 How high should I set my performance expectations? . . . . . . . . .
2.16 What do I do if the individual disagrees with the goals I want set, or
says that my standards are unreasonable or that one of the key job
responsibilities I’ve identified is not really part of the job? . . . . . . .
2.17 How do I wrap up a performance-planning meeting? . . . . . . . . . .
21
22
24
26
26
27
29
32
32
34
36
37
39
41
42
44
44
3. Performance Execution . . . . . . . . . . . . . . . . . . . . . . . . .
46
3.1 What is ‘‘performance execution’’? . . . . . . . . . . . . . . . . . . . . . . .
3.2 What are the manager’s responsibilities in the performance
execution phase? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.3 What are the employee’s responsibilities in the performance
execution phase? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
46
46
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3.4 How should I keep track of employees’ performance? Should I keep
a journal? And should I record day-to-day performance or just note
the exceptional positive and negative events? . . . . . . . . . . . . . . .
3.5 Should employees have access to my performance log? . . . . . . . .
3.6 How do I motivate people to deliver good performance and to
correct performance problems? . . . . . . . . . . . . . . . . . . . . . . . . .
3.7 What about pay? Isn’t money the only thing that really motivates?
3.8 What can a manager do to create the conditions that motivate? . .
3.9 What about recognition? Isn’t recognizing an employee who’s done
good work an effective motivational tool? . . . . . . . . . . . . . . . . . .
3.10 We’re considering starting an employee-of-the-month program. Is
this a good recognition tool? . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.11 Do people need praise every time they do a good job? . . . . . . . .
3.12 I don’t have a budget for awards to recognize people. How can I
recognize their good performance if I can’t demonstrate financially
that we appreciate good work? . . . . . . . . . . . . . . . . . . . . . . . . .
3.13 Is recognition just a matter of heaping on the praise? . . . . . . . . . .
3.14 How do I actually use recognition? Is there more to it than just
saying, ‘‘Thanks . . . nice job’’? . . . . . . . . . . . . . . . . . . . . . . . . . .
3.15 Won’t some people—the better performers—end up getting more
recognition than others who don’t perform as well? Isn’t that
discriminatory? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.16 Won’t people complain when I deliberately treat some people
better than others? Won’t I be accused of favoritism? . . . . . . . . . .
vii
50
51
52
55
57
64
65
67
68
69
70
72
73
4. Performance Assessment . . . . . . . . . . . . . . . . . . . . . . .
74
4.1 What is ‘‘performance assessment’’? . . . . . . . . . . . . . . . . . . . . . .
4.2 What are the manager’s responsibilities for performance
assessment? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.3 What are the employee’s responsibilities in the performance
assessment phase? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.4 What are my boss’s responsibilities in the performance assessment
phase? Does she have to review and approve my appraisals before
I deliver them to my staff? . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.5 Should I ask the individual whose performance appraisal I am
preparing to make up a list of accomplishments? . . . . . . . . . . . . .
4.6 Should I ask the individual to complete a self-appraisal using the
company’s performance appraisal form? . . . . . . . . . . . . . . . . . . .
4.7 I have to write a performance appraisal. Where do I start? . . . . . .
74
75
77
78
80
82
83
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Contents
4.8 What information do I need to write a valid performance appraisal?
85
4.9 What about collecting data from other people to use on the
performance appraisal form? Would it be a good idea to ask for
information from a salesman’s customers, or ask a manager’s
subordinates about her performance as a supervisor? . . . . . . . . . .
87
4.10 I’ve asked the employee to write a self-appraisal. Should I use what
the employee has written in the self-appraisal as part of the official
appraisal I’m writing? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
88
4.11 Should I put more emphasis on the results the individual achieved
or on the way the person went about doing the job? . . . . . . . . . .
89
4.12 One of my subordinates works in a different city and I don’t see her
very much. How can I appraise her performance accurately? . . . .
90
4.13 Should I include the employee’s successes and failures in
completing the development plan as part of his formal performance
appraisal? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
91
4.14 What are ‘‘rating errors’’? . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
91
4.15 Should I go over the employee’s appraisal with my manager before
I review it with the individual? . . . . . . . . . . . . . . . . . . . . . . . . . .
92
4.16 How do I go about convincing my boss (assuming her approval is
needed) that one of my people deserves a particularly positive or
negative review? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
97
4.17 If the appraiser’s boss approves the appraisal before the employee
sees it, hasn’t the door been closed on the possibility of any
changes? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
98
4.18 The individual failed to achieve an important objective, but there
were extenuating circumstances. How should I rate her
performance? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
99
4.19 In writing the individual’s performance appraisal, should I consider
how well he performs compared with other people in the
department who are doing the same job? . . . . . . . . . . . . . . . . . . 100
4.20 Our performance appraisal form has a rating scale that asks whether
the performance failed to meet expectations/met some
expectations/met all expectations/exceeded expectations/far
exceeded expectations. If I haven’t discussed my expectations with
the employee, how do I rate performance? . . . . . . . . . . . . . . . . . 101
4.21 Our rating scale is numerical: one, two, three, four, and five, with
five being the highest on the scale. Sally basically did a good job
this year. Should I rate her a three, a four, or a five? . . . . . . . . . . . 103
4.22 Should employees in new roles be measured and evaluated the
same as employees who have been in a role for a length of time?
104
Contents
ix
4.23 How can we take the ‘‘personal’’ out of a review and still give an
accurate picture of the employee? For example, Joe’s going through
a divorce. His performance has suffered, but I empathize and want
to give him a passing review. . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
4.24 One of my subordinates does a very good job . . . not breathtakingly
outstanding, but solid and strong and better than average. Should I
rate her in our middle category of fully successful or push her
evaluation over the line and into the superior category? How do I
figure out the right category? . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
4.25 I have a concern about one of my people’s performance, but I
haven’t previously discussed it with him. Is it okay to bring it up for
the first time on the performance appraisal? . . . . . . . . . . . . . . . . 107
5. Performance Review . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
5.1 What is ‘‘performance review’’? . . . . . . . . . . . . . . . . . . . . . . . . . 110
5.2 What are the manager’s responsibilities in the performance review
phase of the process? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
5.3 What are the employee’s responsibilities in the performance review
phase? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
5.4 What should I do before the meeting? . . . . . . . . . . . . . . . . . . . . 114
5.5 Before I sit down to conduct an appraisal discussion with an
individual, is it appropriate to talk with others to get some insights
into what I might expect? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
5.6 How should I open the discussion? . . . . . . . . . . . . . . . . . . . . . . . 119
5.7 How do I start the appraisal discussion with an individual who has
a great deal of experience and has worked for the company much
longer than I have? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
5.8 It’s easy to discuss the performance appraisal when the individual
and I are in agreement. But what do I do when we disagree about
something important? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
5.9 How do I figure out what the employee is feeling? . . . . . . . . . . . . 125
5.10 How can I get someone to agree with an honest and accurate
performance appraisal rating? . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
5.11 The employee I’m about to review is an unsatisfactory performer
and the appraisal tells it like it is. How should I start the meeting?
127
5.12 What do I do when an employee disagrees with something I have
written on the performance appraisal? . . . . . . . . . . . . . . . . . . . . 128
5.13 How do I handle those awkward moments that always seem to arise
in performance appraisal discussions? For example, the employee
x
5.14
5.15
5.16
5.17
5.18
Contents
who is silent, or makes excuses, or turns the conversation around
so that we are caught up in irrelevancies? . . . . . . . . . . . . . . . . . .
How do I handle defensive reactions? . . . . . . . . . . . . . . . . . . . . .
How should I react when an employee starts crying during the
appraisal discussion . . . or gets mad at me? . . . . . . . . . . . . . . . . .
When should I talk about the pay increase? . . . . . . . . . . . . . . . . .
How do I bring the performance appraisal discussion to a successful
close? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
What’s the best way to deal with an employee who refuses to sign
the performance appraisal document and refuses to provide his
own comments? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
129
131
133
134
135
137
6. The Performance Appraisal Form . . . . . . . . . . . . . . . . 139
TE
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6.1 Is there an ideal performance appraisal form? . . . . . . . . . . . . . . .
6.2 How does a company determine which competencies are truly core
competencies? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.3 Why is it better to write the narrative that explains what is meant
by a competency as a description of master-level performance?
Wouldn’t a dictionary definition work just as well? . . . . . . . . . . . .
6.4 What’s the difference between organizational core competencies
and job family competencies? . . . . . . . . . . . . . . . . . . . . . . . . . .
6.5 How do I determine the key job responsibilities of a position? . . .
6.6 Aren’t goals and projects part of a person’s job responsibilities? Why
does an ideal appraisal form have a separate section for goals and
projects? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.7 The last part of the recommended performance appraisal form
covers the individual’s major accomplishments over the course of
the appraisal period. Shouldn’t the individual’s achievements be
described throughout the appraisal form? . . . . . . . . . . . . . . . . . .
6.8 Are there any other elements that could be included on a
performance appraisal form? . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.9 How many different forms should there be? . . . . . . . . . . . . . . . .
6.10 How many rating levels should there be on the form? . . . . . . . . .
6.11 What should we call the different levels? Does it make any
difference whether we use words or numbers? . . . . . . . . . . . . . .
6.12 Should we use different rating scales for assessing different areas
within the form? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.13 Should the form provide for putting different weights on the various
sections? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
139
141
145
147
149
150
151
152
155
156
157
161
162
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xi
6.14 Should the form provide a recommended distribution of
performance appraisal ratings? . . . . . . . . . . . . . . . . . . . . . . . . . . 163
6.15 Some computer-based performance appraisal systems offer an
electronic form with different traits listed: quality of work, quantity
of work, attitude, or dependability. The manager clicks on a one to
five scale and then the machine generates the text for the appraisal.
Are these programs a good idea? . . . . . . . . . . . . . . . . . . . . . . . . 165
6.16 Most people do a good job—not outstanding, not
unacceptable—and therefore get rated in the middle category. But
they all hate getting rated there. They see it as being labeled as a
‘‘C’’ student. How do we explain that getting the middle rating is
not a bad thing? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
7. The Performance Appraisal Process . . . . . . . . . . . . . . 169
7.1 What does an effective performance appraisal process look like? . . 169
7.2 We’re getting ready to design a completely new performance
appraisal system from scratch. Where should we start? . . . . . . . . . 170
7.3 What should top management, appraisers, employees, and human
resources professionals expect from a performance appraisal
system? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
7.4 What kind of training do managers need to do a good performance
appraisal? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
7.5 Do we need to provide training to employees about our
performance appraisal process? . . . . . . . . . . . . . . . . . . . . . . . . . 176
7.6 Should we provide managers with samples of completed appraisal
forms that they can use as models when they have to prepare
performance appraisals? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
7.7 How can an organization determine whether its managers are doing
a good job in performance appraisal and that the system is working
well? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
7.8 Both appraisers and employees are confused about what the
different rating labels actually mean. How do we solve this
communication problem? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
7.9 Managers don’t seem to understand all the things that they need to
do and end up waiting until the last minute to meet their
performance appraisal activities. Human resources then ends up
playing policeman. What can HR do to help them do a better job? 181
7.10 We use a lot of self-directed work teams in our organization. Should
we evaluate team performance in addition to the performance of
individuals? And how do we evaluate the performance of teams? . 183
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7.11 We are concerned that people who perform the same may get
different ratings from different supervisors. How can we make sure
that appraisers apply consistent standards across our organization? 184
7.12 What Is ‘‘upward appraisal’’? . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
7.13 Should forced ranking be part of our performance appraisal
procedure? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
7.14 We are considering either turning our existing performance
appraisal form into an Internet-based application or purchasing a
web-based performance appraisal system. Is either a good idea? . . 191
8. Building Performance Excellence . . . . . . . . . . . . . . . . 193
8.1 What does building performance excellence involve? . . . . . . . . . . 193
8.2 What influences an individual’s development? . . . . . . . . . . . . . . 193
8.3 How do I determine where I, or someone on my team, should
concentrate development efforts? . . . . . . . . . . . . . . . . . . . . . . . . 195
8.4 Why is the ‘‘achievement orientation’’ competency so important?
196
8.5 Why is the competency of ‘‘impact and influence’’ so important?
197
8.6 How do I create a development plan that works . . . one that
actually produces results? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198
8.7 Isn’t development the responsibility of the individual? What are the
manager’s responsibilities for developing subordinates? . . . . . . . . 200
8.8 Most development plans seem to involve little more than just
signing up for training programs. Where does training fit into a
development plan? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202
8.9 How can I use the job itself as a developmental experience? . . . . 203
8.10 Should I evaluate the employee’s success in completing his
development plan as part of the performance appraisal? . . . . . . . . 205
8.11 I have an employee whose performance is not acceptable. I have
had one or two informal conversations with him, but nothing’s
changed. What should I do? . . . . . . . . . . . . . . . . . . . . . . . . . . . 205
8.12 How do I identify exactly what the gap is between the desired
performance and the employee’s actual performance? . . . . . . . . . 207
8.13 How do I make sure that I’m on solid ground before beginning the
discussion about poor performance? . . . . . . . . . . . . . . . . . . . . . . 210
8.14 How do I get the discussion off to a good start? . . . . . . . . . . . . . . 212
8.15 How do I get someone to agree to change and correct a problem?
214
8.16 How do I document a performance improvement discussion? . . . 215
Contents
xiii
8.17 The individual’s quality and quantity of work are okay. It’s his
attitude that’s the problem. How do I solve an attitude problem? . 217
8.18 The individual’s performance is very good, but her attendance
record is spotty. How do I convince someone that we need to come
to work, on time, every day? . . . . . . . . . . . . . . . . . . . . . . . . . . . 219
8.19 Our discipline system seems harsh and inappropriate for
professional employees with its warnings and reprimands and
suspensions without pay. Is there a better approach? . . . . . . . . . .
8.20 Why should we suspend the employee as a final step of our
discipline system? Why not just issue a final written warning, or
create a performance improvement plan, or place the individual on
probation? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.21 If a suspension is the best final step strategy, why should we pay the
employee for the time he is away on suspension? . . . . . . . . . . . .
8.22 Will Discipline Without Punishment work in my organization? . . .
221
223
224
224
9. One Final Question . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
9.1 Now that all is said and done, is performance appraisal really all
that important? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229
About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237
This Page Intentionally Left Blank
Introduction
In sophisticated, well-managed organizations, performance appraisal
is the single most important management tool. No other management
process has as much influence over individuals’ careers and work lives.
Used well, performance appraisal is the most powerful instrument that
organizations have to mobilize the energy of every employee of the
enterprise toward the achievement of strategic goals. Used well, per
formance appraisal can focus every person’s attention on the com
pany’s mission, vision, and values. But used poorly, the procedure
quickly becomes the butt of jokes and the target of Dilbert lampoons.
For over thirty years, I have helped organizations create highly ef
fective, world-class performance appraisal systems. In this time, I have
learned what actually qualifies as ‘‘best practice.’’ I have learned how
to help companies incorporate the most effective procedures there are
for guiding, directing, assessing, and developing human performance.
I have helped them use performance appraisal to achieve important
organizational objectives. I have taught their managers how to become
masters of this challenging and difficult management technique.
Make no mistake. Performance appraisal is difficult. Doing per
formance appraisal is like being in the Olympics of management. Few
people ever get the chance to participate; even fewer are true masters.
My goal in this book is to make you and your organization a true
master of performance appraisal.
The questions in this book have come from two sources. First,
they have come from the thousands of questions I have responded to
from top executives, human resources professionals, managers, and
individuals both in my consulting practice in helping companies cre
ate a new appraisal system, and in the management seminars I have
conducted to help managers maximize the effectiveness of their exist
ing systems.
Second, questions poured forth from hundreds of managers in
response to the e-mail I sent clients, colleagues, and friends just before
I began writing this book. I explained the project that I had under
taken and asked them to send me the most difficult and important
xv
xvi
Introduction
questions they had about performance appraisal. They responded al
most overwhelmingly. The questions in this book are real; they repre
sent the actual issues of managers whose goal is to create a climate of
performance excellence.
The book begins with an overview of why performance appraisal
is an incredibly powerful but underappreciated management tech
nique. Chapters 2 through 5 deal with the four phases of an effective
performance management system: performance planning, execution,
assessment, and review.
The sixth chapter deals specifically with the performance ap
praisal form. Yes, there is an ideal form. In Chapter 6, I will tell you
exactly what an ideal appraisal form looks like—what it contains and
how to create one.
But we all know that performance appraisal isn’t a form. It’s a
system. In Chapter 7, I will explain exactly how the most effective
performance appraisal process works.
Chapter 8 deals with building performance excellence. In this
chapter I will cover two critical issues: First, I will describe what actu
ally works in developing human talent. Second, I will tell you how to
solve people problems when they arise.
The last chapter is the shortest. In this final chapter, I will respond
to only one question. But this question is the most important of all the
questions, and the one that truly does deserve a chapter all to itself:
Now that all is said and done, is performance appraisal really all that
important? Yes, it is, and I’ll tell you why.
For almost thirty years, I have been a consultant whose work fo
cuses exclusively on performance management. My goal is to help
organizations create performance management systems that reward
excellence and demand personal responsibility; to help their manag
ers understand how to maximize the contributions of every person on
their team. I know that the single most important competency re
quired to build performance excellence is not knowledge or skill or
desire: It is courage. I hope this book gives every reader the incentive
to muster the courage to build performance excellence into every as
pect of life.
This book will probably generate as many questions as it an
swers. If you have a question—or an insight, or a success story—
please share them with me at
[email protected] or
visit my website, www.PerformanceAppraisal.com.
The
PERFORMANCE
APPRAISAL
QUESTION and
ANSWER BOOK
Chapter 1
The Importance of
Performance Appraisal
1.1 What is ‘‘performance appraisal’’?
Performance appraisal is a formal management system that provides
for the evaluation of the quality of an individual’s performance in an
organization. The appraisal is usually prepared by the employee’s im
mediate supervisor. The procedure typically requires the supervisor to
fill out a standardized assessment form that evaluates the individual
on several different dimensions and then discusses the results of the
evaluation with the employee.
Tell Me More
Too often, performance appraisal is seen merely as a once-a-year drill
mandated by the personnel department. But in organizations that take
performance appraisal seriously and use the system well, it is used as
an ongoing process and not merely as an annual event. In these compa
nies, performance appraisal follows a four-phase model:
Phase 1: Performance Planning. At the beginning of the year, the
manager and individual get together for a performance-planning meet
ing. In this hour-long session they discuss what the person will achieve
over the next twelve months (the key responsibilities of the person’s job
and the goals and projects the person will work on) and how the person
will do the job (the behaviors and competencies the organization ex
pects of its members). They typically also discuss the individual’s de
velopment plans.
Phase 2: Performance Execution. Over the course of the year the em
ployee works to achieve the goals, objectives, and key responsibilities
of the job. The manager provides coaching and feedback to the individ
1
2
The Performance Appraisal Question and Answer Book
ual to increase the probability of success. He creates the conditions that
motivate and resolves any performance problems that arise. Midway
through the year—perhaps even more frequently—they meet to review
the individual’s performance thus far against the plans and goals that
they discussed in the performance-planning meeting.
Phase 3: Performance Assessment. As the time for the formal per
formance appraisal nears, the manager reflects on how well the subor
dinate has performed over the course of the year, assembles the various
forms and paperwork that the organization provides to make this as
sessment, and fills them out. The manager may also recommend a
change in the individual’s compensation based on the quality of the
individual’s work. The completed assessment form is usually reviewed
and approved by the appraiser’s boss. Others—perhaps the department
head or the compensation manager—may also review and approve the
assessment.
Phase 4: Performance Review. The manager and the subordinate
meet, usually for about an hour. They review the appraisal form that
the manager has written and talk about how well the person performed
over the past twelve months. At the end of the review meeting they set
a date to meet again to hold a performance-planning discussion for
the next twelve months, at which point the performance management
process starts anew.
Of course there may be many individual variations on the basic
theme, but most sophisticated companies generally follow this four
phase process. Figure 1-1 illustrates the basic four-phase process.
1.2 Where did performance appraisals
come from?
There are early references to performance appraisal in America going
back over a hundred years. The federal Civil Service Commission’s
merit rating system was in place in 1887. Lord & Taylor introduced
performance appraisal in 1914. Many companies were influenced by
Frederick Taylor’s ‘‘scientific management’’ efforts of the early twenti
eth century and concocted performance appraisals.
Before World War II, however, very few organizations conducted
any formal performance appraisals. A handful of companies and the
military were the only ones using the procedure regularly. Most ap
praisals that were done concentrated more on an individual’s personal
ity and traits than on actual achievements against goals and formal
analyses of the behaviors that produced those results.