BUS603: Managing People

A number of suggestions have been advanced recently to minimize the effects of various biases and errors on the performance appraisal process. When errors are reduced, more accurate information is available for personnel decisions and personal development. These methods for reducing error include

• ensuring that each dimension or factor on a performance appraisal form represents a single job activity instead of a group of job activities.
• avoiding terms such as average, because different evaluators define the term differently.
• ensuring that raters observe subordinates on a regular basis throughout the evaluation period. It is even helpful if the rater takes notes for future reference.
• keeping the number of persons evaluated by one rater to a reasonable number. When one person must evaluate many subordinates, it becomes difficult to discriminate. Rating fatigue increases with the number of ratees.
• ensuring that the dimensions used are clearly stated, meaningful, and relevant to good job performance.
• training raters so they can recognize various sources of error and understand the rationale underlying the evaluation process.

Using mechanisms like these, better employee ratings that can have greater meaning both for the individual employee and the organization will result.

Concept Check

1. What are performance appraisals, and how are they used in organizations?
   
2. How are performance appraisals used as a reward system, and what problems can they cause?