Performance Appraisal

Appraisal Purpose

Performance appraisals may be used for a variety of purposes, which may be classified into three categories: within-person, between-person, and system maintenance purposes. Within-person purposes involve identifying an employee's strengths or weaknesses to provide developmental feedback to the employee, set employee goals, or suggest particular training or development programs. Between-person purposes are used to make comparisons between employees and may be used to identify who should be promoted, administer merit pay increases, or decide which employees should be terminated. System maintenance purposes include using the appraisals to validate personnel selection assessments, identify organizational training needs, or document information pertaining to personnel decisions. Research indicates that the organizations often use performance appraisals for multiple purposes simultaneously, and the observed ratings and user attitudes differ as a function of rating purpose. Appraisal purpose is an important consideration given that it will direct how an organization's performance management system is developed, implemented, and maintained.

Rater Source

Supervisors are the most widely used source of performance appraisal information. Recent changes in how organizations are structured and function (e.g., flatter and more decentralized, organized around team-based work) have led many organizations to collect performance information from nonsupervisory sources. These rater sources may include peers, subordinates, or customers. Research indicates that different rater sources provide different information, and a more comprehensive assessment of work behaviors [Page 598]may be obtained by collecting information from multiple sources.

Rating Content and Format

Virtually any aspect of employee behavior, such as specific behaviors or outcomes, and any level of performance, whether individual or group, may be appraised. Early performance appraisal systems tended to focus on evaluating traits, whereas the current focus is on evaluating job-related behaviors. Performance appraisals generally evaluate past performance, but some forms may require raters to make predictions about potential or future performance. Rating formats may also differ across situations such that, for example, some formats requiring ratings and other formats require raters to rank-order employees.

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