Pay for Performance Evaluating Performance Appraisal and Merit Pay (1991) / Chapter Skim
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4 Performance Appraisal: Definition, Measurement, and Application
4 Performance Appraisal: Definition, Measurement, and Application
Pages 45-76
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From page 45... ...
Within the measurement tradition, emanating from psychometrics and testing, researchers have worked and continue to work on the premise that accurate measurement is a precondition for understanding and accurate evaluation. Psychologists have striven to develop definitive measures of job performance, on the theory that accurate job analysis and measurement instruments would provide both employer and employee with a better understanding of what is expected and a knowledge of whether the employee's performance has been effective.
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From page 46... ...
The question of which performance dimensions to evaluate tended to be taken as a given. Although, strictly speaking, we do not disagree with the test analogy for performance appraisals, it can be misleading.
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From page 47... ...
Research relating to managerial-level jobs is presented as available, but most of the work in job performance description and measurement has involved nonmanagerial jobs.) The second section deals with research on the more applied iThe reason for this imbalance in the research literature is obvious: managerial jobs are difficult to define and assess at a specific level not only are they fragmented, diverse, and amorphous, but many of the factors leading to successful outcomes in such jobs are not directly measurable.
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From page 48... ...
Definitions have ranged from general to specific and from quantitative to qualitative. Some researchers have concentrated their efforts on defining job performance in terms of outcomes; others have examined job behaviors; still others have studied personal traits such as conscientiousness or leadership orientation as correlates of successful performance.
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From page 49... ...
propose that descriptions of the performance construct for purposes of appraisal should include job behavior, situational factors that influence or interact with behavior, and job outcomes. Dimensions of Job Performance Applied psychologists have used job analysis as a primary means for understanding the dimensions of job performance (McCormick, 1976, 1979~.
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From page 50... ...
There is general agreement in the literature that the critical incident technique has proven useful in identifying a large range of critical job behaviors. The major reservations of measurement experts concern the omission of important behaviors and lack of precision in working incidents, which interferes with their usefulness as guides for interpreting the degree of effectiveness in job performance.
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From page 51... ...
By the time the project is completed in 1992, over $30 million will have been expended to develop an array of job performance measures including hands-on job-sample tests, written job knowledge tests, simulations, and, of particular interest here, performance appraisals and to administer the measures to some 9,000 troops in 27 enlisted occupations. Each of the services already had an ongoing occupational-task inventory system that reported the percentage of job incumbents who perform each task, the average time spent on the task, and incumbents' perceptions of task importance and task difficulty.
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From page 52... ...
In other words, the picture of job performance that emerged from the JPM research was suited to the organizational objectives and to the nature of the jobs studied. The same job analysis design would not necessarily work in another context, as the following discussion of managerial performance demonstrates.
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From page 53... ...
These researchers suggest that assessment of effective managerial performance in terms of specific behaviors is particularly difficult because many of the behaviors related
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From page 54... ...
Attempts to remove subjectivity from the appraisal process by developing comprehensive lists of tasks or job elements or behavioral standards are unlikely to produce a valid representation of the manager's job performance and may focus raters' attention on trivial criteria. In a private-sector organization with a measurable bottom line, it is frequently easier to develop individual, quantitative work goals (such as sales volume or the number of units processed)
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From page 55... ...
Scale Formats The earliest performance appraisal rating scales were graphic scales they generally provided the rater with a continuum on which to rate a particular trait or behavior of the employee. Although these scales vary in the degree of explicitness, most provide only general guidance on the nature of the underlying
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From page 56... ...
Many decades of research on ratings made with graphic scales found them fraught with measurement errors of unreliability, leniency, and range restriction, which many scholars attributed to the limited amount of definition and guidance they provided the rater. In reaction to these perceived limitations of graphic scales, a second type of scale behaviorally anchored rating scales (BARS)
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From page 57... ...
Validity Validity is a technical term that has to do with the accuracy and relevance of measurements. Since the validity of performance appraisals is a critical issue to measurement specialists and a basic concern to practitioners who must withstand legal challenges to their performance appraisal tools and procedures, we are presenting the following discussion of validation strategies and how they apply to the examination of performance appraisal.
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From page 58... ...
Content Evidence In performance appraisal, a determination of the content validity of the appraisal has been based on the type of analysis used in developing the appraisal instrument. If detailed job analyses or critical incident techniques were used and behaviorally based scales were developed, it has been generally assumed that the appraisal instruments have content validity.
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From page 59... ...
However, any simple reliance on content validity to justify a measurement system has long since been dismissed by measurement specialists. Even if the accomplishment of particular tasks is linked to effective job performance, a comprehensive enumeration of all job tasks and rating on each of them does not give any guidance on what is important to effective job performance and what is not.
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From page 60... ...
The question that interested the author was whether supervisor ratings are determined entirely by job performance (the job sample measure) or whether the ratings are influenced by the employee's job knowledge.
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From page 61... ...
(1973) used the multimethod-multirater technique to compare the construct validity of behaviorally based rating scales with a rating of each behavioral example separated from its dimension (like a Mixed Standard Scale approach)
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From page 62... ...
This suggests that the scales provided clear definitions of behaviors, which allowed the raters to discriminate among the behaviors with some degree of consistency. The behavioral rating scales were superior to the summated ratings in terms of halo (similarity of ratings across performance dimensions)
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From page 63... ...
Hunter (1983) in a detailed meta-analysis showed a corrected correlation of .27 between cognitive ability tests and supervisor ratings of employee job performance.
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From page 64... ...
. All of these studies demonstrate the existence of moderate correlations between employment test scores and supervisor ratings of employee job performance.
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From page 65... ...
suggest that if age effects exist at all, they are likely to be small. Another source of indirect evidence for suggesting that under some conditions supervisors can make accurate performance ratings is the strength of the relationship between performance appraisal feedback and worker productivityby inference, if feedback results in increased productivity, then the performance appraisal must be accurate.
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From page 66... ...
The results show that supervisors can give reliable ratings of employee performance under controlled conditions and with carefully developed rating scales. In addition, there is indirect evidence that supervisors can make moderately accurate performance ratings; this evidence comes from the studies in which supervisor ratings of job performance have been developed as criteria for testing the predictive power of ability tests and from a limited number of studies showing that age, race, and gender do not appear to have a significant influence on the performance rating process.
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From page 67... ...
approaches to improving the quality of performance appraisal ratings, and (3) the types and sources of rating distortions (such as rating inflation)
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From page 68... ...
Greller and Herold (1975) asked employees from a number of organizations to rate five kinds of information about their own performance as sources of information about how well they were doing their job: performance appraisals, informal interactions with their supervisors, talking with coworkers, specific indicators provided by the job itself, and their own personal feelings.
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From page 69... ...
, is one of the reasons that performance appraisals often fail to achieve their desired motivational effect. Approaches to Increasing the Quality of Rating Data Applied psychologists have identified a variety of factors that can influence how a supervisor rates a subordinate.
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From page 70... ...
proposed that rater training is more important in reducing rating errors than is the type of rating scale used. They compared the rating responses of trained and untrained raters on three rating scales (one trait and two behaviorally based scales)
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From page 71... ...
Behaviorally Based Rating Scale Design Another approach used by researchers to reduce rating errors has involved the use of rating scales that present the rater with a more accurate or complete representation of the behaviors to be observed and evaluated. Behaviorally based scales may serve as a memory or observation aid; if developed accurately, they can provide raters with a standard frame of reference.
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From page 72... ...
Context: Sources of Rating Distortion it is widely assumed that the purpose of rating, or more specifically, the uses of rating data in an organization, affects the appraisal process and appraisal outcomes (Landy and Parr, 1980; Mohrman and Lawler, 1983; Murphy and Cleveland, 19911. That is, it is assumed that the same individual might receive different ratings and different feedback if a performance appraisal system is used to make administrative decisions (e.g., salary adjustment, promotion)
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From page 73... ...
By turning in high ratings, supervisors may be able to avoid a number of otherwise difficult problems in their interactions with their subordinates. Equity theory provides a second, related framework for explaining rating distortion.
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From page 74... ...
The bulk of the existing research on job performance and performance appraisal deals with jobs that are more concrete and with clearer outcome measures research that is not directly relevant to managerial jobs. Psychometric Properties Within the framework of the psychometric tradition, research establishes that performance appraisals show a fairly high degree of reliability and moderate validities.
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From page 75... ...
5. Although behaviorally based scales have not been shown to be superior to other scales psychometrically, some researchers suggest that behaviorally anchored rating scales offer advantages in providing employees with feedback and in establishing the external and internal legitimacy of the performance appraisal system.
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From page 76... ...
A third gap has to do with the implications of the reliability, validity, and other psychometric properties of appraisal systems for the behavior of employees and the organization's effectiveness. With few exceptions, the research does not establish any performance effects of performance appraisal.
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