PAULA ROJO HUMAN RESOURCE MANAGEMENT 10/11/2022

LESSON 3. PERFORMANCE MEASUREMENT

It leads not only to the evaluation of people but also the development of people. We want our people to get better to
achieve the organization’s goal.
WHAT IS PERFORMANCE APPRAISAL
Performance: the achievement of specific results required by the job through specific actions while maintaining or
creating coherence with the collective (the other people), the procedures (processes I am supposed to follow), and
the conditions of the organizational environment (Boyatzis, 1982).
Performance appraisal: includes identification, measurement and management of human performance in
organizations.
o Identification: what should I evaluate? Based on job description (because this is the way to know which type
of activities I will do and the results I want to achieve) and affects organizational success (because depending
on what I decide to evaluate, people will shape their behavior accordingly to it).
o Measurement: how do I evaluate? Judgement on good/bad performance. It should be consistent throughout the
organization. We have different types of judgement, and we will also have different types of techniques.
o Management: How do I make performance increase? It is future oriented view. We can use it to make feedback
and coach.
OBJECTIVES OF PERFORMACE MANAGEMENT
Administrative purposes:
o Decisions on promotions, terminations, and rewards: evaluating performance allow me to decide who to
promote, who not, who to terminate, who not.
o Useful to validate our selection system: because we have certain process for selection, and you are supposed
to have decide the best people for the task and then you evaluate if your selection was right. We expect them to
perform according with our expectations.
Developmental purposes:
o Direction and control: align individual goals with organizational objectives
o Providing feedback, recognizing merits (motivation) or signaling alert situation
o Understand and diagnose organizational problems: if they have a bad performance the main reason is
because of the person but I could be because other reasons that the person couldn’t achieved the desired results.
PERFORMANCE MANANGEMENT: MANAGE IT EFFECTIVELY
Performance management is not always well performed in organizations
o Give to employee’s clear indications on the requirements and/or objectives that will be evaluated
o Identify who is the best person/s to evaluate the employee (managers need to know what and how to assess;
need to have the information and the possibility to observe the employee)
o Managers should perceive the benefits of devoting time and energy to evaluation. If they don’t, the entire
process is useless.
o The evaluator and the employee need to discuss about the outcome of the process (future-oriented feedback).
We need to know how to improve, what things we do wrong.
o A continuous informal appraisal > one-a- year formal evaluation or twice a year. Two important points:

 Supervisors should be that good to memorize everything they need to evaluate in 365 days (and this is not
possible really, so evaluation is bias, it is related with our perspective)

1
PAULA ROJO HUMAN RESOURCE MANAGEMENT 10/11/2022

 If I tell people what to improve once a year, during that year there won’t be improvement because I haven’t
told them.
So, I need to give feedback to people every day, not every year.

IDENTIFICATION OF PERFORMANCE PARAMETERS

Performance goals (KPI): results that are required to the employee.

Behaviors (competencies): behaviors that lead to the achievement of significant results.

Example of evaluation of the performance of a receptionist: asking customers to evaluate the relationship with
them. It is measure through the satisfaction of customers.

Area of responsibility: customer satisfaction by performing a quality check in and check out service.
 Performance objectives: detection of the level of customer satisfaction.
 Organizational behavior: observation of problem-solving behaviors, relational or negotiation effectiveness,
which lead to significant levels of customer satisfaction.

When I have difficulty in determine the results, we will focus on behavior, but both are important. The decision of
focusing on results or behaviors (influence how people achieve the results) depends on in what I am interested.
Results are more objective, but we can’t always determine them.

IDENTIFYING PERFORMANCE DIMENSIONS

What is measured should be directly tied to strategic objectives because measurement should be viewed as a
management tool, not a measurement exercise.

The decision evaluate behaviors rather than results depends on various factors, including the difficulty of detecting
and measuring results and the need to indicate not only what must be achieved but also how to achieve it. When
the results are detectable, you can also opt to integrate the two parameters in the evaluation form.

An increasingly popular approach to identifying performance dimensions focuses on behavioral competencies, the
observable characteristics people bring with them in order to perform the job successfully.

QUICK REMINDER ON BEHAVOIRAL COMPENTENCIES AND CODEBOOKS

Behavioral competency: sets of behavior organizes around an underlying “intent” (Boyatzis, 2008)
Different models or codebooks identify competencies’ definitions and related behaviors.

Interpersonal awareness

Definition: the ability to notice, interpret, and anticipate others’ concerns and feelings and to communicate this
awareness empathetically to others.
o Understands the most important concerns of others
o Knows what other individuals like and dislike
o Understands the reasons underlying others’ behavior
o Notices what others are feeling, based on their choice of words, tone of voice, and other nonverbal bahvior
o Anticipates how others will react to a situation
o Is aware of both the strengths and weaknesses of others
o Takes time to listen when others come with problems
o Acts to address the concerns of others

2
PAULA ROJO HUMAN RESOURCE MANAGEMENT 10/11/2022

THRESHOLD OR DISTINCTIVE COMPETENCIES

o Threshold competencies: essential characteristics that anyone holding the position must possess to achieve a
minimum level of effectiveness, but which don’t distinguish best performers. Everyone needs to achieve a
minimum level of performance.
o Distinctive competencies: characteristics that distinguish best performers from average performers. It can
help me in selection and training: When I do the selection, I should try to get people that already have this type
of characteristics. I can try to train people in order that they get these competencies so they would improve the
performance of the whole organization.

MEASURING PERFORMANCE
Examples
o How do I measure productivity? accounting items and how much time do I need to perform
o How do I measure the quality of the product (Customer satisfaction)?
o How do I measure creativity? The level of innovation, how different is my product compared with existing
products, how many new ideas.
GENERAL PRINCIPLES WHEN MEASURING
Reliability: consistency of measurement. Two ways:
 Test-retest reliability: degree to which test scores are consistent from one test administration to the next (if you
take a math test every week for five weeks and always obtain the same score).
 Inter-rater reliability: degree of agreement between two or more raters (if five different evaluators all judged
you to have the same level of social skill).
Validity. The extent to which the technique measures the intended knowledge, skill, or ability.
For instance, it is the extent to which scores on a test correspond to actual job performance.
ENTRA EN EL EXAMEN. Different types of validity:

3
PAULA ROJO HUMAN RESOURCE MANAGEMENT 10/11/2022

Face validity. Example: we want to measure empathy:

 How good are you in creating relationships in the university?
 How good are you in listening to people?
Here, face validity is not good.
Content validity: I need to include all dimensions of the thing I want to measure.
Predictive validity: the language in which I am predicting something allows me to measure other events. For
example, measuring empathy lets me measure the quality of my relationships with my friends.
Concurrent validity: I am focusing on how the measurement is discriminated in groups.
Convergent validity: I am trying to understand if two variables are correlated or not. I check it.
*Extra: correlation: linear relationship between two variables. Example: empathy & trust, they are correlated. If I
have low empathy, I will have low trust. If I have high empathy, I will also have high trust.
MEASURING PERFORMANCE
Type of judgment
Relative (I do rankings of people) vs absolute (I just measure results or behaviors, not ranking)
Type of performance data I am collecting
 They can be based on trait
 They can be based on behavior
 They can be based on outcome (result).
TYPE OF JUDGMENT
RELATIVE JUDGMENT
o Rank order
o Supervisors compare an employee’s performance to the performance of other employees doing the same job. I
force the supervisor to discriminate.
Example: how is the older brother? Oldest, intermediate, and youngest. In absolute judgment would be 21 years
old, 18 years old and 14 years old.
SOME MAIN TOOLS

o Straight ranking: list best to worst

o Alternative ranking: best at the head of the list and the worst at the bottom. Than, the best and worst are
selected from the remaining, the best is placed second on the list and he worst next to the last.
o Forced distribution method: the supervisor must assign only a certain portion of subordinates to each of
several categories of a factor (5 categories with a fixed percentage of all workers falling within each of the
categories). Follows a normal distribution curve (it is an assumption).

ADVANTAGES

4
PAULA ROJO HUMAN RESOURCE MANAGEMENT 10/11/2022

1. Force supervisors to differentiate among their workers.

DISADVATANGES

1. No clear how great and small differences among workers

2. Difficult to compare between different teams (do not reveal whether the top-rated worker in one team is
better or worse than an average worker in another team)
3. Force managers to identify differences among workers where none may truly exist
4. Based on the assessment of overall performance, impedes detailed feedback.

ABSOLUTE JUDGMENT
Judgments are based on performance standards. Implies no ranking. Example: how old are you? Without
comparing between people.
ADVANTAGES

1. They avoid creating conflict among workers

2. Easier to defends when legal issues arise compared to relative systems
DISADVATANGES

1. All workers in a group can receive the same evaluation if the supervisor is reluctant to differentiate among
workers
2. Different supervisor can have markedly different evaluation standards
For example, a rating of 6 from an “easy” supervisor may actually be lower in value than a rating of 4 from a
“tough” supervisor.
A performance review is an absolute judgment. Here we can find employees and supervisor comments because
of the discussion of the results between them.
TYPE OF PERFORMANCE DATA
TRAIT APPRAISAL
Ask the supervisor to make judgments about traits, worker characteristics that tend to be consistent and enduring.
I am evaluating the person and looking at his characteristics more than he or she does. It can be relevant because
from the characteristics of the person I can evaluate the fit of the type of job. And sometimes I use this type of
information to infer likely behaviors of that person.

BEHAVIOR APPRAISAL

5
PAULA ROJO HUMAN RESOURCE MANAGEMENT 10/11/2022

FOCUS ON ASSESSING A WORKER’S BEHAVIORS. We focus on what the people do.

Instead of ranking traits, the rater is asked to assess whether an employee exhibits certain behaviors.
METHODS:

o CHECKLIST SCALE: I ask the supervisor dos this person does it or not (yes or no). But it is a bit drastic,
sometimes the answer is it depends.

o BEHAVIORAL OBSERVATION SCALES (BOS) – FREQUENCY with which I perform a specific behavior. In
this case I rate the frequency of behavior.
BOS appraisers rate subordinates on the frequency of these crucial incidents as they are observed over a given
period of time. The ratings are assigned on a 5-point scale.

o BEHAVIORALLY ANCHORED RATING SCALE (BARS) – VALUE.

Critical incidents serve as anchor statements on a scale and the rating form usually contains six to eight
specifically defined performance dimensions.

BEHAVIORAL METHODS: ADV & DIS

ADVANTAGES
 More legally defensible than trait scales
 Provide employees with specific examples of the types of behaviors to engage in
 Easier acceptance: both workers and supervisor can be involved in the process of generating behavioral
scales.

6
PAULA ROJO HUMAN RESOURCE MANAGEMENT 10/11/2022

DISADVANTAGES

 Developing them can be very time consuming

 Too specific (do not allow for “other” behaviors)
 Significant organizational changes can invalidate the scale.
OUTCOME APPRAISAL
Management by objectives: a goal-directed approach to performance appraisal in
which workers and their supervisor set goals together for the upcoming evaluation
period. Here I just evaluate the results, what you achieve it, not how.
o Type of objective
o Weight %
o Level or grade

Rating: evaluation of to what extent the goals have been met.

MBO: ADV & DIS
ADVANTAGES

o Clear and ambiguous criteria to judge worker performance.

o No subjectivity and the potential for error and bias
o Flexibility in changing performance standards according to new outcome measures
o Tied to strategic objectives
DISADVANTAGES

o May give a seriously deficient and distorted view of worker performance levels
o Development of a “results at any cost” mentality.

HOW CAN WE ENSURE A REALIABLE RATING?

o Choosing the right rating system
o Choosing the right rater (person)

It’s both. But what is the “right” rater (or source)?

Customers, self-review, peer- review, the worker’s direct supervisor, subordinate review or 360-degree feedback
(means: myself, supervisor, peers, subordinates and eventually external people).
It is difficult to find consistency in evaluation because people usually have different lenses to look at reality.
360 DEGREE FEEDBACK
One of the most remarkable innovations in leadership development over the past
20 years (Helzett, 2008)
 Gives overview of different perspectives (however different raters may
have different evaluation ability)
 No need for agreement if it is for developmental purpose (Taylor, 2014)
 Allow for comparison between external rater and self-assessment
 The individual reviews the results, seeks clarification from the raters, and
sets specific development goals based on the strengths and weaknesses
identified

7
PAULA ROJO HUMAN RESOURCE MANAGEMENT 10/11/2022

CHALLENGES TO EFFECTIVE PERFORMANCE MEASUREMENT

 Rater errors and bias
 The influence of liking
 Organizational politics
 Whether to focus on the individual or the group
 Legal issues
RATER ERRORS
o A rater error is an error in performance appraisal that reflects consistent biases on the part of the rater.
o One of the most prominent rater errors is halo effect (Throdmmmm, 1920): the tendency to rate similarly across
dimensions.
o A supervisor may make an overall judgment about a worker and then conform all dimensional ratings to that
judgment and/or a supervisor may make all ratings consistent with the worker’s performance level on a
dimension that is important to the supervisor
ACCURACY OF PERFORMANCE RATING RATINGS ERRORS

GENDER BIAS
We analyzed a large-scale military dataset (over 4.000 participants and 81.000 evaluations) to examine objective
and subjective performance measures that included a list of 89 positive and negative leadership attributes that were
used to assess leader performance in a military leadership setting
No gender differences in objective measures (example: grades, fitness scores, class standing), which is consistent
with prior research.
The subjective evaluations provided a wealth of interesting findings.

8
PAULA ROJO HUMAN RESOURCE MANAGEMENT 10/11/2022

THE DIFFERENT WORDS USED TO DESCRIBE MALE AND FEMALE LEADERS

DOUBLE-BIND AND GENDER BIAS

When women demonstrate behaviors in contrast with the gender stereotypic perceptions and inconsistent with the
attributes believed to be relevant for a leader, they are more subject to ratings of potential career derailment than
their male counterpart.
Double-bind argument: women are penalized both if the behave in a masculine manner because they violate
gender role expectations, and if they behave in a feminine manner because they do not match the “leader-like”
attributes.
LIKING
Liking can cause errors when raters allow their like or dislike of an individual to influence their assessment of that
person’s performance but which is the causal relationship?
Precautions:
 A performance diary of observed behavior for each worker as the basis for evaluation and other managerial
actions.
 To prevent error and bias, one should record behavioral incidents, not opinions or inferences about the
behavior.
TEAM VS INDIVIDUAL
If in the organization the work is structured in teams, there are at two levels of appraisal:
o The individual contribution to team performance.
o The performance of the team as a unit

Precautions
 If I do not evaluate team level performance, people may focus on individual goals rather than common
objectives.
 If I do not evaluate individual performance, people may become free riders.
MANAGING PERFORMANCE
Although the ratings themselves are important, even more critical is what managers do with them.

9
PAULA ROJO HUMAN RESOURCE MANAGEMENT 10/11/2022

Appraisal interview is the moment in which the feedback on the evaluation is discussed (supervisor + employee
(+HR)) Formal appraisal interview usually happens once a year/six months (critical).
Informal day-to-day performance management.
In order to be effective:
1. Explore the causes of performance problems.
2. Direct attention to the causes of problems.
3. Develop an action plan and empower workers to reach a solution.
4. Direct communication at performance and provide effective feedback.
IMPROVING PERFORMANCE MANAGEMENT
o Use of wider data collection techniques and multiple raters.
o Managers require training to effectively coach employees on their career paths
o Organizational goals, team goals and individual goals should be aligned.
o Performance management should be a continuous effort rather than spot activity.
o Positive feedbacks are relevant.
o Less documentation, more discussion

EXTRA STAFFING HOMEWORK: JOB DESCRIPTION – TIME FOR SIMULATION

 Imagine we have to move you to another country; would you accept it?
 Imagine we propose you to increase your compensation if you work 3 more hours, would you be fine with it?
 If we need you urgently, would you come to the office?
 How would you do a marketing campaign online for this type of product?
 Do you know how to deal with the program STATA?
 Have you ever done an interview?

10