Compensation Chapter 11- Performance Appraisals

Recency error

Performance (either good or bad) at the end of the review period plays tool large a role in determining an employee's rating for the entire period

Straight ranking

A type of performance appraisal format in which the rater compares or ranks each employee relative to each other employee

Rating formats

A type of performance appraisal format that requires that raters evaluate employees on absolute measurement scales that indicate varying levels of performance

Balanced Scorecard Approach

A corporate-wide, overall performance measure typically incorporating financial results, process improvements, customer service, and innovation

Alternation ranking

A job evaluation method that involves ordering the job description alternately at each extreme. All the jobs are considered. Agreement is reached on which is the most valuable and then the least valuable. Evaluators alternate between the next most valued and next least valued and so on until the jobs have been ordered

Essay format

A open-ended performance appraisal format. Te descriptors used can range from comparisons with other employees to adjectives, behaviors, and goal accomplishment

Central tendency Error

A rating error that occurs when a rater consistently rates a group of employees at or close to the midpoint of a scale irrespective of the true score performance of ratees. Avoiding extremes in ratings across employees

Clone error

A rating error that occurs when a rater gives better ratings to individuals who are like the rater in behavior or personality

Management by Objectives

An employee planning, development, and appraisal procedure in which a supervisor and a subordinate, or group of subordinates, jointly identify and establish common performance goals. Employee performance on the absolute standards is evaluated at the end of the specified periods

Standard rating scale

Appraisal system characterized by (1) one or more performance standards being developed and defined for the appraiser and (2) each performance standard having a measurement scale indicating varying levels of performance on that dimension.

Brito v. Zia Company

Benchmark case that interpreted performance evaluation as a test, subject to validation requirements, and used these evaluations based on a rating format to lay off employees, resulting in a disproportionate of minorities being discharged.

Horn Error

Downgrading an employee across all performance dimensions exclusively because of poor performance on one dimension

Seniority increases

Pay increases tied to a progression pattern based on seniority. To the extent performance improves with time on the job, this method has the rudiments of paying for performance

Performance Metrics

Quantitative measures of job performance

Halo Error

Rating error in which an appraiser gives favorable ratings to all job duties based on impressive performance in just on job function.

Leniency error

Rating error in which the rater consistently rates someone higher than is deserved

First impression error

Rating error in which the rater develops a negative (positive) opinion of an employee early in the review period and allows it to negatively (positively) color all subsequent perception of performance

Severity error

Rating someone consistently lower than is deserved

Behaviorally anchored rating scales

Variants on standard rating scales in which the various scale levels are anchored with behavioral descriptions directly applicable to jobs being evaluated

Spillover error

The fact that improvements obtained in unionized firms affect nonunion firms seeking ways to lessen workers' incentives for organizing a union

Rater-error training

Training that enables performance appraisers to identify and suppress psychometric errors such as leniency, severity, central tendency, and halo errors when evaluating employee performance

Performance-standard training

Training that gives performance appraisers a frame of reference for making ratee appraisals

Performance-dimension training

Training that gives performance appraisers an understanding of the dimensions on which to evaluate employee performance

Paired-comparison ranking

a ranking job evaluation method that involves comparing all possible pairs of jobs under study

Ranking formats

a type of performance appraisal format the requires that the rater compare employees against each other to determine the relative ordering of the group on some performance measure

Criterion contamination

allowing nonperformance factors to affect performance scores

Criterion deficient

criterion fails to include all of the dimensions relevant to job performance

Pay increase guidelines

the mechanisms through which levels are translated into pay increases and, therefore, dictate the size and time of the pay reward for good performance.