"New Developments in Performance Management"

G. Latham, J. Almost, S. Mann, and C. Moore

Organizational Dynamics

2005, 34(1), pp. 77-87

This article summarizes things learned in the past decade about ways organizations can overcome problems with the traditional performance appraisal. Five general areas are addressed by the authors:

• Legal issues—"Organizations are most likely to win court challenges when:
  • The appraisal instrument is based on a written job analysis
  • It is behavioral
  • There is a written manual for appraising and then coaching an employee
  • Reliability and validity of the appraisal decisions have been documented
  • The results of an appraisal have been reviewed with the employee
  • Organizations can show that appraising and coaching of employees is "fair"
• The appraisal instrument—Instruments usually provide behaviorally-based, trait-based or results-based measures. Employees and raters are most likely to have positive attitudes "if the appraisal instrument facilitates assessments that are: (1) perceived as factual, objective, and unbiased; (2) explicitly related to the organization's strategy; (3) developmental, in that the assessment specifies what the employee must start doing, stop doing, continue doing, or do differently to improve performance; and (4) conducive to setting specific high goals for doing so."
• Who should appraise and coach the employee—Multisource, 360-degree feedback is now used at an estimated 90 percent of the Fortune 1000 firms. Most commonly, feedback is collected from the supervisor, subordinates, peers, and oneself.
• Objectivity and fairness—Training should teach raters:
  • The relevant performance criteria for evaluating people
  • The relevant job behaviors to observe
  • Ways to effectively minimize rating biases and errors
  Raters should also be formally evaluated on "the accuracy and comprehensiveness of appraisals of others, as well as on the extent to which organizational justice principles are followed, and specific high goals are set."
• The coaching process itself—Year-round performance feedback and coaching is recommended. Self-efficacy should be instilled in employees.

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