{"id":805,"date":"2019-08-13T21:48:11","date_gmt":"2019-08-13T21:48:11","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/?post_type=chapter&#038;p=805"},"modified":"2024-04-25T01:35:17","modified_gmt":"2024-04-25T01:35:17","slug":"appraisal-methods","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/chapter\/appraisal-methods\/","title":{"raw":"Appraisal Methods","rendered":"Appraisal Methods"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Outcomes<\/h3>\r\n<ul>\r\n \t<li>Evaluate absolute appraisal methods<\/li>\r\n \t<li>Evaluate relative appraisal methods<\/li>\r\n \t<li>Discuss management by objectives<\/li>\r\n<\/ul>\r\n<\/div>\r\n<h2><img class=\"alignright wp-image-2444\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4056\/2019\/08\/13212006\/Screen-Shot-2019-11-13-at-10.50.24-AM-300x165.png\" alt=\"Decorative image.\" width=\"350\" height=\"192\" \/><\/h2>\r\nThere are two primary methods for conducting performance appraisals: based on absolute or relative standards.\r\n<h2>Absolute Appraisal Methods<\/h2>\r\nCommon methods of conducting an absolute appraisal are critical incident, BARS (Behaviorally Anchored Rating Scale), and a graphic rating scale.\r\n<h3>Critical Incident<\/h3>\r\nA critical incident appraisal focuses on the essential behaviors that determine whether a task is done well or poorly. Documentation in this case involves briefly summarizing situations (incidents) that demonstrate either successful or unsuccessful behavior and outcomes. The critical incident appraisal method is more intensive for the appraiser since it involves more attention to detail. This is especially the case since incidents should be recorded as they occur and be representative of the appraisal period rather than based on memory and written when preparing for the appraisal. However, this level of details if more valuable to an employee and may better support development. A variation on this is asking or tasking employees with recording their critical incidents, similar to a self-assessment.\r\n<h3>Graphic Rating Scale<\/h3>\r\n<h3><img class=\"alignright wp-image-2446\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4056\/2019\/08\/13214647\/Screen-Shot-2019-11-13-at-1.45.49-PM-300x201.png\" alt=\"Decorative image.\" width=\"350\" height=\"234\" \/><\/h3>\r\nOne of the simplest and most common appraisal methods is the graphic rating scale. A graphic rating performance appraisal form lists job behaviors, competencies, skills and results and provides five (more or less) rating options ranging from unsatisfactory to exceeds expectations. The appraiser selects a performance rating for each criteria and totals the values. The positive is rating scales are relatively easy to develop and complete and yield quantitative data that can be used to compare performance relative to prior appraisals or other employees. The downside is the method doesn\u2019t provide a level of detail that supports specific corrective action. Another drawback: performance factors tend to be vague and open to interpretation\u2014for example, quantity of work, quality of work, initiative\u2014and performance ratings can be subjective.\r\n<h3>BARS<\/h3>\r\nThe Behaviorally Anchored Rating Scale or BARS appraisal method combines aspects of the critical incident and graphic rating methods. Like the critical incident method, BARS focused on behaviors that constitute significant performance dimensions of a job. It differs from the typical graphic rating scale in that it focuses on job specifics rather than vague work statements. For example, instead of a rating that might be open to interpretation\u2014for example, \u201cAnswers phone promptly and courteously\u201d\u2014a BARS approach would break it down into two component actions: \u201cAnswers phone within 3 rings.\u201d and \u201cGreets caller with \u201cHello. This is [name]. How may I help you?\u201d[footnote]\"<a href=\"http:\/\/performance-appraisals.org\/faq\/bars.htm\" target=\"_blank\" rel=\"noopener\">What is BARS (Behaviorally Anchored Rating Scale).<\/a>\" The Performance Management and Appraisal Resource Center. Accessed August 20, 2019.[\/footnote]\r\n\r\nImplementing BARS involves identifying the primary job behaviors and developing a 3\u20137 (or more) point rating scale that anchors the rating to specific descriptions of effective and ineffective behavior. The benefit of BARS is that it yields both qualitative and quantitative data. The quantitative data makes it possible to compare and rank relative employee performance. The level of detail in behavior descriptions also helps to avoid differences in interpretation across raters and employees. The downside of BARS is the complexity of development and maintenance, with each position requiring a set of evaluation criteria and rating descriptions.\r\n<table><caption>Table 1. BARS for Army Nurses<\/caption>\r\n<tbody>\r\n<tr>\r\n<th scope=\"col\" width=\"20%\">1<\/th>\r\n<th scope=\"col\" width=\"20%\">2<\/th>\r\n<th scope=\"col\" width=\"20%\">3<\/th>\r\n<th scope=\"col\" width=\"20%\">4<\/th>\r\n<th scope=\"col\" width=\"20%\">5<\/th>\r\n<\/tr>\r\n<tr>\r\n<td>Sometimes fails to follow doctors' orders<\/td>\r\n<td>Always follows doctors' orders<\/td>\r\n<td>Always follows doctors' orders<\/td>\r\n<td>Always follows doctors' orders<\/td>\r\n<td>Always follows doctors' orders; available to meet with doctors whenever needed;<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Often impatient with difficult patients<\/td>\r\n<td>Occasionally impatient with difficult patients<\/td>\r\n<td>Never impatient with difficult patients<\/td>\r\n<td>Never impatient with difficult patients; helps other nurses with difficult patients<\/td>\r\n<td>Never impatient with difficult patients; helps other nurses with difficult patients; ; eases patients' fears<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Doesn't always follow hospital procedures<\/td>\r\n<td>Rarely doesn't follow hospital procedures<\/td>\r\n<td>Always follows hospital procedures<\/td>\r\n<td>Always follows hospital procedures<\/td>\r\n<td>Always follows hospital procedures<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<h2>Relative Appraisal Methods<\/h2>\r\nA second category of appraisal methods uses relative or comparative standards. Common methods in use include ranking and paired comparison and forced distribution.\r\n<h3>Ranking<\/h3>\r\nRanking methods include individual ranking and group order ranking. These methods involve placing employees in relative performance (or perceived value) order from top to bottom or ranking them on a \u201ccurve\u201d (bell curve). Group ranking\u2014also referred to as stack ranking or forced distribution\u2014involves placing employees in categories\u2014for example, top 20% and bottom 10% that was championed by former General Electric CEO Jack Welch. Former CEO Welch imposed a 20\/70\/10 discipline where managers were forced to identify their top 20%, middle 70%, and bottom 10% of employees annually. GE focused rewards and retention efforts on the top 20% and fired the bottom 10%.\r\n\r\nAccording to Welch, \u201c\u2018sprinkling\u2019 financial rewards over a much larger group is a mistake.\u201d Instead, the middle 70% should be coached and trained to move into the top.[footnote]Murray, Alan. \"<a href=\"https:\/\/guides.wsj.com\/management\/recruiting-hiring-and-firing\/should-i-rank-my-employees\/\" target=\"_blank\" rel=\"noopener\">Should I Rank My Employees?<\/a>\" The Wall Street Journal. Accessed August 20, 2019.[\/footnote] This technique was and remains controversial. A survey of human resource professionals surveyed \u201creported that forced ranking resulted in lower productivity, inequity and skepticism, negative effects on employee engagement, reduced collaboration, and damage to morale and mistrust in leadership.\u201d[footnote]Ibid.[\/footnote] Human resource management perceptions are supported by field research. Wharton School of Management Associate Professor of Management Iwan Barankay\u2019s research demonstrated that when people are rated relative to others, performance declined. Further, rating accuracy was questionable, with ratings having \u201cas much to do with who the rater was (people gave higher ratings to those who were like them) as they did with performance.\u201d[footnote]Cappelli, Peter and Anna Tavis. \"<a href=\"https:\/\/hbr.org\/2016\/10\/the-performance-management-revolution\" target=\"_blank\" rel=\"noopener\">The Performance Management Revolution<\/a>.\" Harvard Business Review. October 2016. Accessed August 20, 2019.[\/footnote]\r\n<h3>Paired Comparison<\/h3>\r\nThe paired comparison method bases evaluations on an employee\u2019s performance relative to his or her peers in selected job skill categories. For example, if you have five employees, you would compare their performance in each category individually, assigning a plus or a minus to indicate relative strength or weakness, as illustrated in Table 2. An employee\u2019s evaluation would be the sum of their pluses and would be the basis of a relative ranking. This method is unwieldy for large numbers of employees and suffers from the vagueness and subjectivity of a graphic ranking system.\r\n<table><caption>Table 2. Performance Appraisal<\/caption>\r\n<thead>\r\n<tr>\r\n<th scope=\"col\"><\/th>\r\n<th colspan=\"5\" scope=\"col\">Employees Rated<\/th>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"col\">Compared with<\/th>\r\n<th scope=\"col\">Employee HC<\/th>\r\n<th scope=\"col\">Employee SH<\/th>\r\n<th scope=\"col\">Employee AL<\/th>\r\n<th scope=\"col\">Employee DN<\/th>\r\n<th scope=\"col\">Employee ET<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<th scope=\"row\">Employee HC<\/th>\r\n<td>N\/A<\/td>\r\n<td>\u2212<\/td>\r\n<td>+<\/td>\r\n<td>\u2212<\/td>\r\n<td>\u2212<\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Employee SH<\/th>\r\n<td>+<\/td>\r\n<td>N\/A<\/td>\r\n<td>+<\/td>\r\n<td>\u2212<\/td>\r\n<td>+<\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Employee AL<\/th>\r\n<td>\u2212<\/td>\r\n<td>\u2212<\/td>\r\n<td>N\/A<\/td>\r\n<td>\u2212<\/td>\r\n<td>\u2212<\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Employee DN<\/th>\r\n<td>+<\/td>\r\n<td>+<\/td>\r\n<td>+<\/td>\r\n<td>N\/A<\/td>\r\n<td>+<\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Employee ET<\/th>\r\n<td>+<\/td>\r\n<td>\u2212<\/td>\r\n<td>+<\/td>\r\n<td>\u2212<\/td>\r\n<td>N\/A<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<div class=\"textbox tryit\">\r\n<h3>Practice questions<\/h3>\r\nhttps:\/\/assess.lumenlearning.com\/practice\/febae6f7-8d7a-4d03-9c9d-b952ee787fa9\r\n\r\nhttps:\/\/assess.lumenlearning.com\/practice\/78a22985-0ae6-4612-86a8-e50ef29ad5fa\r\n\r\n<\/div>\r\n<h2>Management by Objectives<\/h2>\r\nAn additional appraisal technique that represents a significant departure from the manager-centric approaches discussed above is a hybrid appraisal\/management technique referred to as management by objectives (MBO). The MBO concept was introduced in management consultant, educator, and author Peter Drucker\u2019s 1954 book <em>The Practice of Management<\/em>. What\u2019s particularly powerful about using MBO is the clear connection between individual goals and organizational goals. The\u00a0development of MBO is a process in which objectives \u201ccascade down through the organization.\u201d That is, \u201cthe organization\u2019s overall objectives are translated into specific objectives for each succeeding level in the organization-divisional, departmental and individual.\u201d[footnote]DeCenzo, David A., Stephen P. Robbins, and Susan L Verhulst. <em>Fundamentals of Human Resource Management.<\/em> New York, NY: John Wiley &amp; Sons, 2016.[\/footnote]\r\n\r\nA second key differentiating factor is the participative management aspect of MBO. Specifically, performance objectives (evaluation criteria) are discussed and agreed to by management and the employees. In theory, this approach results in employees who not only have a clearer understanding of expectations but greater buy-in. The greatest potential of MBO is developing goals and objectives that are aligned with not only the organization\u2019s objectives but the employee\u2019s personal goals and objectives.\r\n\r\nAlthough MBO is a complex and time-consuming method that must be undertaken as an organizational initiative, it has the potential to address some of the relevance and motivation issues of other appraisal methods. DeCenzo, et. al. report that \u201cstudies of actual MBO programs confirm that MBO effectively increases employee performance and organizational productivity.\u201d[footnote]Ibid.[\/footnote]\r\n<div class=\"textbox key-takeaways\">\r\n<h3>Learn More<\/h3>\r\nFor more on MBO, see Communication Theory\u2019s overview: <a href=\"https:\/\/www.communicationtheory.org\/management-by-objectives-drucker\/\" target=\"_blank\" rel=\"noopener\">Management By Objectives<\/a>.\r\n\r\n<\/div>\r\n<div class=\"textbox tryit\">\r\n<h3>Practice Question<\/h3>\r\nhttps:\/\/assess.lumenlearning.com\/practice\/f131405d-536b-47d1-a1a5-febf4ba7fd49\r\n<\/div>","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Outcomes<\/h3>\n<ul>\n<li>Evaluate absolute appraisal methods<\/li>\n<li>Evaluate relative appraisal methods<\/li>\n<li>Discuss management by objectives<\/li>\n<\/ul>\n<\/div>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-2444\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4056\/2019\/08\/13212006\/Screen-Shot-2019-11-13-at-10.50.24-AM-300x165.png\" alt=\"Decorative image.\" width=\"350\" height=\"192\" \/><\/h2>\n<p>There are two primary methods for conducting performance appraisals: based on absolute or relative standards.<\/p>\n<h2>Absolute Appraisal Methods<\/h2>\n<p>Common methods of conducting an absolute appraisal are critical incident, BARS (Behaviorally Anchored Rating Scale), and a graphic rating scale.<\/p>\n<h3>Critical Incident<\/h3>\n<p>A critical incident appraisal focuses on the essential behaviors that determine whether a task is done well or poorly. Documentation in this case involves briefly summarizing situations (incidents) that demonstrate either successful or unsuccessful behavior and outcomes. The critical incident appraisal method is more intensive for the appraiser since it involves more attention to detail. This is especially the case since incidents should be recorded as they occur and be representative of the appraisal period rather than based on memory and written when preparing for the appraisal. However, this level of details if more valuable to an employee and may better support development. A variation on this is asking or tasking employees with recording their critical incidents, similar to a self-assessment.<\/p>\n<h3>Graphic Rating Scale<\/h3>\n<h3><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-2446\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4056\/2019\/08\/13214647\/Screen-Shot-2019-11-13-at-1.45.49-PM-300x201.png\" alt=\"Decorative image.\" width=\"350\" height=\"234\" \/><\/h3>\n<p>One of the simplest and most common appraisal methods is the graphic rating scale. A graphic rating performance appraisal form lists job behaviors, competencies, skills and results and provides five (more or less) rating options ranging from unsatisfactory to exceeds expectations. The appraiser selects a performance rating for each criteria and totals the values. The positive is rating scales are relatively easy to develop and complete and yield quantitative data that can be used to compare performance relative to prior appraisals or other employees. The downside is the method doesn\u2019t provide a level of detail that supports specific corrective action. Another drawback: performance factors tend to be vague and open to interpretation\u2014for example, quantity of work, quality of work, initiative\u2014and performance ratings can be subjective.<\/p>\n<h3>BARS<\/h3>\n<p>The Behaviorally Anchored Rating Scale or BARS appraisal method combines aspects of the critical incident and graphic rating methods. Like the critical incident method, BARS focused on behaviors that constitute significant performance dimensions of a job. It differs from the typical graphic rating scale in that it focuses on job specifics rather than vague work statements. For example, instead of a rating that might be open to interpretation\u2014for example, \u201cAnswers phone promptly and courteously\u201d\u2014a BARS approach would break it down into two component actions: \u201cAnswers phone within 3 rings.\u201d and \u201cGreets caller with \u201cHello. This is [name]. How may I help you?\u201d<a class=\"footnote\" title=\"&quot;What is BARS (Behaviorally Anchored Rating Scale).&quot; The Performance Management and Appraisal Resource Center. Accessed August 20, 2019.\" id=\"return-footnote-805-1\" href=\"#footnote-805-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a><\/p>\n<p>Implementing BARS involves identifying the primary job behaviors and developing a 3\u20137 (or more) point rating scale that anchors the rating to specific descriptions of effective and ineffective behavior. The benefit of BARS is that it yields both qualitative and quantitative data. The quantitative data makes it possible to compare and rank relative employee performance. The level of detail in behavior descriptions also helps to avoid differences in interpretation across raters and employees. The downside of BARS is the complexity of development and maintenance, with each position requiring a set of evaluation criteria and rating descriptions.<\/p>\n<table>\n<caption>Table 1. BARS for Army Nurses<\/caption>\n<tbody>\n<tr>\n<th scope=\"col\" style=\"width: 20%;\">1<\/th>\n<th scope=\"col\" style=\"width: 20%;\">2<\/th>\n<th scope=\"col\" style=\"width: 20%;\">3<\/th>\n<th scope=\"col\" style=\"width: 20%;\">4<\/th>\n<th scope=\"col\" style=\"width: 20%;\">5<\/th>\n<\/tr>\n<tr>\n<td>Sometimes fails to follow doctors&#8217; orders<\/td>\n<td>Always follows doctors&#8217; orders<\/td>\n<td>Always follows doctors&#8217; orders<\/td>\n<td>Always follows doctors&#8217; orders<\/td>\n<td>Always follows doctors&#8217; orders; available to meet with doctors whenever needed;<\/td>\n<\/tr>\n<tr>\n<td>Often impatient with difficult patients<\/td>\n<td>Occasionally impatient with difficult patients<\/td>\n<td>Never impatient with difficult patients<\/td>\n<td>Never impatient with difficult patients; helps other nurses with difficult patients<\/td>\n<td>Never impatient with difficult patients; helps other nurses with difficult patients; ; eases patients&#8217; fears<\/td>\n<\/tr>\n<tr>\n<td>Doesn&#8217;t always follow hospital procedures<\/td>\n<td>Rarely doesn&#8217;t follow hospital procedures<\/td>\n<td>Always follows hospital procedures<\/td>\n<td>Always follows hospital procedures<\/td>\n<td>Always follows hospital procedures<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2>Relative Appraisal Methods<\/h2>\n<p>A second category of appraisal methods uses relative or comparative standards. Common methods in use include ranking and paired comparison and forced distribution.<\/p>\n<h3>Ranking<\/h3>\n<p>Ranking methods include individual ranking and group order ranking. These methods involve placing employees in relative performance (or perceived value) order from top to bottom or ranking them on a \u201ccurve\u201d (bell curve). Group ranking\u2014also referred to as stack ranking or forced distribution\u2014involves placing employees in categories\u2014for example, top 20% and bottom 10% that was championed by former General Electric CEO Jack Welch. Former CEO Welch imposed a 20\/70\/10 discipline where managers were forced to identify their top 20%, middle 70%, and bottom 10% of employees annually. GE focused rewards and retention efforts on the top 20% and fired the bottom 10%.<\/p>\n<p>According to Welch, \u201c\u2018sprinkling\u2019 financial rewards over a much larger group is a mistake.\u201d Instead, the middle 70% should be coached and trained to move into the top.<a class=\"footnote\" title=\"Murray, Alan. &quot;Should I Rank My Employees?&quot; The Wall Street Journal. Accessed August 20, 2019.\" id=\"return-footnote-805-2\" href=\"#footnote-805-2\" aria-label=\"Footnote 2\"><sup class=\"footnote\">[2]<\/sup><\/a> This technique was and remains controversial. A survey of human resource professionals surveyed \u201creported that forced ranking resulted in lower productivity, inequity and skepticism, negative effects on employee engagement, reduced collaboration, and damage to morale and mistrust in leadership.\u201d<a class=\"footnote\" title=\"Ibid.\" id=\"return-footnote-805-3\" href=\"#footnote-805-3\" aria-label=\"Footnote 3\"><sup class=\"footnote\">[3]<\/sup><\/a> Human resource management perceptions are supported by field research. Wharton School of Management Associate Professor of Management Iwan Barankay\u2019s research demonstrated that when people are rated relative to others, performance declined. Further, rating accuracy was questionable, with ratings having \u201cas much to do with who the rater was (people gave higher ratings to those who were like them) as they did with performance.\u201d<a class=\"footnote\" title=\"Cappelli, Peter and Anna Tavis. &quot;The Performance Management Revolution.&quot; Harvard Business Review. October 2016. Accessed August 20, 2019.\" id=\"return-footnote-805-4\" href=\"#footnote-805-4\" aria-label=\"Footnote 4\"><sup class=\"footnote\">[4]<\/sup><\/a><\/p>\n<h3>Paired Comparison<\/h3>\n<p>The paired comparison method bases evaluations on an employee\u2019s performance relative to his or her peers in selected job skill categories. For example, if you have five employees, you would compare their performance in each category individually, assigning a plus or a minus to indicate relative strength or weakness, as illustrated in Table 2. An employee\u2019s evaluation would be the sum of their pluses and would be the basis of a relative ranking. This method is unwieldy for large numbers of employees and suffers from the vagueness and subjectivity of a graphic ranking system.<\/p>\n<table>\n<caption>Table 2. Performance Appraisal<\/caption>\n<thead>\n<tr>\n<th scope=\"col\"><\/th>\n<th colspan=\"5\" scope=\"col\">Employees Rated<\/th>\n<\/tr>\n<tr>\n<th scope=\"col\">Compared with<\/th>\n<th scope=\"col\">Employee HC<\/th>\n<th scope=\"col\">Employee SH<\/th>\n<th scope=\"col\">Employee AL<\/th>\n<th scope=\"col\">Employee DN<\/th>\n<th scope=\"col\">Employee ET<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<th scope=\"row\">Employee HC<\/th>\n<td>N\/A<\/td>\n<td>\u2212<\/td>\n<td>+<\/td>\n<td>\u2212<\/td>\n<td>\u2212<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Employee SH<\/th>\n<td>+<\/td>\n<td>N\/A<\/td>\n<td>+<\/td>\n<td>\u2212<\/td>\n<td>+<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Employee AL<\/th>\n<td>\u2212<\/td>\n<td>\u2212<\/td>\n<td>N\/A<\/td>\n<td>\u2212<\/td>\n<td>\u2212<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Employee DN<\/th>\n<td>+<\/td>\n<td>+<\/td>\n<td>+<\/td>\n<td>N\/A<\/td>\n<td>+<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Employee ET<\/th>\n<td>+<\/td>\n<td>\u2212<\/td>\n<td>+<\/td>\n<td>\u2212<\/td>\n<td>N\/A<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<div class=\"textbox tryit\">\n<h3>Practice questions<\/h3>\n<p>\t<iframe id=\"assessment_practice_febae6f7-8d7a-4d03-9c9d-b952ee787fa9\" class=\"resizable\" src=\"https:\/\/assess.lumenlearning.com\/practice\/febae6f7-8d7a-4d03-9c9d-b952ee787fa9?iframe_resize_id=assessment_practice_id_febae6f7-8d7a-4d03-9c9d-b952ee787fa9\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:300px;\"><br \/>\n\t<\/iframe><\/p>\n<p>\t<iframe id=\"assessment_practice_78a22985-0ae6-4612-86a8-e50ef29ad5fa\" class=\"resizable\" src=\"https:\/\/assess.lumenlearning.com\/practice\/78a22985-0ae6-4612-86a8-e50ef29ad5fa?iframe_resize_id=assessment_practice_id_78a22985-0ae6-4612-86a8-e50ef29ad5fa\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:300px;\"><br \/>\n\t<\/iframe><\/p>\n<\/div>\n<h2>Management by Objectives<\/h2>\n<p>An additional appraisal technique that represents a significant departure from the manager-centric approaches discussed above is a hybrid appraisal\/management technique referred to as management by objectives (MBO). The MBO concept was introduced in management consultant, educator, and author Peter Drucker\u2019s 1954 book <em>The Practice of Management<\/em>. What\u2019s particularly powerful about using MBO is the clear connection between individual goals and organizational goals. The\u00a0development of MBO is a process in which objectives \u201ccascade down through the organization.\u201d That is, \u201cthe organization\u2019s overall objectives are translated into specific objectives for each succeeding level in the organization-divisional, departmental and individual.\u201d<a class=\"footnote\" title=\"DeCenzo, David A., Stephen P. Robbins, and Susan L Verhulst. Fundamentals of Human Resource Management. New York, NY: John Wiley &amp; Sons, 2016.\" id=\"return-footnote-805-5\" href=\"#footnote-805-5\" aria-label=\"Footnote 5\"><sup class=\"footnote\">[5]<\/sup><\/a><\/p>\n<p>A second key differentiating factor is the participative management aspect of MBO. Specifically, performance objectives (evaluation criteria) are discussed and agreed to by management and the employees. In theory, this approach results in employees who not only have a clearer understanding of expectations but greater buy-in. The greatest potential of MBO is developing goals and objectives that are aligned with not only the organization\u2019s objectives but the employee\u2019s personal goals and objectives.<\/p>\n<p>Although MBO is a complex and time-consuming method that must be undertaken as an organizational initiative, it has the potential to address some of the relevance and motivation issues of other appraisal methods. DeCenzo, et. al. report that \u201cstudies of actual MBO programs confirm that MBO effectively increases employee performance and organizational productivity.\u201d<a class=\"footnote\" title=\"Ibid.\" id=\"return-footnote-805-6\" href=\"#footnote-805-6\" aria-label=\"Footnote 6\"><sup class=\"footnote\">[6]<\/sup><\/a><\/p>\n<div class=\"textbox key-takeaways\">\n<h3>Learn More<\/h3>\n<p>For more on MBO, see Communication Theory\u2019s overview: <a href=\"https:\/\/www.communicationtheory.org\/management-by-objectives-drucker\/\" target=\"_blank\" rel=\"noopener\">Management By Objectives<\/a>.<\/p>\n<\/div>\n<div class=\"textbox tryit\">\n<h3>Practice Question<\/h3>\n<p>\t<iframe id=\"assessment_practice_f131405d-536b-47d1-a1a5-febf4ba7fd49\" class=\"resizable\" src=\"https:\/\/assess.lumenlearning.com\/practice\/f131405d-536b-47d1-a1a5-febf4ba7fd49?iframe_resize_id=assessment_practice_id_f131405d-536b-47d1-a1a5-febf4ba7fd49\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:300px;\"><br \/>\n\t<\/iframe>\n<\/div>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-805\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Appraisal Methods. <strong>Authored by<\/strong>: Nina Burokas. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>BARS for Army Nurses. <strong>Provided by<\/strong>: Open University of Hong Kong. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"http:\/\/www.opentextbooks.org.hk\/ditatopic\/32257#\">http:\/\/www.opentextbooks.org.hk\/ditatopic\/32257#<\/a>. <strong>Project<\/strong>: Human Resource Management. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-sa\/4.0\/\">CC BY-SA: Attribution-ShareAlike<\/a><\/em><\/li><li><strong>Authored by<\/strong>: rawpixel. <strong>Provided by<\/strong>: Pixabay. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/pixabay.com\/photos\/boss-brainstorming-business-3385070\/\">https:\/\/pixabay.com\/photos\/boss-brainstorming-business-3385070\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/about\/pdm\">Public Domain: No Known Copyright<\/a><\/em>. <strong>License Terms<\/strong>: Pixabay License<\/li><li><strong>Authored by<\/strong>: geralt. <strong>Provided by<\/strong>: Pixabay. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/pixabay.com\/photos\/finger-feedback-confirming-3530353\/\">https:\/\/pixabay.com\/photos\/finger-feedback-confirming-3530353\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/about\/cc0\">CC0: No Rights Reserved<\/a><\/em>. <strong>License Terms<\/strong>: Pixabay License<\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section><hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-805-1\">\"<a href=\"http:\/\/performance-appraisals.org\/faq\/bars.htm\" target=\"_blank\" rel=\"noopener\">What is BARS (Behaviorally Anchored Rating Scale).<\/a>\" The Performance Management and Appraisal Resource Center. Accessed August 20, 2019. <a href=\"#return-footnote-805-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><li id=\"footnote-805-2\">Murray, Alan. \"<a href=\"https:\/\/guides.wsj.com\/management\/recruiting-hiring-and-firing\/should-i-rank-my-employees\/\" target=\"_blank\" rel=\"noopener\">Should I Rank My Employees?<\/a>\" The Wall Street Journal. Accessed August 20, 2019. <a href=\"#return-footnote-805-2\" class=\"return-footnote\" aria-label=\"Return to footnote 2\">&crarr;<\/a><\/li><li id=\"footnote-805-3\">Ibid. <a href=\"#return-footnote-805-3\" class=\"return-footnote\" aria-label=\"Return to footnote 3\">&crarr;<\/a><\/li><li id=\"footnote-805-4\">Cappelli, Peter and Anna Tavis. \"<a href=\"https:\/\/hbr.org\/2016\/10\/the-performance-management-revolution\" target=\"_blank\" rel=\"noopener\">The Performance Management Revolution<\/a>.\" Harvard Business Review. October 2016. Accessed August 20, 2019. <a href=\"#return-footnote-805-4\" class=\"return-footnote\" aria-label=\"Return to footnote 4\">&crarr;<\/a><\/li><li id=\"footnote-805-5\">DeCenzo, David A., Stephen P. Robbins, and Susan L Verhulst. <em>Fundamentals of Human Resource Management.<\/em> New York, NY: John Wiley &amp; Sons, 2016. <a href=\"#return-footnote-805-5\" class=\"return-footnote\" aria-label=\"Return to footnote 5\">&crarr;<\/a><\/li><li id=\"footnote-805-6\">Ibid. <a href=\"#return-footnote-805-6\" class=\"return-footnote\" aria-label=\"Return to footnote 6\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":17,"menu_order":6,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Appraisal Methods\",\"author\":\"Nina Burokas\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"BARS for Army Nurses\",\"author\":\"\",\"organization\":\"Open University of Hong Kong\",\"url\":\"http:\/\/www.opentextbooks.org.hk\/ditatopic\/32257#\",\"project\":\"Human Resource Management\",\"license\":\"cc-by-sa\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"\",\"author\":\"rawpixel\",\"organization\":\"Pixabay\",\"url\":\"https:\/\/pixabay.com\/photos\/boss-brainstorming-business-3385070\/\",\"project\":\"\",\"license\":\"pd\",\"license_terms\":\"Pixabay License\"},{\"type\":\"cc\",\"description\":\"\",\"author\":\"geralt\",\"organization\":\"Pixabay\",\"url\":\"https:\/\/pixabay.com\/photos\/finger-feedback-confirming-3530353\/\",\"project\":\"\",\"license\":\"cc0\",\"license_terms\":\"Pixabay License\"}]","CANDELA_OUTCOMES_GUID":"4068786d-3ed5-4f3b-b408-f56177898786, 8c57a0e5-05b4-4193-82d2-6888a79f3b1a, b8678751-4236-42f1-91e3-305fd0758473, 53737d20-8200-4c04-bb97-77d7db84456d","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-805","chapter","type-chapter","status-publish","hentry"],"part":798,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/chapters\/805","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/wp\/v2\/users\/17"}],"version-history":[{"count":16,"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/chapters\/805\/revisions"}],"predecessor-version":[{"id":3375,"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/chapters\/805\/revisions\/3375"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/parts\/798"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/chapters\/805\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/wp\/v2\/media?parent=805"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/chapter-type?post=805"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/wp\/v2\/contributor?post=805"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/wp\/v2\/license?post=805"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}