employee and labor relations

Instructors manual

Performance Management
and Appraisal
By Myrna L. Gusdorf, MBA, SPHR

Project Team
Author:

Myrna L. Gusdorf, MBA, SPHR

SHRM project contributor:

Bill Schaefer, SPHR

External contributor:

Sharon H. Leonard

Copy editing:

Katya Scanlan, copy editor

Design:

Blair Wright, senior graphic designer

2009 Society for Human Resource Management. Myrna L. Gusdorf, MBA, SPHR
Note to HR faculty and instructors: SHRM cases and modules are intended for use in HR classrooms at
universities. Teaching notes are included with each. While our current intent is to make the materials available
without charge, we reserve the right to impose charges should we deem it necessary to support the program. However,
currently, these resources are available free of charge to all. Please duplicate only the number of copies needed,
one for each student in the class.
For more information, please contact:
SHRM Academic Initiatives
1800 Duke Street, Alexandria, VA 22314, USA
Phone: +1-800-283-7476 Fax: +1-703-535-6432
Web: www.shrm.org/education/hreducation
09-0294

Module Summary
This module explores performance management, specifically how to conduct
performance appraisal interviews. It consists of two class sessions and is intended for
undergraduate students. It is appropriate for business management and HR students.
The first session discusses the performance management process and its link to
overall organizational strategy. The second session looks at the performance appraisal
interview as a part of the performance management process. The module concludes
with students practicing their newly acquired performance appraisal interviewing skills.
Class Structure
The module is designed to be presented in two class periods, with each period
extending between one and two hours in length. The time required for class
activities is not specified because it will vary based on the instructors presentation
style, amount of class discussion and whether the activities are completed in class or
as homework assignments.
Outcomes
At the completion of the module, the student will be able to:
1. Relate individual performance appraisal to the organizationwide performance
management process.
2. Identify a variety of appraisal methods.
3. Explain HRs role in the performance management process.
4. Revise performance appraisal statements.
5. Practice performance appraisal interviewing techniques.
6. Have the skills necessary to use the performance appraisal process as a positive
enhancement to employee performance.

2009 Society for Human Resource Management. Myrna L. Gusdorf, MBA, SPHR 1

Session 1: Outline and Activities

Note: Detailed instructors notes for each slide are included in the PowerPoint
presentation.

Outline of Topics:
Performance Management
I. Performance management
a. Performance management and performance
appraisal
b. The performance management process
II. Participants in performance management
a. Organization
b. Supervisor
c. Employee
III. Performance management goals
IV. HRs role in performance management
V. Performance management process
a. Prerequisites
i. Strategic planning
ii. Job analysis
b. Performance planning
i. Planning for results, behavior and future
development

Activities
Slide 1: Start the discussion by asking students to
comment on their experiences with performance
reviews.
Slide 2: Objectives: Remind students that at the
end of this module they will have the skills to turn
the negatives of performance review into a positive
experience.
Slide 10: Distribute the delivery driver job description.
Discuss what makes an effective performance
objective using the SMART acronym. Have students
practice writing SMART performance objectives
based on the delivery driver job description and share
their results with the class.
Slide 13: Ask students to discuss whether they
believe employees should do a self-appraisal. What
are the positives and negatives of self-appraisal?
Slide 16: Distribute the worksheet on performance
appraisal clichs and have students rewrite the
clichs and share their results with the class.

ii. Writing SMART goals

c. Performance execution
d. Performance assessment and appraisal
i. Who should appraise
ii. Performance appraisal methods
iii. Performance appraisal problems
iv. Writing the appraisal document
VI. Student activity: Rewriting appraisal statements

2 2009 Society for Human Resource Management. Myrna L. Gusdorf, MBA, SPHR

Session 2: Outline and Activities

Note: Detailed instructors notes for each slide are included in the PowerPoint presentation.

Outline of Topics:
Performance Appraisal Interview
I. Preparing for the interview
II. Conducting the performance appraisal interview
a. Discussion
b. Follow-up
c. Appeals process
III. Performance renewal and re-contracting
a. Readjusting if necessary
b. Preparing for next performance management cycle
IV. Problems with assessment/appraisal
a. Tied to compensation
b. Employees lack motivation

Activities
Slide 18: Open the class by asking students to
generate a list of the information and documents they,
as managers, should have ready before administering
a performance review interview. Distribute the
performance review checklist included in the
instructor notes.
Slide 25: Conclude the class by having students
practice interviewing skills. Using the scenarios
found in the instructors notes, have students act
out the scenarios, and after each one, ask the class
for suggestions about how Tom should handle the
appraisal interview with each employee. Additional
instructions are found in the Activities section of the
instructor notes.

c. Disagreement between manager and employee

d. Management reluctance
e. Lack of documentation
V. Issues with appraisal
a. Legal liability
b. Untrained raters
c. Rater errors
d. Rater distortion
e. Lack of grievance procedure
VI. Poorly implemented systems
a. Personnel decisions based on erroneous
assessments
b. Wasted time and money
c. Decreased motivation/increased turnover
d. Damaged relationships
e. Job dissatisfaction
f. Liability risk
g. Unfair standards
VII. Performance management skills
a. Communication/coaching/feedback
b. Empathy
c. Teamwork
VIII. Interview techniques and role play

2009 Society for Human Resource Management. Myrna L. Gusdorf, MBA, SPHR 3

PowerPoint slides
This module includes PowerPoint slides with explanations and comments for
instructors. Comments are accessible in the notes view option. The slides are
divided into two class sessions. Each session starts with a brief discussion activity.
There are additional class activities for each session, and the final slide ends the
module with practice for a performance review interview.
Classroom Activities
Open the class (Slide 1) with a brief discussion of your students experiences with
performance appraisals. You will probably hear negative comments about the
appraisal process. This is your opportunity to tell them that when properly done, an
appraisal review should be a positive experience.
At Slide 10 students are asked to write SMART performance objectives for a delivery
driver. This activity could be done in class or assigned as homework. The job
description for a delivery driver is included at the end of these instructor notes.
The first class ends with a class activity (Slide 16) asking students to rewrite
some common clichs frequently found in performance appraisals. A handout is
provided at the end of these instructor notes for this activity. Students could do this
individually and discuss their answers with the class, or they could do them in pairs
or small groups, depending on what works best in your classroom.
The second class starts with Slide 17. At Slide 18 students are asked to generate a
list of things they think they should have ready before conducting the performance
appraisal interview. At the end of these instructor notes, there is an Interview
Checklist that can be given to students as a handout after the discussion. At the end
of this session, you may want to ask students to come back to this list again and add
any other information they think may be important.
Performance Review Interviews
The Performance Review Interviews activity includes four different performance
scenarios with Tom, a retail manager. Tom is getting ready to conduct appraisal
interviews with staff members. He may find these interviews difficult because he and
his staff members have different ideas about the quality of their work.
Role Play
To role play these scenarios, you will need participation from eight students. Four
of them will play Tom. The other four will play the parts of the employees being
appraised. Going into the interview, there are significant differences in how Tom and
his employees see the quality of their work. Therefore, give each student a copy of
his or her role only. As in real life, managers dont know whats in the mind of their
employees as they approach their appraisal interviews. Give copies of the complete
scenarios to the remainder of the class. After each role play, ask the class to discuss
Toms interview and give suggestions on how he could best manage the interview
process with that particular employee.

4 2009 Society for Human Resource Management. Myrna L. Gusdorf, MBA, SPHR

Written Paper
If there is not time for the role play, the scenarios could be used as a written
assignment. Ask students to write short essays addressing the scenarios and
discussing how Tom should manage the interview process with each employee.
Students should comment on all three appraisal elements: task accomplishment,
behaviors and goal setting.
Suggested Text
Aguinis, H. (2007). Performance management. New Jersey: Pearson Prentice Hall.
References
Aguinis, H. (2007). Performance management. New Jersey: Pearson Prentice Hall.
Campbell, D. J., & Lee, C. (1988). Self-appraisal in performance evaluation:
Development versus evaluation. Academy of Management Review, 13, 2, 302-314.
Freeman, J. (2001). Revisiting subjective assessments as an important part of
performance appraisal [SHRM white paper]. Retrieved February 9, 2009, from
www.shrm.org/Research/Articles/Articles/Pages/CMS_000108.aspx.
Greene, R. J. (2003). Contributing to organizational success through effective
performance appraisal [SHRM white paper]. Retrieved February 9, 2009, from
www.shrm.org/Research/Articles/Articles/Pages/CMS_005421.aspx.
Green, R. J. (2005). Effective performance appraisal: A global perspective [SHRM
white paper]. Retrieved February 9, 2009, from www.shrm.org/hrresources
/whitepapers_published/CMS_012432.asp.
Mondy, R. (2008). Human resource management (10th ed). New Jersey: Pearson
Prentice Hall.
Roberts, G. E. (2003, Spring). Employee performance appraisal system participation:
A technique that works. Public Personnel Management.
Sachs, R. T. (1992). Productive performance appraisals. New York: American
Management Association.
Weatherly, L. A. (2004). Performance management series part I: Comparative
performance appraisal methods. SHRM Briefly Stated. Retrieved February 9, 2009,
from www.shrm.org/Research/Articles/Articles/Pages/Performance_20Managem
ent_20Series_20Part_20I__20Comparative_20Performance_20Appraisal_20Meth
ods.aspx.

2009 Society for Human Resource Management. Myrna L. Gusdorf, MBA, SPHR 5

Activities and Handouts

Writing SMART Performance Objectives
Write some SMART performance objectives for the job of Delivery Driver.
Job Summary
The delivery driver processes and delivers materials, equipment and/or supplies to all
campus locations. This position is based on the Dairy Creek Campus, but deliveries
are made to all organization locations.
Responsibilities and Duties
1. Sorts, loads, transports and delivers materials, equipment and/or supplies to
various locations throughout the college district.
2. Classifies and processes outgoing mail and materials for college operations for
accurate and timely dispatch. Sorts and delivers incoming mail and materials.
Accesses mainframe computer to research unfamiliar staff members and forwards
mail to appropriate locations.
3. Picks up and delivers high-priority materials, equipment and supplies that must
be delivered within a specific time frame.
4. Drives van between locations in all types of weather and road conditions.
5. Maintains knowledge of relevant job-related regulations; provides information
and assistance to others.
6. Performs and schedules preventive maintenance (i.e., oil changes, chassis
lubrication, bulb/fuse/wiper replacement, etc.).
7. Operates forklift, pallet jack and/or hand truck for heavy lifting and large
deliveries.
8. Follows safety procedures at all times and uses proper lifting techniques to ensure
personal health and safety.
9. Completes hazardous chemical awareness program and maintains up-to-date
knowledge regarding safe transport and handling of chemicals and other
potentially hazardous substances.
10. Cross trains in other department operations as assigned.
11. Maintains a clean and safe work environment. Follows safety procedures to
ensure personal health and safety as well as the safety of others.

6 2009 Society for Human Resource Management. Myrna L. Gusdorf, MBA, SPHR

12. Participates in initial and ongoing training in the safe handling of chemicals and other potentially
hazardous material.
13. Performs other related duties as assigned.
Minimum Qualifications
1. High school diploma or equivalent.
2. Six months of experience making deliveries and sorting materials for routing or filling orders.
3. Ability to organize and schedule work to established, strict timelines with minimum supervision.
4. Ability to work effectively with the public.
5. Ability to comprehend various regulations/policies and communicate to those who are unfamiliar
with them.
6. Valid drivers license to operate a motor vehicle in the state and an acceptable driving record.
7. May be required to obtain forklift driver certification soon after hire.

2009 Society for Human Resource Management. Myrna L. Gusdorf, MBA, SPHR 7

Performance Appraisal Clichs

You need to improve your productivity.
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
You get along well with others.
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
Your skills are not up to par.
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
Youre not trying to do your best.
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
Youre a pleasure to supervise.
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
You have to prove yourself before I can give you any more responsibility.
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________

8 2009 Society for Human Resource Management. Myrna L. Gusdorf, MBA, SPHR

Performance Review Interview Checklist

Before you start the interview
Do you know your employee?

Length of service with the organization

Date of last promotion

Experience and educational level

Current projects employee is working on

Career goals

Interview checklist: Do you have?

Employee job description

Attendance records

Salary and job grade information

History of employees training

List of training courses available and appropriate for this employee

Previous performance appraisal documents

Completed performance appraisal form

Recent examples of employees work (if appropriate)

Examples of work problems you want to discuss (if appropriate)

Other items appropriate to this employee

Are you ready? Have you:

Notified the employee of the interview time? Give the employee at

least one or two weeks notice.

Reviewed your ratings with a peer or with HR before the interview?

2009 Society for Human Resource Management. Myrna L. Gusdorf, MBA, SPHR 9

Performance Review Interviews

Tom is the department manager of a retail store. He supervises four employees, and
its time for their performance reviews. He has written the documents and scheduled
appointments to sit down to talk with each employee. As it gets closer to interview
time, all of them are thinking about their performance and what they can expect in
their interviews. Lets listen in to what each is thinking.
Tom and Maria
Maria: Oh, this is so exciting! This is my first job, and Ive never had a performance
review before. Im a little nervous, but Im sure Tom just loves my work! I know
I was late a few times, and Ive had a little problem with the cash register, but Im
really trying. Im just not used to getting up every day and getting to work on time,
and I didnt know you had to be so detailedits just retail, after all! But whatever.
Im really friendly with everyone, and Im having a good time. I wonder if Tom will
let me off a little early on Friday. I know Fridays are busy, but I have big plans for the
weekend. Ill ask himIm sure hell understand.
Tom: Im just not sure things are working out as I had hoped with Maria. She cant
seem to get to work on timeshe was late three days last week and two days the
week before. When I talked to her about it, she got here on time the next day, but
then she disappeared into the ladies room to put on her make-up. Thats not being
on time! And what about the mistakes she makes ringing up a sale? Its not just the
prices that are wrong but the quantities and the item codes, toonow our inventory
is messed up and accounting is on my back. And besides all that, she spends more
time visiting with other employees than she does working. I just dont think shes
taking this seriously.
Tom and David
David: September again and another annual performance appraisal. I dont know
why we bother. We go through the process every year, set some worthless goals, but
nothing ever happens one way or the other. They tell me Im doing a great job, and
then I get a measly 2 percent raise. Big deal! Oh well, Im just putting in my time
until something better comes along.
Tom: David does a good enough job, but he doesnt show much spark. He just
seems to be going through the motions around here. But with the economy getting
tighter, everyone perks up with a little more income. I think a raise in pay is just the
motivator he needs. Its 2 percent this year.

10 2009 Society for Human Resource Management. Myrna L. Gusdorf, MBA, SPHR

Tom and Jason

Jason: Sometimes, I come to work tired in the mornings after going to school at
night, but Toms really helped me by scheduling my shift so I can attend classes.
Another six months, and Ill have my bachelors degree. Ive been working really
hard, got a wife and three kids to support, and I want to carve out a long-term
career. I like this company; some say theres no opportunity in retail, but I dont
agree. I think well always need good managers, and thats where I want to be. I
hope there are opportunities in this company, but if not, I guess, after I graduate Ill
be looking around.
Tom: Jasons a good man. In spite of a heavy class load, he always pulls his weight
and does a good job. I know when he graduates, hes hoping for a promotion, and
Im not sure if that will be available. Ive got to come up with something to keep
him on the team. Hes exactly the employee we want for the long haul.
Tom and Wally
Wally: I really like working here. After I retired from the plant a few years back, I
found out retirement is pretty boring. Now, I get up early again, grab a cup of coffee
and come to work raring to go. Not bad for an old guy! It really helped taking that
computer class at the senior center. Sure, Im not a young techie, but I can hold my
own, and I think Tom is pleased with my work. Id like to keep working and stay
here for a long time to come.
Tom: I dont know what Im going to do with Wally. Hes been here a couple of
years nowmanagement hired him when they thought it would be good PR to hire
older workers. I dont know how old he is and I cant ask him, but Id guess hes
at least 140! Hes so slow, and he thinks he has computer skills, but thats a laugh.
He cant enter anything on the cash register without making mistakes. Maybe a
computer class would help, but is it really worthwhile to train older workers? You
know what they say about old dogs learning new tricks. I just dont think its a good
ideahell probably quit soon anyway.

2009 Society for Human Resource Management. Myrna L. Gusdorf, MBA, SPHR 11

Activity Answer Sheet

Writing SMART Performance Objectives
These are some suggested SMART performance objectives for the delivery driver
position. These objectives address some of the job requirements listed under
the Responsibilities/Duties section. Students will likely have other performance
objective suggestions. The key here is to ensure the objectives fit the SMART
acronym. Some examples:
6. Performs and schedules preventive maintenance.
SMART objective: By Oct. 31, complete inventory of department vehicles and create
an Excel spreadsheet to schedule and track completion of preventive maintenance,
indicating due date, completion date and responsible party.
9. Completes hazardous chemical awareness program...
SMART objective: Attend and complete (with a minimum grade of C) the
Hazardous Chemical Awareness class at the community college during spring
semester of 2009.
10. Cross trains in other department operations as assigned.
SMART objective: Work with the safety manager three hours per week between
Sept. 1 and Nov. 30 to input safety record data and maintain files of safety
requirements and certification.
Performance Appraisal Clichs
These are some suggested rewrites. Students may have other suggestions as well.
1. You need to improve your productivity.
Rewrite: Over the last appraisal period, your productivity has been consistently
below standards. I know you are aware of the company policy on production and
understand the necessity for bringing your productivity levels back in line with
organization minimums.
2. You get along well with others.
Rewrite: You have demonstrated the ability to work well with individuals in the
department, and in peer appraisals your teammates have spoken highly of your
contributions to project success.
3. Your skills are not up to par.
Rewrite: Though your total production quantity indicates a skill level lower than the
average of your department, it is anticipated that with cross training and more time
on task, your skills will improve to the level of your co-workers.
4. Youre not trying to do your best.
Rewrite: You have a history of strong job performance, but lately your production
has been below standards with substantial need for rework. I know you have the
skills to be successful, but you seem to lack the motivation to achieve the high
standards of the past.

12 2009 Society for Human Resource Management. Myrna L. Gusdorf, MBA, SPHR

5. Youre a pleasure to supervise.

Rewrite: As your supervisor, I appreciate the energy you bring to the job and the
enthusiasm with which you tackle even the most difficult assignments.
6. You have to prove yourself before I can give you any more responsibility.
Rewrite: At the end of the next fiscal year and after completing the marketing project, we
will meet again to discuss your level of responsibility and growth opportunities.
Performance Review Interviews: Some suggestions for Tom
Tom and Maria
Tom needs to ensure that Maria understands the expectations of her job. Certainly
getting to work on time is a basic! Hopefully, Tom has kept a log of Marias tardiness so
he can talk to her about specifics and not make generalized accusations. It needs to be
clear to her that she must arrive at work on time AND be ready to workor a disciplinary
action will follow. It also sounds like Maria needs additional training on ringing up a sale.
Perhaps an experienced employee could be assigned to work with Maria for a short time
before Maria is left on her own. Tom should use the performance appraisal interview time
to work with Maria on a plan of improvement.
Tom and David
David has lost interest in his work and has become disenchanted with the performance
appraisal process. Tom thinks the raise will help, but David will be disappointed and
may wind down even more. When increased compensation seems to be the only point
to the performance appraisal and then the increase is small, it presents a real problem for
managers. Tom must move away from the emphasis on compensation and find another
way to energize David. Maybe Davids job can be redesigned to add responsibility and
make it more interesting. Maybe David could learn additional skills by cross training in
another department or attending training activities. Whatever it is, Tom needs to deemphasize compensation and spend the time working with David to design a plan for
Davids career growth and advancement. If not, David will continue to deflate until he
eventually leaves the organization. Or worse yet, David will stay on as a non-productive
corporate zombie.
Tom and Jason
Tom is lucky to have Jason, but he must recognize that Jason needs career opportunities
or he will be going elsewhere. Tom can help secure Jasons career by acting as his mentor.
Tom should delegate some responsibility to Jason to allow Jason to hone his management
skills. Tom should also introduce Jason to people in upper management. Jason should be
scheduled for job rotations with other departments and wherever possible be included
in meetings so he can learn how things get done in the organization. Tom must keep
Jason in the loop for any in-house training opportunities that may help prepare him for
advancement. Tom should ensure that Jason understands he cannot promise a promotion
when Jason graduates, but there are a number of things that can be done to prepare Jason
and ensure he is ready when the advancement opportunity arises. Its good for Jason, its
good for the organization, and mentoring a rising star in the organization is a feather in
Toms cap too!

2009 Society for Human Resource Management. Myrna L. Gusdorf, MBA, SPHR 13

Tom and Wally

It sounds like Toms gotten sucked into believing all the stereotypes about older
workers. Certainly he should be sending Wally to the computer class. He may have a
discrimination issue if he refuses to train Wally because he believes Wally is too old.
Likely, the class Wally took at the senior center covered only the basics, and now hes
ready for more training. Tom needs to ensure that Wally gets the training he needs
and some time to practice on the cash register. He should spend the performance
appraisal interview time setting goals and establishing a training plan for Wally.
Wally seems eager and willing to learn and just needs an opportunity to show his
stuff. In spite of what the stereotypes tell us, older workers have strong work ethics
and can be dependable, long-term employees.

14 2009 Society for Human Resource Management. Myrna L. Gusdorf, MBA, SPHR

SHRM members can download this case study and many others free of charge
at www.shrm.org/education/hreducation/pages/cases.aspx.
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1800 Duke Street

Alexandria, VA 22314-3499