...inaccurate, unlikely that employees will buy into a performance system. In addition, efforts to improve the performance appraisal process should lead to greater "buy in" from line and senior mangers. All three parties must buy into a performance management system for it to be successful. (1) Lavigna reported a survey that found that one of the most common concerns for HR Managers is improving the ability of managers to reward performance. (2) Initiatives to address this concern would likely lead to concerns regarding the consistency of ratings given by managers. Consistency of ratings would also be an underlying concern of performance management initiatives such as those described by Neary (3) or multi-source feedback systems like those reviewed by Atwater, Waldman, and Brett. (4) Much of the effectiveness of a performance management system hinges on the accuracy of the data generated by it. When HR departments conduct internal research, they often become discouraged by the degree of inconsistency in their data.

The focus of this article is in four main areas. First, the typical results found in the research literature are provided. This will allow one to compare one's results to benchmark values. Second, a very important method for correcting for error in the data is pointed out. This correction shows that the data is far more accurate than commonly thought. Third, the degree to which the use of multiple raters will increase accuracy is demonstrated. Fourth, research data in order to make suggestions for improving an existing performance appraisal system is drawn upon.

Benchmark data from the literature for four rating sources--managers, peers, subordinates and self-appraisals--have been provided. The data should prove useful for evaluating 360-degree appraisal systems. For the appraisals generated by managers, enough data to make separate analyses for three different measures of accuracy has been found. Data could also be analyzed at different levels of job complexity.

As expected, it was found that simple jobs are more accurately evaluated than more complex ones. Furthermore, the difference in accuracy between rating and ranking data was compared. Rankings were more accurate than ratings in two of the four categories of jobs that we investigated.

To summarize, this article will provide:

1. Benchmarks at 95 percent intervals (or the range within one would expect the data to fall) for appraisals by managers, peers, subordinates and self-assessments.

2. The difference in accuracy between rating and ranking data.

3. For appraisals of managers, the average results for three different measures of accuracy and relationship between these three measures.

4. A method for estimating the increase in accuracy when averaging results from two or more appraisers.

5. The degree to which the use of a large number of job factors increases overall accuracy.

6. Suggestions for improving the appraisal process based on the research results.

The Data

To gather data, all issues of The Journal of Applied Psychology and Personnel Psychology from the first volume through 2002 were reviewed. Relevant articles in other journals that were referenced in the original articles found were also reviewed. It was found that nearly 400 correlations could be categorized by two important factors--job level and appraisal method. A meta-analysis was then conducted to average the studies on a given topic, according to a widely used mathematical procedure. (5)

There are three methods of determining appraisal accuracy: coefficients of stability (rate-rerate coefficients), alpha coefficients (internal consistency), and interrater...

NOTE: All illustrations and photos have been removed from this article.




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