Page 177 - Psychological Management of Individual Performance

160 analysis of performance potential
developed. Potential analysis can be performed in the contexts of personnel selection as
well as human resources development.

DELIMITATION OF POTENTIAL ANALYSIS AGAINST PERFORMANCE APPRAISAL

For the human resources management to sustain a continuously high level of performance
of the organization, it is necessary to measure and predict the performance of individu-
als. Methods of realizing these tasks are performance appraisal and potential analysis.
Whereas the application of performance appraisals is restricted to current employees,
potential analyses are also done for applicants (as discussed in the following section).
The following delineates how performance appraisal differs from potential analysis.
Both, performance appraisal and potential analysis are concerned with the measure-
mentofperformance.Typically,performanceappraisalsarerestrictedtothemeasurement
of actual performance and do not include performance predictions (Cascio, 1992). One
reason for this is that actual performance is in part determined by the requirements of
the current position and in this way reflects typical performance rather than the perfor-
mance maximum. In contrast, potential analysis aims at determining the performance
maximum of an individual. However, some appraisal systems include some kind of
potential analysis in so far as the person who renders the performance appraisal is often
asked to judge the performance potential without reference to the individual’s actual
performance. Such a statement is usually based on observations during the daily work
and relies on an individual and supposedly subjective impression that does not involve a
formal or systematic assessment. Potential analysis differs from performance appraisal
in several ways. These differences concern the time span, the purposes of appraisals
(Cleveland, Murphy, & Williams, 1989; Williams, DeNisi, Meglino, & Cafferty, 1986),
the sources which are used to obtain the judgments (Murphy & Cleveland, 1995) as well
as the dimensions of performance that are assessed (Cascio, 1991; Domsch & Gerpott,
1985). Other differences such as the frequency and regularity of performance evaluation,
the kind and amount of feedback and the kind of participants are less clear-cut.
One crucial distinction is the time span to which the performance measurement refers.
Performance appraisals reflect the degree to which the individual’s past behavior in the
current position meets the expectations of effective performance in that position. In this
respect they make up only part of what performance measurement means as the latter
is not necessarily restricted to performance dimensions that are related to the current
position (Cascio, 1992). However, the more important aspect is that they focus on the
performance the individual has shown in the past. In the case of potential analysis,
statements referring to performance are focused on the judgement of future behavior
of the individual. Usually they do not, or at least not only, refer to the current position
but rather to the individual’s potential to perform very effectively at higher levels in the
organization or in different types of jobs. The focus of such an appraisal is not a specific
position but rather a family of jobs that have relevant characteristics in common.
Purposes common to potential analysis and performance appraisal are the identifica-
tion of strengths and weaknesses of the assessed personnel and the provision of feedback
by the assessor in order to attain performance improvements and substantiate placement
decisions. The major purpose of performance appraisals, however, is the controlling of
behavior (Schuler, 1991) and the evaluation of goal attainment. Moreover, some crucial