Learning Objectives

2. Learning Objectives After studying this chapter, you should be able to: Define performance. Define performance appraisal. Explain management by objectives. Describe multi-rater assessment. Describe the graphic rating scale. Explain critical-incident appraisal.

3. Learning Objectives (cont.) Describe essay appraisal. Describe the checklist method of performance appraisal. Explain the forced-choice method of performance appraisal. Describe the work standards approach to performance appraisal. Define leniency, central tendency, recency, and the halo effect.

4. Performance Management Systems Performance management systems let employees: Know how well they are presently performing Clarify what needs to be done to improve performance

5. Understanding Performance • Performance • Degree of accomplishment of the tasks that make up an employee’s job • Reflects how well an employee is fulfilling requirements of a job

6. Determinants of Performance • Job performance • net effect of an employee’s effort as modified by abilities and role (or task) perceptions • Effort • Refers to amount of energy (physical and/or mental) an individual uses in performing a task

7. Determinants of Performance • Abilities • personal characteristics used in performing a job • do not fluctuate widely over short periods of time • Role (task) perceptions • direction(s) in which individuals believe they should channel their effort on their jobs

8. Determinants of Performance • To attain an acceptable level of performance, a minimum level of proficiency must exist in each of the performance components

9. Environmental Factors as Performance Obstacles

10. Environmental Factors as Performance Obstacles Management is responsible for providing: • Employees with adequate working conditions • A supportive environment to eliminate or minimize performance obstacles

11. Responsibilities of the Human Resource Department in Performance Management • Design the performance management system and select the methods and forms to be used for appraising employees • Train managers in conducting performance appraisals • Maintain a reporting system to ensure that appraisals are conducted on a timely basis • Maintain performance appraisal records for individual employees

12. Responsibilities of Managers in Performance Appraisal Evaluate the performance of employees Complete the forms used in appraising employees and return them to the human resource department Review appraisals with employees Establish a plan for improvement with employees

13. Performance Appraisal: Definition And Uses • Performance appraisal • Process of evaluating and communicating to an employee how he or she is performing the job and establishing a plan for improvement.

14. Performance Appraisal: Definition And Uses Used to make administrative decisions relating to promotions, firings, layoffs, and merit pay increases Provides needed input for determining both individual and organizational training and development needs Encourages performance improvement

15. Performance Appraisal: Definition And Uses Two other important uses: Input to the validation of selection procedures Input to human resource planning

16. Performance Appraisal Methods

17. Management by Objectives (MBO) • Establishing clear and precisely defined statements of objectives for the work to be done by an employee • Establishing an action plan indicating how these objectives are to be achieved • Allowing employee to implement the action plan

18. Management by Objectives (MBO) Measuring objective achievement Taking corrective action when necessary Establishing new objectives for the future

19. Management by Objectives (MBO) • Objectives should be quantifiable and measurable • Objectives should also be challenging yet achievable, and they should be expressed in writing and in clear, concise, unambiguous language • Employees participate in objective-setting process • Objectives and action plan must serve as a basis for regular discussions between manager and employee concerning employee’s performance

20. Examples of How to Improve Work Objects Table 11.1

21. Typical Areas of Supervisory Objectives Table 11.2

22. Multi-Rater Assessment (or 360-Degree Feedback) • Managers, peers, customers, suppliers, or colleagues are asked to complete questionnaires on the employee being assessed • Person assessed also completes a questionnaire • Human resources department provides results to the employee, who in turn gets to see how his or her opinion differs from those of the group doing the assessment

23. Graphic Rating Scale • Graphic rating scale • Method of performance appraisal that requires the rater to indicate on a scale where the employee rates on factors such as quantity of work, dependability, job knowledge, and cooperativeness

24. Sample Items on a GraphicRating Scale Table 11.3

25. Behaviorally Anchored Rating Scale (BARS) • Behaviorally anchored rating scale (BARS) • Method of performance appraisal that determines an employee’s level of performance based on whether or not certain specifically described job behaviors are present.

26. Example of a BehaviorallyAnchored Rating Scale Table 11.4

27. Behaviorally Anchored Rating Scale (BARS) • Job dimensions • broad categories of duties and responsibilities that make up a job • Scale values • Define specific categories of performance • Anchors • Specific written statements of actual behaviors that indicate the level of performance on the scale opposite that particular anchor

28. Developing BARS Managers and job incumbents identify relevant job dimensions for the job Managers and job incumbents write behavioral anchors for each job dimension Managers and job incumbents reach consensus concerning scale values to be used and grouping of anchor statements for each scale value

29. Critical-Incident Appraisal • Critical-incident appraisal • Method of performance appraisal in which the rater keeps a written record of incidents that illustrate both positive and negative employee behaviors • rater then uses these incidents as a basis for evaluating the employee’s performance.

30. Essay Appraisal • Essay appraisal • Method of performance appraisal in which the rater prepares a written statement describing an employee’s strengths, weaknesses, and past performance.

31. Checklist • Checklist • Method of performance appraisal in which the rater answers with a yes or no a series of questions about the behavior of the employee being rated.

32. Sample Checklist Questions Table 11.5

33. Forced-Choice Rating • Forced-choice rating • Method of performance appraisal that requires the rater to rank a set of statements describing how an employee carries out the duties and responsibilities of the job.

34. Sample Set of Forced-Choice Statements Table 11.6

35. Ranking Methods • Ranking methods • Methods of performance appraisal in which the performance of an employee is ranked relative to the performance of others.

36. Ranking Methods

37. Ranking Methods • Alternation ranking • Ranks employees from most to least valuable • Paired comparison • Each employee is compared with every other employee

38. Ranking Methods • Forced distribution • requires the rater to compare the performance of employees and place a certain percentage of employees at various performance levels • assumes the performance level in a group of employees will be distributed according to a normal curve.

39. Forced-Distribution Curve Figure 11.1

40. Work Standards • Work standards approach • Method of performance appraisal that involves setting a standard or an expected level of output and then comparing each employee’s level to the standard.

41. Frequently Used Methods for Setting Work Standards Table 11.7

42. Potential Errors In Performance Appraisals • Leniency • Occurs in performance appraisals when a manager’s ratings are grouped at the positive end instead of being spread throughout the performance scale. • Central tendency • Tendency of a manager to rate most employees’ performance near the middle of the performance scale.

43. Potential Errors In Performance Appraisals • Recency • Tendency of a manager to evaluate employees on work performed most recently—one or two months prior to evaluation. • Halo effect • Occurs when a rater allows a single prominent characteristic of an employee to influence his judgment on each separate item in the performance appraisal.

44. Overcoming Errors In Performance Appraisals Raters should receive training in: • Performance appraisal method(s) used by company • Importance of rater’s role in total appraisal process • Use of performance appraisal information • Communication skills necessary to provide feedback to employee

45. Providing Feedback Through the Appraisal Interview • What results should the interview achieve? • What good contributions is the employee making? • Is the employee working up to his or her potential?

46. Providing Feedback Through the Appraisal Interview Is the employee clear about the manager’s performance expectations? What training does the employee need to improve? What strengths does the employee have that can be built on or improved?

47. Providing Feedback Through the Appraisal Interview • Manager must know the employee’s job description • Evaluation must be based on employee’s performance and not on his or her personality • Manager must be positive and build on the employee’s strengths

48. Providing Feedback Through the Appraisal Interview Manager must be candid and specific Manager must listen to the employee as well as presenting her or his own views Manager must elicit employee feedback on how to improve performance

49. Factors Influencing Success or Failure of Appraisal Interviews More the employees are allowed to participate in the appraisal process, the more satisfied they will be with the appraisal interview and the manager More a manager uses positive motivational techniques, the more satisfied the employee is likely to be with appraisal interview and with manager Manager and employee mutually setting specific performance improvement objectives results in better performance than when managers use a general discussion or criticism

50. Factors Influencing Success or Failure of Appraisal Interviews Discussing and solving problems hampering employee’s current job performance improve employee’s performance The more the thought and preparation that both manager and employee devote before the appraisal interview, greater the benefits of the interview More the employee perceives that performance appraisal results are tied to organizational rewards, the more beneficial the interview will be