MGTO 231 Human Resources Management

1. MGTO 231Human Resources Management Performance appraisal II Dr. Kin Fai Ellick WONG

2. A Model of Performance Appraisal Identification Measurement Management Source: Managing Human Resources, 4th Edition, p.223

3. Outline • Measuring performance (continued) • Major types of measurement • Measuring error and bias • Managing performance • Appraisal interview • Performance improvement

4. Outline • Measuring performance (continued) • Major types of measurement • Measuring error and bias • Managing performance • Appraisal interview • Performance improvement

5. Appraisal formats • Type of judgment • Relative or absolute • Scale format • Nominal, ordinal, interval, or ratio • Focus of the measure • Trait, behavior, outcome

6. Focus of measurement • Trait appraisal • Behavioral appraisal • Outcome appraisal

8. Trait appraisal • Ask supervisor to make judgments about worker characteristics that tend to be consistent and enduring (i.e., the trait) • Decisiveness, reliability, energy, loyalty • Quite common in appraisal systems, as well as in other related systems, e.g., reference letters

9. Sample Trait Scales Rate each worker using the scales below. Decisiveness: 1 2 3 4 5 6 7 Very low Moderate Very high Reliability: 1 2 3 4 5 6 7 Very low Moderate Very high Energy: 1 2 3 4 5 6 7 Very low Moderate Very high Loyalty: 1 2 3 4 5 6 7 Very low Moderate Very high Source: Managing Human Resources, 4th Edition, p.228

10. Problems • The definition of traits may be ambiguous • One’s definition of loyalty may be different from others’ • 岳飛(武穆)

12. Another problem of trait approach • It is person oriented, but not performance oriented • 龐統(仕元) • One of the cleverest guys in the period of “three kingdoms” • He was ugly and so was ignored in Wu (吳) • “權見其人濃眉掀鼻，黑面短髯，形容古怪，心中不喜… 權曰：狂士也，用之何益？ • ＜＜三國演義＞＞第五十七回

15. Behavioral appraisal • Ask manager to assess a worker’s behavior • Types of behaviors can be derived from critical incident technique • Frequency-based format (Behavioral Observation Scales) • Anchor-based format (Behaviorally Anchored Rating Scales)

16. Source: Managing Human Resources, 4th Edition, p.229

17. Advantages • Behaviors are much more concrete and can be objectively observed • Provide specific examples for assessment so that it is clear to employees what they are expected to perform • Performance feedback can be given in a clear way

18. Disadvantages • The development of such a system is quite time consuming • Some important behaviors may be missed • Organization may change dynamically, old behaviors may have different implications in the current context • Or, it may limit the organization’s changes or adaptation

20. Outcome appraisal • Ask manager to assess the result achieved by worker • Management by objectives (MBO) • Supervisors and workers set goals together • The goal is a specific performance expected to be achieved (total sales or number of products produced) • The extent to which the goals have been met

21. Advantages • The criteria to be assessed are very clear and specific • Subjectivity is essentially eliminated • Goal-setting increases job motivation • The objectives can be adjusted easily

22. Disadvantages • How about the processes? • Those who have followed the BEST processes may result in the poorest outcome due to uncontrollable factors (911) • Quantity vs. Quality • Complaints on sales actives

23. Outline • Measuring performance (continued) • Major types of measurement • Measuring error and bias • Managing performance • Appraisal interview • Performance improvement

24. Some kinds of measuring error and bias • Halo effect • Escalating commitment • Contrast effect • Central tendency • Strictness/leniency • Number-size framing

25. Halo effect • Individual that is good (poor) in one dimension is tended to be perceived as good (poor) in other dimensions, although there is no such evidence • Good in verbal reasoning  good in logical reasoning, smart, having senses • Good in basketball (Michael Jordan)  good in all kinds of sports (baseball and golf) • In the HR context • Good impression in one trait may lead to better evaluation of another trait

26. Escalating commitment • Individual tends to persist in a self-selected decision, even there is evidence that the outcome of the decision is negative • In the selection context • Performance appraisal of an employee will be higher when it is rated by the one selected him/her than when it is rated by others

27. Contrast effect • Evaluation order matters!!! • Evaluator tends to inflate his/her score after evaluating a poorer-than-average individual • Evaluator tends to give lower score after evaluating a better-than-average individual

28. Central tendency • Avoiding extreme scores in ratings • 中庸之道 • Making the employees less differentiated

29. Strictness/leniency • Problem occurs when a supervisor has a tendency to rate all subordinates either high or low • Political reasons • Showing others that my team members are all bright • Maintaining harmony

30. Number-size framing

31. From Wong & Kwong (2005), Journal of Applied Psychology

32. Outline • Measuring performance (continued) • Major types of measurement • Measuring error and bias • Managing performance • Appraisal interview • Performance improvement

33. Appraisal interview • To provide feedback to employees • Two components • Discussion of performance (act as a coach) followed by discussion of salary (act as a judge) • Highlight the association between performance and salary to increase employee job motivation

34. Performance improvement • Knowing the causes of problems • Ability, motivation, or situation • 不為而非不能為 • Seeking converging evidence • Self-review, peer review, and subordinate review • Directing attention to the causes • Action plan • Providing suggestions and possible ways to improve performance • Directing communication at performance