Appraising and Managing Performance

1. 7 Appraising and Managing Performance

2. Challenges • Explainwhy performance appraisal is important and describe its components. • Discuss the advantages and disadvantages of different performance rating systems. • Manage the impact of rating errors and bias on performance appraisals. • Discuss the potential role of emotion in performance appraisal and how to manage its impact. • Identify the major legal requirements for appraisal. • Use performance appraisals to manage and develop employee performance.

3. Performance Appraisal The identification, measurement, and management of human performance in organizations.

4. A Model of Performance Appraisal Identification Measurement Management

5. Dimension An aspect of performance that determines effective job performance.

6. The Benefits of Performance Appraisal Employer Perspective: • Despite imperfect measurement techniques, individual differences in performance can make a difference to company performance. • Documentation of performance appraisal and feedback may be needed for legal defense. • Appraisal provides a rational basis for constructing a bonus or merit system. • Appraisal dimensions and standards can help to implement strategic goals and clarify performance expectations. • Providing individual feedback is part of the performance management process. • Despite the traditional focus on the individual, appraisal criteria can include teamwork and the teams can be the focus of the appraisal.

7. The Benefits of Performance Appraisal (cont.) Employee Perspective: • Performance feedback is needed and desired. • Improvement in performance requires assessment. • Fairness requires that differences in performance levels across workers be measured and have an effect on outcomes. • Assessment and recognition of performance levels can motivate workers to improve their performance.

8. Measurement Tools • The type of judgment that is required • Relative or absolute • The focus of the measure • Trait, behavior, or outcome

9. Relative and Absolute Judgment Relative Judgment An appraisal format that asks supervisors to compare an employee's performance to the performance of other employees doing the same job. Absolute Judgment An appraisal format that asks supervisors to make judgments about an employee’s performance based solely on performance standards.

10. Trait Appraisal, Behavioral Appraisal, and Outcome Appraisal Instruments Trait Appraisal An appraisal tool that asks a supervisor to make judgments about worker characteristics that tend to be consistent and enduring. Behavioral Appraisal An appraisal tool that asks managers to assess a worker’s behaviors. Outcome Appraisal An appraisal tool that asks managers to assess the results achieved by workers.

11. 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

12. Challenges to Effective Performance Measurement • Rater errors and bias • The influence of liking • Organizational politics • Whether to focus on the individual or the group • Legal issues

13. Legal Issues • Arecent analysis of 295 court cases involving performance appraisal found judges’ decisions to be favorably influenced by the following additional factors: • Use of job analysis • Providing written instructions • Allowing employees to review appraisal results • Agreement among multiple raters (if more than one was used) • The presence of rater training

14. Communication Skills for the Appraisal Interview Skills Benefit Description Example Rater sits with a slight forward, comfortable lean of the upper body, maintains eye contact, and speaks in a steady and soothing voice. —Open questions encourage information sharing and are most appropriate early in an interview or in complex, ambiguous situations. —Closed question evoke short responses and are useful for focusing and clarifying. Suggests interest and active listening. Appropriate use of open and closed questions can ensure an effective flow of communication during an interview. While the ratee is speaking, the rater looks at the person and gently nods head to signal interest. — Open questions start with words like “Could,” “Would,” “How,” “What,” or “Why”. — Closed questions start with words like “Did,” “Is,” or “Are.” Nonverbal Attentive Open and Closed Questions

15. Communication Skills for the Appraisal Interview (Cont.) Skills Benefit Description Example A paraphrase is a concise statement in your own words of what someone has just said. It should be factual and nonjudgmental. Similar to paraphrase, a reflection of feeling is a factual statement of the emotions you sense the other person is feeling. Be cautious about using this technique insincerely or with those who need professional help. Paraphrasing can clarify and convey to the ratee that you are listening actively. Shows that you are trying to understand the emotional aspect of the workplace. The empathy and sensitivity of such reflection can open up communication and allow the interview to move more meaningfully to task-related issues. You might begin by saying “If I have this right…” or “What you’re saying is…” and end with “Is that correct?” or “That’s what you are saying?” Start by saying something like “It sounds like you’re feeling…” End as you would a paraphrase (“Is that right?”). Paraphrasing Reflection of Feeling

16. Communication Skills for the Appraisal Interview (Cont.) Skills Benefit Description Example Pay attention to cultural differences that may influence how another person communicates and how you might communicate with others. Communication is more effective when you are sensitive to the possible influence of cultural differences. When dealing with employees from a culture that is highly formal, avoid addressing them in the workplace by their first names. Doing so may signal disrespect. Cultural Sensitivity

17. Situational (System) Factors to Consider in Determining the Causes of Performance Problems • Poor coordination of work activities among workers. • Inadequate information or instructions needed to perform a job. • Low-quality materials. • Lack of necessary equipment. • Inability to obtain raw materials, parts, or supplies. • Inadequate financial resources. • Poor supervision. • Uncooperative coworkers and/or poor relations among people. • Inadequate training. • Insufficient time to produce the quantity or quality of work required. • A poor work environment (for example, cold, hot, noisy, frequent • interruptions.) • Equipment breakdown.

18. How to Determine and Remedy Performance Shortfalls Cause Questions to Ask Possible Remedies • Has the worker ever been • able to perform adequately? • Can others perform the job • adequately, but not this worker? • Is the worker’s performance • level declining? • Is performance lower on all • tasks? • Is performance erratic? • Are performance problems • showing up in all workers, • even those who have adequate • supplies and equipment? • Train • Transfer • Redesign job • Terminate • Clarify linkage between • performance and rewards • Recognize good performance • Streamline work process • Clarify needs to suppliers • Change suppliers • Eliminate conflicting • signals or demands • Provide adequate tools Ability Effort Situation

19. 360° Feedback The combination of peer, subordinate, and self-review

20. Key Steps in Implementing 360° Appraisal • Top management communicates the goals of and need for 360° appraisal. • Employees and managers are involved in the development of the appraisal criteria and appraisal process. • Employees are trained in how to give and receive feedback. • Employees are informed of the nature of the 360° appraisal instrument and process. • The 360° system undergoes pilot testing in one part of the organization. • Management continuously reinforces the goals of the 360° appraisal and is ready to change the process when necessary.