Performance management systems Chapter 11

1. Performance management systems Chapter 11

2. Performance Appraisal Definition And Uses Definition: Process of evaluating and communicating to an employee how he or she is performing the job and establishing a plan for improvement. • When properly conducted , performance appraisals not only let employees know how well they are performing but also influence their future level of effort and task direction .

3. Why is it important ? Think 1-One of the most common uses of performance appraisals is for making administrative decisions relating to promotions, firings, layoffs, and merit pay increases. 2- Performance appraisal information can also provide needed input for determining both individual and organizational training and development needs 3- to encourage performance improvement. 4-information generated through performance appraisals are input to human resource planning.

4. Performance Appraisal Methods • Methods of performance appraisals include • Management by objectives (MBO) • Multi-rater assessment (or 360-degree feedback) • Graphic rating scale • Behaviorally anchored rating scale (BARS) • Critical-incident appraisal • Essay appraisal • Checklist • Forced-choice rating • Ranking methods • Work standards approach

5. Management by objectives (MBO) 1-Establishing clear and precisely defined statement of objectives for the work to be done by the employee. • Objectives should be quantifiable and measurable objectives that are challengeable but achievable. • Objectives should be written and in clear, concise, and unambiguous language. • See table 11.1 and 11.2 p. 217 2- Develop action plan for how these objectives are to be achieved .. 3- Allow employee to implement …. 4- Measure objective achievement… 5-Take corrective action when necessary … 6- Establish new objective for the future

6. Who participate in objective-setting process? Why? Successful use of MBO is that the objectives and action plan must serve as a basis for regular discussions between the manager and the employee concerning the employee’s performance. because these regular discussions provide an opportunity for the manager and employee to discuss progress and modify objectives when necessary.

7. Examples of how to improve work objectives :

8. MULTI-RATER ASSESSMENT (OR 360-DEGREE FEEDBACK ) • Who participates? managers, peers, customers, suppliers, or colleagues. • How to do it? • Everyone asked to complete questionnaires on the employee being assessed. The person assessed also completes a questionnaire. • The questionnaires are generally lengthy. Typical questions are: “Are you crisp, clear, and articulate? Abrasive? • The human resources department provides the results to the employee, who in turn gets to see how his or her opinion differs from those of the group doing the assessment.

9. GRAPHIC RATING SCALE • Definition: The rater assesses an employee Based on factors such as; Quantity of work, dependability, job knowledge, attendance, accuracy of work, and cooperativeness. • Table 11.3 p.218 • What are the weaknesses? • is that evaluators are unlikely to interpret written descriptions in the same manner due to differences in background, experience, and personality. • the choice of rating categories.

10. BEHAVIORALLY ANCHOREDRATING SCALE (BARS) Definition :Method of performance appraisal that determines an employee’s level of performance based on whether or not certain specifically described job behaviors are present.

11. CRITICAL-INCIDENT APPRAISAL • Method of performance appraisal in which the rater keeps a written record of incidents that illustrate both positive and negative behaviors (or satisfactory and unsatisfactory performance )of the employee. The rater then uses these incidents as a basis for evaluating the employee’s performance.

12. ESSAY APPRAISAL • The essay appraisal method requires that the evaluation describe an employee’s performancein written narrative form (describing an individual’s strengths, weaknesses, and past performance).

13. 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. • Table 11.5

14. 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. • Table 11.6

15. RANKING METHODS • Methods of performance appraisal in which the performance of an employee is ranked relative to the performance of others.

16. WORK STANDARDS • The work standards approach to performance appraisal is most frequently used for production employees • and is basically a form of goal setting for these employees. • It involves setting a standard or an expected level of output and then comparing each employee’s performance to the standard. • work standards should reflect the average output of a typical employee.

17. Potential Errors In Performance Appraisals Several common errors, some are: • Leniency • Central tendency • Recency • Halo effect

18. 1-Leniency error: • Occurs in performance appraisals when a manager’s ratings are grouped at the positive end instead of being spread throughout the performance scale. • when a manager or interviewer rate an employee or the interviewee too positively. • Opposite of strictness error. 2-Central tendency: Tendency of manager to rate most employees’ performance near the middle of the performance scale.

19. 3-Recency: • Tendency of a manager to evaluate employees on work performed most recently – one or two months prior to evaluation. 4-Halo effect: • Occurs when a rater allows a single prominent characteristics of an employee to influence his/her judgment on each separate item in the performance appraisal .

20. Performance Appraisal and the Law • Civil Right Act to permits to use bona fides (good faith in contract) performance appraisal system. • The above Act applied when minorities, women, or older employees treated unfairly.