Why evaluate the performance of employees?

1. Why evaluate the performance of employees? • Compensation (raises, merit pay, bonuses) • Personnel Decisions (e.g., promotion, transfer, • dismissal) • Training (Identify specific requirements) • Research (e.g., assessing the worth/validity of • selection tests

2. Basic Performance Appraisal Process Conduct a Job Analysis (e.g., specify tasks and KSAs) Develop Performance Standards (e.g., define what is superior, acceptable, and poor job performance) Develop or Choose a Performance Appraisal Approach

3. Breaking Down the Performance Appraisal Process • Observation • Selective Attention • Timing • Structure • Frequency • Storage • Encoding of Information (e.g., categorization) • Short vs. Long-term • Memory • Evaluation • Retrieve Information • Combine information • Decision-making (judgment)

4. Sources of Information • 1)Supervisors(most common) • Role Conflict (e.g., judge and trainer/teacher) • Motivation • Time availability • Friendship • Co-Workers(Peers) • Peer nominations: (Identifying those with highest and lowest KSAs) • Peer ratings: For providing feedback • Peer rankings: For discriminating highest to lowest performance on various dimensions • Friendship bias • Leniency • High level of accuracy • Best used as a source of feedback Effects of poor peer ratings on subsequent task performance: Lower perceived group performance Lower cohesiveness Lower satisfaction Lower peer ratings

5. Sources of Information (cont) • 3)Self • Lots of knowledge • Leniency effect • Good preparation for performance appraisal meeting (conducive for dialog) • 4)Subordinates • Biases (e.g., # of subordinates, type of job, expected evaluation from • supervisor) • Best if ratings are anonymous -- if not, leniency in ratings occur • (Antonioni, 1994) • Can add information above and beyond other sources (Conway, et. al 2001) • 5)Clients • Good source of feedback • Negativity bias • Customer ratings on the web (usage/role, accuracy, verification issues)

6. Technology and Client/Customer Feedback Other examples: Amazon, eBay, Trip Advisor, iTunes

7. Technology and Client/Customer Feedback (cont.)

8. Other Examples of Internet-Based Performance Information Amazon

9. Other Examples of Internet-Based Performance Information Expedia That's the second time I stay in this hotel. The location is fantastic and the rooms, in general are very comfortable. The view from the top, at the breakfast place is superb. Rating: 4.0 The standard rooms are very, very small, I had only one bag and no place to put it. you could barely turnaround in the bathrooms. I love the decor/ art deco style but a little updating is definitely do. Rating: 2.0

10. Subjective Appraisal Methods(can be used with any type of job) • Relative Methods • Ranking • 1st _____ • 2nd_____ • 3rd _____ • Pair Comparison • Employee-1 _____ versus Employee-2 _____ • Employee-1 _____ versus Employee-3 _____ etc. Both are difficult to use with a large number of subordinates

11. Subjective Appraisal Methods Absolute Methods • 1)Narrative essays • Unstructured (e.g., content, length) • Affected by the writing ability of supervisors and time availability • Cannot validate selection devices (no numbers) • Graphic Rating Scale (most common) • _____ _____ _____ _____ _____ • Very Average Excellent • Poor

12. Common Rating Scale Errors Leniency (positive bias) X _____ _____ _____ _____ _____ Very Average Excellent Poor Central Tendency (midpoint) X _____ _____ _____ _____ _____ Very Average Excellent Poor Both lead to a restriction in the range of performance scores

13. Halo Error Responsibility Commitment Initiative Sensitivity Judgment Communication Observation of specific behavior (s) (e.g., volunteers to work overtime) High ratings on other performance dimensions

14. Subordinate Characteristics (e.g., age, gender, race, attractiveness) Labels for Subordinate (positive or negative) Supervisor Characteristics (e.g., gender, race, age) Attitudes, Stereotypes Expectations for Subordinate Liking of subordinate Observation of Subordinate Job Performance Selective Attention Encoding of Information Recall Information Self-Fulfilling Prophecy Process Evaluate Performance

15. Subjective Appraisal Methods Behavioral Methods (use of critical incidents; examples of good and poor job behavior collected by job experts over time) • Behavior Observation Scales (BOS) • Rate the frequencyin which critical incidents are performed by employees • Sum the ratings for a total “performance” score • 1) Assists others in job duties. • _____ _____ _____ _____ _____ • Never Usually Always • Cleans equipment after each use. • _____ _____ _____ _____ _____ • Never Usually Always

16. Behaviorally Anchored Rating Scale (BARS) Process • Generate critical incidents (examples of good and poor job performance) • 2) Place Critical Incidents Into performance dimensions (e.g., Responsibility, Initiative, Safety) • Retranslation Step (do step # 2 again with a separate group of job experts. Discard incidents where disagreement exists as to which dimension in which they belong) • Calculate the mean and standard deviation of each critical incident (discard those with a large standard deviation) • 5) Place critical incidents on a vertical scale

17. BARS (Pros and Cons) • Process involves various employees (increases the likelihood of usage) • Job specificity (different BARS need to be developed for each position) • Not any better at reducing common rating scale errors (e.g., leniency, halo) • Time consuming

20. Objective Appraisal Data • 1) Production Data (e.g., sales volume, units produced) • When observation occurs (timing), and how data is collected • Fairness and relevancy issue • Potential limited variability • Limitations regarding supervisory personnel • 2) Personnel Data • Absenteeism (excused versus unexcused) • Tardiness • Accidents (fault issue)

21. 360 Degree Performance Appraisal

22. Performance Appraisal Training • Frequent observation of performance and feedback (both positive and negative) • 2) Recordkeeping (ongoing if possible) • 3) Encourage self-assessment of employees • 4) Focus on behaviors (not traits) • Use specific behavioral criteria and standards • 6) Set goals for employees (specific and challenging ones) • 7) Focus on howto observe job behaviors and provide incentives to do so

23. Legally Defensible Appraisal Systems • Ensure that procedures for personnel decisions do not differ as a function • of the race, sex, national origin, religion, or age of those affected by such • decisions. • Use objective and uncontaminated data whenever they are available. • 3) Provide a formal system of review or appeal to resolve disagreements • regarding appraisals. • Use more than one independent evaluator of performance. • 5) Use a formal, standardized system for personnel decisions. • Ensure that evaluators have ample opportunity to observe and rate performance if ratings must be made. • Avoid ratings on traits such as dependability, drive, aptitude, or attitude. • 8) Provide documented performance counseling prior to performance,-based termination decisions.

24. Legally Defensible Appraisal Systems (cont) 9) Communicate specific performance standards to employees. 10) Provide raters with written instructions on how to complete performance evaluations. 11) Evaluate employees on specific work dimensions, rather than on a single overall or global measure. 12) Require documentation in terms of specific behaviors (e.g., critical incidents) for extreme ratings. 13) Base the content of the appraisal form on a job analysis. 14) Provide employees with an opportunity to review their appraisals (e.g., several days prior to formal feedback session). 15) Educate personnel decision-makers regarding laws on discrimination.

25. Factors Affecting Employees Acceptance of Performance Evaluations • Asking for (and using) performance information/input from employees • Ensure a 2-way interaction during the performance appraisal meeting • Provide a way for employees to counter or challengethe appraisal • Sufficient detail and knowledge of employee performance by • supervisors • Consistentuse of performance standards across employees • Basing performance evaluation on actual job behaviors (importance of using employee self-evaluations) Importance of rater training