Primary Purposes of Performance Evaluations

1. Primary Purposes of Performance Evaluations Percent* Use of Data • Compensation (Decision-making) • Performance Feedback (Development) • Training (Development) • Promotion (Decision-making) • Human Resource Planning • Retention/Discharge (Decision-making) 85.6 65.1 64.3 45.3 43.1 30.3 *Based on responses from 600 organizations Chapter 16

2. Performance Evaluation Methods:How • Objective • Management by objectives • Numerical counts • Units produced, sales calls made, patients seen per day • Subjective • Based on individuals perceptions • Identify performance dimensions • Develop scale or measure to assess employee’s standing on each dimension • Ranking of employees • Highest to lowest on performance measures

3. Subjective Scale Methods • Graphic rating scale • How courteous is the salesperson toward customers? • (1) Very discourteous……………Very courteous (7) • Behaviorally anchored rating scale • (1) Ignores customers … (2) Keeps customers waiting… (4) Answers questions promptly………….(7) Greets customers pleasantly and always tries sincerely to help customers locate items to suit their needs • Behavioral observation scale • Pleasantly greets customers • almost never……………………almost always (7)

4. Subjective Scale Methods (cont.) • BARS & BOS • More time consuming to develop and to complete in comparison to a graphic rating scale • Appraise more specific behaviors and thus provide a better source of feedback

5. Other Subjective Methods • Written essays • Narrative of employees strengths and weaknesses, and suggestions for improvement • Critical incidents • Written anecdotes of effective or ineffective behaviors • Can supplement other forms of appraisal, add to one’s “file”

6. Who Should Evaluate Performance? • Supervisors • 95% of immediate supervisors evaluate subordinates • Peers • Closer to the action • Potentially more interactions with workers and observations of work behaviors • More sources of data • Some hesitation to evaluate peers • Issues of friendship

7. Who Should Evaluate Performance? (cont) • Self-evaluations • Advantages • Stimulates discussion, very useful as a developmental tool • Less subordinate defensiveness • Increases satisfaction with evaluations • Disadvantages • Self-evaluations tend to be inflated • Almost no one rates oneself below average • Self-serving bias

8. Who Should Evaluate Performance? (cont) • Subordinates (upward evaluations) • Consistent with employee empowerment and concerns for employee development • Issues • Should the individual evaluations completed by subordinates be anonymous? • Who should review the evaluations?

9. 360-Degree Evaluations • Objective is to pool feedback from all of the employees customers (internal & external) • 20% of organizations are currently using this approach & another 20% are considering implementing it this year (2001) • Alcoa, Du Pont, Levi Strauss, Sprint, • Why might organizations use this approach?

10. Performance Appraisal & the Fair-process Effect • Independent of the amount of the raise, employees who perceive that performance appraisals are conducted in a fair manner, report more satisfaction with pay and more satisfaction with the appraisal itself

11. Attributes of a Fair Performance Appraisal • Specific behavioral objectives (performance criteria) are identified and communicated in advance • Subordinates have an opportunity to provide input in terms of setting the performance objectives • Helps ensure that evaluation criteria are: appropriate, understood, and accepted • Behaviors - not traits- are evaluated • “Reports are finished late” versus “you are lazy”

12. Attributes of a Fair Performance Appraisal (continued) • Appraisal is based upon accurate information • Supervisor diaries • Check for accuracy (does the subordinate have anything different?) • Employee provides a review of activities, accomplishments achieved, and progress made during the period (self-evaluation) • Appraisals conducted more often (timeliness) • Once a quarter as opposed to once a year

13. Communication & Interpersonal Relationships • Giving feedback and criticism concerning performance issues • Fear of alienating or offending subordinates • Fear of reducing their morale/motivation • Common practices (ineffective) • “don’t worry” • To protect relationship & avoid hurting feelings • “shape up or ship out” • Ignores subordinate reactions & feelings

14. Supportive Communication / Criticism • Preserves a positive relationship between the communicators and still addresses the problem at hand • Helpful attitude directed toward solving problems • Participative • Positive manager/sub interpersonal relationships • Not merely to be liked or judged as a “nice person” • Practical instrumental value: • Most powerful predictor of profitability, 3 times better than sales growth rate, firm size, & market share combined

15. Attributes of Supportive Communication • Problem oriented, not person oriented • A focus on problems & issues that can be changes • “going forward, how can we solve this problem?” • NOT, “because of you….” • Participative & supportive listening • “What do you think are the obstacles standing in the way of improvement?”

16. Attributes of Supportive Communication • Specific, not global • A focus on specific events & behaviors, avoiding general or extreme statements • “Your work was late 3 times this month” • NOT, “Your work is always late” • Validating, not invalidating • A focus on statements that communicate respect & collaboration • “I have some ideas, but first do you have any suggestions?” • NOT, “Here is how you will proceed”

17. Coaching and Counseling Situations • Coaching • When managers must pass along performance related advice, information, standards (ability issues) • “I can help you, lets work together on this” • Directive, accurate, specific • Counseling • When problems result from attitudes, personality clashes, defensiveness, or emotions • Goal: convey that a problem exists • This is what is perceived • Not directive • Effects on others

18. Finding the reasons for problems • Probing responses • Asks a questions about what the person just said • Intends to acquire more information & to help the communicator say more • Neutral in tone • “Can you tell me more about that?” • “What do you mean, help me understand that” • “You are having difficulty with ..?”

19. Performance Appraisal Video • Identify pros & cons of the organizations performance appraisal system • Consider the performance appraisal meeting • Was this an effective meeting? • Why, why not? • What could have improved the meeting? • What should the boss and the subordinate do now? • What recommendations can you make to improve the performance appraisal experience at the company?