Performance Appraisal

1. Performance Appraisal

2. What is performance appraisal? Uses of performance reviews; Types of performance appraisals; performing performance appraisal.

3. Performance Appraisal Programs • Performance Appraisal • The process of evaluating how well employees perform their jobs when compared to a set of standards, and then communicating the information to employees. • A process, typically performed annually by a supervisor for a subordinate, designed to help employees understand their roles, objectives, expectations, and performance success.

4. Performance appraisal judges effectiveness of recruitment efforts Recruitment Quality of applicants determines feasible performance standards Selection Selection should produce workers best able to meet job requirements Performance appraisal validates selection function Performance appraisal determines training needs Training and Development Training and development aids achievement of performance standards Performance appraisal is a factor in determining pay Compensation Management Compensation can affect appraisal of performance Performance appraisal justifies personnel actions Labor Relations Appraisal standards and methods may be subject to negotiation Performance Appraisal and Other HRM Functions

5. Performance management • The process of creating a work environment in which people can perform to the best of their abilities.

6. Administering Wages and Salaries Giving Performance Feedback Identifying Strengths and Weaknesses Uses of Performance Appraisal PerformanceAppraisal

7. Appraisal Programs Performance Appraisal Administrative Developmental Compensation Ind. Evaluation Job Evaluation Training Career Planning EEO/AA Support

8. Purposes for Performance Appraisal

9. Who Conducts Appraisals • Supervisors who rate their subordinates • Employees who rate their supervisors • Team members who rate each other • Outside sources • Employees’ self-appraisal • Multisource (360° feedback) appraisal

10. Performance Appraisal Process • Establish performance standards • Communicate the standards • Measure actual performance • Compare actual performance with standards and discuss the appraisal • Taking corrective action, if necessary

11. Traditional Performance Appraisal:Logic and Process Figure 11–5

12. Lack of top-management information and support Unclear performance standards Rater bias Too many forms to complete Use of the appraisal program for conflicting (political) purposes. Reasons Appraisal Programs Sometimes Fail

13. Figure 8–2 Let Me Count the Ways . . . There are many reasons why performance appraisal systems might not be effective. Some of the most common problems include the following: • Inadequate preparation on the part of the manager. • Employee is not given clear objectives at the beginning of performance period. • Manager may not be able to observe performance or have all the information. • Performance standards may not be clear. • Inconsistency in ratings among supervisors or other raters. • Rating personality rather than performance. • The halo effect, contrast effect, or some other perceptual bias. Sources: Patricia Evres, “Problems to Avoid during Performance Evaluations,” Air Conditioning, Heating & Refrigeration News 216, no. 16 (August 19, 2002): 24–26; Clinton Longnecker and Dennis Gioia, “The Politics of Executive Appraisals,” Journal of Compensation and Benefits 10, no. 2 (1994): 5–11; “Seven Deadly Sins of Performance Appraisals,” Supervisory Management 39, no. 1 (1994): 7–8.

14. Figure 8–2 Let Me Count the Ways (cont’d) . . . There are many reasons why performance appraisal systems might not be effective. Some of the most common problems include the following: • Inappropriate time span (either too short or too long). • Overemphasis on uncharacteristic performance. • Inflated ratings because managers do not want to deal with “bad news.” • Subjective or vague language in written appraisals. • Organizational politics or personal relationships cloud judgments. • No thorough discussion of causes of performance problems. • Manager may not be trained at evaluation or giving feedback. • No follow-up and coaching after the evaluation. Sources: Patricia Evres, “Problems to Avoid during Performance Evaluations,” Air Conditioning, Heating & Refrigeration News 216, no. 16 (August 19, 2002): 24–26; Clinton Longnecker and Dennis Gioia, “The Politics of Executive Appraisals,” Journal of Compensation and Benefits 10, no. 2 (1994): 5–11; “Seven Deadly Sins of Performance Appraisals,” Supervisory Management 39, no. 1 (1994): 7–8.

15. Performance Appraisal Methods

16. Graphic Rating Scale Mixed Standard Scale Forced-Choice Essay Performance Appraisal Methods Trait Methods

17. Trait Methods • Graphic Rating-Scale Method • A trait approach to performance appraisal whereby each employee is rated according to a scale of individual characteristics. • Mixed-Standard Scale Method • An approach to performance appraisal similar to other scale methods but based on comparison with (better than, equal to, or worse than) a standard.

18. Highlights in HRM 2 Graphic Rating Scale with Provision for Comments

19. Highlights in HRM 3 Example of a Mixed-Standard Scale

20. Trait Methods • Forced-Choice Method • Requires the rater to choose from statements designed to distinguish between successful and unsuccessful performance. • 1. ______ a) Works hard _____ b) Works quickly • 2. ______ a) Shows initiative _____ b) Is responsive to customers • 3. ______ a) Produces poor quality _____ b) Lacks good work habits • Essay Method • Requires the rater to compose a statement describing employee behavior.

21. Critical Incident Behavioral Checklist Behaviorally Anchored Rating Scale (BARS) Behavior Observation Scale (BOS) Behavioral Methods Behavioral Methods

22. Behavioral Methods • Critical Incident Method • Critical incident • An unusual event that denotes superior or inferior employee performance in some part of the job • The manager keeps a log or diary for each employee throughout the appraisal period and notes specific critical incidents related to how well they perform. • Behavioral Checklist Method • The rater checks statements on a list that the rater believes are characteristic of the employee’s performance or behavior.

23. Behavioral Methods • Behaviorally Anchored Rating Scale (BARS) • Consists of a series of vertical scales, one for each dimension of job performance; typically developed by a committee that includes both subordinates and managers.

24. Highlights in HRM 4 Example of a BARS for Municipal Fire Companies FIREFIGHTING STRATEGY: Knowledge of Fire Characteristics. Source: Adapted from Landy, Jacobs, and Associates. Reprinted with permission.

25. Summary of Appraisal Methods • Trait Methods • Advantages • Are inexpensive to develop • Use meaningful dimensions • Are easy to use • Disadvantages • Have high potential for rating errors • Are not useful for employee counseling • Are not useful for allocating rewards • Are not useful for promotion decisions

26. Summary of Appraisal Methods (cont’d) • Behavioral Methods • Advantages • Use specific performance dimensions • Are acceptable to employees and superiors • Are useful for providing feedback • Are fair for reward and promotion decisions • Disadvantages • Can be time-consuming to develop/use • Can be costly to develop • Have some potential for rating error

27. Figure 8–8 Factors That Influence Performance

28. Highlights in HRM 9 Performance Diagnosis Source: Scott Snell, Cornell University.