(c) 2007 by Prentice Hall7-1 Appraising and Managing Performance Chapter 7.

(c) 2007 by Prentice Hall 7-1

Appraising and Appraising and

Managing PerformanceManaging Performance

Chapter 7Chapter 7

(c) 2007 by Prentice Hall 7-2

• Explain why performance appraisal is important and Explain why performance appraisal is important and describe its componentsdescribe its components

• Discuss the advantages and disadvantages of Discuss the advantages and disadvantages of different performance rating systemsdifferent performance rating systems

• Manage the impact of rating errors and bias on Manage the impact of rating errors and bias on performance appraisalsperformance appraisals

• Discuss the potential role of emotion in performance Discuss the potential role of emotion in performance appraisal and how to manage its impactappraisal and how to manage its impact

• Identify the major legal requirements for appraisalIdentify the major legal requirements for appraisal• Use performance appraisals to manage and develop Use performance appraisals to manage and develop

employee performanceemployee performance

Chapter 7 OverviewChapter 7 Overview

(c) 2007 by Prentice Hall 7-3

What Is Performance Appraisal?What Is Performance Appraisal?

• Performance Performance AppraisalAppraisal – –

• The identification, The identification, measurement, and measurement, and management of management of human human performance in performance in organizations.organizations.

(c) 2007 by Prentice Hall 7-4

What Is Performance Appraisal?What Is Performance Appraisal?

The uses of performance appraisal

1.1. Administrative purposesAdministrative purposes

2.2. Developmental purposesDevelopmental purposes

(c) 2007 by Prentice Hall 7-5

• DimensionDimension – An aspect of performance – An aspect of performance that determines effective job performance.that determines effective job performance.

• Measuring performanceMeasuring performance– Administering numbers or labels Administering numbers or labels

towards performance is difficult to towards performance is difficult to quantifyquantify

Identifying Performance Identifying Performance DimensionsDimensions

(c) 2007 by Prentice Hall 7-6

Measurement Tools• 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 supervision to make judgments about an employee’s performance based solely on performance standards.

Identifying Performance Identifying Performance DimensionsDimensions

(c) 2007 by Prentice Hall 7-7

Identifying Performance Identifying Performance DimensionsDimensions

Trait, Behavioral, and Outcome Data

• Trait appraisal Trait appraisal instrumentsinstruments

• Behavioral appraisal Behavioral appraisal instrumentsinstruments

• Outcome appraisal Outcome appraisal instruments – MBOinstruments – MBO

(c) 2007 by Prentice Hall 7-8

Measurement Tools – continued

Identifying Performance Identifying Performance DimensionsDimensions

(c) 2007 by Prentice Hall 7-9

Challenges to effective performance measurement

• Rater errors and biasRater errors and bias– Rater errorRater error – An error in performance appraisals that – An error in performance appraisals that

reflects consistent biases on the part of the rater.reflects consistent biases on the part of the rater.

• ComparabilityComparability• Frame-of-reference (FOR) training Frame-of-reference (FOR) training

Identifying Performance Identifying Performance DimensionsDimensions

(c) 2007 by Prentice Hall 7-10

Challenges to effective performance measurement

• The Influence of LikingThe Influence of Liking

• PrecautionsPrecautions

• Organizational PoliticsOrganizational Politics

• Individual or Group FocusIndividual or Group Focus

Identifying Performance Identifying Performance DimensionsDimensions

(c) 2007 by Prentice Hall 7-11

Yahoo!Yahoo!

(c) 2007 by Prentice Hall 7-12

Emerging Trends: Measuring the Emerging Trends: Measuring the Performance of TeamsPerformance of Teams

• Review existing measures to make sure the team is aware of the measures and has commitment and responsibilities to achieve them.

• Identify interim checkpoints at which team progress or achievements can be assessed.

• Identify what the team and team members must do to achieve the desired team-level results.

• Prioritize team goals according to relative importance.

(c) 2007 by Prentice Hall 7-13

• Develop any needed measures of interim and final team and individual performance.

• Develop team and individual performance standards so that everyone has a clear understanding of performance expectations.

• Determine how the performance management system will work. Who will be the raters? How will feedback be provided?

Emerging Trends: Measuring the Emerging Trends: Measuring the Performance of TeamsPerformance of Teams

(c) 2007 by Prentice Hall 7-14

Challenges to effective performance measurement

• Legal IssuesLegal Issues – – factors influencing judges’ factors influencing judges’ decisions in cases involving performance decisions in cases involving performance appraisalsappraisals

• Use of job analysisUse of job analysis• Providing written instructionsProviding written instructions• Allowing employees to review appraisal resultsAllowing employees to review appraisal results• Agreement among multiple ratersAgreement among multiple raters• The presence of rater trainingThe presence of rater training

Identifying Performance Identifying Performance DimensionsDimensions

(c) 2007 by Prentice Hall 7-15

Managing PerformanceManaging Performance

• The The

AppraisalAppraisal

InterviewInterview

Helpful or Helpful or Dreadful??Dreadful??

(c) 2007 by Prentice Hall 7-16

Performance Improvement

• Exploring the causes of performance Exploring the causes of performance problemsproblems

– Situational factors or system factorsSituational factors or system factors

– Self, peer, and subordinate reviewsSelf, peer, and subordinate reviews

– 360-degree feedback360-degree feedback

Managing PerformanceManaging Performance

(c) 2007 by Prentice Hall 7-17

Situational (System) Factors to Consider in Situational (System) Factors to Consider in Determining the Causes of Performance ProblemsDetermining the Causes of Performance Problems

(c) 2007 by Prentice Hall 7-18

Performance ImprovementPerformance Improvement

• Directing attention to the causes of Directing attention to the causes of problems and developing an action problems and developing an action plan and empowering workers to plan and empowering workers to reach a solution –reach a solution –

• Directing communication at Directing communication at performance – performance –

Managing PerformanceManaging Performance

(c) 2007 by Prentice Hall 7-19

How to Determine andHow to Determine and Remedy Performance Shortfalls Remedy Performance Shortfalls

(c) 2007 by Prentice Hall 7-20

• Give-and-Take! Tips for Better Performance ReviewsGive-and-Take! Tips for Better Performance Reviews

– Start with the raw dataStart with the raw data– Make sure you are evaluating performance on Make sure you are evaluating performance on

appropriate dimensionsappropriate dimensions– Beware of rating biasesBeware of rating biases– Support ratings with written commentsSupport ratings with written comments– Evaluate several or all of your people at one time, if Evaluate several or all of your people at one time, if

possiblepossible– Stick with performance and stay away from inferences Stick with performance and stay away from inferences

about causeabout cause– Be consistent across workersBe consistent across workers

Customer-Driven HRCustomer-Driven HR

(c) 2007 by Prentice Hall 7-21

Summary and ConclusionsSummary and Conclusions

• What is performance What is performance appraisal?appraisal?

• Identify performance Identify performance dimensionsdimensions

• Measuring Measuring PerformancePerformance

• Managing Managing PerformancePerformance