chapter 11

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Chapter

1111

Performance AppraisalsPerformance Appraisals

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Learning ObjectivesLearning ObjectivesAfter studying Chapter 11, students should be able to:After studying Chapter 11, students should be able to:

1.1. Discuss when each of the five types of performance Discuss when each of the five types of performance appraisal formats would be appropriate to use.appraisal formats would be appropriate to use.

2.2. Discuss the relevant factors to consider when deciding Discuss the relevant factors to consider when deciding who should conduct performance appraisals.who should conduct performance appraisals.

3.3. Discuss strategies that can be used to improve the Discuss strategies that can be used to improve the accuracy of performance appraisals.accuracy of performance appraisals.

4.4. Discuss EEO considerations in performance appraisals.Discuss EEO considerations in performance appraisals.5.5. Explain the issues involved in designing merit pay Explain the issues involved in designing merit pay

guidelines.guidelines.

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You cant manage what you dont understand.

You dont understand what you dont measure.

What gets measured gets done.

What gets measured gets rewarded.

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Performance AppraisalPerformance Appraisal!!Control mechanism for feedbackControl mechanism for feedback!!Allows progress to be assessedAllows progress to be assessed!!Ensures strategyEnsures strategy--consistent behaviorconsistent behavior!!Reinforces values of the organizationReinforces values of the organization!!Ensures alignment of individual performance and Ensures alignment of individual performance and

behavior to organization culture and work behavior to organization culture and work systemssystems

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Purposes of Performance AppraisalPurposes of Performance AppraisalEvaluationEvaluation

!! Performance MeasurementPerformance Measurement

!! CompensationCompensation

!! MotivationMotivation

DevelopmentDevelopment!! Management DevelopmentManagement Development

!! Identification of PotentialIdentification of Potential

!! FeedbackFeedback

!! Human Resource PlanningHuman Resource Planning

!! CommunicationsCommunications

!! Performance ImprovementPerformance Improvement

!! Research on Legal Research on Legal ComplianceCompliance

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Common Errors in the

Appraisal Process

Halo Error

Horn Error

First Impression Error

Recency Error

Leniency ErrorSeverity Error

Central Tendency Error

Clone Error

Spillover Error

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Strategies to Better Understand and Measure Strategies to Better Understand and Measure Job PerformanceJob Performance

Improve Appraisal FormatsImprove Appraisal Formats

Select the Right RatersSelect the Right Raters

Understand Why Raters Understand Why Raters Make MistakesMake Mistakes

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Performance Appraisal ApproachesPerformance Appraisal Approaches

! Comparative! ranking! forced distribution! paired comparison

! Attribute! graphic rating scales! mixed standard scales

! Behavioral! critical incidents! BARS! essay

! Results! MBO

! Comparative! ranking! forced distribution! paired comparison

! Attribute! graphic rating scales! mixed standard scales

! Behavioral! critical incidents! BARS! essay

! Results! MBO

Show me theShow me theperformance!performance!

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An Evaluation of Performance Appraisal FormatsAn Evaluation of Performance Appraisal FormatsAn Evaluation of Performance Appraisal FormatsAn Evaluation of Performance Appraisal FormatsAn Evaluation of Performance Appraisal FormatsAn Evaluation of Performance Appraisal FormatsAn Evaluation of Performance Appraisal FormatsAn Evaluation of Performance Appraisal Formats

Format AdministrationAdministrationAdministrationAdministrationPersonnel Personnel Personnel Personnel ResearchResearchResearchResearch CostCostCostCost ValidityValidityValidityValidity

Ranking

StandardRating Scale

BARs

MBO

Essay

poor

average

good

excellent

unknown

average

poor average

average

good good

poor poor

poor poor

good

good

poor

average

average good

average

average

excellent

unknown

EmployeeEmployeeEmployeeEmployeeDevelopmentDevelopmentDevelopmentDevelopment

CRITERIACRITERIACRITERIACRITERIA

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Select the Right RatersSelect the Right Raters

SupervisorsPeers

Subordinates

Self

Customers

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Understand Why Raters Make MistakesUnderstand Why Raters Make Mistakes

Errors inErrors inErrors inErrors inObservationObservationObservationObservation(Attention)(Attention)(Attention)(Attention)

Errors inErrors inErrors inErrors inStorage andStorage andStorage andStorage and

RecallRecallRecallRecall

Errors in theErrors in theErrors in theErrors in therating processrating processrating processrating process

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Training Raters to Rate More AccuratelyTraining Raters to Rate More Accurately

!!RaterRater--error training to reduce psychometric errorserror training to reduce psychometric errors!!Performance dimension trainingPerformance dimension training!!PerformancePerformance--standard trainingstandard training

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At a minimum, the performance measurement At a minimum, the performance measurement system should provide:system should provide:

!! A clear sense of direction.A clear sense of direction.!! An opportunity for employees to participate in setting An opportunity for employees to participate in setting

the goals and standards for performance.the goals and standards for performance.!! Prompt, honest, and meaningful feedback.Prompt, honest, and meaningful feedback.!! Immediate and sincere reinforcement.Immediate and sincere reinforcement.!! Coaching and suggestions for improving future Coaching and suggestions for improving future

performance.performance.!! Fair and respectful treatment.Fair and respectful treatment.!! An opportunity for employees to understand and An opportunity for employees to understand and

influence decisions which affect them.influence decisions which affect them.

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EEO and Performance EvaluationEEO and Performance Evaluation

The courts stress six issues in setting up a The courts stress six issues in setting up a performance appraisal system:performance appraisal system:

1.1. Instructions on how to complete the appraisal Instructions on how to complete the appraisal should be specific and written.should be specific and written.

2.2. Performance dimensions, criteria, and scale Performance dimensions, criteria, and scale levels should be written, objective, and clear.levels should be written, objective, and clear.

3.3. Job descriptions should be adequately Job descriptions should be adequately developed and documented.developed and documented.

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EEO and Performance Evaluation EEO and Performance Evaluation (continued)(continued)

4.4. Supervisors should be required to provide Supervisors should be required to provide feedback about appraisal results to the feedback about appraisal results to the employees affected.employees affected.

5.5. Review of any performance rating by a higher Review of any performance rating by a higher level supervisor should be part of the system.level supervisor should be part of the system.

6.6. Consistent treatment across raters, regardless of Consistent treatment across raters, regardless of race, color, religion, sex, and national origin race, color, religion, sex, and national origin should be built into the system.should be built into the system.

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Tying Pay to Subjectively Appraised PerformanceTying Pay to Subjectively Appraised Performance

Designing merit guidelines involves answering Designing merit guidelines involves answering four questions:four questions:

!! What should the poorest performer be paid as an What should the poorest performer be paid as an increase?increase?

!! What should average performers be paid as an increase?What should average performers be paid as an increase?!! What should the top performers be paid as an increase?What should the top performers be paid as an increase?!! What should be the size of the percentage increase What should be the size of the percentage increase

differential between different levels of performance?differential between different levels of performance?

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How to Create a Merit Pay GridHow to Create a Merit Pay Grid

Merit Grids Combine 3 Variables:!Level of Performance!Distribution of Employees Within Pay Ranges!Merit Budget Increase Percentage

Merit Grids Combine 3 Variables:Merit Grids Combine 3 Variables:!!Level of PerformanceLevel of Performance!!Distribution of Employees Within Pay RangesDistribution of Employees Within Pay Ranges!!Merit Budget Increase PercentageMerit Budget Increase Percentage

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The Performance Management ProcessThe Performance Management Process

Performance Management is a continuous process where employees and managers work together

Establish Expectations Coaching and

Development

Feedback

Review

Rewards and Recognition

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SummarySummary

!! Development of sound appraisal systems requires an Development of sound appraisal systems requires an understanding of organizational objectives balanced understanding of organizational objectives balanced against the relative merits of each type of appraisal against the relative merits of each type of appraisal system.system.

!! Training supervisors effectively to appraise performance Training supervisors effectively to appraise performance requires an understanding of organizational objectives.requires an understanding of organizational objectives.

!! That combined with a knowledge of common errors in That combined with a knowledge of common errors in evaluation can make a significant difference in the evaluation can make a significant difference in the quality of appraisals.quality of appraisals.

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Review QuestionsReview Questions1.1. Employees in your department semiEmployees in your department semi--autonomous work teams. autonomous work teams.

Individual performance is assessed using four performance Individual performance is assessed using four performance dimensions: quantity of work, quality of work, interpersonal dimensions: quantity of work, quality of work, interpersonal skills, and teamwork.skills, and teamwork.

a.a. Should the supervisor have a role in the rating process?Should the supervisor have a role in the rating process?b.b. What role, if any, should other members of the work team have inWhat role, if any, should other members of the work team have in the the

assessment process?assessment process?2.2. What do you think should be included in the design of a What do you think should be included in the design of a

performance appraisal process to lessen the probability that youperformance appraisal process to lessen the probability that your r company would be accused of discrimination in performance company would be accused of discrimination in performance appraisal?appraisal?

3.3. If you wanted to ensure that employees had good feedback If you wanted to ensure that employees had good feedback about performance problems and strengths, which appraisal about performance problems and strengths, which appraisal format would you recommend using? Why?format would you recommend using? Why?