M_of_HR_Session_5_-_2012

Performance Appraisal

Session 5

Performance Appraisal

• The process of considering and evaluating the performance of an employee with the objective of improving job performance

• The information generated during appraisal can be used as a basis for career planning, training and as a basis for deciding levels of pay

PA integration

Citibank, Senior Management: If people’s jobs are dictated by who they know

and networking why do Personnel wants these 35 box-tick forms? … all I’m rebelling against is why do I have to fill out this form that just gets stuffed in a drawer downstairs and is never looked at again in anyone’s life. My sense is that it’s not used.

Two sides of appraisal

EVALUATIVE:

Making a judgement about the employee which follows from historical analysis of the performance against objectives; linked to pay and rewards

DEVELOPMENTAL:

The needs of employee are evaluated in terms of the training required to improve skill and knowledge in line with future performance objectives; linked to career planning and management succession

Three assumptions of PA

1. Work arrangements allow reliable & valid collection of information

2. Raters can assess performance accurately

3. Rational criteria exist

What should be assessed?

• Focus can take number of forms: attitudes, behavior in work tasks, meeting of objectives

• ‘Task Performance’ - job specific behaviors and core responsibilities

• ‘Contextual Performance’ - non-job-specific behaviors such as dedication, co-operation, enthusiasm and persistence

Result driven PA

Lloyds: Line Management

Majority of people are really only judged on their results, and that is very bad because you are always result driven, you tend to wash over those issues that really need to be assessed… My Area Director only sees my results, he doesn’t see how I deal with the situations, he doesn’t know really how I motivate the staff, he does not know how good I am in delegating because all he knows is what gets done.

Methods of measurement

• Ranking - making comparison in the group from the highest to the poorest performer

• Rating - measurement of employees performance according to set of standards/traits (i.e. communication skills from 1 to 5)

• Critical incident method - records of specific examples of the employee acting in ways that are either effective or ineffective

Multi-source feedback

• Self-appraisal - less judgmental feedback• Downward and upward feedback - works in

particular type of organisations and cultures • Peer feedback – ‘paradox of roles’• 360-degree feedback – individual receiving

feedback from anyone he/she comes to contact in organisation

• 560-degree – feedback process goes beyond organization and includes customers/clients and suppliers

Self- appraisal

DISADVANTAGES• Leniency error, bias

and poor validity• Potential for conflict

and disagreement• Increased expectations

regarding the impact on PA

ADVANTAGES• Employee involvement

• More satisfaction with appraisal

• More likely to accept criticism

• Catalyst for discussion (more opportunities for corrections)

The role of affect in appraisal

"I decided in favour of  X" is no more than "I liked X"' (Zajonc, 1980)

Determinants of interpersonal attraction: • physical attractiveness (Park & Flink, 1989)  • similarity between people (opinions, attitudes and values;

pastimes; motivation; reciprocity of liking;compatibility of roles; socio-economic status and bio-socialattributes like age, sex, ethnicity, and level of education) 

(Wayne & Liden, 1995)

A rater's affective regard for a ratee is associated with:• higher ratings; a higher quality relationship; less inclination to punish poor performance;

greater halo effect and less accuracy 

Attribution theory

• Explains how people evaluate the behavior of others

• All behavior is determined by:

– internal factors which are within our own control

– external factors which are outside our control

• Attribution errors:

– tendency to attribute the success of others to external factors and their failures to internal factors

– tendency to attribute our own success to internal factors and our own failures to external factors

Errors in PA

• Similar-to-me error - higher evaluation to people who seem similar to oneself

• Hallo error - rater reacts to one positive aspect by rating positively in all other areas

• Horns error - rater reacts to one negative aspect by rating negatively in all other areas

• Leniency error - high ratings to all

• Strictness error - low ratings to all

• Central tendency error - middle ratings to all

Cultural differences in PA:

• Delivery of feedback:– Explicitness versus indirectness– Verbal versus non–verbal

• Focus on individual versus group • Degree of formality/structure/objective

criteria • Degree of employee input

– Participative versus autocratic management

Organisational justice

• Study of fairness/justice perceptions in organisational procedures (i.e. selection, performance appraisal, pay/reward, decision-making)

• Impacts on commitment, trust, satisfaction, citizenship, revenge behaviors

• Types of justice: distributive, procedural and interactional justice

Procedural justice

Rules of fair procedures (Leventhal, 1980):Consistency - Equal treatment across persons and over time

Accuracy - Using accurate information and informed opinions

Correctability - Opportunities for review

Representativeness- Everyone is involved in decision-making

Bias suppression - Avoiding self-interest Ethicality - Compatibility with fundamental moral and ethical values

Lack of consistency in PA

BT/Line Management:

I feel that the more senior in the business you get the less seriously performance appraisal is taken. Therefore, I don’t think my manager gets a decent appraisal… The top management think that this is something which middle and junior management need and they don’t, it’s not sort of in

the blood.

Voice and choice in procedures

Voice

• Allows people an opportunity to provide inputs and present their opinions (i.e. self-appraisal)

• Mute procedures - do not provide opportunity to provide voice (i.e. recruitment, selection, budget decision-making, compensation plans)

Choice

• The presence or an absence of an option given to employees (i.e. choice of referent)

• Employees are freely offered the opportunity to accept or reject an offer involving disadvantageous outcome

(i.e. work for lower pay)

Role of voice

• Any manner of communication with the decision-maker which allows to convey the message about your interests

• Provides the perception of indirect control over decision when direct control is impossible - belief that input increase the chances of receiving desired outcome

• Voice is valued because it is indicative of one’s status - respect to employees is communicated and their self-esteem enhanced

Role of choice

• Refers to the opportunity of the employees to make decisions about what happens to them

• Decision giving an employee a choice - an employee is at least partially accountable for the decision-making process

• Decision without allowing a choice – decision makers are held fully responsible and accountable for the negative outcome

Interactional justice

• The quality of interpersonal treatment received during implementation of the organisational procedures

• The social determinants of fairness

• When people are asked about unfairness they tend to focus on the interpersonal factors

Interactional justice (Bies & Moag, 1986)

 1. Informational part - Adequacy and clarity of the information provided by decision-makers: i.e. quality of excuses, justifications, explanations, apologies, rationale for unfavourable outcomes, honesty, truthfulness.

  2. Interpersonal part - Degree of sensitivity and politeness

during treatment of employees i.e. respect, concern, considerations for feelings, kindness.

The Churchill effect - ‘When you have to kill a man, it costs nothing to be polite’.

Poor interactional justice

Advertising agency, Staff: First, he tore my advertising campaign strategy apart. I know the ideas needed more development, but he went

way beyond that. He was vicious in his attacks on me. I don’t think anyone, including my boss, is justified in calling me ‘ stupid’ or ‘an idiot’.

Fair PA: Summary

• Provides for the setting of both performance and developmental goals– Link to goal setting (MBO) and career paths

• Based on behaviours not personal traits– BARS (Behavioural Anchored Rating Scales)

• Based on detailed information– Record keeping, diaries

• Usage of different sources of ratings– Supervisor, peers, self-ratings

• Interpersonal fairness (interactional justice)– Supportive, participative, respectful