Nov 22, 2014
PERFORMANCE APPRAISAL
Process of obtaining, analyzing, and recording information about the relative worth of an employee to the organization.
An analysis of an employee's recent successes and failures, personal strengths and weaknesses, and suitability for promotion or further training.
Judgment of an employee's performance in a job based on considerations other than productivity alone.
What the Experts Say About Performance
Appraisals
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A PERFORMANCE APPRAISAL IS:One of those special human encounters where the manager gets no sleep the night before, and the employee gets no sleep the night after.
—Thomas B. Wilson
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STEPS IN PERFORMANCE APPRAISAL:
Setting goals for the appraisal system Developing criteria for successful
performance Creating metrics for evaluating performance Selecting reviewees and reviewers Considering the timing of feedback Organizing logistics for the report and
meeting Giving candid and constructive feedback Following up to ensure that the system works
AIMS
Gives employees feedback on performance. Identifies employee training needs. Documents criteria used to allocate
organizational rewards. Form a basis for personnel decisions like
salary increases, promotions, disciplinary actions, bonuses, etc.
Provides the opportunity for organizational diagnosis and development.
Facilitates communication between employee and administration.
Validate selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements.
To improve performance through counseling, coaching and development.
METHODS OF PERFORMANCE APPRAISAL
Traditional Methods
Paired comparison Graphic Rating scales Forced choice Description method Forced Distribution Method Checks lists
Free essay method
Critical Incidents
Group Appraisal Field Review Method Confidential Report Ranking
Modern Methods
Assessment Center Appraisal by Results or Management by Objectives Human Asset Accounting Behaviorally Anchored Rating scales 360 degree
Case Study
DARK SIDE OF PERFORMANCE APPRAISAL
WHAT’S WRONG WITH THIS PICTURE?
A potential for unpleasant results. Can be a way of punishing. Recipients aren't the only victims of
hazardous feedback; so is the organization. Can trigger a recipient to react even more
negatively.
Getting Real About Performance Appraisals
Assumptions Reality
One appraisal process can effectively serve several functions at the same time.
Appraisal is overloaded with too many functions—often one function undercutsthe other
A one size fits all coaching structure works well for all supervisors and employees.
Supervisors have different styles of working with people, and employees have different.
Appraisal processes can objectively and reliably assess individual performance.
Evaluative processes are largely subjective—just-in-time ratings provided for a single purpose are more valid and reliable than multiuse ratings.
Ratings are motivating and let people know where they stand. Ratings typically don’t provide information truly reflective of employees’ status— ratings demoralize because nearly everyone expects to be rated highly and have his or her efforts appreciated.
Feedback, development and performance improvement are annual events.
Feedback and improvement opportunities are available all the time, not once a year.
People withhold effort if special incentives are not dangled in front of them.
People are intrinsically motivated to perform well when the work is meaningful.
Inspecting individuals improves individual and organizational performance.
Improving systems and processes improves the performance—improvement results from identifying the cause of poor performance and planning specific steps for improvement.
Appraisals are required by law or are necessary to assure legal documentation
With a few exceptions, the law does not require appraisals. Appraisal evidence tends to help employees in legal actions at least as much as it helps the employer. Just-in-time, written counseling provides more reliable performance.
CONFRONTING POLITICS IN PERFORMANCE APPRAISAL
Managers often use the rating process to help them get results they need.
Accurate performance ratings might conceivably interfere with managers' desires to protect their people, encourage employee loyalty, minimize conflict, and create the "wiggle room" they need to achieve effectiveness through their employees.
Exploring the Politics of Appraisal
What are the primary reasons a manager might intentionally increase or decrease a subordinate's performance rating(s)?
What are the potential problems associated with giving an employee a less than candid, accurate, or honest rating?
What are the primary reasons a manager might
intentionally increase or decrease a subordinate's performance rating(s)?
The rating behaviors can be categorized as follows: Conflict Avoiders -- Managers who inflate employee
ratings if they believe accurate ratings will cause unwanted conflict or confrontation with an employee.
Manipulators -- Managers who inflate or deflate ratings either to try to influence employee behavior, loyalty and/or performance, or to influence employee pay-raise decisions.
CYA Raters -- Managers who are cautious about employee ratings because they constitute a long-term record with legal implications that is accessible to review by others. Also includes managers who give lenient ratings be cause they are unsure of an employee's actual performance.
Go-With-The-Flow Raters - Managers who carefully assess an organization's current rating climate and adjust employee ratings accordingly.
(Bad year -> lower ratings; Good year -> higher ratings)
Feeling Types -- Managers who intentionally rate employees higher or lower on the basis of personal liking and disliking.
PR Types - Managers who consciously use the performance ratings to make themselves or their employees look good.
Godfathers - Managers who use the rating process to protect valued employees who are struggling for various reasons. Inflated ratings provide cover.
What are the potential problems associated with giving an employee a less than candid, accurate,
or honest rating?Political ratings negatively affect employees in a number
of significant ways. They tend to reward the wrong behaviors. They discourage high performers. They raise everyone's expectations for higher ratings.
Undermine employee development. Create an organizational culture based on the exchange
of favors instead of performance. Breeds widespread cynicism not only in the appraisal
system but the organization more generally. Subordinate performance ultimately declines as a result
of politics.
AN APPRAISER MUST:
BE AWARE OF THE OBJECTIVES & REQUIREMENTS OF THE EMPLOYEE’S JOB.
HAVE THE OPPORTUNITY TO FREQUENTLY OBSERVE THE EMPLOYEE OR HIS/HER WORK.
BE CAPABLE OF EVALUATING AND RECORDING OBSERVED WORK BEHAVIOR OR PERFORMANCE.
AVOID OR MINIMIZE POTENTIAL APPRAISAL ERRORS AND BIAS.
PROBLEMS IN PERFORMANCE APPRAISAL
Appraiser discomfort Lack of objectivity
Halo/horn error Leniency/strictness Central tendency
Recent behavior bias Personal bias
Manipulating the evaluation Employee anxiety
APPRAISER DISCOMFORTPerformance appraisal process cuts into manager’s time
Experience can be unpleasant when employee has not performed well
LACK OF OBJECTIVITY In rating scales method, commonly used
factors such as attitude, appearance, and personality are difficult to measure
Factors may have little to do with employee’s job performance
Employee appraisal based primarily on personal characteristics may place evaluator and company in untenable positions
HALO/HORN ERROR Halo error - Occurs when manager
generalizes one positive performance feature or incident to all aspects of employee performance resulting in higher rating
Horn error - Evaluation error occurs when manager generalizes one negative performance feature or incident to all aspects of employee performance resulting in lower rating
LENIENCY/STRICTNESS
Leniency - Giving undeserved high ratings
Strictness - Being unduly critical of employee’s work performance
Worst situation is when firm has both lenient and strict managers and does nothing to level inequities
CENTRAL TENDENCY Error occurs when employees are incorrectly
rated near average or middle of scale May be encouraged by some rating scale
systems requiring evaluator to justify in writing extremely high or extremely low ratings
RECENT BEHAVIOR BIAS Employee’s behavior often improves and
productivity tends to rise several days or weeks before scheduled evaluation
Only natural for rater to remember recent behavior more clearly than actions from more distant past
Maintaining records of performance
PERSONAL BIAS (STEREOTYPING) Managers allow individual differences such as
gender, race or age to affect ratings they give
Effects of cultural bias, or stereotyping, can influence appraisals
Other factors – Example: mild-mannered employees may be appraised more harshly simply because they do not seriously object to results
MANIPULATING THE EVALUATION Sometimes, managers control virtually every
aspect of appraisal process and are in position to manipulate system
Example: Want to give pay raise to certain employee. Supervisor may give employee a undeserved high performance evaluation
EMPLOYEE ANXIETY Evaluation process may
create anxiety for appraised employee
Opportunities for promotion, better work assignments, and increased compensation may hinge on results
SPILLOVER EFFECT
Past performance appraisal ratings influence current ratings.
Past ratings, good or bad, result in similar rating for the current period although the demonstrated behavior does not deserve the rating good or bad.
STATUS EFFECT
It refers to overrating of employees in higher- level jobs or jobs held in high esteem, and underrating employees in lower level job or jobs held in low esteem.
STEREOTYPING
Stereo typing is a standard mental picture that a rater holds about a subordinate because of that person’s sex, caste, age, physical characteristics or place of origin, etc.
Stereo typing results in an oversimplified view of the individual and may blur the rater’s assessment of the person’s performance on the job.
SAME AS ME
Giving the subordinate a rating higher than deserved because the person has qualities or characteristics similar to those of rater (or similar to those held in high esteem)
DIFFERENT FROM ME
Giving the subordinate a rating lower than deserved because the person has qualities or characteristics different from the rater (or similar to those held in low esteem)
REASONS FOR INTENTIONALLY INFLATING RATINGS
Believe accurate ratings would damage subordinate’s motivation and performance.
Improve employee’s eligibility for merit raises.
Avoid creating negative permanent record that might haunt employee in future.
Protect good workers whose performance suffered because of personal problems.
Reward employees displaying great effort even when results were relatively low.
Avoid confrontation with hard-to-manage employees.
Promote a poor or disliked employee up and out of department.
REASONS FOR INTENTIONALLY LOWERING RATINGS
Scare better performance out of employee.
Punish difficult or rebellious employee.Encourage problem employee to quit.Create strong record to justify planned
firing.Minimize amount of merit increase a
subordinate receives.Comply with organizational edict that
discourages managers from giving high ratings.
RATEE’S CONCERNS
Non-performance-related influences
Rater will be unfair and subjective due to considerations other than job-related aspects like sex, race, state of origin, age, religion, old association or even on physical or psychological makeup.
The average issue
An “average” rating is perceived as “mediocre”, or less than acceptable for promotions and good assignments. This in turn, means that raters are faced with an emotional problem when rating their subordinates’ as “average” and then with a mathematical incongruency when rating the majority of their subordinates as “above average”.
Exploitation by rater
A superior could exploit a subordinate in many ways with promises or indications of higher ratings.
Some other rate concerns
These concerns could be due to many unanswered questions in the minds of rates regarding his superior. These are:
Will my superior be fair? Does he fully know the requirements and constraints
in my job? Will he recall all my achievements or will he
remember only my shortcomings and failures? Does he know me sufficiently? What does he expect from me? What are his standards?
Negative outcomes of ineffective
performance appraisal
When an organization does not do an effective job of appraising managerial performance a host of negative outcomes can occur at both
Individual level
Organizational level.
At individual level ineffective appraisals can cause:
Ineffective performance planning and goal setting;
Managers to be demotivated and frustrated;Added tension in the working relationship with a superior;
A loss of confidence on the part of the subordinate manager;
Management performance improvement to be stifled; and
Subordinate managers to develop a “second- guessing mentality” in trying to anticipate
What they think their superiors really want from them (which breeds paranoia in the long run).
At organizational level ineffective appraisals can cause :
Breeds cynicism and low morale among managers;
Cause managers to lose focus on both the goals they are pursuing and the means they are employing;
Cause pay for performance system to breakdown;
Set a poor example for the rest of the organization;
Damage the development of managerial talent;
Cause human resource departments to lose credibility.
Salient problems in performance appraisal in INDIA
Inadequacy of quantifiable and measurable criterion. Assumption that one psychological configuration makes the
best executive. Relation between traits assessed and performance doubtful. Appraisers have no or little responsibility for development of
subordinates. Inadequate formal training to appraisers in appraising. Reporting officer’s ability to judge subordinates is taken for
granted. Attributes for appraisal generally too many. Credibility of system often suspect. Appraisal forms lengthy and time consuming. Performance counseling is poor. Involvement of ratees is minimal. Scarcity of job opportunities and unemployment leads to
abuse of system. Difficulties connected with negative appraisal are too many. Majority ask for an open system-yet mentally neither prepared
nor trained for it.