Performance Appraisla Lecture

7/28/2019 Performance Appraisla Lecture

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PERFORMANCEAPPRAISALS


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Performance Management


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Performance AppraisalThe identification, measurement,

and management of human

performance in organizations.


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Performance ManagementProcesses used to identify, encourage, measure,

evaluate, improve, and reward employee

performance

Provide information to employees about their

performance.

Clarify organizational performance expectations.

Identify the development steps that are needed to

enhance employee performance.

Document performance for personnel actions.

Provide rewards for achieving performance objectives.


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Difference Between PerformanceManagement and PerformanceAppraisals Performance Management

Processes used to

identify, encourage,

measure, evaluate,

improve, and reward

employee performance.

Performance Appraisal

The process of evaluating

how well employees

perform their jobs and then

communicating that

information to the

employees.


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Objectives Opportunity to Regularly Discuss

Results

Supervisor Identifies Strengths and

Weaknesses Fair and Equitable Format

Basis for Salary/Promotion

Recommendations


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Main Purposes of Performance Management Individual Rewards (Base and Incentive)

Feedback for Sub-Ordinate (Plus and Minus)

Recognition of Superior Performance

Documentation of Weak Performance

Personnel Decision-Making

Future Goal Commitments (Planned

Achievements)


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Appraisal Data Is Needed For... Assessment of current employee performance

are performance standards being met?

Training needs what does the employee need to learn in order to improve current work

performance?

Career planning and development assessing an employees strengths and weaknesses to determine advancement

Compensation programs provides a basis for rational decisions regarding pay adjustments (raises and

bonuses)

Internal employee relations used for decisions in several areas of internal employee relations, including

promotion, demotion, termination, layoff, and transfer (transfers, layoffs,

terminations) Recruitment and selection generates data to validate selection criteria

Human resource planning assessment data is helpful in building replacement or succession charts


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Performance Appraisal ProcessExternal EnvironmentInternal EnvironmentIdentify Specific Performance

Appraisal Goals

Establish Performance

Criteria (Standards) and

Communicate Them To

Employees

Examine Work Performed

Appraise the Results

Discuss Appraisal with

Employee


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Trends in Managing Performance

Superior Performance leads to Superior Rewards

Issue: How to objectively measure specific goals!

Appraising/Evaluating

Managing Performance

VERSUS


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Supervisor Appraisal Performance appraisal done by

an employees manager and

often reviewed by a manager

one level higher.


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Self-Appraisal Performance appraisal done by the

employee being evaluated, generally

on an appraisal form completed by

the employee prior to theperformance review.


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Subordinate Appraisal Performance appraisal of a

superior by an employee,

which is more appropriate for

developmental than foradministrative purposes.


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Peer Appraisal Performance appraisal done by ones

fellow employees, generally on forms

that are complied into a single profile

for use in the performance interviewconducted by the employees manager.


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Team Appraisal Performance appraisal, based

on TQM concepts, that

recognizes team

accomplishment rather thanindividual performance.


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The 360 Appraisal Interview

Individual

Staff

Self-Assessment

Supervisor

Other Superiors

Peers

Teams

Sub-Ordinates

Teams

Customers

Other Superiors


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Types of Appraisals Errors/Problems Leniency/Strictness Error

Central Tendency

Recency Error

Halo/Horn Error

Similar to me Error

Personal Biases


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Error of Central Tendency Performance-rating error in

which all employees are rated

about average.


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Leniency or Strictness Error Performance-rating error in which the

appraiser tends to give employees

either unusually high or unusually

low ratings.


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Recency Error Performance-rating error in

which the appraisal is based

largely on the employees most

recent behavior rather than onbehavior throughout the

appraisal period.


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Halo/Horn Error Halo error- Occurs when manager

generalizes onepositive performance

feature or incident to all aspects of

employee performance resulting in higherrating

Horn error- Evaluation error occurs when

manager generalizes one negative

performance feature or incident to allaspects of employee performance resulting

in lower rating


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Rating Errors ExampleHalo

Job Rating Scale

EXCELLENT

on all factors

Leniency

Job Rating Scale

Employee AEXCELLENT

Job Rating Scale

Employee BEXCELLENT

Job Rating Scale

Employee CSUPERIOR

Job Rating Scale

Employee DEXCELLENT

Central

Tendency

Job Rating Scale

Employee A

AVERAGE

Job Rating Scale

Employee B

AVERAGE

Job Rating Scale

Employee C

AVERAGE

Job Rating Scale

Employee D

AVERAGE

Recency

Bias

Job rating scale behavior during the

last month has been POOR.


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Similar-To-Me Error Performance-rating error in

which an appraiser inflates the

evaluation of an employee

because of a mutual personalconnection.


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Personal Bias (Stereotyping) Managers allow individual differences such

as gender, race or age to affect ratings theygive

Effects of cultural bias, or stereotyping, caninfluence appraisals

Other factorsExample: mild-manneredemployees may be appraised more harshly

simply because they do not seriously objectto results


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Scheduling the Performance Appraisal1. Schedule the review and notify the

employee ten days or two weeks in

advance.

2. Ask the employee to prepare for thesession by reviewing his or her

performance, job objectives, and

development goals.

3. Clearly state that this will be the formal

annual performance appraisal.


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Trait Appraisal, Behavioral Appraisal, and OutcomeAppraisal InstrumentsAn appraisal tool that asks a supervisor to make

judgments about worker characteristics that tend to be

consistent and enduring.

An appraisal tool that asks managers to

assess a workers behaviors.

An appraisal tool that asks managers to

assess the results achieved by workers.

Trait Appraisal

Behavioral Appraisal

Outcome Appraisal


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Types of Performance to MeasureResults-based (results-oriented): measure the

results produced by the employee

Examples for a retail store manager (examples of

some results for which the store manager has

responsibility and so should be held accountable): Sales of the store

Profit per square foot

Inventory shrinkage

Customer satisfaction


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Types of Performance to MeasureBehavior-based (behavior-oriented): measure

the employees behaviors

Examples for a retail store manager: Good attendance

Completes management reports correctly & on time Monitors customers and employees for theft

Coaches employees to welcome customers to the store& offer assistance within 3 minutes, and to thankcustomers as they leave

Conducts regular sessions with employees to developteamwork


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Types of Performance to Measure

Trait-based (trait-oriented): measure the

employees personal characteristics

Examples for a retail store manager:

Ability to make decisions

Loyalty to the company

Communication skills

Level of initiative


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Performance Appraisal Methods Once we decide which results & behaviors

we want to measure, we next need to decide

how to measure those results & behaviors

We have 3 categories of choices:

Objective measures of performance

Subjective measures of performance

Essay Method

Management By Objectives


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Performance Appraisal MethodsObjective measures:measure an employees jobperformance in terms of things we can see andcount with no (or minimal) use of opinionProduction measures: count units produced by an

employee Sales measures: count the sales ($) of an employee

Personnel data: count things in the employeespersonnel file

Examples:

Number of times late to workNumber of times absent

Number of disciplinary actions taken


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Performance Appraisal Methods

Subjective measures:measure an employees jobperformance using human judgmentRanking:subjectively rank employees from best to

worst Example:

1. Bob2. Carol3. Ted4. Alice

Note carefully that the ranking is in terms of subjectiveopinion (e.g., who is your best salesperson overall?), notobjective factors (e.g., which salesperson sold the most?)

Note the ranking requires you to compare one employee toanother

Problem: it can be hard to determine the subjective rankingposition of employees who are in the middle (it all blurstogether)


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Performance Appraisal Methods Subjective measures (more)

Rating scale(graphic rating scale): subjectively

rate the employees job performance on a labeled

numeric measuring scale

Rating scales are perhaps the most commonly usedmethod of subjectively evaluating an employees job

performance

Before we use a rating scale to subjectively rate an

employees job performance, we need to:

Identify the aspects of job performance (results & behaviors)

that are to be evaluated (rated) using the rating scale

Develop the rating scale itself


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Performance Appraisal Methods Rating Scale Examples Rating Scale Examples

Examples of a 5-point scale:

5 = Excellent

4 = Very satisfactory3 = Satisfactory

2 = Unsatisfactory

1 = Very unsatisfactory

5 = Greatly exceeds standards

4 = Exceeds standards3 = Meets standards

2 = Below standards

1 = Far below standards

Example of a 7-point scale:

7 = Truly exceptional

6 = Excellent5 = Very good

4 = Good

3 = Satisfactory

2 = Unsatisfactory

1 = Very unsatisfactory


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Performance Appraisal Methods

Subjective measures (more) Behaviorally Anchored Rating Scale (BARS):replace

the vague descriptors in a rating scale with specificexamples of performance Example: Customer assistance

5 = Could be expected to volunteer to help customer and towalk with customer to location of desired product4 = Could be expected to walk with customer to location ofdesired product when asked for help by customer3 = Could be expected to tell and point customer to where thedesired product is located when asked for help by customer

2 = Could be expected to shrug shoulders and walk awaywhen asked for assistance by customer1 = Could be expected to hide from customers in theemployee break-room


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Performance Appraisal Methods Subjective measures (more)

Behavioral Observation Scale (BOS):evaluators

rate the frequency with which an employee

engages in specific behaviors

Example: on a list of possible employee behaviors,

rate how often the employee engages in each behavior

using a rating scale where:

1 = almost never 5 = almost always


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Essay Method A trait approach to performance

appraisal that requires the rater to

compose a statement describing

employee behavior.


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Essay Method Write a Behavioral Statement Strengths versus Weaknesses

Describe Selected Traits

Evaluate Performance

Advantages Disadvantages


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Management by Objectives(Peter Drucker) Integrates performance and goal

setting

Frequent intervals

Record maintenance

Objective review jointly

Mutual buy-in


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Advantages of MBO Employees Can Measure

Performance

Quantifiable Goals

Joint Effort

Employee Satisfaction in

Participation


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Disadvantages of MBO Success Not Validates by Research

Studies

Easy to Set Unrealistic Goals

Hard to Get Full Commitment toProcess

Difficult to Define Some Goals

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