Performance Management and the Employee Appraisal Process. The Challenges of Human Resources Management. Performance Appraisal. “Performance Appraisal given by someone who does not want to give it to someone who does not want to get it .” –Anonymous - PowerPoint PPT Presentation
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An annual or biannual process in which a (typically) a manager evaluates an employee’s performance relative to the requirements of his or her job and uses the information
To develop the worker and show the person where improvements are needed and why
Selected Best Practices for Administering Fair Performance Appraisals
• Base the performance review on duties and standards from a job analysis.• Try to base the performance review on observable job behaviors or objective
performance data.• Make it clear ahead of time what your performance expectations are.• Use a standardized performance review procedure for all employees (at same level).• Make sure whoever conducts the reviews has frequent opportunities to observe the
employee’s job performance.• Either use multiple raters or have the rater’s supervisor evaluate the appraisal results.• Include an appeals mechanism.• Document the appraisal review process and results.• Discuss the appraisal results with the employee.• Let the employees know ahead of time how you’re going to conduct the review and use
the results.• Let the employee provide input regarding your assessment of him or her.• Indicate what the employee needs to do to improve.• Thoroughly train the supervisors who will be doing the appraisals.
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Guidelines for a Legally Defensible Appraisal
1. Preferably, conduct a job analysis to establish performance criteria and standards.
2. Communicate performance standards to employees and to those rating them, in writing.
3. When using graphic rating scales, avoid undefined abstract trait names (such as “loyalty” or “honesty”).
4. Use subjective narratives as only one component of the appraisal.
5. Train supervisors to use the rating instrument properly.
6. Allow appraisers substantial daily contact with the employees they’re evaluating.
7. Using a single overall rating of performance is usually not acceptable to the courts.
8. When possible, have more than one appraiser, and conduct all such appraisals independently.
9. One appraiser should never have absolute authority to determine a personnel action.
10. Give employees the opportunity to review and make comments, and have a formal appeals process.
11. Document everything: Without exception, courts condemn informal performance evaluation practices that eschew documentation.
12. Where appropriate, provide corrective guidance to assist poor performers in improving.
This is foundation for One Minute Management. The authors advocate the 80-20 goal-setting rule: that 80% of your really important results will come from 20% of your goals. One Minute Goal Setting is simply:
1. Agree on your goals. 2. See what good behavior looks like. 3. Write out each of your goals on a single sheet of paper using less than 250 words. 4. Read and re-read each goal, which requires only a minute or so each time you do it. 5. Take a minute every once in a while out of your day to look at your performance.6. See whether or not your behavior matches your goal.
The authors suggest that effective managers help people reach their full potential by catching them doing something right. The One Minute Praising works well when you:
1. Tell people up front that you are going to let them know how they are doing. 2. Praise people immediately. 3. Tell people what they did right—be specific. 4. Tell people how good you feel about what they did right, and how it helps the organization and the other people who work there. 5. Stop for a moment of silence to let them "feel" how good you feel. 6. Encourage them to do more of the same. 7. Shake hands or touch people in a way that makes it clear that you support their success in the organization.
1. Tell people beforehand that you are going to let them know how they are doing and in no uncertain terms.
the first half of the reprimand: 2. Reprimand them immediately. [reprimand the behavior only, not the person or their worth] 3. Tell people what they did wrong—be specific. 4. Tell people how you feel about what they did wrong—and in no uncertain terms. 5. Stop for a few seconds of uncomfortable silence to let them feel how you feel.
6. Shake hands, or touch them in a way that lets them know you are honestly on their side. 7. Remind them how much you value them. 8. Reaffirm that you think well of them but not of their performance in this situation. 9. Realize that when the reprimand is over, it’s over.
• Motivations for Soft Appraisals– The fear of having to hire and train someone new.– The unpleasant reaction of the appraisee.– An appraisal process that’s not conducive to candor.
• Hazards of Soft Appraisals– Employee loses the chance to improve before being
discharged or forced to change jobs.– Lawsuits arising from dismissals involving
Note: + means “better than.” - means “worse than.” For each chart, add up the number of +’s in each column to get the highest ranked employee.
Forced Distribution• Normal curve
• Rank and Yank
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Targeted Distribution of Performance Ratings
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Narrative forms• Write something (provide a narrative) about the
individual’s performance either by key factors or just overall.
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Critical Incident Method Critical incident
– An unusual event that denotes superior or inferior employee performance in some part of the job
– The manager keeps a log or diary for each employee throughout the appraisal period and notes specific critical incidents related to how well they perform.
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Examples of Critical Incidents for Assistant Plant Manager
Continuing Duties Targets Critical Incidents
Schedule productionfor plant
90% utilization of personnel and machinery in plant; orders delivered on time
Instituted new production scheduling system; decreased late orders by 10% last month; increased machine utilization in plant by 20% last month
Supervise procurement of raw materials and on inventory control
Minimize inventory costs while keeping adequate supplies on hand
Let inventory storage costs rise 15% last month; over-ordered parts “A” and “B” by 20%; under-ordered part “C” by 30%
Supervise machinery maintenance
No shutdowns due to faulty machinery
Instituted new preventative maintenance system for plant; prevented a machine breakdown by discovering faulty part
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Example of a Behaviorally Anchored Rating Scale for the Dimension Salesmanship Skills
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Behaviorally Anchored Rating Scale (BARS)Developing a BARS
1. Write critical incidents
2. Develop performance dimensions3. Reallocate incidents4. Scale the incidents5. Develop a final instrument
Advantages of BARS A more accurate gauge Clearer standards Feedback Independent dimensions Consistency
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Management by Objectives (MBO)• A comprehensive and formal organizationwide
goal-setting and appraisal program requiring:1. Setting of organization’s goals
Computerized and Web-Based Performance Appraisal Systems
• Allow managers to keep notes on subordinates.• Notes can be merged with employee ratings.• Software generates written text to support appraisals.• Allows for employee self-monitoring and self-evaluation.
• Electronic Performance Monitoring (EPM) Systems Use computer network technology to allow managers access to
their employees’ computers and telephones. Managers can monitor the employees’ rate, accuracy, and time
Important Advantages and Disadvantages of Appraisal Tools
Tool Advantages Disadvantages Graphic rating scale Simple to use; provides a quantitative
rating for each employee. Standards may be unclear; halo effect, central tendency, leniency, bias can also be problems.
BARS Provides behavioral “anchors.” BARS is very accurate.
Difficult to develop.
Alternation ranking Simple to use (but not as simple as graphic rating scales). Avoids central tendency and other problems of rating scales.
Can cause disagreements among employees and may be unfair if all employees are, in fact, excellent.
Forced distribution method
End up with a predetermined number or % of people in each group.
Employees’ appraisal results depend on your choice of cutoff points.
Critical incident method
Helps specify what is “right” and “wrong” about the employee’s performance; forces supervisor to evaluate subordinates on an ongoing basis.
Difficult to rate or rank employees relative to one another.
MBO Tied to jointly agreed-upon performance objectives.
Time-consuming.
Training Performance Appraisers
Recency errors
Leniency or strictness errors
Error of central tendency
Similar-to-me errors
Contrast and halo/horn errors
Common rater-related errors
Rater Errors
• Error of Central Tendency A rating error in which all employees are rated about
average.• Leniency or Strictness Error
A rating error in which the appraiser tends to give all employees either unusually high or unusually low ratings.
• Similar-to-Me Error An error in which an appraiser inflates the evaluation of
an employee because of a mutual personal connection
Rater Errors (cont.)
• Recency Error A rating error in which appraisal is based largely on an
employee’s most recent behavior rather than on behavior throughout the appraisal period.
• Contrast Error A rating error in which an employee’s evaluation is
biased either upward or downward because of comparison with another employee just previously evaluated.
• Halo/Horn Error The tendency to rate a person high on all performance
factors or low on all of them because of a global impression one has based on one characteristic.
Rater Errors: Training and Feedback
• Rating Error Training Observe other managers making errors Actively participate in discovering their own errors Practice job-related tasks to reduce the errors they tend
to make
• Feedback Skills Training Communicating effectively Diagnosing the root causes of performance problems Setting goals and objectives