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CHAPTER SEVENCHAPTER SEVEN
Appraising andAppraising and
Managing PerformanceManaging Performance
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Chapter ObjectivesChapter Objectives
Explain why performance appraisalExplain why performance appraisalis important and describe itsis important and describe itscomponentscomponentsDiscuss the advantages andDiscuss the advantages anddisadvantages of differentdisadvantages of different
performance rating systems performance rating systemsManage the impact of rating errorsManage the impact of rating errorsand bias on performance appraisalsand bias on performance appraisalsDiscuss the potential role of Discuss the potential role of emotion in performance appraisalemotion in performance appraisaland how to manage its impactand how to manage its impactIdentify the major legalIdentify the major legalrequirements for appraisalrequirements for appraisalUse performance appraisals toUse performance appraisals tomanage and develop employeemanage and develop employee
performance performance
Review Key Terms
360-degree feedback Absolute judgment
BARSDimensionsMBO
Performance Appraisal
PerformanceManagementRelative judgment
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W hat is Performance Appraisal?W hat is Performance Appraisal?
Performance AppraisalPerformance AppraisalEvaluating an employees current and/or past
performance relative to his or her performance
standards.TheThe identificationidentification , , measurement measurement , and, and management management of human performance in organizations.of human performance in organizations.
Performance ManagementThe process employers use to make sure employeesare working toward organizational goals.
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I dentifying Performance DimensionsI dentifying Performance Dimensions
DimensionsDimensionsDefined as an aspect of performance that determinesDefined as an aspect of performance that determineseffectiveeffective job job performance. performance.
Performance dimensions are defined based on the jobPerformance dimensions are defined based on the joband the work itself.and the work itself.Identified based on the job analysisIdentified based on the job analysisPerformance dimensions help answer the question:Performance dimensions help answer the question:
How does someone act and/or behave when s/heHow does someone act and/or behave when s/hedoes the job well?does the job well?May be further defined through use of competenciesMay be further defined through use of competencies
Characteristics associated with successful performance
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I dentifying Performance DimensionsI dentifying Performance Dimensions
Examples of Performance Dimensions:Examples of Performance Dimensions:Strong Interpersonal SkillsCustomer Service Orientation
Teamwork Effective CommunicationValuing DiversityAnalysis and Problem - SolvingDecision - Making and Results OrientationAdaptabilityFostering a Safe and Secure Environment
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I dentifying Performance DimensionsI dentifying Performance Dimensions
For dimensions to be an effective means of measuring performance , they must have twocharacteristics:
Have a clear general definition Team work might then be defined in terms of competencies
Have well - defined levels of performance at each pointalong a rating scale.
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Measuring PerformanceMeasuring Performance
Measuring performanceMeasuring performanceadministering numbers or labels towards performanceadministering numbers or labels towards performanceis difficult tois difficult to quantifyquantify
Two formats that are most common , legallydefensible , and promising are classified by
type of judgment required
focus of the measure
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Measuring PerformanceMeasuring Performance
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Measurement ToolsMeasurement ToolsRelative judgment
An appraisal format that asks supervisors to comparean employees performance to the performance of
other employees doing the same job. Rank order Grouping Forced Ranking
GE , Ford Motor , Conoco , Sun Microsystems , Cisco Systems , EDS , and Enron
Pros: Forced Differentiation and create conflictCons: No absolute rankings and may force differenceswhere none truly exist
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Measurement ToolsMeasurement Tools
Absolute judgmentAn appraisal format that asks supervision to make
judgments about an employees performance based
solely on performance standards.Pros: Can be more specific , helpful and create lessconflictCons: Different supervisors may have differentstandards
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Measurement ToolsMeasurement Tools
Type of Performances Data the tool focuses on:Trait Appraisal InstrumentBehavioral Appraisal Instrument (BARS)Outcome Appraisal Instrument (MBO)
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Measurement ToolsMeasurement Tools Trait Appraisal InstrumentsTrait Appraisal Instruments
Focuses on the person rather than on the performanceGraphic rating scale
A scale that lists a number of traits and a range of performance for each that is used to identify the scorethat best describes an employees level of
performance for each trait.
Example: Reliability1
(very low) to5
(very high)Pros: We are good at itCons: Legal Concerns because traits can beambiguous and focuses is on person
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Measurement ToolsMeasurement Tools Behavioral Appraisal InstrumentBehavioral Appraisal Instrument
Combines traditional rating scales and criticalincidents methodsJob behaviors derived from critical incidentsdescribed more objectivelyPros Legally defensible and provides specificexamples of behavior to engage in
Cons - Can be time consuming to create and behavior may occur
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Measurement ToolsMeasurement Tools Behavioral Appraisal InstrumentBehavioral Appraisal Instrument
Behaviorally Anchored Rating Scale (BARS)An appraisal method that uses quantified scale withspecific narrative examples of good and poor
performance.Developing a BARS:
Generate critical incidents
Develop performance dimensionsReallocate incidentsScale the incidentsDevelop a final instrument
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Measurement ToolsMeasurement Tools Outcome Appraisal Instrument (MBO)Outcome Appraisal Instrument (MBO)
Involves setting specific measurable goals with eachemployee and then periodically reviewing the progressmade.
Set the organizations goals.
Set departmental goals. Discuss departmental goals. Define expected results (set individual goals).
Performance reviews. Provide feedback.
Pros: tied to organizational strategyCons: may develop results at any cost mentality
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W ho Does the Appraisals?W ho Does the Appraisals?
Self ReviewsSelf ReviewsPeer ReviewsPeer Reviews
Subordinate ReviewsSubordinate Reviews360360- - degree feedback degree feedback
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W ho Does the Appraisals?W ho Does the Appraisals?360360--Degree ValuationDegree Valuation
Multi - rater evaluationInput from multiple levels with firm and externalsourcesFocuses on skills needed across organizational
boundariesMore objective measure of performanceProcess more legally defensible
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Challenges to Effective PerformanceChallenges to Effective PerformanceMeasurementMeasurement
Rater ErrorsRater ErrorsAn error in performance appraisals that reflectsAn error in performance appraisals that reflectsconsistent biases on the part of the rater consistent biases on the part of the rater
FrameFrame -- of of -- reference (FOR) training can help combatreference (FOR) training can help combatthis problemthis problem
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Problems in Performance AppraisalProblems in Performance AppraisalRater Errors & BiasRater Errors & Bias
Lack of objectivityHalo error Comparability across Supervisors
Leniency/strictness
Central tendencyRecent behavior biasPersonal biasManipulating the evaluation
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Challenges to Effective PerformanceChallenges to Effective PerformanceMeasurementMeasurement
Rater ErrorsRater ErrorsThe Influence of LikingThe Influence of Liking
PrecautionsPrecautionsAccurate record keepingAccurate record keeping -- journals journals
Individual or Group FocusIndividual or Group Focus
Organizational PoliticsOrganizational Politics
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Reasons for I ntentionally I nflating orReasons for I ntentionally I nflating orLowering RatingsLowering Ratings
Believe accurate ratings would have a damaging effect onsubordinates motivation and performance.Improve employees eligibility for merit raises.Avoid airing departments dirty laundry.
Avoid creating negative permanent record that might hauntemployee in the future.Protect good workers whose performance suffered because of
personal problems.Reward employees displaying great effort even when resultswere relatively low.Avoid confrontation with hard - to - manage employees.Promote a poor or dislike employee up and out of thedepartment.
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Reasons for I ntentionally I nflating orReasons for I ntentionally I nflating orLowering RatingsLowering Ratings
Scare better performance out of an employee.Punish a difficult or rebellious employee.Encourage a problem employee to quit.Create a strong record to justify a planned firing.Minimize the amount of merit increase a subordinatereceives.
Comply with an organizational edict that discouragesmanagers from giving high ratings.
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Emerging Trends: Measuring the PerformanceEmerging Trends: Measuring the Performanceof Teamsof Teams
Review existing measures to make sure the teamis aware of the measures and has commitment andresponsibilities to achieve them.
Identify interim checkpoints at which team progress or achievements can be assessed.Identify what the team and team members must
do to achieve the desired team - level results.Prioritize team goals according to relativeimportance.
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Characteristics of an EffectiveCharacteristics of an EffectiveAppraisal SystemAppraisal System
Develop any needed measures of interim and finalteam and individual performance.Develop team and individual performancestandards so that everyone has a clear understanding of performance expectations.Determine how the performance management
system will work. Who will be the raters? Howwill feedback be provided?
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Challenges to Effective PerformanceChallenges to Effective PerformanceMeasurementMeasurement
Legal IssuesLegal IssuesFactors influencing judges decisions in casesFactors influencing judges decisions in casesinvolving performance appraisalsinvolving performance appraisals
Use of job analysisUse of job analysis Providing written instructionsProviding written instructions Allowing employees to review appraisal resultsAllowing employees to review appraisal results Agreement among multiple ratersAgreement among multiple raters The presence of rater trainingThe presence of rater training
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Managing PerformanceManaging PerformancePerformance ImprovementPerformance Improvement
Because formal appraisal interviews typically areconducted only once a year , they may not always have asubstantial and lasting impact on worker performance.Thus , supervisors who manage performance effectivelygenerally share four characteristics.
Exploring the causes of performance problemsDirecting attention to the causes of problems
Developing an action plan and empowering workers to reach asolutionDirecting communication at performance & provide effectivefeedback
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Tips for Better Performance ReviewsTips for Better Performance Reviews
Start with the raw dataStart with the raw dataMake sure you are evaluating performance onMake sure you are evaluating performance onappropriate dimensionsappropriate dimensions
Beware of rating biasesBeware of rating biasesSupport ratings with written commentsSupport ratings with written commentsEvaluate several or all of your people at one time , if Evaluate several or all of your people at one time , if
possible possibleStick with performance and stay away fromStick with performance and stay away frominferences about causeinferences about causeBe consistent across workersBe consistent across workers
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