9 9-1 Performance Management and Appraisal. 9-2 Learning Objectives 1.Describe the appraisal process. 2.Define performance management and discuss how

9

9-1

Performance Management and

Appraisal

9-2

Learning Objectives

1. Describe the appraisal process.

2. Define performance management

and discuss how it differs from

performance appraisal.

3. Develop, evaluate, and administer

at least four performance

appraisal tools.

9-3

Learning Objectives

4. Explain and illustrate the problems

to avoid in appraising performance.

5. Perform an effective appraisal

interview.

6. Explain how to “segment”

employees for appraisal and reward

purposes.

Copyright © 2015 Pearson Education, Inc. 9-4

Describe the appraisal process.


The Basics of Performance Management and Appraisal

• The performance appraisal process steps

1. Sets work standards

2. Assesses performance

3. Provides feedback to the employee

o Figure 9-1 sample

evaluation survey


Five reasons:1. Used for pay, promotion, and retention

decisions2. Links performance management to

company goals3. The manager can correct deficiencies

and reinforce strengths4. With appraisals employee’s can review

career plans5. Training needs are identified

Performance Management and Appraisal


Define performance management and discuss how it differs from performance appraisal.

9–8

Comparing Performance Appraisal and Performance Management

• Performance appraisal

• Evaluating an employee’s current and/or past performance relative to his or her performance standards.

• Performance management

• The process employers use to make sure employees are working toward organizational goals.

9–9

Why Performance Management?

• Increasing use by employers of performance management reflects:

• The popularity of the total quality management (TQM) concepts.

• The belief that traditional performance appraisals are often not just useless but counterproductive.

• The necessity in today’s globally competitive industrial environment for every employee’s efforts to focus on helping the company to achieve its strategic goals.


Performance management definition

The continuous process of:

o Identifying

o Measuring

o Developing performance

of individuals and teams

o Aligning performance with the

organization’s goals

Performance Management


Performance ManagementSix Elements

• Direction sharing

• Goal alignment

• Ongoing performance monitoring

• Ongoing feedback

• Coaching and developmental support

• Recognition and rewards


Information Technology Supports Performance Management

• Assign financial and nonfinancial goals

• Inform all employees of their goals

• Use IT-supported scorecard software

• Continuously take corrective action


Defining the Employee’s Goals and Performance Standards

• Manager assess:o Attaining numerical goalso Meeting quality and quantity criteriao Mastering competencies

• Managers goals are SMART: o Specific oMeasurable oAttainableoRelevanto Timely

© 2005 Prentice Hall Inc. All rights reserved.9–14

Classroom Teaching

Appraisal By Students

Figure 9–1

Source: Richard I. Miller, Evaluating Faculty for Promotional and Tenure (San Francisco: Jossey-Bass Publishers, 1987), pp. 164–165. Copyright © 1987, Jossey-Bass Inc., Publishers. All rights reserved. Reprinted with permission.

9–15

Realistic Appraisals

• Motivations for soft (less-than-candid) appraisals

• The unpleasant reaction of the appraisee

• A company appraisal process that’s not conducive to transparency

• Hazards of giving soft appraisals

• Employee loses the chance to improve before being forced to change jobs.

• Lawsuits arising from dismissals involving inaccurate performance appraisals.


IMPROVING PERFORMANCE: HR Tools for Line Managers and

Entrepreneurs

1. Should a manager tell employees what their

goals are or let them participate in setting the

goals?

2. Write a short paragraph that addresses the

question: “Why is it not a good idea to simply tell

employees to ‘do their best’ when assigning a

task?”


Performance Appraisal Roles

• Supervisors

• Usually do the actual appraising.

• Must be familiar with basic appraisal techniques.

• Must understand and avoid problems that can cripple appraisals.

• Must know how to conduct appraisals fairly.


Performance Appraisal Roles (cont’d)

• HR department

• Serves a policy-making and advisory role.

• Provides advice and assistance regarding the appraisal tool to use.

• Prepares forms and procedures and insists that all departments use them.

• Responsible for training supervisors to improve their appraisal skills.

• Responsible for monitoring the system to ensure that appraisal formats and criteria comply with EEO laws and are up to date.


Who Should Do the Appraising?

• Peer appraisals

• Rating committees

• Self-ratings

• Appraisal by subordinates

• 360-degree feedback


Develop, evaluate, and administer at least four performance

appraisal tools.


Techniques for Appraising Performance

• Graphic rating

scale method

• What to rate?

9–22

Performance Appraisal Methods

• Graphic rating scale

• A scale that lists a number of traits and a range of performance for each that is used to identify the score that best describes an employee’s level of performance for each trait.


Graphic Rating

Scale with Space for

Comments

Figure 9–3


Portion of an Administrative Secretary’s Sample Performance Appraisal Form

Figure 9–4 Source: James Buford Jr., Bettye Burkhalter, and Grover Jacobs, “Link Job Description to Performance Appraisals,” Personnel Journal, June 1988, pp. 135–136.



Outline


Outline

Figure 9–5a Source: www.cwru.edu.

© 2005 Prentice Hall Inc. All rights reserved.9–26Figure 9–5b


Outline(cont’d)


Outline(cont’d)

Source: www.cwru.edu.


Performance Appraisal Methods (cont’d)

• Alternation ranking method

• Ranking employees from best to worst on a particular trait, choosing highest, then lowest, until all are ranked.

• Paired comparison method

• Ranking employees by making a chart of all possible pairs of the employees for each trait and indicating which is the better employee of the pair.


Alternation Ranking Scale

Figure 9–6


Ranking Employees by the Paired Comparison Method

Figure 9–7

Note: + means “better than.” − means “worse than.” For each chart, add up the number of 1’s in each column to get the highest-ranked employee.

9–30


• Forced distribution method

• Similar to grading on a curve; predetermined percentages of ratees are placed in various performance categories.

• Example:

• 15% high performers

• 20% high-average performers

• 30% average performers

• 20% low-average performers

• 15% low performers

• Narrative Forms



• Behaviorally anchored rating scale (BARS)

• An appraisal method that uses quantified scale with specific narrative examples of good and poor performance.

• Developing a BARS:

• Generate critical incidents

• Develop performance dimensions

• Reallocate incidents

• Scale the incidents

• Develop a final instrument



• Advantages of using a BARS

• A more accurate gauge

• Clearer standards

• Feedback

• Independent dimensions

• Consistency


Example of a Behaviorally

Anchored Rating Scale for two

Dimensions for Academic Advising

Figure 9–9

Source:Walter C. Borman, “Behavior Based Rating,” in Ronald A. Berk (ed.), Performance Assessment: Methods and Applications (Baltimore, MD: JohnsHopkins University Press, 1986), p. 103.

Advisor knowledge of program requirements.A. My advisor has excellent knowledge of program requirements and thecourse progression that leads to graduationB. My advisor has very good knowledge of program requirements and thecourse progression that leads to graduationC. My advisor is somewhat lacking in this knowledge, but knows whom to askD. My advisor has some knowledge of my curriculumE. My advisor has little knowledge of my curriculum

Advisor availablility.A. My advisor is easily accessible and stays in contact with me throughoutthe quarterB. My advisor is easily accessible and contacts me about advanceregistration advising at the proper timeC. My advisor is usually accessibleD. It is sometimes hard to reach my advisor in personE. My advisor is extremely hard to get hold of


Examples of Critical Incidents for an Assistant Plant Manager

Table 9–1


Performance Appraisal Tools

• Alternation ranking

• Paired comparison

• Forced distribution

• Critical incident

• Narrative forms

• Behaviorally Anchored Rating Scales

(BARS)


Management by Objectives (MBO)

• Involves setting specific measurable goals with each employee and then periodically reviewing the progress made.1. Set the organization’s goals.

2. Set departmental goals.

3. Discuss departmental goals.

4. Define expected results (set individual goals).

5. Performance reviews.

6. Provide feedback.


Performance Appraisal Tools

• Mixed standard scales

• Management by objectives (MBO)

• Computerized and web-based performance

appraisal

• Electronic performance monitoring (EPM)

• Conversation Days

• Using Multiple Methods


Explain and illustrate the problems to avoid in

appraising performance.


Dealing with Appraisal Problems and Interviews

• Potential appraisal problems

o Unclear standards

o Halo effect

o Central tendency

o Leniency or strictness

o Recency effects

o Bias


Potential Rating Scale Appraisal Problems

• Unclear standards

• An appraisal that is too open to interpretation.

• Halo effect

• Occurs when a supervisor’s rating of a subordinate on one trait biases the rating of that person on other traits.

• Central tendency

• A tendency to rate all employees the same way, such as rating them all average.

9–41

A Graphic Rating Scale with Unclear Standards

Note: For example, what exactly is meant by “good,” “quantity of work,” and so forth?


Potential Rating Scale Appraisal Problems (cont’d)

• Strictness/leniency

• The problem that occurs when a supervisor has a tendency to rate all subordinates either high or low.

• Bias

• The tendency to allow individual differences such as age, race, and sex to affect the appraisal ratings employees receive.


Guidelines for Effective Appraisals

• Know the problems

• Use the right tool

• Keep a diary

• Get agreement on a plan

• Ensure fairness

• Appraisals and the law


Review

Unclear Standards

Central Tendency

Halo Effect

Recency Effect

Bias

Leniency/

Strictness


Perform an effective appraisal interview.


How to Conduct the

Appraisal Interview

• Prepare

• Plan

• Coach

• Be objective


How to Conduct the Appraisal Interview

• Types of appraisal interviews

• How to conduct the appraisal

interview

o Objective data

o Don’t get personal

o Encouragement

o Agreement


Managing the Appraisal

Interview

• Handling a defensive subordinate

• Criticizing a subordinate

• The formal written warning

• Realistic appraisals


• How to Conduct the Appraisal Interview

• Managing the Appraisal Interviewo Type of interviewso Defensivenesso Criticismo Warningso Realism

Review


Explain how to “segment” employees

for appraisal and reward purposes.


Talent Management and

Employee Appraisal

• Appraising and Actively

Managing Employees

• Segmenting and Actively

Managing Employees in

Practice

Documents

9 9-1 Performance Management and Appraisal. 9-2 Learning Objectives 1.Describe the appraisal process. 2.Define performance management and discuss how