9–6 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.
9–7 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.
9–35 Ranking Employees by the Paired Comparison Method 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 curveNormal curve Rank and YankRank and Yank 9–36
Targeted Distribution of Performance Ratings 9–37
Narrative forms Write something (provide a narrative) about the individual’s performance either by key factors or just overall.Write something (provide a narrative) about the individual’s performance either by key factors or just overall. 9–38
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. 9–39
9–40 Examples of Critical Incidents for Assistant Plant Manager Continuing DutiesTargetsCritical Incidents Schedule production for 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
9–41 Example of a Behaviorally Anchored Rating Scale for the Dimension Salesmanship Skills
9–43 Behaviorally Anchored Rating Scale (BARS) Developing a BARS 1. Write critical incidents 2. Develop performance dimensions 3. Reallocate incidents 4. Scale the incidents 5. Develop a final instrument Advantages of BARS A more accurate gauge Clearer standards Feedback Independent dimensions Consistency
9–44 Management by Objectives (MBO) A comprehensive and formal organizationwide goal-setting and appraisal program requiring:A comprehensive and formal organizationwide goal-setting and appraisal program requiring: 1. Setting of organization’s goals 2. Setting of departmental goals 3. Discussion of departmental goals 4. Defining expected results (setting individual goals) 5. Conducting periodic performance reviews 6. Providing performance feedback
9–52 Computerized and Web-Based Performance Appraisal Systems Allow managers to keep notes on subordinates.Allow managers to keep notes on subordinates. Notes can be merged with employee ratings.Notes can be merged with employee ratings. Software generates written text to support appraisals.Software generates written text to support appraisals. Allows for employee self-monitoring and self-evaluation.Allows for employee self-monitoring and self-evaluation. Electronic Performance Monitoring (EPM) SystemsElectronic 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 spent working online.
9–53 Online Performance Appraisal Tool
9–54 Who Should Do the Appraising?: 360-degree feedback Self-rating Subordinates Customers/Vendors Potential Appraisers Immediate supervisor Peers Rating committee
9–56 Important Advantages and Disadvantages of Appraisal Tools ToolAdvantagesDisadvantages Graphic rating scaleSimple to use; provides a quantitative rating for each employee. Standards may be unclear; halo effect, central tendency, leniency, bias can also be problems. BARSProvides behavioral “anchors.” BARS is very accurate. Difficult to develop. Alternation rankingSimple 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. MBOTied 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 TendencyError of Central Tendency A rating error in which all employees are rated about average. Leniency or Strictness ErrorLeniency 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 ErrorSimilar-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 ErrorRecency 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 ErrorContrast 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 ErrorHalo/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 TrainingRating 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 TrainingFeedback Skills Training Communicating effectively Diagnosing the root causes of performance problems Setting goals and objectives