Presentation on theme: "Appraising and Managing Performance"— Presentation transcript:
1 Appraising and Managing Performance CHAPTER SEVENAppraising andManaging Performance
2 Chapter Objectives Review Key Terms 360-degree feedback Explain why performance appraisal is important and describe its componentsDiscuss the advantages and disadvantages of different performance rating systemsManage the impact of rating errors and bias on performance appraisalsDiscuss the potential role of emotion in performance appraisal and how to manage its impactIdentify the major legal requirements for appraisalUse performance appraisals to manage and develop employee performanceReview Key Terms360-degree feedbackAbsolute judgmentBARSDimensionsMBOPerformance AppraisalPerformance ManagementRelative judgment
3 What is Performance Appraisal? Evaluating an employee’s current and/or past performance relative to his or her performance standards.The identification, measurement, and management of human performance in organizations.Performance ManagementThe process employers use to make sure employees are working toward organizational goals.
5 Identifying Performance Dimensions Defined as an aspect of performance that determines effective job performance.Performance dimensions are defined based on the job and the work itself.Identified based on the job analysisPerformance dimensions help answer the question: “How does someone act and/or behave when s/he does the job well?”May be further defined through use of competenciesCharacteristics associated with successful performance
6 Identifying Performance Dimensions Examples of Performance Dimensions:Strong Interpersonal SkillsCustomer Service OrientationTeamworkEffective CommunicationValuing DiversityAnalysis and Problem-SolvingDecision-Making and Results OrientationAdaptabilityFostering a Safe and Secure Environment
7 Identifying Performance Dimensions For dimensions to be an effective means of measuring performance, they must have two characteristics:Have a clear general definitionTeam work might then be defined in terms of competenciesHave well-defined levels of performance at each point along a rating scale.
8 Measuring Performance administering numbers or labels towards performance is difficult to quantifyTwo formats that are most common, legally defensible, and promising are classified bytype of judgment requiredfocus of the measure
10 Measurement Tools Relative judgment An appraisal format that asks supervisors to compare an employee’s performance to the performance of other employees doing the same job.Rank orderGroupingForced RankingGE, Ford Motor, Conoco, Sun Microsystems, Cisco Systems, EDS, and EnronPros: Forced Differentiation and create conflictCons: No absolute rankings and may force differences where none truly exist
11 Measurement Tools Absolute judgment An appraisal format that asks supervision to make judgments about an employee’s performance based solely on performance standards.Pros: Can be more specific, helpful and create less conflictCons: Different supervisors may have different standards
12 Measurement Tools Type of Performances Data the tool focuses on: Trait Appraisal InstrumentBehavioral Appraisal Instrument (BARS)Outcome Appraisal Instrument (MBO)
13 Measurement Tools – Trait Appraisal Instruments Focuses on the person rather than on the performanceGraphic rating scaleA 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.Example: Reliability 1 (very low) to 5 (very high)Pros: We are good at itCons: Legal Concerns because traits can be ambiguous and focuses is on person
14 Measurement Tools – Behavioral Appraisal Instrument Combines traditional rating scales and critical incidents methodsJob behaviors derived from critical incidents described more objectivelyPros – Legally defensible and provides specific examples of behavior to engage inCons - Can be time consuming to create and behavior ‘may’ occur
15 Measurement Tools – Behavioral Appraisal Instrument 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 incidentsDevelop performance dimensionsReallocate incidentsScale the incidentsDevelop a final instrument
16 Measurement Tools – Outcome Appraisal Instrument (MBO) Involves setting specific measurable goals with each employee and then periodically reviewing the progress made.Set the organization’s 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
17 Who Does the Appraisals? Self ReviewsPeer ReviewsSubordinate Reviews360-degree feedback
18 Who Does the Appraisals? 360-Degree Valuation Multi-rater evaluationInput from multiple levels with firm and external sourcesFocuses on skills needed across organizational boundariesMore objective measure of performanceProcess more legally defensible
19 Challenges to Effective Performance Measurement Rater ErrorsAn error in performance appraisals that reflects consistent biases on the part of the raterFrame-of-reference (FOR) training can help combat this problem
20 Problems in Performance Appraisal Rater Errors & Bias Lack of objectivityHalo errorComparability across SupervisorsLeniency/strictnessCentral tendencyRecent behavior biasPersonal biasManipulating the evaluation
21 Challenges to Effective Performance Measurement Rater ErrorsThe Influence of LikingPrecautionsAccurate record keeping - journalsIndividual or Group FocusOrganizational Politics
22 Reasons for Intentionally Inflating or Lowering Ratings Believe accurate ratings would have a damaging effect on subordinate’s motivation and performance.Improve employee’s eligibility for merit raises.Avoid airing department’s “dirty laundry.”Avoid creating negative permanent record that might haunt employee in the future.Protect good workers whose performance suffered because of personal problems.Reward employees displaying great effort even when results were relatively low.Avoid confrontation with hard-to-manage employees.Promote a poor or dislike employee up and out of the department.
23 Reasons for Intentionally Inflating or Lowering 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 subordinate receives.Comply with an organizational edict that discourages managers from giving high ratings.
24 Emerging Trends: Measuring the Performance of Teams Review existing measures to make sure the team is aware of the measures and has commitment and responsibilities 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 relative importance.
25 Characteristics of an Effective Appraisal System Develop any needed measures of interim and final team and individual performance.Develop team and individual performance standards so that everyone has a clear understanding of performance expectations.Determine how the performance management system will work. Who will be the raters? How will feedback be provided?
26 Challenges to Effective Performance Measurement Legal IssuesFactors influencing judges’ decisions in cases involving performance appraisalsUse of job analysisProviding written instructionsAllowing employees to review appraisal resultsAgreement among multiple ratersThe presence of rater training
27 Managing Performance Performance Improvement Because formal appraisal interviews typically are conducted only once a year, they may not always have a substantial and lasting impact on worker performance. Thus, supervisors who manage performance effectively generally share four characteristics.Exploring the causes of performance problemsDirecting attention to the causes of problemsDeveloping an action plan and empowering workers to reach a solutionDirecting communication at performance & provide effective feedback
28 Tips for Better Performance Reviews Start with the raw dataMake sure you are evaluating performance on appropriate dimensionsBeware of rating biasesSupport ratings with written commentsEvaluate several or all of your people at one time, if possibleStick with performance and stay away from inferences about causeBe consistent across workers