7-1 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Appraising and Managing Performance Chapter 7

7-2 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall  What is a performance appraisal?  Identifying Performance Dimensions  Measuring Performance  Challenges to Effective Performance Appraisals  Managing Performance  Managing the Cause of Problems Chapter 7 Overview

7-3 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall What Is Performance Appraisal?

7-4 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Uses of Performance Appraisal  Administrative purposes  Developmental purposes

7-5 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall  Dimension—aspect of performance  Determines effective job performance  Should be based on job analysis  E.g. quality, quantity, and interpersonal skills Identification   Competencies   Increasingly popular basis for performance appraisal dimensions

7-6 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall  Relative judgment appraisal format  Supervisors compare employees to each other  Rank employees in a work area  May not know actual performance levels Measurement: Type of Judgment   Absolute judgment appraisal format   Supervisors make judgments about workers   Performance based standards   Easier to defend in court

7-7 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Measurement: Focus of Measure  Trait appraisal instruments  Focus is on individual, not performance  Subject to perceptual biases   Behavioral appraisal instruments   Assess worker’s behaviors   BARS (see Figure 7.7, p. 219)   Outcome appraisal instruments   Focus on specific outcomes   MBO and Naturally Occurring outcomes

7-8 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Measurement Tools

7-9 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall  Person doing rating determines accuracy  Tool used less important Measurement   Most ratings “top-down”   Also have:   Self-rating   Peer review   Subordinate review   Customer review   360  feedback

7-10 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall  Rater errors  Reflect underlying biases by the rater  Halo effect  Range restriction  Personal bias Measurement: Pitfalls and Challenges   Comparability   Frame-of-reference (FOR) training   Scenarios, role-playing, etc.   To “calibrate” raters to same standards

7-11 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall  “Liking”—influence of personal feelings Measurement: Pitfalls and Challenges   Precautions   Keep records, regularly   Reflect behavior, not opinions   If problem exists, address it immediately   Organizational Politics   Worker’s appraisal depends on supervisor’s goals   Most feel appraisals are political

7-12 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Measurement: Groups and Teams  Assess both group and indiv. contributions   Use behavioral measures for individuals   Develop individual measures with team input   Keep team measurements balanced   Financial outcomes are good, but not only measures   Look at both outcome and process measures   Team must be able to influence measurement criteria

7-13 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall  Anti-discrimination laws apply to performance appraisals Measurement: Legal Issues   Factors influencing judges’ decisions:   Use of job analysis   Providing written instructions   Allow employees to review appraisal results   Agreement among multiple raters   Presence of rater training

7-14 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Managing Performance  The Appraisal Interview  Helpful or Dreadful?  Include Salary Discussion?

7-15 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall  Performance from:  Ability, motivation and situation factors Performance Improvement   Performance mgmt should be an ongoing, day-to-day process   When problems; explore causes   Including situational or system factors   Fundamental Attribution Error (Actor/Observer Bias)

7-16 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall  Recognize two roles: Judge and Coach  Four characteristics of effective managers  Direct attention to cause of problem  Develop action plan  Empower workers to reach a solution  Direct communication at performance  Provide effective feedback  Be as specific as possible Managing Performance: Effective Managers

7-17 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall How to Determine and Remedy Performance Shortfalls

7-18 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Summary and Conclusions  Performance appraisals future oriented  Identify the dimensions of the job that determine effective performance  Rating quality function of raters  Thus, train the raters  Recognize and avoid rating biases  Provide useful feedback  Don’t save “laundry list” for annual appraisal  Manage performance regularly