Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter 9 Performance Management
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Challenges of Performance Review In forced ranking, all employees are ranked against each other and grades are distributed along a bell-shaped curve Do you support the use of forced rankings? If the criteria used to determine an employee’s rank are more qualitative than quantitative, does this undermine the forced- ranking system? Suppose all the members of a given team are superstars. Can forced ranking deal with that situation?
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Facts About Performance Appraisals Employees are often less certain where they stand after the appraisal interview than before it Employees tend to evaluate their supervisors less favorably after the interview than before it Employees feel that the authoritarian, “tell-and-sell” approach to appraisal is out of sync with today’s democratic business structure
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Purposes of Performance-Appraisal Systems Appraisals provide legal and formal organizational justification for employment decisions Appraisals are used as criteria in test validation Appraisals provide feedback to employees Appraisals can help establish objectives for training programs Appraisals can help diagnose organizational problems
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Key Components of Effective Appraisal Systems Relevance Sensitivity Reliability Acceptability Practicality
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. To Avoid Legal Problems with Performance Appraisals Conduct a job analysis to determine characteristics necessary for effective job performance Incorporate these characteristics into a rating instrument Provide written instructions and train supervisors to use the rating instrument properly Establish a system to detect potentially discriminatory practices Include formal appeal mechanisms + higher-level review Document all appraisals + reasons for any termination decisions Provide performance counseling or guidance to assist poor performers
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Alternative Methods for Appraising Employee Performance Behavior-oriented rating methods Relative rating systems Absolute rating systems Results-oriented rating systems
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Behavior-Oriented Rating Methods Narrative essay Ranking Simple ranking Alternation ranking Paired comparisons Forced distribution Behavioral checklist Critical incidents Graphic rating scales Behaviorally anchored rating scales
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Who Should Evaluate Performance? The immediate supervisor Peers Subordinates Self-appraisal Customers whom the employee has served Computers
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. To Improve 360-Degree Feedback Be clear about the purpose of the appraisal – employee development Train raters to understand the overall process, show them how to complete forms, and to avoid common rating errors Seek a variety of types of information about performance Make all raters accountable to upper-level review Help employees interpret and react to the ratings, and include goal setting. Implement 360-degree reviews regularly, so employees can track their progress over time Take the time to evaluate the overall system
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Incorporation of TQM into Appraisal Customer expectations should generate individual or team performance expectations Include results expectations that meet or exceed customer expectations Consider individual behaviors that make a real difference in achieving total customer satisfaction, for example Listening skills Attention to detail Initiative