1. Chapter Ten Performance Assessment and Management

2. Copyright © Houghton Mifflin Company. All rights reserved. 10–2 Chapter Outline The Performance Assessment and Management Process Strategic Importance of Performance Appraisal Functions of Performance Appraisal Criteria for a Good Assessment System Deciding What Types of Performance to Measure Methods of Appraising Performance Raters of Employee Performance Enhancing the Measurement of Employee Performance Feedback of Results: The Performance Appraisal Interview

3. Copyright © Houghton Mifflin Company. All rights reserved. 10–3 Figure 10.1 Performance Management Cycle

4. Copyright © Houghton Mifflin Company. All rights reserved. 10–4 Strategic Importance of Performance Assessment Consistency Between Organizational Strategy and Job Behavior Consistency Between Organizational Values and Job Behavior

5. Copyright © Houghton Mifflin Company. All rights reserved. 10–5 Table 10.1 Multiple Organizational Uses for Performance Appraisal Information Source: J.N. Cleveland, K.R. Murphy, and R.E. Williams, “Multiple Uses of Performance Appraisal: Prevalence and Correlates,” Journal of Applied Psychology, Vol. 74. 1989, pp. 130-135. Copyright © 1989 by the American Psychological Association. Adapted with permission.

6. Copyright © Houghton Mifflin Company. All rights reserved. 10–6 Functions of Performance Assessment Performance Assessment as an Employee Development Tool –Goal Setting –Reinforcing and Sustaining Performance –Improving Performance –Determining Career Progression Goals –Determining Training Needs

7. Copyright © Houghton Mifflin Company. All rights reserved. 10–7 Functions of Performance Assessment (cont’d) Performance Assessment as an Administrative Tool –Linking Rewards to Performance –Evaluation of HRM Policies and Programs Summary

8. Copyright © Houghton Mifflin Company. All rights reserved. 10–8 Criteria for a Good Appraisal System Validity Reliability

9. Copyright © Houghton Mifflin Company. All rights reserved. 10–9 Figure 10.2 The Relationship Between Relevance, Deficiency, and Contamination

10. Copyright © Houghton Mifflin Company. All rights reserved. 10–10 Criteria for a Good Appraisal System (cont’d) Freedom from Bias –Legal Issues of Fairness Race Differences Age Differences –Freedom from Rating Errors Leniency Errors Severity Errors Central Tendency Errors Halo Errors –Why Do Rating Errors Occur? Unintentional Errors –Cognitive Information Processing (CIP) –Schemas Practicality

11. Copyright © Houghton Mifflin Company. All rights reserved. 10–11 Figure 10.3 How Information Processing Causes Rating Errors

12. Copyright © Houghton Mifflin Company. All rights reserved. 10–12 Table 10.2 Why Supervisors Inflate and Deflate Ratings Source: Based on C.O. Longnecker, H.P. Sims, and D.A. Gioia, “Behind the Mask: The Politics of Employee Appraisal,” Academy of Management Executive, Vol. 1, 1987, pp. 183-193.

13. Copyright © Houghton Mifflin Company. All rights reserved. 10–13 Deciding What Types of Performance to Measure Trait-Based Appraisals Behavior-Based Appraisals Results-Based Appraisals

14. Copyright © Houghton Mifflin Company. All rights reserved. 10–14 Methods of Appraising Performance Objective Measures –Production Measures –Dollar Sales Opportunity Bias –Personnel Data Personnel Measures Contamination –Performance Tests –Business Unit Performance Measures –Overall Value

15. Copyright © Houghton Mifflin Company. All rights reserved. 10–15 Methods of Appraising Performance (cont’d) Subjective Measures –Comparative Procedures Ranking –Straight Ranking –Alternate Ranking –Paired-Comparison Ranking Forced Distribution Advantages and Disadvantages of Comparative Procedures –Absolute Standards Graphic Rating Scales Mixed Standard Scales

16. Copyright © Houghton Mifflin Company. All rights reserved. 10–16 Figure 10.6 Examples of Typical Graphic Rating Scales

17. Copyright © Houghton Mifflin Company. All rights reserved. 10–17 Methods of Appraising Performance (cont’d) Subjective Measures (cont’d) –Weighted Checklists Critical-Incident Technique Behaviorally Anchored Rating Scales (BARS) –Behavioral Observation Scales (BOS) Management by Objectives

18. Copyright © Houghton Mifflin Company. All rights reserved. 10–18 Raters of Employee Performance Self-Evaluation Peer Evaluation Subordinate Evaluation Customer Evaluation 360-Degree Assessment Self Managed Teams

19. Copyright © Houghton Mifflin Company. All rights reserved. 10–19 Enhancing the Measurement of Employee Performance Training Evaluators –Rater Error Training (RET) –Frame-of-Reference (FOR) Training –Information-Processing Approaches Observation Training Decision-Making Training –Which Training Method is Best? Feedback to Evaluators

20. Copyright © Houghton Mifflin Company. All rights reserved. 10–20 Feedback of Results: The Performance Appraisal Interview Types of Feedback Interviews –Tell and Sell –Tell and Listen –Problem Solving Problems with the Appraisal Interview –Disagreement and Defensiveness –Multiple Purposes –Impression Management in the Feedback Process

21. Copyright © Houghton Mifflin Company. All rights reserved. 10–21 Feedback of Results: The Performance Appraisal Interview (cont’d) Improving the Performance Appraisal Interview –Feedback Specificity –Subordinate Acceptance –Setting Clear Goals

22. Copyright © Houghton Mifflin Company. All rights reserved. 10–22 Review The Performance Assessment and Management Process Strategic Importance of Performance Assessment Functions of Performance Assessment Criteria for a Good Appraisal System Deciding What Types of Performance to Measure Methods of Appraising Performance Raters of Employee Performance Contemporary Assessment Challenges Enhancing the Measurement of Employee Performance Feedback of Results: The Performance Assessment Interview