Presentation on theme: "Performance Appraisal"— Presentation transcript:
1 Performance Appraisal The identification, measurement, and management of human performance in organizations.
2 Performance Evaluation and Management 8-5Performance Evaluation and ManagementPerformance Management: efforts to align employee performance with the firm’s goalsPerformance Evaluation: efforts to determine the extent to which an employee performs work effectively. Also known as:Performance reviewPersonnel ratingMerit ratingPerformance appraisalEmployee appraisalEmployee evaluation
3 Potential Purposes of Evaluation 9-3Potential Purposes of EvaluationDevelopmentHR andEmploymentPlanningMotivationLegalComplianceHRMResearchCommunications
4 A Model of Performance Appraisal IdentificationMeasurementEvaluating an employee’s performance on the job is called a performance appraisal. Shown here are the essential steps of this process, but there are many specific variations in the way these steps are accomplished.Management
5 Performance Evaluation: Criteria of Evaluation 9-5Performance Evaluation: Criteria of EvaluationReliabilityRelevanceSensitivityPracticalityCombination of criteria using activitiesand results is desirable
6 Who Should Evaluate the Employee? 9-6Who Should Evaluate the Employee?MANY POSSIBILITIESImmediate supervisor only (typical)Committee of several supervisorsEmployees’ peers (coworkers)Employees’ subordinatesSomeone outside the immediate work situationSelf-evaluation
7 Management By Objectives (MBO) 9-11Management By Objectives (MBO)Some Potential BenefitsEncourages employee participationEnables subordinates to exercise self-control and manage own performanceUseful for training and career development purposesMay be used as an impetus for changing organization-wide systemsSome Potential PitfallsManagers may not be adequately prepared for MBODemands active employee and manager involvementToo much emphasis on the short run and resultsFailure to tie results to rewardsToo much time and paperworkToo many and conflicting objectives set
8 Potential Evaluation Problems 9-12Potential Evaluation ProblemsOpposition to evaluationSystem design and operating problemsRater problems include:Problems with standards of evaluationHalo effectsLeniency or harshnessCentral tendency errors“Recency of events” errorsContrast effectsPersonal bias/stereotypingMajor problems exist more withthe rater than the technique used.
9 Solutions to Evaluation Problem 9-13Solutions to Evaluation ProblemELIMINATINGRATER ERRORSTrain raters on how to evaluate others wellGrant ample opportunities to observe behaviorMotivate raters to use the system effectivelyAVOIDING PROBLEMSWITH EMPLOYEESTrain employees in performance evaluation methodsSimplify reporting formsCommunicate how evaluation information is be usedAllow employees to participatein system developmentBuild equity into the system
10 The Benefits of Performance Appraisal Employer Perspective:Despite imperfect measurement techniques, individual differences in performance can make a difference to company performance.Documentation of performance appraisal and feedback may be needed for legal defense.Appraisal provides a rational basis for constructing a bonus or merit system.Appraisal dimensions and standards can help to implement strategic goals and clarify performance expectations.Providing individual feedback is part of the performance management process.Despite the traditional focus on the individual, appraisal criteria can include teamwork and the teams can be the focus of the appraisal.Though there is generally a lot of dissatisfaction with the way appraisals are conducted, these next two illustrations highlight some of the benefits of performance appraisal; from the perspective of the employer and the employee.
11 Trait Appraisal, Behavioral Appraisal, and Outcome Appraisal Instruments An appraisal tool that asks a supervisor to make judgments about worker characteristics that tend to be consistent and enduring.Behavioral AppraisalAn appraisal tool that asks managers to assess a worker’s behaviors.Outcome AppraisalIn addition to relative and absolute judgments, performance measurement systems can be classified by the type of performance data on which they focus. Shown here are the three types of performance data and a brief description of each.An appraisal tool that asks managers to assess the results achieved by workers.
12 Rate each worker using the scales below. Sample Trait ScalesRate each worker using the scales below.Decisiveness:Very low Moderate Very highReliability:Very low Moderate Very highEnergy:Very low Moderate Very highTrait appraisal instruments ask the supervisor to make judgments about traits. Shown here are four traits that are typically found on trait-based rating scales. Trait ratings have been criticized for being much too ambiguous, and leaving the door open for conscious or unconscious bias, In addition, trait ratings are less defensible in court than other types of ratings.Loyalty:Very low Moderate Very high
13 Evaluation of Major Appraisal Formats Administrative UseDevelopmental UseLegal DefensibilityAbsoluteRelativeTraitBehaviorOutcome++++----+++There is no single best appraisal format. Each approach has positive and negative aspects. This illustration summarizes the strengths and weaknesses of each approach in the areas of administration, development, and legal defensibility. The choice of appraisal system should rest largely on the appraisal’s primary purpose.-- Very Poor- Poor0 Unclear or mixed+ Good++ Very good
14 Who Should Evaluate the Employee? 9-7Who Should Evaluate the Employee?360-DEGREE FEEDBACKAlternative to traditional supervisor-only approachesUses multipleappraisersNot a panaceaSupervisorsSelf-appraisalPeersSubordinates
15 Challenges to Effective Performance Measurement Rater errors and biasThe influence of likingOrganizational politicsWhether to focus on the individual or the groupLegal issuesEach appraisal format has both positive and negative aspects. Most appraisal systems were developed on the premise that companies could reduce or eliminate rater errors by using the right appraisal format. However, rating formats make little difference in the actual ratings that are obtained. So, how can managers ensure accurate measurement of worker performance? The primary means is to understand the barriers that stand in the way. Shown here are five of the most important challenges in this area.
16 Legal Issues Use of job analysis Providing written instructions A recent analysis of 295 court cases involving performance appraisal found judges’ decisions to be favorably influenced by the following additional factors:Use of job analysisProviding written instructionsAllowing employees to review appraisal resultsAgreement among multiple raters (if more than one was used)The presence of rater trainingThe legal implications of an employee’s performance appraisal have become a major concern for managers. Shown here are five factors that have been shown to help defend the results of an appraisal in court.
17 Communication Skills for the Appraisal Interview BenefitDescriptionExampleNonverbal AttendingOpen and Closed QuestionsSuggests interest and active listening.Appropriate use of open and closed questions can ensure an effective flow of communication during an interview.Rater sits with a slight forward, comfortable lean of the upper body, maintains eye contact, and speaks in a steady and soothing voice.—Open questions encourage information sharing and are most appropriate early in an interview or in complex, ambiguous situations.—Closed question evoke short responses and are useful for focusing and clarifying.While the ratee is speaking, the rater looks at the person and gently nods head to signal interest.— Open questions start with words like “Could,” “Would,” “How,” “What,” or “Why”.— Closed questions start with words like “Did,” “Is,” or “Are.”These next three illustrations outline a description, the benefits, and examples of different communication skills. These skills all have a place in an appraisal interview.
18 Communication Skills for the Appraisal Interview (Cont.) BenefitDescriptionExampleCultural SensitivityCommunication is more effective when you are sensitive to the possible influence of cultural differences.Pay attention to cultural differences that may influence how another person communicates and how you might communicate with others.When dealing with employees from a culture that is highly formal, avoid addressing them in the workplace by their first names. Doing so may signal disrespect.
19 Key Steps in Implementing 360° Appraisal Top management communicates the goals of and need for 360° appraisal.Employees and managers are involved in the development of the appraisal criteria and appraisal process.Employees are trained in how to give and receive feedback.Employees are informed of the nature of the 360° appraisal instrument and process.The 360° system undergoes pilot testing in one part of the organization.Management continuously reinforces the goals of the 360° appraisal and is ready to change the process when necessary.360° feedback is rapidly becoming important and may someday be the rule rather than the exception. One reason for the rise of 360° feedback is the trend to fewer management layers. The shift to a 360° system can be major change that requires careful planning to be successful. Shown here are some key steps in implementing a 360° appraisal system.