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Chapter 8 Appraising Employee Job Performance

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Presentation on theme: "Chapter 8 Appraising Employee Job Performance"— Presentation transcript:

1 Chapter 8 Appraising Employee Job Performance

2 Outline 8-1 Gaining Competitive Advantage 8-2 HRM Issues and Practices
8-3 The Manager’s Guide

3 8-1 Gaining Competitive Advantage
Performance appraisals Should accurately assess the quality of employee job performance Improving job performance Directing behavior Monitoring behavior Making the correct employment decisions Ensuring legal compliance Minimizing job dissatisfaction and turnover

4 8-2 HRM Issues and Practices
Standards for effective performance appraisal systems The quality of the rating form Accuracy of the ratings Legal standards

5 The Quality of the Rating Form
Relevance The degree to which the rating form includes necessary information, that is, information that indicates the level or merit of a person’s job performance To be relevant, the form must: Include all the pertinent criteria for evaluating performance Exclude criteria that are irrelevant to job performance Criterion deficiency The omission of pertinent performance criteria Criterion contamination When irrelevant criteria are included on the rating form

6 Accuracy of the Ratings
Leniency and severity errors Central tendency error Halo effect The rater’s use of implicit personality theory Recency error

7 Leniency & Severity Errors
Leniency error Occurs when raters provide ratings that are unduly high Severity error Occurs when ratings are unduly low Causes of leniency and severity errors: Political reasons Raters’ lack of conscientiousness Personal bias

8 Central Tendency Error
Occurs when appraisers purposely avoid giving extreme ratings even when such ratings are warranted Causes of central tendency error: Result of administrative procedures When the end points of the rating scale are unrealistically defined

9 Halo Effect Occurs when an appraiser’s overall impression of an employee is based on a particular characteristic Such as intelligence of appearance Causes of the halo effect: When rating standards are vague The rater fails to conscientiously complete the rating form

10 The Rater’s Use of Implicit Personality Theory
When the rater’s estimation is based on a personal “theory” of how different types of people behave in certain situations Rater cannot observe all aspects of a worker’s performance Rater classifies employee by “type of person” Based on perceived personality type Using this theory organizations are unable to identify employees’ specific strengths and weaknesses

11 Recency Error Memory decay
Ratings are heavily influenced by recent events that are more easily remembered Ratings that unduly reflect recent events can present a false picture of the individual’s job performance during the entire rating period

12 Legal Standards Appraisal systems must meet all the criteria imposed by EEO laws A court would examine: The nature of the appraisal instrument The fairness and accuracy of the ratings

13 Types of Rating Instruments
Employee comparison systems Graphic rating scales Behaviorally anchored rating scales (BARS) Behavior observation scales (BOS) Management-by-objectives (MBO)

14 Employee Comparison Systems
Employee performance is evaluated relative to other employees’ performances Use rankings rather than ratings Ranking formats: Simple rankings Require raters to rank-order their employees from best to worst, according to their job performance Paired comparison A rater compares each possible pair of employees Forced distribution Requires a rater to assign a certain percentage of employees to each category of excellence, such as “best,” “average,” or “worst”

15 Employee Comparison Systems—Strengths & Weaknesses
Low cost Practical Take very little time & effort Eliminates some rating errors Employment decisions become much easier to make Weaknesses Accuracy Fairness Do not specify what a worker must do to receive a good rating Cannot compare the performance of people from different departments

16 Graphic Rating Scales Presents appraisers with a list of traits assumed to be necessary to successful job performance Examples—cooperativeness, adaptability, maturity, motivation A five- or seven-point rating scale accompanies each trait Points on the scale are defined by numbers and/or descriptive words or phrases that indicate level of performance

17 Graphic Rating Scales—Strengths & Weaknesses
Practical Low cost Can be developed quickly A single form is applicable to all or most jobs within an organization Weaknesses Vaguely defined traits to evaluate (e.g. demeanor or attitude) Do not effectively direct behavior Fail to provide specific, nonthreatening feedback Accuracy

18 Behaviorally Anchored Rating Scales (BARS)
Similar to graphic rating scale Requires appraisers to rate employees on their traits Typical BARS include seven or eight traits, referred to as “dimensions” Each anchored by a seven- or nine-point scale BARS anchors each trait with examples of specific job behaviors that reflect varying levels of performance

19 BARS—Strengths & Weaknesses
Ability to direct and monitor behavior Lets employees know what types of behaviors are expected Weaknesses Not found to be substantially superior than other rating scales Selecting one behavior that is most indicative of the employee’s performance Time consuming to develop Requires a lot of effort to develop

20 Behavior Observation Scales (BOS)
Contains a list of desired behaviors required for the successful performance of specific jobs Developed like BARS Critical incidents are collected and categorized into dimensions An appraiser rates job performance by indicating the frequency with which the employee engages in each behavior A five-point scale is used ranging from “almost never” (1) to “almost always” (5)

21 BOS—Strengths & Weaknesses
Preferred by managers and subordinates Believed to be more legally defensible than BARS or graphic rating scale Effective in directing employees’ behavior Used to monitor behavior and give specific feedback Weaknesses Time consuming to develop Not always cost-effective A separate instrument is needed for each job since different jobs call for different behaviors

22 Management-by-Objectives (MBO)
A management system designed to achieve organizational effectiveness by steering each employee’s behavior toward organization’s mission MBO process includes: Goal setting Planning Evaluation

23 MBO—Strengths & Weaknesses
Widely practiced Improves job performance Performance standards are stated in relatively objective terms Practical Cost effective Allows employees to have a say in how their performance will be measured Weaknesses Does not specify the behaviors required to reach goals Success may be attributed to factors outside employee’s control Performance standards vary from employee to employee Performance pressures and stress placed on employee’s

24 Developing an Appraisal System
Step 1: Gain support for the system Step 2: Choose the appropriate rating instrument Step 3: Choose the rater(s) Step 4: Determine the appropriate timing of appraisals Step 5: Ensure appraisal fairness

25 Step 1: Gaining Support for the System
Gain the support of upper-level managers Gain the support of employees

26 Step 2: Choosing the Appropriate Rating Instrument
Practicality Cost Development costs Constructing an appraisal system Implementation costs Training appraisers Developing written guidelines Utilization costs Appraiser’s time observing, rating, and giving performance feedback Nature of job

27 Step 3: Choosing the Rater(s)
Supervisory ratings Peer ratings Self-ratings Using multiple raters: 360-degree feedback systems

28 Step 4: Determining the Appropriate Timing of Appraisals
Mostly conducted annually Appraisers may have a difficult time remembering events of the past year Appraisers should maintain records of employee performance to minimize this problem Record keeping also serves as documentation for EEO suits

29 Step 5: Ensuring Appraisal Fairness
Upper-level management review Appeals system

30 8-3 The Manager’s Guide—Performance Appraisal & Managers
Complete the ratings Provide performance feedback Set performance goals

31 Performance Appraisal & HRM Department
Develop the appraisal system Provide rater training Monitor and evaluating the appraisal system

32 HRM Skill-Building for Managers
Conducting periodic performance review sessions Conducting the annual performance review conference Setting goals for MBO Consistent with goals set at higher organizational levels Specific and challenging Realistic and achievable Measurable

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