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Performance Evaluation

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1 Performance Evaluation

2 Definitions Performance Appraisal
Systematic description of job relevant strengths and weaknesses within and between employees and groups. Performance appraisal should accurately describe job performance behavior (not effectiveness) The evaluation process can identify improvement areas that allow the employee to do their jobs more effectively. Similarly, if there are significant gaps between the skills the workers possess and the skills needed to perform well, training can be designed to help close those gaps. As the strengths and weaknesses of each worker are identified through the evaluation process, it is easier to assign employees to the work for which they are most suited. Salary and wages will be allocated more fairly if there is a clear indication of the level of performance of each employee. Those who are performing at higher levels should receive appropriate rewards (raises, promotions, etc.). If promotions and firing decisions are to be done fairly, they need to be based on accurate performance measures. I/O psychologists ensure that the decision process is based on valid measures of performance.

3 Uses for PA Information
Development Identifies training needs Helps employees do their jobs better Administrative Assigns people to the work they do best Maintains fairness in personnel decisions Research Appraisals can serve as criteria for test validation Appraisals can serve as predictors for promotion Development Identifies areas of employee strength Identifies areas of employee job-related “weakness” employees want to know how they are doing on the job timely, concrete, accurate, constructive feedback is necessary for effective performance key to employee motivation (goal setting & equity theory) Research Appraisals can serve as criteria for test validation Appraisals can serve as predictors for promotion Administrative Assigns people to the work they do best people are hired to do one job… but may eventually become more suited for another job but may develop particular areas of expertise but may develop new skills and abilities (or interests) Rewarding good performance Promotion, wage and salary, and benefits Addressing poor performance remediating poor performers terminating poor performers Requires accurate measurement of how well people do their jobs

4 Types of Evaluation Data
Objective (Quantitative) Production Information Dollar Volume of Sales Number of Passing Yards Personnel Data Absenteeism Turnover Accidents Subjective (Judgmental) Data Ratings of performance Objective (Quantitative) Production Information Problems with Objective Data May result from factors other than performance effectiveness versus performance Are you using the “right” criterion Personnel Data Problems with personnel data How do they reflect actual performance? How relevant are they? How accurate are your records? Subjective (Judgmental) Data Relevant for almost all types of jobs Problems with Judgmental Data Prone to bias and error associated with observation and judgement

5 Errors in Performance Ratings
Three types of error Halo errors Leniency errors negative - “hard grader” positive - “easy grader” Central tendency errors Halo rater’s general impression of employee (good or bad) will influence ratings on all dimensions of performance Ex. Clumsy waiter may be great at dealing with irate customers Leniency being a “hard” or “easy” grader Hard grader - want to motivate employee performance Easy grader - may be uncomfortable giving negative feedback Central Tendency Rater’s reluctance to use the extreme edges of the scale

6 Legal Issues Properties of a legally sound appraisal system
Barrett & Kernan (1987) Based on job analysis Focuses on behaviors as opposed to traits Evaluators are trained to use the system Results are reviewed with employee Appeal mechanisms are available to employees Evaluations are documented Poor performers receive corrective guidance Rountree v. Dept. of Agriculture (1995) Received low performance appraisal rating from supervisor Claimed it was because of racial bias Filed a claim with the EEOC Received $8,000 for lost wages and benefits that a fair appraisal would have brought Hopkins v. Price Waterhouse (1987) She was senior manager in charge of large government computer contracts Only woman among 88 partner candidates Supported by colleagues (evaluated as outstanding) Not accepted Told that to improve her chances she needed to: “walk, dress, and talk more femininely; wear makeup and jewelry, and have her hair styled” Also, one board member stated outright would not consider a woman for partner… did not believe women were capable of functioning as partners Ultimately won her case in Supreme Court

7 Performance Appraisal Methods
Relative (employee) comparisons Order employees in terms of overall performance rank order alteration ranking paired comparisons forced distributions

8 Forced Distributions The rater must normally distribute performance ratings across employees Controls leniency, severity, and central tendency biases Employees at bottom may not be “bad” performers

9 Forced Distributions (Example)
Excellent Good Average Poor Bad Number of employees

10 Utility of Relative Comparisons
Advantages Helpful in making personnel decisions Effectively control: leniency/severity and central tendency errors Disadvantages Employees compared on a global “suitability” criterion Halo error is obscured not eliminated Difficult to compare rankings across work groups

11 Performance Appraisal Methods
Using Absolute Standards Behavioral Checklists and Scales Critical Incidents Weighted Checklist Behavioral Observation Scale Behaviorally Anchored Rating Scale (BARS)

12 Exercise: Evaluate Your Boss
Think of your boss and the things he or she does at work On a blank piece of paper, choose one or two dimensions of work performance from the following list: Training others Planning work for others Assigning tasks to others Scheduling people Observing others’ work

13 Exercise: Evaluate Your Boss
Next, for each area/dimension you have chosen, write three sentences Sentence A: Give an example of very poor performance in this area Sentence B: Give an example of acceptable performance in this area Sentence C: Give an example of excellent performance in this area Make a rating scale from 1 to 5, where 1 corresponds to sentence A, 3 to sentence B, and 5 to sentence C

14 Example: Scheduling People
1 - “Often forgets to tell people when he has made changes to the shift schedule.” 2 - 3 - “Gives people a choice of shifts, whenever possible.” 4 - 5 - “Plans shifts so that no one person always ends up working the bad shift.” Generating critical incidents - Behavioral statements describing different levels of performance. Retranslating Scaling

15 Exercise: Make your rating
Using your example statements as a guide, make a rating of your boss on the scale you designed. In actual work settings, I/O psychologists would spend much time and effort with workers and supervisors to make sure that: All of the performance areas made sense for the job being rated All of the example statements fit the areas All of the scale values were fair

16 Rater Training Can minimize error Can be used to “calibrate” ratings
leniency/severity and central tendency Can be used to “calibrate” ratings provide all raters with common points of reference

17 Performance Feedback Identify tasks performed of the job
Develop performance standards Train raters Communicate frequently Evaluate own performance first Encourage subordinate preparation/participation Evaluate performance (not personality) Provide specific, behavioral, constructive criticism Be an active listener Set mutually agreeable goals Make rewards contingent on performance

18 Conclusions Performance evaluation is an important issue both for companies and for workers With careful design and appropriate use, performance evaluations can support productivity and fair allocation of rewards Industrial-organizational psychologists specialize in making sure that performance evaluations are designed correctly Prepared by the Society for Industrial and Organizational Psychology - SIOP © 1998

19 Landmark Legal Decisions
Many court battles are fought because of discrimination in the workplace Example: Rountree v. Department of Agriculture Example: Hopkins v. Price-Waterhouse Performance evaluation is often at the center of these disputes I/O psychologists ensure the evaluation process is fair and help companies avoid these kinds of legal problems In Rountree v. Department of Agriculture (1995), Reginald Rountree received a low performance appraisal rating from his supervisor at the Department of Agriculture. He claimed that this low rating was the result of racial bias. He submitted a request for $937,725 in compensatory damages to the Equal Employment Opportunity Commission. Of the total claim, $680,000 constituted compensation for emotional distress and related non-monetary injuries. Ultimately, the EEOC agreed that discrimination had occurred, but awarded Rountree only $8000 to compensate partially for the increased wages and benefits that a fair and accurate performance appraisal would have brought and partially for Rountree’s emotional distress associated with the unfair appraisal. In Hopkins v. Price Waterhouse, (1987), Ann Hopkins was being considered for partner at Price Waterhouse, where she was a senior manager in charge of large government computer contracts. At the time of her consideration, Hopkins was the only woman among eighty-eight candidates nominated for partnership. Her close colleagues submitted an evaluation noting her "outstanding performance" and strongly urged her admission to the partnership. When she was not accepted as a partner by the promotion board, the person responsible for explaining the board’s decision to her advised Hopkins that in order to improve her chances for partnership she should "walk more femininely, talk more femininely, dress more femininely, wear make-up, have her hair styled, and wear jewelry." In addition, another board member "repeatedly commented that he could not consider any woman seriously as a partnership candidate and believed that women were not even capable of functioning" as partners. Hopkins brought her gender discrimination lawsuit all the way to the Supreme Court and won.

20 Evaluating Work Performance
Identify tasks performed of the job Develop performance standards Train supervisors to: observe/evaluate performance accurately focus on only job-relevant issues Study why and how rating errors happen Identify the knowledge, skills, abilities, and other qualities necessary for performance Create standards for performance: What is acceptable, or good, or excellent? Train supervisors to: observe/evaluate performance accurately focus on only job-relevant issues Study why and how rating errors happen

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