1. Chapter 8 Performance Appraisals and Retention
HFT 2220
Chapter 8
Performance Appraisals and Retention

2. What is a Performance Appraisal?
A meeting held between a manager and employee for the purpose of evaluating the performance, behaviors, knowledge and skills of the employee

3. Purposes for Performance Appraisals
Assess quality of job performance
Provide feedback regarding job performance
Plan future performance goals and objectives
Improve job performance through recognition and coaching
Establish a better knowledge of the employee to understand what motivates them
Document unsatisfactory performance
Serve as the basis for compensation changes

4. Relationship to Performance
Performance defined in company standards
Defines accountability
Evaluate effectiveness of training programs

5. Relationship to Communication
Feedback: information provided by the manager to the employee during a performance appraisal.
Helps to prevent misunderstandings when performance standards are communicated to employees who are held accountable

6. Relationship to Development
Identify employees who need additional training or are ready to move up
Provide effective employee guidance and career counseling
Helps measure predictive validity – the extent to which management predicts future behavior

7. Relationship to Training
Helps management evaluate training programs
Allows managers to discuss good and/or bad points of training programs with employees

8. Relationship to Compensation
Long used as basis for increases in compensation.
Make sure criteria are based on measurable outcomes based on the current job

9. Judge versus Coach Development appraisal
Coaching. Manager and employee agree on training and development agenda
Performance appraisal (evaluation)
Judge. Manager provides employee with information on their success or failures in the organization

10. Performance Appraisals
Should be based on previously established goals which should always be
Logical
Specific
Realistic
Measurable
Time Sensitive
Results Oriented
Mutually Acceptable

11. Appraisal Document Basic information Name Date Job position
Date of the interview
Who is conducting the interview

12. Subjectivity/Objectivity
Subjective rating systems not illegal but must be applied equally
Cannot misuse objective information
Retroactive documentation illegal
Criticism cannot be
Extreme and outrageous
Intentionally reckless
Intended to cause emotional distress
Any distress to the criticized employee is not severe

13. Criteria for Performance Appraisals
Construct validity
Must measure what they claim to measure
Content validity
Must measure the entire issue
Inter-rater validity
More than one appraiser
Consistency
All instances, not just one or two points in time

14. Methods of Appraising Performance
Critical incident
Capture and record incidents
Behaviorally Anchored Ratings Scales (BARS)
Rating system based on specific behaviors
Competency approach
Focuses on knowledge and sets of skills
360 Degree appraisals
Provide feedback from multiple sources

15. Mistakes to Avoid in Performance Appraisals
Halo Errors
Positive
Negative – Horn error
Bias
Recency Bias
Past anchoring errors
Courts have held the appraisals are free from bias if they meet the requirements of Title VII

16. Other Mistakes to Avoid
Attractiveness
Personalities
Employee backgrounds
Lacking clear standards of evaluation
Managers can’t or don’t observe employee adequately
Comparing one employee to another
Bureaucratic – more interested in regulations and legal protection than being honest

17. Appraisals and the Law Appraisals must not be discriminatory
Key issues must be
Job relatedness
Objectivity
Should be based on content and due process issues

18. Content (Job Related) Issues
Performance standards must be based on analysis of job requirements
Based on specific dimensions of the job
Standards should be objective and observable
Ratings should be documented
Validity of appraisers ratings should be assessed

19. Due Process Issues
Standards must be communicated and understood by the employee
Specific appraisal instructions should be put in writing
Use more than one appraiser if possible
Review results
Establish legitimate, formal appeal procedures

20. Retention Programs Aimed at decreasing turnover
The rate at which employees leave a company
Turnover costs – Tangible and intangible
Tangible – Out of pocket expenses.
Separation costs
Replacement costs
Training costs
Intangible – Do not relate to out of pocket expenses
Managerial time
Lost productivity
Morale

21. Decreasing Turnover Hire the right people
Make sure the job fits the employee
Meaningful new hire orientation
Effective training
Set clear expectations
Dignity and respect
Review compensation and benefit packages
Improve quality of work life
Sense of community