Chapter 10

Dessler, Cole, and Sutherland

Human Resources Management in Canada Canadian Ninth Edition

Chapter Ten

Performance Appraisal: The Key to Effective Performance Management

© 2005 Pearson Education Canada Inc., Toronto, Ontario 10-1

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© 2005 Pearson Education Canada Inc., Toronto, Ontario

Performance Management

-process encompassing all activities related to improving employee performance, productivity,and effectiveness

-process encompassing all activities related to improving employee performance, productivity,and effectiveness

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The Performance Appraisal Process

-three steps:

1. Setting work standards

2. Assessing actual performance relative

to standards

3. Providing feedback to employee

regarding performance

-three steps:

1. Setting work standards

2. Assessing actual performance relative

to standards

3. Providing feedback to employee

regarding performance

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1. Provides information for promotion and salary

decisions

2. Provides opportunity for reinforcement and/or

corrective action regarding performance

3. Provides opportunity to review career plans

1. Provides information for promotion and salary

decisions

2. Provides opportunity for reinforcement and/or

corrective action regarding performance

3. Provides opportunity to review career plans

Why Should Performance Be Appraised?

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• Lack of standards; irrelevant, subjective,

unrealistic standards• Poor measures of performance• Rater errors• Poor feedback to employees eg. arguing• Failure to use evaluation results for decision

making

• Lack of standards; irrelevant, subjective,

unrealistic standards• Poor measures of performance• Rater errors• Poor feedback to employees eg. arguing• Failure to use evaluation results for decision

making

Performance Appraisal Problems

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Defining Performance Expectations

-job description often insufficient to clarify

performance expectations

-measurable standards should be developed

for each position

-job description often insufficient to clarify

performance expectations

-measurable standards should be developed

for each position

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Appraisal Methods

Trait: _____ ____ Outstanding

____ Very Good

____ Good

____ Improvement Needed

____ Unsatisfactory

____ Not Rated

Trait: _____ ____ Outstanding

____ Very Good

____ Good

____ Improvement Needed

____ Unsatisfactory

____ Not Rated

Graphic Rating Scale

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Appraisal Methods

Trait: ____________

Highest-ranking employee

1. _________________ 4. ____________

2. _________________ 5. ____________

3. _________________ 6. ____________ Lowest-ranking employee

Trait: ____________

Highest-ranking employee

1. _________________ 4. ____________

2. _________________ 5. ____________

3. _________________ 6. ____________ Lowest-ranking employee

Alternation Ranking Scale

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Appraisal Methods

Trait: ____________

EmployeeAs Compared to: Art Bob Carl DianeArt + + -Bob - - -Carl - + +Diane + + -

1 3 1 1Bob ranks highest

Trait: ____________

EmployeeAs Compared to: Art Bob Carl DianeArt + + -Bob - - -Carl - + +Diane + + -

1 3 1 1Bob ranks highest

Paired Comparison Method

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Appraisal Methods

Forced Distribution Method

High Performers 15% of employees

High-Average Performers 20% of employees

Average Performers 30% of employees

Low-Average Performers 20% of employees

Low Performers 15% of employees

High Performers 15% of employees

High-Average Performers 20% of employees

Average Performers 30% of employees

Low-Average Performers 20% of employees

Low Performers 15% of employees

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Appraisal MethodsCritical Incident Method

-keep a record of:

-uncommonly good

-undesirable

work-related behaviours

-review with employee at predetermined times

-keep a record of:

-uncommonly good

-undesirable

work-related behaviours

-review with employee at predetermined times

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Appraisal MethodsNarrative Forms

1. Rate performance

2. Note performance analysis and examples

3. Create improvement plan, including a

timetable and follow-up process

4. Discussion with employee

1. Rate performance

2. Note performance analysis and examples

3. Create improvement plan, including a

timetable and follow-up process

4. Discussion with employee

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Appraisal MethodsBehaviourally Anchored Rating Scales (1 of 2)

1. Generate critical incidents (job experts specify

effective and ineffective job-related behaviours)

2. Develop performance dimensions (experts

group incidents into clusters)

3. Reallocate incidents (different experts group

incidents into same clusters; retain incidents

similarly assigned twice)

1. Generate critical incidents (job experts specify

effective and ineffective job-related behaviours)

2. Develop performance dimensions (experts

group incidents into clusters)

3. Reallocate incidents (different experts group

incidents into same clusters; retain incidents

similarly assigned twice)

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Appraisal MethodsBehaviourally Anchored Rating Scales (2 of 2)

4. Scale the incidents (from effective to

ineffective behaviour)

5. Develop final instrument (6-7 incidents

used as behavioural anchors for each

performance dimension)

4. Scale the incidents (from effective to

ineffective behaviour)

5. Develop final instrument (6-7 incidents

used as behavioural anchors for each

performance dimension)

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Appraisal MethodsBehaviourally Anchored Rating Scales

Advantages

-more accurate measure

-clearer standards

-assists feedback

-independent dimensions

-consistency

Advantages

-more accurate measure

-clearer standards

-assists feedback

-independent dimensions

-consistency

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Appraisal MethodsManagement by Objectives (MBO)

1. Set the organization’s goals

2. Set departmental goals

3. Discuss departmental goals

4. Define expected results (individual)

5. Performance reviews: measure the results

6. Provide feedback

1. Set the organization’s goals

2. Set departmental goals

3. Discuss departmental goals

4. Define expected results (individual)

5. Performance reviews: measure the results

6. Provide feedback

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Appraisal MethodsManagement by Objectives (MBO)

Problems

1. Setting unclear, unmeasurable objectives

2. Time consuming

3. Tug of war between manager and employee

Problems

1. Setting unclear, unmeasurable objectives

2. Time consuming

3. Tug of war between manager and employee

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Performance Appraisal: Problems and Solutions

Reliability

-criteria must be precise enough to result in consistent

measures when applied across many employees by

many different raters

Reliability

-criteria must be precise enough to result in consistent

measures when applied across many employees by

many different raters

Validity-criteria must be accurate to be valid; must be relevant to the job; broad enough to cover all aspects of job; specific

Validity-criteria must be accurate to be valid; must be relevant to the job; broad enough to cover all aspects of job; specific

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-unclear standards

-halo effect

-central tendency

-leniency/strictness

-unclear standards

-halo effect

-central tendency

-leniency/strictness

Rating Scale Problems

-appraisal bias

-recency effect

-similar-to-me bias

-appraisal bias

-recency effect

-similar-to-me bias

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Avoiding Appraisal Problems

Ensure rater

awareness

of problems

Ensure rater

awareness

of problems

Choose

the right

appraisal tool

Choose

the right

appraisal tool

Train

supervisors

to eliminate

rating errors

Train

supervisors

to eliminate

rating errors

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Who Should Do the Appraising?

-immediate supervisor-peers-rating committees-self-employees/subordinates-360-degree appraisal (all of the above)

-immediate supervisor-peers-rating committees-self-employees/subordinates-360-degree appraisal (all of the above)

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The Appraisal InterviewTypes of Appraisal Interview

• performance is satisfactory; employee is

promotable• performance is satisfactory; employee is

not promotable• performance is unsatisfactory, but correctable

• performance is satisfactory; employee is

promotable• performance is satisfactory; employee is

not promotable• performance is unsatisfactory, but correctable

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The Appraisal InterviewHow to Conduct an Appraisal Interview

• be direct and specific• don’t get personal• encourage the person to talk• develop an action plan

• be direct and specific• don’t get personal• encourage the person to talk• develop an action plan

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The Appraisal InterviewHow to Handle a Defensive Employee

• recognize that defensive behaviour is normal

• never attack a person’s defenses

• postpone action

• recognize human limitations

• recognize that defensive behaviour is normal

• never attack a person’s defenses

• postpone action

• recognize human limitations

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Role of Appraisals in Managing Performance

• central role in performance management• quality-based appraisals:

• avoid forced distribution• use objective performance criteria• 360-degree feedback• atmosphere of partnership and constructive

advice

• central role in performance management• quality-based appraisals:

• avoid forced distribution• use objective performance criteria• 360-degree feedback• atmosphere of partnership and constructive

advice

Chapter 10

Business

Transcript of Chapter 10