Performance Management and Appraisal 9 Copyright © 2013 Pearson EducationChapter 6-1.

Copyright © 2013 Pearson Education

Performance Management and Appraisal

9

Chapter 6-1


Learning Objectives

1. Define performance management and discuss how it differs from performance appraisal.

2. Describe the appraisal process.

3. Set effective performance appraisal standards.

Chapter 9-2


Learning Objectives

4. Develop, evaluate, and administer performance appraisal tools.

5. Explain and illustrate the problems to avoid in appraising performance.

6. Perform an effective appraisal interview.

Chapter 9-3


Define performance management

and discuss how itdiffers from performance

appraisal.

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Basic Concepts in Performance Management and Appraisal

Performance Appraisal:Setting work standards, assessing actual performance, and providing feedback to employees to motivate, correct, and continue their performance.

Performance Management: Performance management has to do with creating an organizational system that is fair, effective, and widely understood by all. An integrated approach to ensuring that an employee’s performance supports and contributes to the organization’s strategic aims by establishing a valid and reliable process connecting the employees to it..

ComparingPerformance Appraisal

and Performance Management


Describe the appraisal process.

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The Performance Appraisal Process

• Why appraise performance?• Continuous feedback• Performance management

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Effective appraisals begin before the actual appraisal, with the manager defining the employee’s job and performance criteria. Defining the job means making sure that you and your subordinate agree on his or her duties and job standards and on the appraisal method you will use.

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To summarize the purpose of performance appraisal :

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Is useful in career planning

Plays an integral role in performance management

Why Appraise Performance?

Is the basis for pay and promotion decisions

Helps in correcting deficiencies and reinforcing good performance

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3

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Copyright © 2013 Pearson Education Chapter 9-9

Appraising performance is important for several reasons. Many employers still base pay and promotions on employee appraisals. Appraisals play an integral role in the employer's performance management process. The appraisal lets the boss and subordinate develop a plan for correcting any deficiencies while reinforcing correct actions. Appraisals are a useful career planning tool. In addition, appraisals play a role in identifying training and development needs. In addition, training and development activities are based on the appraisal system.

Aligning the employee’s efforts with the job’s standards should be a continuous process. When you see a performance problem, the time to take action is immediately. Similarly, when someone does something well, the best reinforcement comes immediately, not six months later.

Finally, providing continuous feedback and making improvements to how employees and employers do things contributes to organizational success. Performance management includes continuously adjusting how an organization and its team members do things. Team members who need coaching and training receive it, and procedures that need changing are changed.


Set effective performance appraisal standards.

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Defining the Employee’s Goals and Work Standards

Assign Specific Goals

Encourage Participation

Assign Measurable Goals

Assign Challenging but Doable Goals

Guidelines for Effective Goal Setting

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Setting Goals

• SMART Goals:

- Specific, and clearly state the desired results

- Measurable in answering “how much”

- Attainable, and not too tough or too easy

- Relevant to what’s to be achieved

- Timely in reflecting deadlines and milestones

Encourage participation- employees should always have the opportunity to have meaningful input into the goals they are to achieve


Employee’s Goals and Performance Standards

• Basing appraisal standards on required competencies. Competencies are often arranged according to the basic technical, motor, intellectual, and other skills needed to be successful in a job. In addition, the minimum level of each skill needed should be specified.

• The role of job descriptions: Ideally, what to appraise and how to appraise it will be obvious from the job description. For the criteria to appraise, the job description should list the job’s duties or tasks, including how critical each is to the job and how often it’s performed.

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Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

9–14

Self-rating

Subordinates

360-degree feedback

Potential Appraisers

Immediate supervisor

HR

Peers

Who Should Do the Appraising?

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Performance Appraisal Roles

• Supervisors- Usually do the actual appraising- Must be familiar with basic appraisal techniques- Must understand and avoid problems that can cripple

appraisals- Must know how to conduct appraisals fairly

Rating committees consist of multiple raters, typically the employee’s immediate supervisor and three or four other supervisors.

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(cont)

• The HR Department- Serves a policy-making and advisory role- Provides advice and assistance regarding the appraisal

tool to use- Trains supervisors to improve their appraisal skills- Monitors the appraisal system’s effectiveness- Corrects any deviations from procedures


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• Peer appraisal

Performance appraisal by peers is becoming popular.

Studies found that peer appraisal has a positive impact on improving open communication, task motivation, cohesion and satisfaction.

• Self ratings :

Some employers ask employee to evaluate him self.

The basic problem is that employees usually rate themselves higher than do their supervisors or peers.

(cont)


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• Appraisal by subordinatesStudies found that managers who received upward feedback poor or moderate showed significant improvements. And managers who met their subordinates to discusse their assessment improved than who did not.

• 360-degree feedbackIt means that the employer collects performance information from all around the employee:

Supervisors, peers, customers, self-ratings

Results are mixed

Most employees prefer this approach

(cont)


Develop, evaluate, and administer at least four

performance appraisal tools.

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Designing the Appraisal Tool

• What to Measure?Managers must decide which job performance aspects to measure. Such aspects include generic dimensions, actual job duties, or behaviorally recognizable competencies.

- Generic dimensions – quality, quantity, and timeliness of work

- Developing one’s competencies, or achieving one’s goals

• The graphic rating scale method is the simplest and most popular performance appraisal technique. First, a scale is used to list a number of traits and a range of performance for each. Then the employee is rated by identifying the score that best describes his/her performance level for each trait.


Performance Appraisal Tools

• Alternation ranking • Forced distribution • Critical incident • Behaviorally Anchored Rating Scales (BARS)

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Performance Appraisal Tools

• Management by objectives (MBO)• Computerized and web-based

performance appraisal• Electronic performance monitoring (EPM)

Chapter 9-22


The Alternation Ranking Method ranks employees from best to worst on a specific trait, choosing highest, then lowest, until all are ranked.

Forced Distribution Method – Predetermined percentages of employee ratings are placed in various performance categories, similar to grading on a curve.

Critical Incident Method – A supervisor keeps a record of uncommonly good and/or undesirable examples of an employee’s work-related behavior. The supervisor then reviews the record with the employee at predetermined times.

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Behaviorally Anchored Rating Scale (BARS)

Developing a BARS Advantages of BARS

1. Generate critical incidents

2. Develop performance dimensions

3. Reallocate incidents

4. Scale the incidents

5. Develop a final instrument

1. A more accurate gauge

2. Clearer standards

3. Feedback

4. Independent dimensions

5. Consistency

Behaviorally Anchored Rating Scales (BARS) is a method that combines the benefits of, critical incidents, and quantified scales. It does so by anchoring a scale with specific behavioral examples of good or poor performance.

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Management by Objectives (MBO) – The manager sets specific measurable goals with each employee and then periodically discusses the employee’s progress toward them. The process consists of six steps: 1. set organizational goals2. set departmental goals3. discuss4. define expected results5. conduct performance reviews6. provide feedback

A computerized and web-based performance appraisal approach generally enables managers to keep notes on subordinates during the year. It allows employee ratings on a series of performance traits, and then generates text to support each part of the appraisal.

Electronic Performance Monitoring use computer network technology to allow managers access to their employees’ computers and telephones.

Note, however, the most effective appraisal forms often merge several approaches


Explain and illustrate the problems to avoid in

appraising performance.

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Appraising Performance: Problems and Solutions

Unclear Standards

Leniency or Strictness

Halo Effect

Potential Rating-Scale Appraisal

Problems

Central Tendency

BiasRecency Effect


If standards are unclear, ambiguous traits and degrees of merit can result in an unfair appraisal.

The influence of a rater’s general impression on ratings of specific qualities is known as the halo effect. Central tendency occurs when supervisors stick to the middle of the rating scales, thus rating everyone average.

Leniency or strictness occurs if supervisors have a tendency to rate everyone either high or low.

Recency effects involve letting what the employee has done recently blind the manager to the employee’s performance over the entire year.

Bias is a tendency to allow individual differences such as age, race, and sex affect employee appraisal ratings.

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Guidelines for Effective AppraisalsDealing with appraisal problems

Know the problems

Get agreement on a plan

Use the right tool

Guidelines for effective appraisals

Keep a diary

Be fair


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Guidelines for appraisal effectiveness

• Appraisals are always interpersonal and so subject to human bias

• First The rater must learn and understand the potential appraisal problems such as central tendency and work to avoid them.

• Second, he must use the right appraisal tool or combination of tools because each tool has its pros and cons

• Third, he must keep a diary for employee’s performance over the year. Studies proved that critical incidents as they occur reduces appraisal problems.

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• Fourth, he must get agreement on a plan because the aim of the appraisal is to improve unsatisfactory performance and reinforce good performance.

Therefore the appraisal’s end product, should always be a plan for what the employee must do to improve his effort.

• Fifth, ensure fairness. Some managers ignore accuracy and honesty in performance appraisal, therefor performance standards must be clear to ensure that the appraisal is fair.

Guidelines for appraisal effectiveness Cont.


Perform an effective appraisal interview.

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Types of Appraisal Interview

Satisfactory—Promotable

Satisfactory—Not Promotable

Unsatisfactory—Correctable

Unsatisfactory—Uncorrectable

Types of Appraisal Interviews


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Satisfactory-promotable: the person’s performance is satisfactory and there is a promotion a head. In this case, The supervisor discuss the person’s career plans.

•Satisfactory-not promotable: the person’s performance is satisfactory, but the promotion is not possible. The objective here is to maintain satisfactory, so the best option is to find incentives to maintain performance.

•Unsatisfactory but correctable. The objective here is to lay out an action plan for correcting the unsatisfactory performance.

•If the performance is unsatisfactory and uncorrectable the interview is skipped

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–35

How to conduct the appraisal interview

Talk in terms of objective work data

Get agreement

Don’t get personal

Encourage the person to

talk

Guidelines for Conducting an Interview

Such as absences, productivity, quality Try to compare

person’s performance to standards

Llisten and ask open questions

Make sure the person know his weak points and put plan with him


Three concepts distinguish performance management from performance appraisal:

1.performance management is continuous2.it is goal-directed3.it is continuously re-evaluating and modifying the way

people accomplish their work

Using information technology to support performance management allows management to monitor and correct deficiencies in real time.

Performance Management


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Six basic elements of Performance Management

Direction sharing

Goal alignment

Ongoing performance monitoring

Rewards, recognition,

and compensation

Coaching and development

support

Ongoingfeedback

Performance Management SummaryPerformance management’s six basic elements:

• Direction sharing means communicating the company’s goals throughout the company. Then translating these into doable departmental, team, and individual goals.

• Goal alignment means having a method that enables managers and employees to see the link between the employees’ goals and those of their department and company.

• Ongoing performance monitoring usually includes using computerized systems that measure and then e-mail progress and exception reports. The reports are based on the person’s progress toward meeting his or her performance goals.

• Ongoing feedback includes both face-to-face and computerized feedback regarding progress toward goals.

• Coaching and developmental support should be an integral part of the feedback process.

• Recognition and rewards provide the consequences needed to keep the employee’s goal-directed performance on track.

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Performance Management and Appraisal 9 Copyright © 2013 Pearson EducationChapter 6-1.

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Transcript of Performance Management and Appraisal 9 Copyright © 2013 Pearson EducationChapter 6-1.