Appraising and Improving Performance

Managing Human Resources

Belcourt * Bohlander * Snell
Copyright 2008 by Nelson, a division of Thomson Canada Limited. All rights reserved.

5th Canadian edition

PowerPoint Presentation by Monica Belcourt, York University and Charlie Cook, The University of West Alabama

Objectives
After studying this chapter, you should be able to: 1. Explain the purposes of performance appraisals and the reasons they can sometimes fail. 2. Identify the characteristics of an effective appraisal program. 3. Describe the different sources of appraisal information. 4. Explain the various methods used for performance evaluation. 5. Outline the characteristics of an effective performance appraisal interview.
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Performance Appraisal and Other HRM Functions

Performance appraisal judges effectiveness of recruitment efforts Performance appraisal validates selection function

Recruitment

Quality of applicants determines feasible performance standards Selection should produce workers best able to meet job requirements Training and development aids achievement of performance standards Compensation can affect appraisal of performance Appraisal standards and methods may be subject to negotiation
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Selection

Performance appraisal determines training needs

Training and Development Compensation Management Labour Relations

Performance appraisal is a factor in determining pay

Performance appraisal justifies personnel actions

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Performance Appraisal Programs

Performance Appraisal
 A process, typically performed annually by a supervisor for a subordinate, designed to help employees understand their roles, objectives, expectations, and performance success.

Performance management
 The process of creating a work environment in which people can perform to the best of their abilities.

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Performance Appraisal
Appraisal Programs

Administrative
Compensation Job Evaluation EE Support

Developmental
Ind. Evaluation Training Career Planning

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Reasons Appraisal Programs Sometimes Fail

Lack of top-management information and support Unclear performance standards Rater bias Too many forms to complete Use of the appraisal program for conflicting (political) purposes.

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Managerial Issues Concerning Appraisals

1. There is little face-to-face discussion between the manager and the employee being appraised. 2. The relationship between the employees job description and the criteria on the appraisal form isnt clear. 3. Managers feel that little or no benefit will be derived from the time and energy spent in the process, or they are concerned only with bad performances. 4. Managers dislike the face-to-face confrontation of appraisal interviews.

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Managerial Issues Concerning Appraisals (cont d)

5. Managers are not sufficiently adept at rating employees or providing them with appraisal feedback. 6. The judgmental role of appraisal conflicts with the helping role of developing employees. 7. The appraisal is just a once-a-year event, and there is little follow-up afterward.

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Performance Standards Characteristics

Strategic Relevance Individual standards directly relate to strategic goals.

Criterion Deficiency

Standards capture all of an individuals contributions.

Criterion Performance capability is not Contamination reduced by external factors. Reliability (Consistency) Standards are quantifiable, measurable, and stable.

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Guidelines for Appraisals

Performance ratings must be job-related. Employees must be given a written copy of their job standards in advance of appraisals. Managers who conduct the appraisal must be able to observe the behavior they are rating. Supervisors must be trained to use the appraisal form correctly. Appraisals should be discussed openly with employees and counseling or corrective guidance offered. An appeals procedure should be established to enable employees to express disagreement with the appraisal.
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Sources of Performance Appraisal

Manager and/or Supervisor
 Appraisal done by an employees manager and reviewed by a manager one level higher.

Self-Appraisal
 Appraisal done by the employee being evaluated, generally on an appraisal form completed by the employee prior to the performance interview.

Subordinate Appraisal
 Appraisal of a superior by an employee, which is more appropriate for developmental than for administrative purposes.
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Sources of Performance Appraisal

Peer Appraisal
 Appraisal by fellow employees, compiled into a single profile for use in an interview conducted by the employees manager.  Why peer appraisals are used more often:
1. Peer ratings are simply a popularity contest. 2. Managers are reluctant to give up control over the appraisal process. 3. Those receiving low ratings might retaliate against their peers. 4. Peers rely on stereotypes in ratings.

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Sources of Performance Appraisal

Team Appraisal
 Based on TQM concepts, that recognizes team accomplishment rather than individual performance.

Customer Appraisal
 A performance appraisal that, like team appraisal, is based on TQM concepts and seeks evaluation from both external and internal customers.

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360-Degree Performance Appraisal System Integrity Safeguards

Assure anonymity Make respondents accountable Prevent gaming of the system. Use statistical procedures Identify and quantify biases

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Training Performance Appraisers

Common rater-related errors raterError of central tendency Leniency or strictness errors Similar-toSimilar-to-me errors Recency errors Contrast and halo errors
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Rater Errors
Error of Central Tendency
 A rating error in which all employees are rated about average.

Leniency or Strictness Error

 A rating error in which the appraiser tends to give all employees either unusually high or unusually low ratings.

Recency Error
 A rating error in which appraisal is based largely on an employees most recent behaviour rather than on behaviour throughout the appraisal period.
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Rater Errors
Contrast Error
 A rating error in which an employees evaluation is biased either upward or downward because of comparison with another employee just previously evaluated.

Similar-to-Me Error
 An error in which an appraiser inflates the evaluation of an employee because of a mutual personal connection.

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Rater Errors: Training and Feedback

Rating Error Training
 Observe other managers making errors  Actively participate in discovering their own errors  Practice job-related tasks to reduce the errors they tend to make

Feedback Skills Training

 Communicating effectively  Diagnosing the root causes of performance problems  Setting goals and objectives

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Highlights in HRM
Supervisors Checklist for the Performance Appraisal
Scheduling 1. Schedule the review and notify the employee ten days to two weeks in advance. 2. Ask the employee to prepare for the session by reviewing his or her performance, job objectives, and development goals. 3. Clearly state that this will be the formal annual performance appraisal. Preparing for the Review 1. Review the performance documentation collected throughout the year. Concentrate on work patterns that have developed. 2. Be prepared to give specific examples of above- or below-average performance. 3. When performance falls short of expectations, determine what changes need to be made. If performance meets or exceeds expectations, discuss this and plan how to reinforce it. 4. After the appraisal is written, set it aside for a few days and then review it again. 5. Follow whatever steps are required by your organizations performance appraisal system. Conducting the Review 1. Select a location that is comfortable and free of distractions. The location should encourage a frank and candid conversation. 2. Discuss each topic in the appraisal one at a time, considering both strengths and shortcomings. 3. Be specific and descriptive, not general and judgmental. Report occurrences rather than evaluating them. 4. Discuss your differences and resolve them. Solicit agreement with the evaluation. 5. Jointly discuss and design plans for taking corrective action for growth and development. 6. Maintain a professional and supportive approach to the appraisal discussion.
Highlights 8.1

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Performance Appraisal Methods

Graphic Rating Scale Mixed Standard Scale

Trait Methods

ForcedForced-Choice

Essay

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Trait Methods
Graphic Rating-Scale Method
 A trait approach to performance appraisal whereby each employee is rated according to a scale of individual characteristics.

Mixed-Standard Scale Method

 An approach to performance appraisal similar to other scale methods but based on comparison with (better than, equal to, or worse than) a standard.

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Highlights in HRM
Graphic Rating Scale with Provision for Comments

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Highlights 8.2

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Highlights in HRM
Example of a Mixed-Standard Scale

Highlights 8.3

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Trait Methods
Forced-Choice Method
 Requires the rater to choose from statements designed to distinguish between successful and unsuccessful performance.
 1. ______ a) Works hard  2. ______ a) Shows initiative  3. ______ a) Produces poor quality _____ b) Works quickly _____ b) Is responsive to customers _____ b) Lacks good work habits

Essay Method
 Requires the rater to compose a statement describing employee behaviour.

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Behavioural Methods
Critical Incident

Behavioural Checklist

Behavioural Methods

Behaviourally Anchored Rating Scale (BARS) Behaviour Observation Scale (BOS)

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Behavioural Methods
Critical Incident Method
 Critical incident


An unusual event that denotes superior or inferior employee performance in some part of the job

 The manager keeps a log or diary for each employee throughout the appraisal period and notes specific critical incidents related to how well they perform.

Behavioural Checklist Method

 The rater checks statements on a list that the rater believes are characteristic of the employees performance or behaviour.

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Behavioural Methods
Behaviourally Anchored Rating Scale (BARS)
 Consists of a series of vertical scales, one for each dimension of job performance; typically developed by a committee that includes both subordinates and managers.

Behaviour Observation Scale (BOS)

 A performance appraisal that measures the frequency of observed behaviour (critical incidents).  Preferred over BARS for maintaining objectivity, distinguishing good performers from poor performers, providing feedback, and identifying training needs.

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Highlights in HRM
Example of a BARS for Municipal Fire Companies
FIREFIGHTING STRATEGY: Knowledge of Fire Characteristics. [EDITOR USE HRM 4 FROM CDN 5TH FOR CORRECT SPELLING]

Highlights 8.4 Source: Adapted from Landy, Jacobs, and Associates. Reprinted with permission. Copyright 2008 by Nelson, a division of Thomson Canada Ltd. 828

Highlights in HRM

Highlights 8.4

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Results Methods
Productivity Measures
 Appraisals based on quantitative measures (e.g., sales volume) that directly link what employees accomplish to results beneficial to the organization.
Criterion contamination  Focus on short-term results


Management by Objectives (MBO)

 A philosophy of management that rates performance on the basis of employee achievement of goals set by mutual agreement of employee and manager.

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Highlights in HRM
The Balanced Scorecard

Source: Robert Kaplan and David Norton, Strategic Learning and the Balanced Scorecard, Strategy & Leadership 24, no. 5 (September/October 1996): 1824. Copyright 2008 by Nelson, a division of Thomson Canada Ltd.

Highlights 8.6

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The Balanced Scorecard

The appraisal focuses on four related categories
 Financial, customer, processes, and learning

Ensuring the methods success

Translate strategy into a scorecard of clear objectives. Attach measures to each objective. Cascade scorecards to the front line. Provide performance feedback based on measures. Empower employees to make performance improvements. Reassess strategy.
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Summary of Appraisal Methods

Trait Methods
 Advantages
Are inexpensive to develop  Use meaningful dimensions  Are easy to use


 Disadvantages
Have high potential for rating errors  Are not useful for employee counseling  Are not useful for allocating rewards  Are not useful for promotion decisions


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Summary of Appraisal Methods (cont d)

Behavioural Methods
 Advantages
Use specific performance dimensions  Are acceptable to employees and superiors  Are useful for providing feedback  Are fair for reward and promotion decisions


 Disadvantages
Can be time-consuming to develop/use  Can be costly to develop  Have some potential for rating error


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Summary of Appraisal Methods (cont d)

Results Methods
 Advantages
Have less subjectivity bias  Are acceptable to employees and superiors  Link individual to organizational performance  Encourage mutual goal setting  Are good for reward and promotion decisions


 Disadvantages
Are time-consuming to develop/use  May encourage short-term perspective  May use contaminated criteria  May use deficient criteria


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Appraisal Interviews
Types of Appraisal Interviews
Tell and Sell - persuasion Tell and Listen - nondirective Problem Solving - focusing the interview on problem resolution and employee development

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Appraisal Interview Guidelines

Invite Participation Change Behaviour Minimize Criticism Establish Goals Ask for a Self-Assessment SelfProblem Solving Focus Express Appreciation Be Supportive

Follow Up Day by Day

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Highlights in HRM

Highlights 8.9 Source: Scott Snell, Cornell University. Copyright 2008 by Nelson, a division of Thomson Canada Ltd. 838

Key Terms
behaviour observation scale (BOS) behaviourally anchored rating scale (BARS) contrast error critical incident customer appraisal error of central tendency essay method forced-choice method graphic rating-scale method leniency or strictness error management by objectives (MBO)
Copyright 2008 by Nelson, a division of Thomson Canada Ltd.

manager and/or supervisor appraisal mixed-standard scale method peer appraisal performance appraisal performance management recency error self-appraisal similar-to-me error subordinate appraisal team appraisal

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