12 th Edition Part 3 Training and Development Chapter 9 Performance Management and Appraisal 93 Basic Concepts in Performance Management and Appraisal Performance Appraisal Setting work standards, assessing performance, and providing feedback to employees to motivate, correct, and continue their performance. Performance Management An integrated approach to ensuring that an employees performance supports and contributes to the organizations strategic aims. 95 Defining the Employees Goals and Work Standards Set SMART goals Assign challenging/ doable goals Assign specific goals Guidelines for Effective Goal Setting Assign measurable goals Encourage participation 97 An Introduction to Appraising Performance 1 Is useful in career planning. Plays an integral role in performance management. Why Appraise Performance? Is basis for pay and promotion decisions. Helps in correcting deficiencies and reinforcing good performance. 2 3 4 98 (Un)Realistic Appraisals Motivations for Soft Appraisals The fear of having to hire and train someone new. The unpleasant reaction of the appraisee. An appraisal process thats not conducive to candor (Honesty, openness) Hazards of Soft Appraisals Employee loses the chance to improve before being discharged or forced to change jobs. Lawsuits arising from dismissals involving inaccurate performance appraisals. 99 Performance Appraisal Roles The Supervisors Role 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 910 Performance Appraisal Roles (contd) The HR Departments Role 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 effectiveness and compliance with EEO laws. 911 Effectively Appraising Performance 1 Appraising performance Steps in Appraising Performance Defining the job and performance criteria Providing feedback session 2 3 912 Designing the Appraisal Tool What to Measure? Work output (quality and quantity) Personal competencies Goal (objective) achievement How to Measure? Generic dimensions Actual job duties Behavioral competencies
913 Performance Appraisal Methods 1 2 3 4 5 Alternation ranking Graphic rating scale Paired comparison Forced distribution Critical incident 6 7 8 9 10 Behaviorally anchored rating scales (BARS) Narrative forms Management by objectives (MBO) Computerized and Web-based performance appraisal Merged methods Appraisal Methodologies 914 Performance Appraisal Methods Graphic rating scale A scale that lists a number of traits and a range of performance for each that is used to identify the score that best describes an employees level of performance for each trait.
915 Graphic Rating Scale with Space for Comments Figure 93 920 Performance Appraisal Methods (contd) Alternation ranking method Ranking employees from best to worst on a particular trait, choosing highest, then lowest, until all are ranked.
921 Alternation Ranking Scale 922 Performance Appraisal Methods (contd) Paired comparison method Ranking employees by making a chart of all possible pairs of the employees for each trait and indicating which is the better employee of the pair. 923 Ranking Employees by the Paired Comparison Method Figure 97 Note: + means better than. means worse than. For each chart, add up the number of 1s in each column to get the highest-ranked employee. 924 Performance Appraisal Methods (contd) Forced distribution method Similar to grading on a curve; predetermined percentages of ratees are placed in various performance categories. Example: 15% high performers 20% high-average performers 30% average performers 20% low-average performers 15% low performers
925 Performance Appraisal Methods (contd) Critical Incident Method Keeping a record of uncommonly good or undesirable examples (critical incidents) of an employees work- related behaviour and reviewing it with the employee at predetermined times, using the incidents as examples.
926 TABLE 91 Examples of Critical Incidents for Assistant Plant Manager Continuing Duties Targets Critical Incidents Schedule production for plant 90% utilization of personnel and machinery in plant; orders delivered on time Instituted new production scheduling system; decreased late orders by 10% last month; increased machine utilization in plant by 20% last month Supervise procurement of raw materials and on inventory control Minimize inventory costs while keeping adequate supplies on hand Let inventory storage costs rise 15% last month; over-ordered parts A and B by 20%; under-ordered part C by 30% Supervise machinery maintenance No shutdowns due to faulty machinery Instituted new preventative maintenance system for plant; prevented a machine breakdown by discovering faulty part 927 Performance Appraisal Methods (contd) Narrative Forms All or part of the written appraisal may be in narrative form. The supervisor is responsible for assessing the employees past performance and the required areas of improvement. The supervisors narrative assessment aids the employee in understanding where his or her performance was good or bad , and how to improve the performance. 929 Performance Appraisal Methods (contd) Behaviorally anchored rating scale (BARS) An appraisal method that combines the benefits of narratives, critical incidents and quantified scales by anchoring a rating scale with specific behavioral examples of good and poor performance. Developing a BARS: Generate critical incidents Develop performance dimensions Reallocate incidents Scale the incidents Develop a final instrument 930 Performance Appraisal Methods (contd) Advantages of using a BARS A more accurate gauge Clearer standards Feedback Independent dimensions Consistency
931 933 Management by Objectives (MBO) A comprehensive and formal organizationwide goal- setting and appraisal program requiring: 1. Setting of organizations goals 2. Setting of departmental goals 3. Discussion of departmental goals 4. Defining expected results (setting individual goals) 5. Conducting periodic performance reviews 6. Providing performance feedback 934 Using MBO Setting unclear objective Conflict with subordinates over objectives Potential Problems with MBO Time-consuming appraisal process 935 Computerized and Web-Based Performance Appraisal Systems Allow managers to keep notes on subordinates. Notes can be merged with employee ratings. Software generates written text to support appraisals. Allows for employee self-monitoring and self- evaluation.
Electronic Performance Monitoring (EPM) Systems Use computer network technology to allow managers access to their employees computers and telephones. Managers can monitor the employees rate, accuracy, and time spent working online. 937 Dealing with Performance Appraisal Problems Unclear standards Leniency or strictness Halo effect Potential Rating Scale Appraisal Problems Central tendency Bias A Graphic Rating Scale with Unclear Standards Note: For example, what exactly is meant by good, quantity of work, and so forth? Potential Rating Scale Appraisal Problems Unclear standards An appraisal that is too open to interpretation. 939 Potential Rating Scale Appraisal Problems (contd) Halo effect Occurs when a supervisors rating of a subordinate on one trait biases the rating of that person on other traits.
Central tendency A tendency to rate all employees the same way, such as rating them all average. 940 Potential Rating Scale Appraisal Problems (contd) Strictness/leniency The problem that occurs when a supervisor has a tendency to rate all subordinates either high or low.
Bias The tendency to allow individual differences such as age, race, and sex to affect the appraisal ratings employees receive. 941 Guidelines for Effective Appraisals Know the problems Get agreement on a plan Use the right tool How to Avoid Appraisal Problems Keep a diary Be fair 943 Choosing the Right Appraisal Tool Accessibility Accuracy Ease-of-use Employee acceptance Criteria for Choosing an Appraisal Tool 946 Who Should Do the Appraising? Self-rating Subordinates 360-degree feedback Potential Appraisers Immediate supervisor Peers Rating committee 947 The Appraisal Interview SatisfactoryPromotable SatisfactoryNot Promotable UnsatisfactoryCorrectable UnsatisfactoryUncorrectable Types of Appraisal Interviews 949 Appraisal Interview Guidelines Talk in terms of objective work data Get agreement Dont get personal Encourage the person to talk Guidelines for Conducting an Interview 951 Handling Defensive Responses 1 Recognize your own limitations. Never attack a persons defenses. How to Handle a Defensive Subordinate Recognize that defensive behavior is normal. Postpone action. 2 3 4 952 How to Deliver Criticism 1 2 3 4 5 How to Criticize a Subordinate Criticize in private, and do it constructively. Do it in a manner that lets the person maintain his or her dignity and sense of worth. Give daily feedback so that the review has no surprises. Never say the person is always wrong. Criticism should be objective and free of biases. 953 The Appraisal Interview (contd) How to ensure the interview leads to improved performance Dont make the subordinate feel threatened during the interview. Give the subordinate the opportunity to present his or her ideas and feelings and to influence the course of the interview. Have a helpful and constructive supervisor conduct the interview. Offer the subordinate the necessary support for development and change. 954 Formal Written Warnings Purposes of a Written Warning To shake your employee out of bad habits. To help you defend your rating, both to your own boss and (if needed) to the courts. A Written Warning Should: Identify standards by which employee is judged. Make clear that employee was aware of the standard. Specify deficiencies relative to the standard. Indicate employees prior opportunity for correction. 955 Creating the Total Performance Management Process What is our strategy and what are our goals? What does this mean for the goals we set for our employees, and for how we train, appraise, promote, and reward them? What will be the technological support requirements?
956 Performance Management Performance Management Is the continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning their performance with the organizations goals. How Performance Management Differs From Performance Appraisal A continuous process for continuous improvement A strong linkage of individual and team goals to strategic goals A constant reevaluation and modification of work processes 957 Basic Building Blocks of Performance Management Direction Sharing Goal Alignment Ongoing Performance Monitoring Rewards, Recognition, and Compensation Coaching and Development Support Ongoing Feedback 958 Why Performance Management? Total Quality Management Resolution of Appraisal Issues Strategic Goal Alignment The Performance Management Approach 959 Using Information Technology to Support Performance Management Assign financial and nonfinancial goals to each teams activities along the strategy map chain of activities leading up to the companys overall strategic goals. Inform all employees of their goals. Use IT-supported tools like scorecard software and digital dashboards to continuously monitor and assess each teams and employees performance. Take corrective action at once.
961 K E Y T E R M S performance appraisal graphic rating scale alternation ranking method paired comparison method forced distribution method critical incident method behaviorally anchored rating scale (BARS) electronic performance monitoring (EPM) unclear standards halo effect central tendency strictness/leniency bias appraisal interview performance management