HRM 5th chapter 8 appraising and improving performance

Performance Appraisal and Other HRM FunctionsTraining and development aids achievement of Compensation can affect appraisal of performance Performance appraisal judges Performance appr

Managing Human Resources

Belcourt * Bohlander * Snell 5th Canadian edition

Appraising and

Improving Performance

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

5 Outline the characteristics of an effective

performance appraisal interview

Performance Appraisal and Other HRM Functions

Training and development aids achievement of

Compensation can affect appraisal of performance

Performance appraisal judges

Performance appraisal

Performance appraisal Labour Labour Appraisal standards and

methods may be subject to Appraisal standards and methods may be subject to

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

Reasons Appraisal Programs

Sometimes Fail

information and support

conflicting (political) purposes

Managerial Issues Concerning Appraisals

manager and the employee being appraised

description and the criteria on the appraisal form isn’t 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

appraisal interviews

Managerial Issues Concerning Appraisals

(cont’d)

employees or providing them with appraisal feedback

helping role of developing employees

little follow-up afterward

Strategic Relevance

Strategic Relevance Individual standards directly relate to strategic goals. Individual standards directly relate to strategic goals.

Criterion Deficiency

Criterion Deficiency Standards capture all of an individual’s contributions. Standards capture all of an individual’s contributions.

Criterion Contamination

Criterion Contamination Performance capability is not reduced by external factors. Performance capability is not reduced by external factors.

Reliability (Consistency)

Reliability (Consistency) Standards are quantifiable, measurable, and stable. Standards are quantifiable, measurable, and stable.

Performance Standards Characteristics

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

Sources of Performance Appraisal

• Manager and/or Supervisor

Appraisal done by an employee’s 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

Sources of Performance Appraisal

• Peer Appraisal

 Appraisal by fellow employees, compiled into a

single profile for use in an interview conducted by

the employee’s 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.

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

360-Degree Performance Appraisal System Integrity Safeguards

• Assure anonymity

• Make respondents accountable

• Prevent “gaming” of the system.

• Use statistical procedures

• Identify and quantify biases

Training Performance Appraisers

Recency errors

Recency errors

Leniency or strictness errors

Leniency or strictness errors

Common rater-related errors

Common rater-related errors

Error of central tendency

Error of central tendency

Similar-to-me errors

Similar-to-me errors

Contrast and halo errors

Contrast and halo errors

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 employee’s most recent behaviour rather than on behaviour throughout the appraisal period

Rater Errors

• Contrast Error

A rating error in which an employee’s 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

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

Highlights in HRM

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 organization’s 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.

Supervisor’s Checklist for the Performance Appraisal

Performance Appraisal Methods

Trait Methods

Trait Methods

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

Highlights in HRM

Example of a Mixed-Standard Scale

Trait Methods

• Forced-Choice Method

Requires the rater to choose from statements

designed to distinguish between successful and

unsuccessful performance

Behaviourally Anchored Rating Scale (BARS)

Behaviour Observation

Scale (BOS) Behaviour Observation

Scale (BOS)

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 employee’s

performance or behaviour

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

Highlights in HRM

Example of a BARS for Municipal Fire Companies

FIREFIGHTING STRATEGY: Knowledge of Fire Characteristics

[EDITOR USE HRM 4 FROM CDN 5 TH FOR CORRECT SPELLING]

Highlights in HRM

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

Highlights in HRM

The Balanced

Scorecard

The Balanced Scorecard

• The appraisal focuses on four related categories

Financial, customer, processes, and learning

• Ensuring the method’s 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.

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

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

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

Appraisal Interviews

Tell and Listen - nondirective Tell and Listen - nondirective

Types of Appraisal Interviews

Types of Appraisal Interviews

Tell and Sell - persuasion Tell and Sell - persuasion

Problem Solving - focusing the interview on problem resolution and employee development

Problem Solving - focusing the interview on problem resolution and employee development

Ask for a Self-Assessment

Highlights in HRM