Strategic human resource management ch09

Basic Concepts in Performance Management and AppraisalPerformance Appraisal: Setting work standards, assessing performance, and providing Performance Management: An integrated approach

Performance Management and Appraisal

Basic Concepts in Performance Management and Appraisal

Performance Appraisal:

Setting work standards, assessing

performance, and providing

Performance Management:

An integrated approach to ensuring that an employee’s

Comparing Performance Appraisal

and Performance Management

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Why Performance Management?

Total Quality

Appraisal Issues

Strategic Focus

The Performance Management Approach

Why Performance Management?

• Increasing use of performance management by

 The necessity in today’s globally competitive

industrial environment for every employee’s efforts to focus on helping the company to achieve its strategic goals

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FIGURE The Building Blocks of an Effective Performance Management Process

Ongoing performance monitoring

Performance assessment (appraisal) Rewards, recognition, and compensation Workflow, process control, and return on investment management

Defining the Employee’s Goals

and Work Standards

Assign

Specific

Goals

Encourage Participation

Assign Measurable Goals

Assign Challenging but Doable

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

Performance Appraisal Roles

 Must understand and

avoid problems that can

cripple appraisals

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Performance Appraisal Roles (cont’d)

• 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 effectiveness and

compliance with EEO laws

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

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An Introduction to Appraising Performance

1

Appraising performance

Steps in Appraising Performance

Defining the job

Providing feedback

2

3

Performance Appraisal Methods

Merged Methods

Appraisal Methodologies

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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 employee’s level of

performance for each trait

Graphic Rating Scale with Space

for Comments

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Portion of an Administrative Secretary’s Sample

Performance Appraisal Form

Figure 9–4

Source: James Buford Jr., Bettye Burkhalter, and Grover Jacobs, “Link Job Description

to Performance Appraisals,” Personnel Journal, June 1988, pp 135–136.

Performance Management Outline

Performance Management Outline

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Figure 9–5b

Performance Management Outline (cont’d)

Performance Management Outline (cont’d)

Source: www.cwru.edu.

Performance Management Outline (cont’d)

Performance Management Outline (cont’d)

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Performance Appraisal Methods (cont’d)

• Alternation ranking method

 Ranking employees from best to worst on a

particular trait, choosing highest, then lowest, until all are ranked

• 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

Alternation Ranking Scale

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Ranking Employees by the Paired Comparison Method

Figure 9–7

Note: + means “better than.” − means “worse than.” For each chart, add up the

number of 1’s in each column to get the highest-ranked employee.

Performance Appraisal Methods (cont’d)

• Forced distribution method

 Similar to grading on a curve; predetermined

percentages of ratees are placed in various

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TABLE Examples of Critical Incidents for a Plant Manager

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

on hand

Let inventory storage costs rise 15% last month; overordered parts “A” and “B” by 20%;

to faulty machinery Instituted new preventative maintenance system for plant;

prevented a machine breakdown

by discovering faulty part

Behaviorally Anchored Rating Scale (BARS) Developing a BARS

 Clearer standards

 Feedback

 Independent dimensions

 Consistency

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Example of a Behaviorally Anchored Rating Scale for the Dimension

Salesmanship Skill

Figure 9–9

Source:Walter C Borman, “Behavior

Based Rating,” in Ronald A Berk (ed.),

Performance Assessment: Methods and Applications (Baltimore, MD: Johns

Hopkins University Press, 1986), p 103.

BARS for Grocery Clerks

• Researchers developed a BARS for grocery clerks by collecting critical incidents in 8 areas (rating scale given below):

•Knowledge and judgment

•Conscientiousness

•Skill in human relations

•Skill in operation of register

•Skill in bagging

•Ability of checkout work

•Skill in monetary transactions

•Observational ability

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Management by Objectives (MBO)

• A comprehensive and formal organizationwide

goal-setting and appraisal program requiring:

1. Setting of organization’s 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

Using MBO

Problems with

MBO

Setting unclear objectives

Conflict with

Time-consuming appraisal process

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Computerized and Web-Based

Performance Appraisal

• Performance appraisal software programs

 Keep notes on subordinates during the year

 Electronically rate employees on a series of

performance traits

 Generate written text to support each part of the

appraisal

• Electronic performance monitoring (EPM)

 Having supervisors electronically monitor the

amount of computerized data an employee is processing per day, and thereby his or her performance

Halo Effect

Potential Rating Scale Appraisal Problems

Central

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A Graphic Rating Scale with Unclear Standards

Table 9–2

Note: For example, what exactly is meant by

“good,” “quantity of work,” and so forth?

FIGURE Sample Rating Errors

Focusing on one or two critical incidents

Lower rating for less challenge Nobody can be that good (Strictness)

Similarity Being influenced by prior performance

Rating for retention Style differences Emotional rating

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Use the Right Tool

How to Avoid Appraisal Problems

Train Supervisors

Keep

a Diary

TABLE Important Advantages and Disadvantages of Appraisal Tools

Tool Advantages Disadvantages

BARS Provides behavioral “anchors.”

BARS is very accurate

Difficult to develop

Alternation ranking Simple to use (but not as simple as

graphic rating scales) Avoids central tendency and other problems of rating scales.

Can cause disagreements among employees and may be unfair if all employees are, in fact, excellent.

Forced distribution

method

End up with a predetermined number or % of people in each group

Employees’ appraisal results depend

on your choice of cutoff points

Critical incident

method

Helps specify what is “right” and

“wrong” about the employee’s performance; forces supervisor to

Difficult to rate or rank employees relative to one another

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Who Should Do the Appraising?

Self-Rating

Subordinates

360-Degree Feedback

Potential Appraisers

Immediate Supervisor

Peers

Rating Committee

The Appraisal Interview

Satisfactory—Promotable

Satisfactory—Not Promotable

Unsatisfactory—Correctable

Unsatisfactory—Uncorrectable Types of Appraisal

Interviews

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The Appraisal Interview (cont’d)

Talk in terms

of objective

work data.

Don’t tiptoe around.

Don’t get personal.

Encourage the person to

talk.

Guidelines for Conducting an Interview

The Appraisal Interview (cont’d)

1

Recognize your own limitations

Never attack a person’s defenses

How to Handle a Defensive Subordinate

Recognize that defensive behavior is normal

Postpone action

2

3

4

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The Appraisal Interview (cont’d)

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.

The Appraisal Interview (cont’d)

How to Ensure Improved Performance

Give the subordinate the opportunity to present his or her ideas and feelings.

Don’t make the subordinate feel threatened during the interview.

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.