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PERFORMANCE APPRAISAL

Uses of performances appraisal Who conducts appraisals Common appraisals methods Rater error or biases The appraisals interviews

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Definitions

PERFORMANCE APPRAISAL is a process of evaluating how well employees perform their jobs when compared to as et of standard and then communicating that information to those employees

PERFORMANCE APPRAISAL is a formal system of periodic review and evaluation of an individual’s or team’s job performances

PERFORMANCE APPRAISAL is the process by which organization evaluate employee job performance

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Different between PM and PA

Performance Management Processes used to identify,

encourage, measure, evaluate, improve, and reward employee performance.

Performance Appraisal The process of evaluating

how well employees perform their jobs and then communicating that information to the employees.

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Performance management should do the following:a) Provide information to employees about their performancesb) Clarify what the organization expectsc) Identify development needsd) Document performance for personnel records

Elements of employee performance:a) Quantity of output d) Presence of workb) Quality of output e) Cooperativenessc) Timeliness of output

Types of Performance Information:a) Trait-based (character/attitude) c) Result-based (accomplishment)b) Behavior-based (behavior)

Potential performances criteria problems:a) Deficient c) Objective/Subjectiveb) Contaminates

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Uses of Performance Appraisals

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Criticisms of Performance Appraisal:a) focus on the individualb) receive generally ratec) inconsistent, short-term oriented,

subjective & valuable

Two ways of Performance Appraisal:a) informal appraisalb) systematic appraisal

Timing of appraisal:a) once/twice a year/annuallyb) new employeesc) probationary employees

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Who Conduct Appraisals?

Supervisory rating of subordinates

Employee rating of managers Team/Peer ratings Self-ratings Outside raters Multisource rating/360 feedback

a) managerb) co-workers/peersc) subordinatesd) self-evaluatione) customers

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Who conduct

Advantages Disadvantages

Employee rating of managers

Helps in identifying competent managersServes to make managers more responsive to employeesCan contribute to the career development of managers

Negative reactions by managers to employee ratingsSubordinates’ fear of reprisals may inhibit them from giving realistic (negative) ratingsRatings are useful only for self-improvement purposes

Team/Peer rating

Helps improve the performance of lower-rated individualsPeers have opportunity to observe other peers.Peer appraisals focus on individual contributions to teamwork and team performance.

Can negatively affect working relationships.Can create difficulties for managers in determining individual performance.Organizational use of individual performance appraisals can hinder the development of teamwork

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Performances Appraisals Process

1. Determining specific performances appraisals goals2. Choose appropriate appraisal method3. Train supervisors4. Discuss the method used with employees5. Appraise according to the goals set earlier6. Discuss appraisals with employees7. Determine future performance goals

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Method of Appraising Performance

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1. Category Scaling Methods

Graphic Rating Scale A scale that allows the rater to indicate an employee’s

performance on a continuum of job behaviors. Aspects of performance measured:

• Descriptive categories, job duties, and behavioral dimensions• Behavioral rating scales (e.g., BARS)

Drawbacks• Restrictions on the range of possible rater responses• Differences in the interpretations of the meanings of scale items and

scale ranges by raters• Poorly designed scales that encourage rater errors• Rating form deficiencies limit effectiveness of the appraisal

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Category Rating Methods (cont’d)

Checklists A performance appraisal tool that uses a list of statements or

work behaviors that are checked by raters.• Can be quantified by applying weights to individual checklist items.

Drawbacks• Interpretation of item meanings by raters• Weighting creates problems in appraisal interpretation• Assignment of weights to items by persons other than the raters

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2. Comparative Methods Ranking

A listing of all employees from highest to lowest in performance.

Drawbacks• Does not show size of differences in performance between

employees• Implies that lowest-ranked employees are unsatisfactory

performers.• Becomes an unwieldy process if the group to be ranked is large.

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Comparative Methods (cont’d)

Forced Distribution Performance appraisal method in which ratings of

employees are distributed along a bell-shaped curve. Drawbacks

• Assumes a normal distribution of performance.• Resistance by managers to placing individuals in the lowest or

highest groups.• Providing explanation for placement in a higher or lower grouping

can be difficult.• Is not readily applicable to small groups of employees.

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Forced Distribution on a Bell-Shaped Curve

Figure 11–11

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3. Narrative Methods Critical Incident

Manager keeps a written record of highly favorable and unfavorable employee actions.

Drawbacks• Variations in how managers define a “critical incident”• Time involved in documenting employee actions• Most employee actions are not observed and may become different if

observed• Employee concerns about manager’s “black books”

Essay Manager writes a short essay describing an employee’s performance. Drawback

• Depends on the managers’ writing skills and their ability to express themselves.

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4. Behavioral/Objective Methods

Behavioral Rating Approach Assesses employees’ behaviors instead of other

characteristics Consists of a series of scales created by:

• Identifying important job dimensions• Creating statements describing a range of desired and

undesirable behaviors (anchors) Types of behavioral scales

• Behaviorally anchored rating scales (BARS)• Behavioral observation scales (BOS)• Behavioral expectation scales (BES)

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Behaviorally-Anchored Rating Scale for Customer Service Skills

Figure 11–10

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Management by Objectives (MBO)

Management by Objectives Specifying the performance goals that an individual and

his or her manager agree the employee will to try to attain within an appropriate length of time.

Key MBO Ideas Employee involvement creates higher levels of

commitment and performance. Encourages employees to work effectively toward

achieving desired results. Performance measures should be measurable and should

define results.

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The MBO Process

Job Review and AgreementJob Review and Agreement

Development of Performance StandardsDevelopment of Performance Standards

Objective SettingObjective Setting

Continuing Performance DiscussionsContinuing Performance Discussions

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Sample Performance

Appraisal Form

Figure 11–8

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Problems in PA (Rater Error)

Recency/Primary Effect- Recency effect – the rater gives greater weight to recent events

when appraising an individual’s performance.- Primary effect – info. received first gets the most weight. Central tendency- rating all employees in a narrow range in the middle of the rating

scale Leniency/Strictness- Leniency – rating all employees fall at the high end of the scale.- Strictness – a manager uses only the lower part of the scale to rate

employees. Rater Bias- when a rater’s values or prejudices distort the rating.

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Halo Effect- rating a person high on all items because of

performance in one area.Contrast Error- tendency to rate people relative to others rather than

against performance standards.Similar to/Different from Me Error- raters are influenced by whether people show the

same or different characteristics from the rater.

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Common Rater Biases

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Appraisal Interview Hints

Figure 11–12

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Characteristics of An Effective PA

Effective PA

Employee accessto results

Job related criteria

Performance expectations

Standardization

Qualified appraisals

Open communication

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Effective of Performances Appraisals

Consistent with the strategic of mission of the organization

Beneficial as a development tool

Useful as an administrative tool

Legal & job related Viewed as generally fair by

employee Effective in documenting

employee performance

Performance expectations Standardization Qualified appraisers Open communication Employee access to results Unbiased Acceptable &

understandable Regularity Feedback