Dessler HRM12e PPT 09

Chapter 9
Performance Management and Appraisal
Part Three | Training and Development

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall PowerPoint Presentation by Charlie Cook The University of West Alabama
WHERE WE ARE NOW
Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall
92
LEARNING OUTCOMES
1. Define performance management and discuss how it differs from performance appraisal. 2. Set effective performance appraisal standards. 3. Describe the appraisal process. 4. Develop, evaluate, and administer at least four performance appraisal tools.
5. Explain and illustrate the problems to avoid in appraising performance.

6. Discuss the pros and cons of using different raters to appraise a persons performance. 7. Perform an effective appraisal interview.
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Basic Concepts in Performance Management and Appraisal

Performance Appraisal Performance Management
An integrated approach to ensuring that an employees performance supports and contributes to the organizations strategic aims.
Setting work standards, assessing performance, and providing feedback to employees to motivate, correct, and continue their performance.
FIGURE 91 Online Faculty Evaluation Form
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Defining the Employees Goals and Work Standards

Guidelines for Effective Goal Setting
Set SMART goals
Assign specific goals
Assign measurable goals
Assign challenging/ doable goals
Encourage participation
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Setting SMART Goals

Specific, and clearly state the desired results. Measurable in answering how much. Attainable, and not too tough or too easy. Relevant to whats to be achieved. Timely in reflecting deadlines and milestones.
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An Introduction to Appraising Performance

Why Appraise Performance?
1
Is basis for pay and promotion decisions. Plays an integral role in performance management.
2 3
Helps in correcting deficiencies and reinforcing good performance.

Is useful in career planning.
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(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.
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.
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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
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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.
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Effectively Appraising Performance

Steps in Appraising Performance
1
Defining the job and performance criteria Appraising performance
2
3
Providing feedback session
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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
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Performance Appraisal Methods

Appraisal Methodologies
1
Graphic rating scale Alternation ranking Paired comparison Forced distribution Critical incident
Narrative forms
2
3 4 5
7
8 9 10
Behaviorally anchored rating scales (BARS)

Management by objectives (MBO)
Computerized and Web-based performance appraisal

Merged methods
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FIGURE 92 Sample Graphic Rating Performance Rating Form
915
FIGURE 93
One Item from an Appraisal Form Assessing Employee Performance on Specific Job-Related Duties
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FIGURE 94
Appraisal Form for Assessing Both Competencies and Specific Objectives
917
FIGURE 94 Appraisal Form for Assessing Both Competencies and Specific Objectives (contd)
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FIGURE 95
Scale for Alternate Ranking of Appraisee
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FIGURE 96
Ranking Employees by the Paired Comparison Method
Note: + means better than. - means worse than. For each chart, add up the number of +s in each column to get the highest ranked employee.
920
TABLE 91
Examples of Critical Incidents for Assistant Plant Manager
Continuing Duties
Schedule production for plant
Targets
90% utilization of personnel and machinery in plant; orders delivered on time
Critical Incidents
Instituted new production scheduling system; decreased late orders by 10% last month; increased machine utilization in plant by 20% last month Let inventory storage costs rise 15% last month; over-ordered parts A and B by 20%; underordered part C by 30% Instituted new preventative maintenance system for plant; prevented a machine breakdown by discovering faulty part
Supervise procurement Minimize inventory costs of raw materials and while keeping adequate on inventory control supplies on hand Supervise machinery maintenance No shutdowns due to faulty machinery
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FIGURE 97 Appraisal-Coaching Worksheet
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Behaviorally Anchored Rating Scale (BARS)

Developing a BARS
1. Write critical incidents
Advantages of BARS
A more accurate gauge
2. Develop performance
Clearer standards
Feedback Independent dimensions
dimensions
3. Reallocate incidents 4. Scale the incidents 5. Develop a final
Consistency
instrument
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FIGURE 98 Example of a Behaviorally Anchored Rating Scale for the Dimension Salesmanship Skills
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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
925
Using MBO
Potential Problems with MBO
Setting unclear objective
Time-consuming appraisal process
Conflict with subordinates over objectives
926
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.
927
FIGURE 99 Online Performance Appraisal Tool
928
Dealing with Performance Appraisal Problems

Potential Rating Scale Appraisal Problems
Unclear standards
Halo effect
Central tendency
Leniency or strictness
Bias
929
TABLE 92
A Graphic Rating Scale with Unclear Standards
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Guidelines for Effective Appraisals

How to Avoid Appraisal Problems
Know the problems
Use the right tool
Keep a diary
Get agreement on a plan
Be fair
931
TABLE 93
Important Advantages and Disadvantages of Appraisal Tools
Tool
Graphic rating scale
Advantages
Simple to use; provides a quantitative rating for each employee. Provides behavioral anchors. BARS is very accurate.
Disadvantages
Standards may be unclear; halo effect, central tendency, leniency, bias can also be problems. Difficult to develop.
BARS
Alternation ranking
Simple to use (but not as simple as graphic rating scales). Avoids central tendency and other problems of rating scales.
End up with a predetermined number or % of people in each group. Helps specify what is right and wrong about the employees performance; forces supervisor to evaluate subordinates on an ongoing basis. Tied to jointly agreed-upon performance objectives.
Can cause disagreements among employees and may be unfair if all employees are, in fact, excellent.
Employees appraisal results depend on your choice of cutoff points. Difficult to rate or rank employees relative to one another.
Forced distribution method Critical incident method
MBO
Time-consuming.
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Choosing the Right Appraisal Tool

Criteria for Choosing an Appraisal Tool
Accessibility
Ease-of-use
Employee acceptance
Accuracy
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FIGURE 910 Selected Best Practices for Administering Fair Performance Appraisals Base the performance review on duties and standards from a job analysis. Try to base the performance review on observable job behaviors or objective performance data. Make it clear ahead of time what your performance expectations are. Use a standardized performance review procedure for all employees. Make sure whoever conducts the reviews has frequent opportunities to observe the employees job performance. Either use multiple raters or have the raters supervisor evaluate the appraisal results. Include an appeals mechanism. Document the appraisal review process and results.
Discuss the appraisal results with the employee.

Let the employees know ahead of time how youre going to conduct the review and use the results. Let the employee provide input regarding your assessment of him or her. Indicate what the employee needs to do to improve. Thoroughly train the supervisors who will be doing the appraisals.
Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall 934
FIGURE 911 Guidelines for a Legally Defensible Appraisal

1. 2. 3. 4. 5. 6. 7. 8. 9. Preferably, conduct a job analysis to establish performance criteria and standards. Communicate performance standards to employees and to those rating them, in writing. When using graphic rating scales, avoid undefined abstract trait names (such as loyalty or honesty). Use subjective narratives as only one component of the appraisal. Train supervisors to use the rating instrument properly. Allow appraisers substantial daily contact with the employees theyre evaluating. Using a single overall rating of performance is usually not acceptable to the courts. When possible, have more than one appraiser, and conduct all such appraisals independently. One appraiser should never have absolute authority to determine a personnel action.
10. Give employees the opportunity to review and make comments, and have a formal appeals process. 11. Document everything: Without exception, courts condemn informal performance evaluation practices that eschew documentation. 12. Where appropriate, provide corrective guidance to assist poor performers in improving.
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Who Should Do the Appraising?
Immediate supervisor
Self-rating
Peers
Potential Appraisers
Subordinates
Rating committee
360-degree feedback
936
The Appraisal Interview
SatisfactoryPromotable
Types of Appraisal Interviews
SatisfactoryNot Promotable
UnsatisfactoryCorrectable UnsatisfactoryUncorrectable
937
FIGURE 912 Sample Employee Development Plan
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Appraisal Interview Guidelines

Guidelines for Conducting an Interview
Talk in terms of objective work data
Dont get personal
Encourage the person to talk
Get agreement
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FIGURE 913 Checklist During Appraisal Interview
940
Handling Defensive Responses

How to Handle a Defensive Subordinate
1
Recognize that defensive behavior is normal. Never attack a persons defenses.
2 3
Postpone action.
Recognize your own limitations.
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How to Deliver Criticism

How to Criticize a Subordinate
1 2 3 4 5
Do it in a manner that lets the person maintain his or her dignity and sense of worth. Criticize in private, and do it constructively. 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.
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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.
943
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
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Basic Building Blocks of Performance Management

Ongoing performance monitoring
Rewards, recognition, and compensation
Direction sharing
Goal alignment
Ongoing feedback
Coaching and development support
945
Why Performance Management?
Total Quality Management The Performance Management Approach Resolution of Appraisal Issues Strategic Goal Alignment
946
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.
947
FIGURE 914
Performance Management Report
948
KEY TERMS
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
Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall 949
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
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Chapter 9

Performance Management and Appraisal

Part Three | Training and Development

WHERE WE ARE NOW

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

5. Explain and illustrate the problems to avoid in appraising performance.

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Basic Concepts in Performance Management and Appraisal

FIGURE 91 Online Faculty Evaluation Form

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Defining the Employees Goals and Work Standards

Set SMART goals

Assign specific goals

Assign measurable goals

Assign challenging/ doable goals

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Setting SMART Goals

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

An Introduction to Appraising Performance

Helps in correcting deficiencies and reinforcing good performance.

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Hazards of Soft Appraisals

or forced to change jobs.

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Performance Appraisal Roles

problems that can cripple appraisals

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Performance Appraisal Roles (contd)

compliance with EEO laws.

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Effectively Appraising Performance

Defining the job and performance criteria Appraising performance

Providing feedback session

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Designing the Appraisal Tool

Actual job duties

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Performance Appraisal Methods

Behaviorally anchored rating scales (BARS)

Computerized and Web-based performance appraisal

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

FIGURE 92 Sample Graphic Rating Performance Rating Form

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Appraisal Form for Assessing Both Competencies and Specific Objectives

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Scale for Alternate Ranking of Appraisee

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Ranking Employees by the Paired Comparison Method

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Examples of Critical Incidents for Assistant Plant Manager

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

FIGURE 97 Appraisal-Coaching Worksheet

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Behaviorally Anchored Rating Scale (BARS)

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Management by Objectives (MBO)

4. Defining expected results (setting individual goals)

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Potential Problems with MBO

Setting unclear objective