Chapter 8 Human Resources

Chapter 8 Appraising and Improving Performance A performance appraisal is a process conducted annually by a supervisor for a subordinate, designed to help employees to understand their roles, objectives, expectations, and performance success. Performance management is the process of creating a work environment where people can perform to the best of their abilities. There are two types of performance appraisals: Administrative (compensation, job evaluation, and ee support) and Developmental (ind. Evaluation, training, and career planning) Many performance appraisals usually fail because of a lack of top-management information and support, unclear performance standards, the difficulty of giving negative feedback, and the use of the appraisal program for conflicting (political) purposes. There are four main factors to consider when developing a performance appraisal program: strategic relevance—individual standards directly related to strategic goals criterion deficiency—standards that capture all of an individual’s contributions criterion contamination—performance capability is not reduced by external factors reliability (consistency)—standards are quantifiable, measurable, and stable There are many different performance appraisal methods. For example, management, peer, subordinate, team, customer, and self-performance appraisals are all different types of appraisals. The 360 degree performance appraisal is the most effective method because it ensures anonymity, makes respondents accountable, prevents `gaming` of the system, uses statistical procedures, and identifies and quantifies biases. There are many problems that arise when conducting performance appraisals. Common rater-related errors: error of central tendency, leniency or strictness errors, similar-to-me errors, recency errors, and contrast and halo errors. There are three major performance appraisal methods: trait methods, behavioural methods, and results methods. trait methods: graphic-rating scale method—a trait approach to performance appraisal whereby each is rated according to a scale of individual characteristics. Mixed-standard scale method—an approach to performance appraisals similar to other scale methods but based on comparisons (better than, equal to, or worse than) with a standard. Forced-choice method—requires the rater to choose from statements designed to distinguish between successful and unsuccessful performance. Essay method—requires an employer to compile a statement describing an employee`s behaviour. Behavioural methods:

Critical incident method—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 check list—the rater checks statements on a list that the rater believes are characteristics of the employee`s performance or behaviour. Behaviourally anchored rating scale (BARS)—consists of a series of vertical scales, one for each dimension of job performance; typically created 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); this method is preferred over BARS for maintaining objectivity, distinguishing good performance from poor performers, providing feedback, and identifying training needs. 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 (focuses 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. Note—a balance scorecard is also commonly used to measure performance. There are three types of performance interviews: tell and sell(persuasion), tell and listen (nondirective), and problem solving (focus on solutions and development)