Performance Management

Eval ua ting Emp lo yee Perfor man ce

PERFORMANCE APPRAISAL ❘ 1: Performance management system purpose ❘ 2: Appraisal process steps ❘ 3: Absolute standards ❘ 4: Relative standards ❘ 5: MBO ❘ 6: Performance appraisal distortions ❘ 7: More effective performance appraisal ❘ 8: Alternative appraisal methods ❘ 9: Global issues

PERFORMANCE EVALUATION PURPOSES ❚ Performance Management Systems ❚ Feedback ❚ Development ❚ Documentation

PERFORMANCE EVALUATION PROBLEMS ❚ Focus on individual personality ❙ Emotions, anger, resentment, satisfaction ❙ Expectations

❚ Focus on process ❙ Tied to budget ❙ Training ❙ AND….

APPRAISAL PROCESS STEPS ❚ 1. Establish performance appraisal standards ❚ 2. Mutually set measurable goals ❚ 3. Measure actual performance ❚ AND….

APPRAISAL PROCESS STEPS ❚ 4. Compare actual with standard ❚ 5. Discuss appraisal with employee ❚ 6. Corrective action ❙ Basic ❙ Immediate

APPRAISAL METHODS ❚ Absolute standards ❙ Measure against external reference

❚ Relative standards ❙ Evaluate employees against each other

❚ Objectives ❙ Measure against goals

ABSOLUTE STANDARDS Essay Critical incident Checklist Adjective rating scale ❚ Forced-choice ❚ BehaviorallyAnchored Rating Scale (BARS) ❚ ❚ ❚ ❚

ESSAYS ❚ Subjective ❚ Hard to compare with others ❚ Simple ❙ ❙ ❙ ❙

Strengths Weaknesses Potential Suggestions for improvement

CRITICAL INCIDENT ❚ Essay about what was most effective or ineffective in a key job situation ❚ Focus on behavior, not personality ❚ Weekly is timeconsuming

CHECKLIST ❚ Yes or No ❚ Predefined behaviors or qualities ❚ Items may be irrelevant ❚ Helps reduce bias

ADJECTIVE RATING SCALE ❚ Factors present ❙ Job knowledge ❙ Cooperation ❙ Quality and quantity of work

❚ 5 to 10 points on a continuum

Sample Adjective Rating Items and Format

FORCED-CHOICE ❚ Bias and distortion reduced ❚ Frustration about lack of feedback ❚ Simple ❚ Like a multiple choice test question

B.A.R.S. ❚ Simple ❚ Reduces rating errors ❚ Definite, observable job behaviors

Sample BARS for an Employee Relations Specialist

RELATIVE STANDARDS ❚ Group order ranking ❙ Quartiles

❚ Individual ranking ❙ Best to worst

❚ Paired comparison ❙ Similar to job ranking ❙ Compare each one to all others

MANAGEMENT BY OBJECTIVE (MBO) ❚ ❚ ❚ ❚ ❚

STEPS Goal setting Action planning Self control Periodic review

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MBO ISSUES ❚ Advantages ❙ Results oriented ❙ Commitment

❚ Problems ❙ Trust needed

❚ Satisfaction ❙ Time-consuming ❙ Important to followup ❙ Frustration builder

PERFORMANCE APPRAISAL DISTORTIONS Leniency Halo Similarity Central tendency Inflationary pressures ❚ Inappropriate substitutes ❚ AND…. ❚ ❚ ❚ ❚ ❚

PERFORMANCE APPRAISAL DISTORTIONS ❚ Attribution theory ❚ Varies by control ❙ Internal ❙ External

❚ Impression management

TO IMPROVE APPRAISALS ❚ Behavior based measures ❚ Combine absolute and relative measures ❚ Provide ongoing feedback ❚ Have multiple raters ❚ Rate selectively

MORE EFFECTIVE APPRAISALS - PEERS ❚ Positives ❙ Constructive criticism ❙ Specific feedback

❚ Negatives ❙ Fear ❙ Halo, leniency error ❙ Training

❚ Upward appraisal

MORE EFFECTIVE APPRAISAL (360-DEGREE) ❚ Multiple appraisers ❙ ❙ ❙ ❙ ❙ ❙

Self Boss Peers Team members Customers Suppliers

360-DEGREE APPRAISALS ❚ Positives ❙ Increase manager’s awareness of own actions ❙ More accurate feedback ❙ Empowerment ❙ Developing leadership ❙ Reduces subjectivity