1/16/2019 Performance Appraisal

Facts about Performance Appraisal Review of various studies suggests “the appraisal of performance appraisal is not good.” Those doing rating, those being rated, & administrators have expressed dissatisfaction with their appraisal systems Widespread dissatisfaction among Fortune 500 companies that have resource to acquire best appraisal technology Survey on small & medium sized firms report even more dissatisfaction So, is there any hope for PA?

Facts about Performance Appraisal Studies have revealed that something can be done to improve the effectiveness of appraisal system Prescription for effective performance management: Precision in the definition & measurement of performance Link performance dimensions by combining functions with aspects of values (eg quantity, quality, timeliness) Incorporate a formal process for investigating and correcting for the effects of situational constraints on performance

Performance Appraisal (PA) A process of determining how well employees do their jobs compared to a set of standards to improve their performance effectiveness.

Why Appraise Performance? Play an integral role in the employer’s performance management process. Help in planning for correcting deficiencies and reinforce things done correctly. Useful for career planning in identifying employee strengths and weaknesses. Affect the employer’s developmental and recognition decisions.

Appraisal Objectives

Roles and Responsibilities in PA

Phases of Appraisal Meetings Goal Setting Communicate Expectations Plan the Assessment Monitor, Assist, &Control Appraise Feedback Personnel Decisions Develop Post- Meeting Phase Pre-Meeting Phase Meeting Phase

Descriptions for Step by Step # 1 Goal Setting Analyze job duties/responsibilities and required outcome; choose and define appraisal criteria. # 2 Communicate Expectations Set performance expectations/targets and communicate to subordinate; allow for participation. # 3 Plan Assist subordinate in determining and implementing effective strategies/processes to perform tasks; explore options and limits to discretion in selection of methods; obtain required resources. # 4 Monitor, Assist, and Control Continually monitor performance, providing ongoing feedback and assistance in the forms of problem solving, coaching, counseling, developing/removing roadblocks to successful performance; take corrective action as required # 5 Appraise Observe, recall, and evaluate performance against expectations/standards; complete appraisal forms; back up evaluation with concrete examples/data. # 6 Feedback Review evaluation with subordinate in carefully planned feedback session; be specific and explicit; listen carefully; build a “problem-solving” focus, cover strengths and weaknesses; complete an action plan to improve performance levels, and/or develop performance capability. # 7 Personnel Decisions Make personnel decisions (e.g. promotions, incentives, transfers, etc.) # 8 Develop Implement developmental action plans made in previous step.

Appraise Methods/Scales Graphical Rating Scale Alternation Ranking Scale Paired Comparison Method Forced Distribution Method Critical Incident Method Behavioral Anchored Rating Scale (BARS)

Graphic Rating Scale

Overall ranking calculated by taking average of all the scores

Paired Comparison method

Forced Distribution Method

Behaviorally Anchored Rating Scales (BARS) Expected Behavior 5 — Exceptional performance Accurately completes and submits all status change notices within an hour of request 4 — Excellent performance Verifies all status change notice information with requesting manager before submitting 3 — Fully competent performance Completes status change notice forms by the end of the workday 2 — Marginal performance Argues when asked to complete a status change notice 1 — Unsatisfactory performance Says status change notice forms have been submitted when they haven’t

Designing an Appraisal System Design decisions Decide the nature of the system (uniform or differentiated; interactive or one- way) Decide the purpose (evaluative, development or both) Define the rater/ appraiser (single or multiple)

Designing an Appraisal System Develop measurement content Focus of appraisal and relative weights Person oriented (attributes and traits) Work oriented (job functions/ results) Aspects of values Generally raters make single overall judgement on job function Criteria by which the value of performance in any work activity can be assessed (quality, quantity, timeliness, cost effectiveness, interpersonal impact)

Designing an Appraisal System Design measurement process Types of measurement scale (ordinal/ranking; rating/interval) Types of rating methods/scales Accounting for situational constraints for performance Score computation methods (judgemental or mathematical)

Designing an Appraisal System Defining the rater More commonly used practiced is the rating by the boss/supervisor Upward rating is increasing in number of organizations Customers provide valid & reliable performance information Survey found only 70% of firms allow self appraisal More organizations are considering multiple raters More accurate Fewer biases More fair Less targets of lawsuits

Designing an Appraisal System Administrative characteristics Frequency and timing Performance recording procedures Information collection and processing procedures Confidentiality and access Methods of feedback

Rating Errors & Bias Primacy and Recency Effect Halo and Horn Effect Central Tendency Leniency/ Severity Stereotyping Contrast Effect Sunflower Effect: putting oneself on safer side Non Performance Factor Effect

Effects of PA Errors & Bias 1/16/2019 Effects of PA Errors & Bias Reduced job satisfaction Reduced employee motivation and organizational commitment Less effective Increased turnover

Avoiding Rating Errors It is unavoidable to make appraisal biases when the ratees and raters are human beings (Bakan and Kelleroglu, 2003), and affect is irrevocable during the process. Awareness of errors/ problems and their likely effects Use of right appraisal tools Training of appraisers Use of diaries Use of multi raters Not using evaluation as a primary reward