Performance Appraisal: The Achilles Heel of Personnel?

Why evaluate the performance of employees? Compensation (raises, merit pay, bonuses) Personnel Decisions (e.g., promotion, transfer, dismissal) Training (Identify specific requirements) Research (e.g., assessing the worth/validity of selection tests

Breaking Down the Performance Appraisal Process Observation Selective Attention Timing Structure Frequency Storage Encoding of Information (e.g., categorization) Short vs. Long-term Memory Evaluation Retrieve Information Combine information Decision-making (judgment)

Basic Performance Appraisal Process Conduct a Job Analysis (e.g., specify tasks and KSAs) Develop Performance Standards (e.g., define what is superior, acceptable, and poor job performance) Develop or Choose a Performance Appraisal Approach

Productivity measures, absenteeism, tardiness, turnover, absenteeism Criterion Domain Productivity measures, absenteeism, tardiness, turnover, absenteeism Objective data Subjective data Performance ratings (e.g., supervisor, co-workers, self, subordinates, clients Contextual data Assisting others, loyalty, extra work/effort, emotional labor, volunteering, counterproductive behaviors (CWBs; tardiness, sabotage, gossiping)

Criteria Dimensionality Static --- Individual performance varies by performance criteria Decision-making Communication

Criteria Dimensionality (cont.) Temporal --- Performance varies as a function of time; importance of when performance is assessed IQ 1st year Specific work methods, interests, personality, interpersonal relationships 2nd year

Criteria Dimensionality (cont.) Individual --- Employees excel at different aspects of job performance Role prescriptions, organizational impact Production Client support & satisfaction Employee # 1 Employee # 2

Criteria Challenges (cont.) Observation --- Variation due to methods used, who observes Low variability (e.g., production line speed, process limitations)? Performance Dimensions --- Uni-dimensional vs. multidimensional criteria (Over-reliance on supervisor ratings of performance; 879/1506)

Criteria Issues (cont.) Contamination --- Error b) Biases (e.g., rating scales, group membership, knowledge of predictor scores, self-fulfilling prophecy)

Criteria Issues Relevance --- Generally considered the most important issue Objective data Subjective data r = .39

To Combine or Not to Combine Criteria? Global criteria Separate, multiple criteria A C 3.0 GPA Is there a single, underlying dimension that “allows” combining separate criteria? Purposes of the data (e.g., a) for personnel decisions or b) feedback, understanding psychological and behavioral processes

Sources of Information 1) Supervisors (most common) Role Conflict (e.g., judge and trainer/teacher) Motivation Time availability Friendship Co-Workers (Peers) Peer nominations: (Identifying those with highest and lowest KSAs) *Peer ratings: For providing feedback Peer rankings: For discriminating highest to lowest performance on various dimensions Friendship bias Leniency High level of accuracy Best used as a source of feedback Effects of poor peer ratings on subsequent task performance: Lower perceived group performance Lower cohesiveness Lower satisfaction Lower peer ratings

Sources of Information (cont) 3) Self Lots of knowledge Leniency effect Good preparation for performance appraisal meeting (conducive for dialog) 4) Subordinates Biases (e.g., # of subordinates, type of job, expected evaluation from supervisor) Best if ratings are anonymous -- if not, leniency in ratings occur (Antonioni, 1994) Can add information above and beyond other sources (Conway, et. al 2001) 5) Clients Good source of feedback Negativity bias Customer ratings on the web (usage/role, accuracy, verification issues)

Technology and Client/Customer Feedback Other examples: Amazon, eBay, Trip Advisor, iTunes

Technology and Client/Customer Feedback (cont.)

Other Examples of Internet-Based Performance Information Amazon

Other Examples of Internet-Based Performance Information Expedia That's the second time I stay in this hotel. The location is fantastic and the rooms, in general are very comfortable. The view from the top, at the breakfast place is superb. Rating: 4.0 The standard rooms are very, very small, I had only one bag and no place to put it. you could barely turnaround in the bathrooms. I love the decor/ art deco style but a little updating is definitely do. Rating: 2.0

Subjective Appraisal Methods (can be used with any type of job) Relative Methods Ranking 1st _____ 2nd_____ 3rd _____ Pair Comparison Employee-1 _____ versus Employee-2 _____ Employee-1 _____ versus Employee-3 _____ etc. Both are difficult to use with a large number of subordinates

Subjective Appraisal Methods Absolute Methods 1) Narrative essays Unstructured (e.g., content, length) Affected by the writing ability of supervisors and time availability Cannot validate selection devices (no numbers) Graphic Rating Scale (most common) _____ _____ _____ _____ _____ Very Average Excellent Poor

Common Rating Scale Errors Leniency (positive bias) X _____ _____ _____ _____ _____ Very Average Excellent Poor Central Tendency (midpoint) Both lead to a restriction in the range of performance scores

High ratings on other performance dimensions Halo Error Responsibility Commitment Initiative Sensitivity Judgment Communication Observation of specific behavior (s) (e.g., volunteers to work overtime) High ratings on other performance dimensions

Self-Fulfilling Prophecy Process and Performance Ratings Subordinate Characteristics (e.g., age, gender, race, attractiveness) Labels for Subordinate (positive or negative) Supervisor Characteristics (e.g., gender, race, age) Attitudes, Stereotypes Expectations for Subordinate Liking of subordinate Observation of Subordinate Job Performance Selective Attention Encoding of Information Recall Information Self-Fulfilling Prophecy Process and Performance Ratings Evaluate Performance

Subjective Appraisal Methods Behavioral Methods (use of critical incidents; examples of good and poor job behavior collected by job experts over time) Behavior Observation Scales (BOS) Rate the frequency in which critical incidents are performed by employees Sum the ratings for a total “performance” score 1) Assists others in job duties. _____ _____ _____ _____ _____ Never Usually Always Cleans equipment after each use.

Behaviorally Anchored Rating Scale (BARS) Process Generate critical incidents (examples of good and poor job performance) 2) Place Critical Incidents Into performance dimensions (e.g., Responsibility, Initiative, Safety) Retranslation Step (do step # 2 again with a separate group of job experts. Discard incidents where disagreement exists as to which dimension in which they belong) Calculate the mean and standard deviation of each critical incident (discard those with a large standard deviation) 5) Place critical incidents on a vertical scale

Process involves various employees (increases likelihood of usage) BARS (Pros and Cons) Process involves various employees (increases likelihood of usage) Job specificity (different BARS need to be developed for each position) Not any better at reducing common rating scale errors (e.g., leniency, halo) Time consuming

3. Problem Solving/Troubleshooting Definition: Uses a logical, step-by step approach to identify and solve process problems 1 2 3 4 5 Well Below Expectations Below Meets Expectations Consistently Exceeds Outstanding Expectations Expectations Fails to understand how equipment and processes interrelate Does not complete checklists or other required forms Is not able to identify root causes of process deviations Does not consistently meet A2E expectations Depends on others to solve problems Uses available resources (e.g., drawings, checklists, forms, people—engineers, data historian) to determine the root cause of problems Selects and interprets data to solve problems Investigates the nature of equipment and process malfunctions on an ongoing basis Participates in A2E efforts Develops novel, safe and effective solutions to current problems Anticipates problems before they occur and suggests solutions Takes ownership in problem solving and sees it through to completion Effectively leads problem solving efforts (e.g., A2E, handles complicated analysis requests on one’s own) Behavioral Examples of Rating:_____________________________________________________________________ __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

4. Teamwork Definition: Strives to build and maintain a good working relationship with one’s work group; shares information with team members; accepts ideas and opinions of others 1 2 3 4 5 Well Below Expectations Below Meets Expectations Consistently Exceeds Outstanding Expectations Expectations Does not respond to work requests from other team members Fails to share information and/or resources with others Refuses to help co-workers Conflicts with coworkers on 'yours not mine' work situations, or is known to say "that's not my job“ Frequently complains or makes negative or derogatory remarks about site initiatives, leadership, and/or fellow workers Is slow to respond to work requests from other team members or management Considers alternative solutions provided by team members Accepts and provides feedback to others Shares information (e.g., trends, status updates) and/or resources with others when asked Readily offers to help other team members on tasks Works with support services and other areas (e.g., maintenance) to resolve shift problems in a timely manner Anticipates other team members’ needs (e.g., training, tools, equipment, information) Resolves conflicts between team members Supports company objectives and volunteers for work duties within and outside of one’s work area Sacrifices one’s own needs for the need of the team Initiates team building activities (e.g., organizing outside group activities, breakfasts) Behavioral Examples of Rating:_____________________________________________________________________ __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Objective Appraisal Data 1) Production Data (e.g., sales volume, units produced) When observation occurs (timing), and how data is collected Fairness and relevancy issue Potential limited variability Limitations regarding supervisory personnel 2) Personnel Data Absenteeism (excused versus unexcused) Tardiness Accidents (fault issue)

360 Degree Performance Appraisal Self Supervisor Customers Subordinates Co-Workers

Performance Appraisal Training: Best Practices Frequent observation of performance and feedback (both positive and negative) 2) Recordkeeping (ongoing if possible) 3) Encourage self-assessment of employees 4) Focus on behaviors (not traits) Use specific behavioral criteria and standards 6) Set goals for employees (specific and challenging ones) 7) Focus on how to observe job behaviors and provide incentives to do so

Legally Defensible Appraisal Systems Ensure that procedures for personnel decisions do not differ as a function of the race, sex, national origin, religion, or age of those affected by such decisions. Use objective and uncontaminated data whenever they are available. 3) Provide a formal system of review or appeal to resolve disagreements regarding appraisals. Use more than one independent evaluator of performance. 5) Use a formal, standardized system for personnel decisions. Ensure that evaluators have ample opportunity to observe and rate performance if ratings must be made. Avoid ratings on traits such as dependability, drive, aptitude, or attitude. 8) Provide documented performance counseling prior to performance,-based termination decisions.

Legally Defensible Appraisal Systems (cont) 9) Communicate specific performance standards to employees. 10) Provide raters with written instructions on how to complete performance evaluations. 11) Evaluate employees on specific work dimensions, rather than on a single overall or global measure. 12) Require documentation in terms of specific behaviors (e.g., critical incidents) for extreme ratings. 13) Base the content of the appraisal form on a job analysis. 14) Provide employees with an opportunity to review their appraisals (e.g., several days prior to formal feedback session). 15) Educate personnel decision-makers regarding laws on discrimination.

Factors Affecting Employees Acceptance of Performance Evaluations Asking for (and using) performance information/input from employees Ensure a 2-way interaction during the performance appraisal meeting Provide a way for employees to counter or challenge the appraisal Sufficient detail and knowledge of employee performance by supervisors Consistent use of performance standards across employees Basing performance evaluation on actual job behaviors (importance of using employee self-evaluations) Importance of rater training

Equal validity, unequal criterion means Satisfactory Non minority Performance Criterion Minority Unsatisfactory Reject Accept Predictor Score Equal validity, unequal criterion means Equal test scores; Minorities performing less well on job (over predicting performance) Minorities hired same as non minorities but probability of success is small. Can reinforce existing stereotypes.