Appraising Performance You have to get ongoing constructive feedback to push you out of your comfort zone. —Kevin Sharer, CEO, Amgen Chapter 17 Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Learning Objectives 1.Summarize the benefits of conducting performance appraisals. 2.Identify the steps in appraising performance systematically. 3.Discuss guidelines for avoiding discrimination in performance appraisals. 4.Compare types of appraisals. 17-2

Learning Objectives 5.Describe sources of bias in appraising performance. 6.Explain the purpose of conducting performance appraisal interviews. 7.Tell how supervisors should prepare for a performance appraisal interview. 8.Describe guidelines for conducting the interview. 17-3

Performance Appraisal Performance appraisal –Formal feedback on how well an employee is performing his or her job 17-4

Purposes of Performance Appraisal To improve, employees need to know how they are doing. An appraisal can help motivate employees. Performance appraisals are part of the ongoing control process and provide important records for the organization. 17-5

The Appraisal Process Establish and communicate expectations for performance. Establish and communicate standards for measuring performance. Observe and measure individual performance against standards. Reinforce performance or provide remedies. 17-6

The Appraisal Process Establish and communicate expectations for performance. –List three to five major responsibilities of each position. –Focus the appraisal on these responsibilities. –Be sure employees know and understand what is expected of them. –Employee are most likely to understand and be committed to objectives they helped develop. 17-7

The Appraisal Process Establish and communicate standards for measuring performance. –Each expectation should be measurable. –A supervisor’s task includes deciding how to measure employees’ performance and then making sure employees know what will be measured. 17-8

The Appraisal Process Observe and measure individual performance against standards. –A supervisor should continuously gather information about each employee’s performance. –When preparing a performance appraisal, a supervisor compares this information with the standards for the employee being appraised. 17-9

The Appraisal Process Reinforce performance or provide remedies. –Point out to employees where they have performed well. –Asking an employee to help solve a problem is often more effective than the supervisor simply stating a remedy

Possible Causes for Poor Performance Inadequate skills Lack of effort Shortcomings of the process External conditions Personal problems 17-11

What to Measure in an Appraisal Do not label people with certain characteristics. Focus on behavior and results. Base conclusions on observations about behavior and results. –Record at least one specific example for each category rated

Qualities of Effective Performance Appraisal Measures Objective Job-related Based on behaviors Within employee’s control Related to specific tasks Communicated to employees 17-13

EEOC Guidelines The behaviors and characteristics measured by a performance appraisal should be related to the job and to succeeding on the job. Appraisals should be based on the employee’s success in carrying out the essential tasks of a particular job. An employee should know performance standards in advance

Performance Appraisals and Pay Reviews Many organizations review an employee’s wage or salary level at the time of the performance appraisal. –Employees may focus on the issue of money, diminishing a supervisor’s motivating and coaching opportunities

Types of Appraisals Graphic rating scales –Rates the degree to which an employee has achieved various characteristics –Most commonly used 17-16

Types of Appraisals Paired-comparison approach –Measures the relative performance of employees in a group –Appropriate to find one outstanding employee in a group –Drawbacks: possible harm to morale and teamwork, and possible lawsuits 17-17

Types of Appraisals Forced-choice approach –Presents an appraiser with sets of statements describing employee behavior; the appraiser must choose which statement is most characteristic of the employee and which is least characteristic 17-18

Types of Appraisals Essay appraisal –Often used with other types of appraisals, such as graphic rating scales –Drawback: depends on supervisor’s writing skills 17-19

Types of Appraisals Behaviorally Anchored Rating Scales (BARS) –A performance appraisal in which an employee is rated on scales containing statements describing performance in several areas –Advantages: can be tailored to organization’s objectivesand less subjective 17-20

Behaviorally Anchored Rating Scale for Nurses 17-21

Types of Appraisals Checklist appraisal –Contains a series of questions about an employee’s performance –Drawbacks: can be difficult to prepare and a supervisor has no way to adjust the answers for any special circumstances that affect performance 17-22

Sample Checklist Appraisal 17-23

Types of Appraisals Critical-incident appraisal –Written record of incidents that show positive and negative ways an employee has acted Work-standards approach –A supervisor compares employee’s actual performance with established standards 17-24

Types of Appraisals Management by Objectives (MBO) –A supervisor compares each employee’s accomplishments with the objectives for that employee 360-degree feedback –supervisors may combine their appraisals with self- assessments by the employee or appraisals by peers and customers. –Appraisals of supervisors and other managers also may come from their subordinates 17-25

Sources of Bias 17-26

Sources of Bias Harshness bias –Rating employees more severely than their performances merit Similarity bias –The tendency to judge others more positively when they are like yourself Leniency bias –Rating employees more favorably than their performances merit 17-27

Sources of Bias Central tendency –The tendency to select employee ratings in the middle of a scale Proximity bias –The tendency to assign similar scores to items that are near each other on a questionnaire 17-28

The Performance Appraisal Interview Purpose of the interview –communicate information about an employee’s performance. Preparing for the interview –allow plenty of time for completing the appraisal form –notify the employee about the appraisal interview ahead of time –prepare an appropriate meeting place 17-29

The Performance Appraisal Interview Conducting the interview –Problem solving and coaching –Signatures –Follow-up 17-30

The Process of Conducting a Performance Appraisal Interview 17-31