© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Performance Management & Apprasial MN 301 – Human Resource Management Craig W. Fontaine, Ph.D. Pine Manor College Fall 2014

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Performance Management versus Performance Appraisal

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. The Nature of Performance Management

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Performance Management Linkage

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Global Cultural Differences in Performance Management In some cultures: It is uncommon for managers to rate employees or to give direct feedback Younger subordinates do not engage in joint discussions with their managers Criticism from superiors is viewed as personally devastating rather than as useful feedback

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Components of a Performance-Focused Culture

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Identifying and Measuring Employee Performance

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Identifying and Measuring Employee Performance Job duties Important elements in a given job as identified from job descriptions What an organization pays an employee to do Weight Used to show the relative importance of different duties in one job

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Types of Performance Information

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Performance Standards Define the expected levels of employee performance Should be realistic, measurable, and clearly understood Benefit both organizations and employees Ensure that everyone involved knows the levels of accomplishment expected Can be both numerical and non-numerical Assessing non numerical standards can be difficult

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Example: Performance Standards for Speaking Proficiency

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Difficulties in Measuring Service Performance Services are individualized for customers Great variation in the services that can be offered Perception of quality is subjective

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Difficulties in Measuring Service Performance

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Performance Appraisals Assess an employee’s performance Provide a platform for feedback Help administering wages and salaries Help identifying individual employee strengths and weaknesses Provide answers to work-related questions Help improve job performance

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Uses for Performance Appraisals

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Decisions About the Performance Appraisal Process Designing Appraisal Systems Appraisal Responsibilities Informal vs. Systematic Processes Timing of Appraisals

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Typical Division of HR Responsibilities: Performance Appraisal

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Who Conducts Appraisals? Supervisors rating their employees Employees rating their superiors Multisource or 360° feedback Outside sources rating employees Team members rating each other Employees rating themselves Sources of Performance Appraisals

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Multisource Appraisal (360 degree)

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Category Scaling Methods Graphic rating scale: Allows the rater to mark an employee’s performance on a continuum indicating low to high levels of a particular characteristic (1-5; 1-7)

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Category Scaling Methods Aspects of Performance Measured Descriptive Categories Job Duties Behavioral Dimensions

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Concerns with Graphic Rating Scales

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Sample Terms for Defining Standards

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Category Scaling Methods Behaviorally Anchored Rating Scale (BARS) Composed of job dimensions (specific descriptions of important job behaviors) that anchor performance levels on the scale Developing a BARS Identify important job dimensions Write short statements of job behaviors Assign statements (anchors) to job dimensions Set scales for anchors

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Behaviorally-Anchored Rating Scale for Customer Service Skills

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Comparative Methods Ranking: Listing of all employees from highest to lowest in performance Drawbacks Does not show size of differences in performance between employees Implies that lowest-ranked employees are unsatisfactory performers Becomes an unwieldy process if the group to be ranked is large

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Comparative Methods Forced distribution: Causes ratings of employees to be distributed along a bell-shaped curve

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Forced Distribution Advantages Helps deal with “rater inflation” Makes manages identify high, average, and low performers Ensures that compensation increases reflect performance differences among individuals Disadvantages Managers resist placing people in the lowest or highest groups Explanation for placement can be difficult Performance may not follow normal distribution Managers may make false distinctions between employees

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Narrative Methods Critical incident - Manager keeps a written record of highly favorable and unfavorable employee actions Drawbacks Variations in how managers define a critical incident Time involved in documenting employee actions Most employee actions are not observed and may become different if observed Employee concerns about manager’s black books

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Narrative Methods Essay - Manager writes a short essay describing an employee’s performance Drawback - Depends on the supervisors’ writing skills and their ability to express themselves

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Management by Objectives (MBO) Management by objectives: Performance appraisal method that specifies the performance goals that an individual and manager identify together

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Stages in the MBO Process 4. Continuing performance discussions 3. Setting of objectives 2. Development of performance standards 1. Job review and agreement

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Combinations of Methods No single appraisal method is best for all situations Performance measurement system that uses a combination of methods may be sensible Managers can choose and mix methods to accomplish what they want a performance appraisal system

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Training Of Managers And Employees in Performance Appraisal

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Types of Rater Errors Varying standards Recency and primacy effects Central tendency, leniency, and strictness errors Rater bias Halo and horns effects Contrast error Similar-to-me/different-from-me errors

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Providing Effective Feedback

© 2014 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. Effective Performance Management Consistent with the strategic mission Beneficial as a development tool Effectively documents performance Viewed as fair by employees Useful as an administrative tool Is legal and job related Effective Performance Management System