PowerPoint Presentation by Monica Belcourt York University and Charlie Cook The University of West Alabama Managing Human Resources Chapter Appraising and Improving Performance

Copyright © 2011 by Nelson Education Ltd. After studying this chapter, you should be able to: 1.Explain the purposes of performance appraisals and the reasons they can sometimes fail, and identify the characteristics of an effective appraisal program. 2.Describe the different sources of appraisal information. 3.Explain the various methods used for performance evaluation. 4.Outline the characteristics of an effective performance appraisal interview. 8–2 Learning Outcomes

Copyright © 2011 by Nelson Education Ltd. Performance Appraisal Programs  Performance Appraisal  Performance Management 8–3

Copyright © 2011 by Nelson Education Ltd. Purposes of Performance Appraisal Appraisal Programs AdministrativeAdministrativeDevelopmentalDevelopmental CompensationCompensation Ind. Evaluation Job Evaluation EE Support TrainingTraining Career Planning 8–4

Copyright © 2011 by Nelson Education Ltd. Figure 8.1 Purposes of Performance Appraisal 8–5

Copyright © 2011 by Nelson Education Ltd. Performance Appraisal and Other HRM Functions Performance appraisal validates selection function SelectionSelection Selection should produce workers best able to meet job requirements Performance appraisal determines training needs Training and Development Training and development aids achievement of performance standards Performance appraisal is a factor in determining pay Compensation Management Compensation can affect appraisal of performance Performance appraisal judges effectiveness of recruitment efforts RecruitmentRecruitment Quality of applicants determines feasible performance standards Performance appraisal justifies personnel actions Labour Relations Appraisal standards and methods may be subject to negotiation 8–6

Copyright © 2011 by Nelson Education Ltd. Reasons Appraisal Programs Sometimes Fail  Lack of top-management information and support  Unclear performance standards  Difficult to give negative feedback  Use of the appraisal program for conflicting (political) purposes. 8–7

Copyright © 2011 by Nelson Education Ltd. Strategic Relevance Individual standards directly relate to strategic goals. Criterion Deficiency Standards capture all of an individual’s contributions. Criterion Contamination Performance capability is not reduced by external factors. Reliability(Consistency)Reliability(Consistency) Standards are quantifiable, measurable, and stable. Developing an Effective Appraisal Program 8–8

Copyright © 2011 by Nelson Education Ltd. Guidelines for Appraisals  Include: 8–9

Copyright © 2011 by Nelson Education Ltd. Sources of Performance Appraisal  Manager and/or Supervisor  Subordinate Appraisal  Self-Appraisal 8–10

Copyright © 2011 by Nelson Education Ltd. Sources of Performance Appraisal  Peer Appraisal  Why peer appraisals are not used more often: 8–11

Copyright © 2011 by Nelson Education Ltd. Sources of Performance Appraisal  Team Appraisal  Customer Appraisal 8–12

Copyright © 2011 by Nelson Education Ltd. Figure 8.4 Alternative Sources of Appraisal Figure 8.4 Alternative Sources of Appraisal 8–13

Copyright © 2011 by Nelson Education Ltd. Figure 8–5 Pros and Cons of 360-Degree Appraisal Sources: Compiled from David A. Waldman, Leanne E. Atwater, and David Antonioni, “Has 360-Degree Feedback Gone Amok?” Academy of Management Executive 12, no. 2 (May 1998): 86–94; Bruce Pfau, Ira Kay, Kenneth Nowak, and Jai Ghorpade, “Does 360-Degree Feedback Negatively Affect Company Performance?” HRMagazine 47, no. 6 (June 2002): 54–59; Maury Peiperl, “Getting 360-Degree Feedback Right,” Harvard Business Review 79, no. 1 (January 2001): 142–47; Joyce E. Bono and Amy E. Colbert, Understanding Responses to Multi-Source Feedback: The Role of Core Self-Evaluations,” Personnel Psychology 58, no. 1 (Spring 2005): 171–205.  PROS  The system is more comprehensive in that responses are gathered from multiple perspectives.  Quality of information is better. (Quality of respondents is more important than quantity.)  It complements TQM initiatives by emphasizing internal/external customers and teams.  It may lessen bias/prejudice since feedback comes from more people, not one individual.  Feedback from peers and others may increase employee self- development. 8–14

Copyright © 2011 by Nelson Education Ltd. Figure 8–5 Pros and Cons of 360-Degree Appraisal (cont’d) Sources: Compiled from David A. Waldman, Leanne E. Atwater, and David Antonioni, “Has 360-Degree Feedback Gone Amok?” Academy of Management Executive 12, no. 2 (May 1998): 86–94; Bruce Pfau, Ira Kay, Kenneth Nowak, and Jai Ghorpade, “Does 360-Degree Feedback Negatively Affect Company Performance?” HRMagazine 47, no. 6 (June 2002): 54–59; Maury Peiperl, “Getting 360-Degree Feedback Right,” Harvard Business Review 79, no. 1 (January 2001): 142–47; Joyce E. Bono and Amy E. Colbert, Understanding Responses to Multi-Source Feedback: The Role of Core Self-Evaluations,” Personnel Psychology 58, no. 1 (Spring 2005): 171–205.  CONS  The system is complex in combining all the responses.  Feedback can be intimidating and cause resentment if employee feels the respondents have “ganged up.”  There may be conflicting opinions, though they may all be accurate from the respective standpoints.  The system requires training to work effectively.  Employees may collude or “game” the system by giving invalid evaluations to one another.  Appraisers may not be accountable if their evaluations are anonymous. 8–15

Copyright © 2011 by Nelson Education Ltd. 360-Degree Performance Appraisal System Integrity Safeguards  Assure anonymity  Make respondents accountable  Prevent “gaming” of the system  Use statistical procedures  Identify and quantify biases 8–16

Copyright © 2011 by Nelson Education Ltd. Training Performance Appraisers Recency errors Leniency or strictness errors Common rater-related errors Error of central tendency Similar-to-me errors Contrast and halo errors 8–17

Copyright © 2011 by Nelson Education Ltd. Rater Errors  Error of Central Tendency  Leniency or Strictness Error  Recency Error 8–18

Copyright © 2011 by Nelson Education Ltd. Rater Errors (Cont’d)  Contrast Error  Similar-to-Me Error 8–19

Copyright © 2011 by Nelson Education Ltd. Performance Appraisal Methods  The trait method  The behavioural method  Results methods 8–20

Copyright © 2011 by Nelson Education Ltd. Performance Appraisal Methods Trait Methods Graphic Rating Scale Mixed Standard Scale Forced-ChoiceForced-Choice EssayEssay 8–21

Copyright © 2011 by Nelson Education Ltd. Trait Methods  Graphic Rating-Scale Method  Mixed-Standard Scale Method 8–22

Copyright © 2011 by Nelson Education Ltd. Trait Methods (Cont’d)  Forced-Choice Method  Essay Method 8–23

Copyright © 2011 by Nelson Education Ltd. Behavioural Methods Critical Incident Behavioural Checklist Behaviourally Anchored Rating Scale (BARS) Behaviour Observation Scale (BOS) 8–24

Copyright © 2011 by Nelson Education Ltd. Behavioural Methods  Critical Incident Method  Behavioural Checklist Method 8–25

Copyright © 2011 by Nelson Education Ltd. Behavioural Methods (Cont’d)  Behaviourally Anchored Rating Scale (BARS)  Behaviour Observation Scale (BOS) 8–26

Copyright © 2011 by Nelson Education Ltd. Highlights in HRM 8.4 8–27

Copyright © 2011 by Nelson Education Ltd. Highlights in HRM 8.5 Sample Items from Behaviour Observation Scales Instructions: Please consider the sales representative’s behaviour on the job in the past rating period. Read Each statement carefully. Then circle the number that indicate the extent to which the employee has demonstrated this effectiveness and ineffective behaviors. 8–28

Copyright © 2011 by Nelson Education Ltd. Results Methods Behavioural Methods Productivity Measures Management By Objectives 8–29 Balanced Scorecard

Copyright © 2011 by Nelson Education Ltd. Results Methods  Productivity Measures  Management by Objectives (MBO) 8–30

Copyright © 2011 by Nelson Education Ltd. The Balanced Scorecard  The appraisal focuses on four related categories: 8–31

Copyright © 2011 by Nelson Education Ltd. Summary of Appraisal Methods  Trait Methods  Advantages  Disadvantages 8–32

Copyright © 2011 by Nelson Education Ltd. Summary of Appraisal Methods (cont’d)  Behavioural Methods  Advantages  Disadvantages 8–33

Copyright © 2011 by Nelson Education Ltd. Summary of Appraisal Methods (cont’d)  Results Methods  Advantages  Disadvantages 8–34

Copyright © 2011 by Nelson Education Ltd. Appraisal Interviews Tell and Listen - nondirective Types of Appraisal Interviews Tell and Sell - persuasion Problem Solving - focusing the interview on problem resolution and employee development 8–35

Copyright © 2011 by Nelson Education Ltd. Ask for a Self-Assessment Express Appreciation Appraisal Interview Guidelines Be Supportive Follow Up Day by Day Establish Goals Problem Solving Focus Minimize Criticism Invite Participation Change Behaviour 8–36

Copyright © 2011 by Nelson Education Ltd. Figure 8–8 Factors That Influence Performance 8–37

Copyright © 2011 by Nelson Education Ltd. Figure 8.9 Performance Diagnosis Source: Scott Snell, Cornell University. 8–38