1. Performance Appraisal MANA 5341 Dr. George Benson

2. Perceptual Errors of Raters  Halo Effect  Rater allows a single trait, outcome or consideration to influence other measures of performance.  Stereotyping  Rater makes performance judgments based on employee’s personal characteristics rather than the employee’s actual performance.  Recency Error  Recent events and behaviors of the employee bias the rater’s evaluation of the employee’s overall performance.

3. Perceptual Errors of Raters  Central Tendency Error  Evaluator avoids higher and lower ends of performance assessment rating in favor of placing all employees at or near the middle of the scales.  Leniency or Strictness Errors  Evaluator’s tendency is to rate all employees either above (leniency) or below (strictness) their actual performance level.  Personal Biases and Organizational Politics  Have a significant impact on the ratings employees receive from their supervisors.

4. Performance Appraisal Challenges  Frame of Reference  Gender Bias  Attribution Theory

5. “Don't confuse luck with skill when judging others, and especially when judging yourself.”  Carl Icahn, billionaire investor

6. Diagnosing Performance Problems Performance = f (Ability, Motivation, Environment) Ability Technical Skills Analytical Skills Interpersonal Skills Physical Limitations Business Knowledge Motivation Goals / Expectations Career Motivation Employee Conflict Employee Satisfaction Boredom / Frustration Environment Job Design Equipment / Materials Rules and Policies Economic Conditions Management Support

7. Diagnosing Performance Problems Source: Scott Snell, Cornell University.

8. The Appraisal Interview

9. Conducting A Fair Appraisal 1.Collect appraisal data  Objective data on job performance  Critical incidents (good and bad)  Behavioral observation 2. Evaluate performance  Before completing form – think about intended result  Avoid biases  Consider how the message will be viewed by employee  Consider circumstances beyond employee’s control  Consider past evaluations

10. Conducting A Fair Appraisal 3. Write the appraisal  Have courage to address poor performers  Be specific and use examples  Avoid nitpicking  Additional evidence needed for high/low performers  Tied to specific goals  Prioritize development needs

11. Providing Performance Feedback  Location and timing  Quiet and private  “Neutral” seating arrangement  Scheduled well in advance  Avoids unrelated events  Approaches to the Appraisal Interview  Tell and Sell  Tell and Listen  Problem Solving

12. Approaches to the Appraisal Interview  Tell and Sell  Supervisor does most of the talking  Can encourage defensiveness and detachment  To be avoided or used as last resort  Tell and Listen  Offer subordinate ample time to talk  Understand and reflect feelings  Summarize subordinate’s feelings  Can release frustration or avoid defensiveness  Little focus on improvement / development  Problem Solving  Evaluation is avoided  Sole focus on development  Allow the subordinate to understand and identify their own deficiencies

13. Mixed Model Interview 1.Open-ended discussion of successes and problems or difficulties on the job.  Subordinate leads / Subordinate listens 2.Problem solving  Subordinate leads/Supervisor contributes 3.Mutual agreement on performance problems and development plans. 4.Supervisor summarizes using Tell and Listen HBR Beer (1997)

14. Providing Performance Feedback Avoid Defensive Reactions:  Describe performance, not personality.  Avoid questioning motives.  Providing specific examples and quantify whenever possible.  Avoid vague statements or unsubstantiated claims.  Give the employee a chance to respond.

15. Providing Performance Feedback Focus on Employee Development:  Limit plans for change, growth, and development to a few important items that are achievable.  Keep career discussions separate from performance feedback.  Create a development plan.

16. Dealing With Poor Performers  Avoiding problems usually makes them worse.  “Why didn’t you tell me this before?”  Approach the employee for mutual benefit – to solve the problem and maintain the relationship.  Threats and punishment increase compliance but....  Good intentions matter.

17. Identifying Performance Gap 1.Identify a specific gap between performance and expectations. Assume an employee says: “I know you are not happy with something, but I am not sure what I am doing wrong. What exactly is it that concerns you?” OR “I want to make sure that I’m doing the job the way you want it done. What exactly should I do so that you will say I am doing a good job?”

18. Dealing With Poor Performers 2.Making the business case why the problem must be solved. Be prepared to answer: “What’s the big deal?” “Why is this important?” “That’s a dumb rule anyway – you know I do a good job” 3.Determine consequences and actions.  Be specific – no vague threats  Give time for employee to change  How critical is the problem behavior?

19. Dealing With Poor Performers  Consider a range of action  Discuss during the appraisal without making a written reference.  Reference the issue in the appraisal narrative without lowering ratings.  Reference the issue and lower the performance rating for that particular area.  Reference the issue in performance summary and lower final appraisal rating.  Use progressively stronger sanctions

20. “Performance Appraisals Don’t Work”  Measuring objective performance is impossible.  We measure the wrong things for today’s business.  Difference between high and low performers not motivating.  No one is average. So…..  Simplify the form.  Focus on core competencies (e.g. adaptability / flexibility).  Open ended self-appraisal.  Use promotion to reward top performers.  Use technology to your advantage.

21. HR Staffing  Legal Compliance  Determining HR needs  Projecting staffing levels  Job analyses  Managing competencies  Identifying and recruiting employees  Evaluating candidates  Selection tests  Interviewing  Managing retention

22. Performance Management  Performance management systems  Timing, forms, and outcomes  Managing for employee motivation  Goal setting  Pay for performance  Providing performance feedback