1. Performance Management and Appraisal
This chapter gives an overview of the performance appraisal process and the different tools and methods available. The main topics covered include the performance management process, appraisal methods, appraisal performance problems and solutions, and the appraisal interview.
Despite lots of attention, money, and effort, performance appraisals remain an area with which few managers or employees are satisfied.
The following questions are worth considering with respect to why some managers and employees are dissatisfied.
Is it just that we don't have a good enough system yet?
Is there an intrinsic problem with performance appraisals?
Is it just human nature to dislike them? 
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2. Chapter 9 Case study Carter Cleaning Company
Carter Cleaning Company – The Performance Appraisal
9-20: Is Jennifer right about the need to evaluate the workers formally? The managers?
Why or why not?
Based on the information presented in the chapter YOU need to determine if the
workers and managers should be evaluated formally or informally, and provide a
reasons for your decision.
Outcome: Describe the process of performance appraisal and
different appraisal methods.
9-21: Develop a performance appraisal method for the workers and managers in each
store.
Examine different appraisal methods discussed in the chapter.
You can use the sample appraisal forms given in the chapter as guides. .
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3. Performance Appraisal
In this lecture we will get an overview of the performance appraisal process and the different tools and methods available.
The main topics covered include the performance management process, appraisal methods, appraisal performance problems and solutions, and the appraisal interview.
Despite lots of attention, money, and effort, performance appraisals remain an area with which few managers or employees are satisfied.
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4. Learning Objectives
Define performance management and discuss how it differs from performance appraisal.
Describe the appraisal process.
Set effective performance appraisal standards.
At the conclusion of this chapter, you will be able to:
Define performance management and discuss how it differs from performance appraisal.
Describe the appraisal process.
Set effective performance appraisal standards.
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5. Learning Objectives
Develop, evaluate, and administer at least four performance appraisal tools.
Explain and illustrate the problems to avoid in appraising performance.
At the conclusion of this chapter, you will be able to:
Develop, evaluate, and administer at least four performance appraisal tools.
Explain and illustrate the problems to avoid in appraising performance.
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6. Learning Objectives
Discuss the pros and cons of using different raters to appraise a person’s performance.
Perform an effective appraisal interview.
At the conclusion of this chapter, you will be able to:
Discuss the pros and cons of using different raters to appraise a person’s performance.
Perform an effective appraisal interview.
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7. OK Lets start Today's lecture!
Lets define performance management and discuss how it
differs from performance appraisal.
Performance management has to do with creating an organizational system that is fair, effective, and widely understood by all. The goal of the system is to support the strategic aims of the firm by establishing a valid and reliable process connecting the employees to it.
Performance appraisal involves :
setting work standards,
assessing actual performance relative to those standards, and
providing feedback to the employee.
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8. Performance Management
Performance management has to do with creating an organizational system that is fair, effective, and widely understood by all.
The goal of the system is to support the strategic aims of the firm by establishing a valid and reliable process connecting the employees to it.
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9. Performance Appraisal
Performance appraisal involves :
setting work standards,
assessing actual performance relative to those standards, and
providing feedback to the employee.
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10. Basic Concepts In Performance Management and Appraisal
The performance appraisal process
Why appraise performance?
The importance of continuous feedback
Performance management c
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11. Lets describe the appraisal process.
For this learning objective, we will discuss the need to have a performance appraisal process, provide continuous feedback and how to manage performance.
Effective appraisals begin before the actual appraisal, with the manager defining the employee’s job and performance criteria. Defining the job means making sure that you and your subordinate agree on his or her duties and job standards and on the appraisal method you will use.
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12. Effective Appraisals
Effective appraisals begin before the actual appraisal, with the manager defining the employee’s job and performance criteria.
Defining the job means making sure that you and your subordinate agree on his or her duties and job standards and on the appraisal method you will use.
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13. Appraising Performance
Appraising performance is important for several reasons. Many employers still base pay and promotions on employee appraisals. Appraisals play an integral role in the employer's performance management process.
The appraisal lets the boss and subordinate develop a plan for correcting any deficiencies while reinforcing those things the employee does correctly.
Appraisals are a useful career planning tool. Finally, appraisals play a role in identifying training and development needs. 
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14. Aligning Employees efforts
Aligning the employee’s efforts with the job’s standards should be a continuous process. When you see a performance problem, the time to take action is immediately. Similarly, when someone does something well, the best reinforcement comes immediately, not six months later.
Performance management includes continuously adjusting how an organization and its team members do things. Team members who need coaching and training receive it, and procedures that need changing are changed.
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15. Pay and Promotion
Employers frequently use (end employees have come to expect) their pay and promotions are determined by their appraisals.
Improvement and career development planning also originates with an effective appraisal system. In addition, training and development activities are based on the appraisal system.
Finally, providing continuous feedback and making improvements to how employees and employers do things contributes to organizational success.
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16. Set effective performance appraisal standards.
Most employees need and expect to know ahead of time on what basis their employer will appraise them. Let’s discuss how you can make this happen.
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17. Basis of Appraisal
Most employees need and expect to know ahead of time on what basis their employer will appraise them. Le
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18. Employee’s Goals and Performance Standards
HR in practice: how to set effective goals
Assign specific goals
Assign measurable goals
Assign challenging but doable goals
Encourage participation
At the heart of performance management is the idea that employees’ efforts should be goal directed. Such a process involves clarifying expectations and quantifying them by setting measurable standards for each objective. Goals should be:
specific
measurable
challenging but attainable
relevant and timely
Finally, employees should always have the opportunity to have meaningful input into the goals they are to achieve.
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19. Goals
At the heart of performance management is the idea that employees’ efforts should be goal directed.
Such a process involves clarifying expectations and quantifying them by setting measurable standards for each objective.
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20. SMART Goals specific measurable challenging but attainable relevant
timely
Finally, employees should always have the opportunity to have meaningful input into the goals they are to achieve.
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21. Employee’s Goals and Performance Standards
Basing appraisal standards on required competencies
The role of job descriptions
Competencies are often arranged according to the basic technical, motor, intellectual, and other skills needed to be successful in a job. In addition, the minimum level of each skill needed should be specified.
Ideally, what to appraise and how to appraise it will be obvious from the job description. For the criteria to appraise, the job description should list the job’s duties or tasks, including how critical each is to the job and how often it’s performed.
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22. Competencies
Competencies are often arranged according to the basic technical, motor, intellectual, and other skills needed to be successful in a job.
In addition, the minimum level of each skill needed should be specified.
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23. What and How to Appraise
Ideally, what to appraise and how to appraise it will be obvious from the job description.
For the criteria to appraise, the job description should list the job’s duties or tasks, including how critical each is to the job and how often it’s performed.
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24. Who should do the appraising ?
Who should do the appraising? The immediate supervisor is usually in the best position to observe and evaluate the subordinate’s performance. He or she also is typically responsible for that person’s performance.
Peer appraisals are becoming more popular with firms using self-managing teams.
Rating committees consist of multiple raters, typically the employee’s immediate supervisor and three or four other supervisors.
Self-ratings tend to be higher than supervisor or peer ratings although input from the subordinate is always to be encouraged. .
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25. Peer Appraisals
Peer appraisals are becoming more popular with firms using self-managing teams.
Rating committees consist of multiple raters, typically the employee’s immediate supervisor and three or four other supervisors.
Self-ratings tend to be higher than supervisor or peer ratings although input from the subordinate is always to be encouraged.
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26. Upward Appraisal
Appraisal by subordinates is also known as upward feedback.
In this instance, subordinates anonymously rate their supervisor’s performance.
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27. 360 –degree feedback
360-degree feedback has become more widely used. Ratings are collected from the employee’s supervisors, subordinates, peers, and occasionally, internal or external customers.
The best advice is that firms should carefully assess costs, train those giving feedback thoroughly, and not rely solely on 360-degree feedback.
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28. Techniques for Appraising Performance
Graphic rating scale method
What to rate?
The graphic rating scale method is the simplest and most popular performance appraisal technique. First, a scale is used to list a number of traits and a range of performance for each. Then the employee is rated by identifying the score that best describes his/her performance level for each trait.
Managers must decide which job performance aspects to measure. Such aspects include generic dimensions, actual job duties, or behaviorally recognizable competencies.
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29. Graphic Rating scale
The graphic rating scale method is the simplest and most popular performance appraisal technique.
First, a scale is used to list a number of traits and a range of performance for each.
Then the employee is rated by identifying the score that best describes his/her performance level for each trait.
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30. Managers must decide
Managers must decide which job performance aspects to measure. Such aspects include generic dimensions, actual job duties, or behaviorally recognizable competencies.
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31. Review Effective goals Competencies Job descriptions Appraisers
Effective goals should be:
specific
measurable
challenging but attainable
relevant and timely
Competencies are often arranged according to the basic technical, motor, intellectual, and other skills needed to be successful in a job. In addition, the minimum level of each skill needed should be specified.
What to appraise and how to appraise it will be obvious from the job description. The job description should list the job’s duties or tasks, including how critical each is to the job, and how often it’s performed.
Appraisals may be done by many individuals or groups such as self-ratings, peers, subordinates and committees. The best advice is to use several data points for collecting information and feeding it back to the individual. The point is to establish credibility and acceptance in the mind of the employee in order to produce improved future results.
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32. Develop, evaluate, and administer at least four
performance appraisal tools.
Next, we will discuss and interpret 10 performance appraisal tools.
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33. Performance Appraisal Tools
Alternation ranking
Paired comparison
Forced distribution
Critical incident
Narrative forms
Behaviorally Anchored Rating Scales (BARS)
The Alternation Ranking Method ranks employees from best to worst on a specific trait, choosing highest, then lowest, until all are ranked.
The Paired Comparison Method involves ranking employees by making a chart of all possible pairs of employees for each trait. The manager then indicates which one is the better employee of the pair.
Forced Distribution Method – Predetermined percentages of employee ratings are placed in various performance categories, similar to grading on a curve.
Critical Incident Method – A supervisor keeps a record of uncommonly good and/or undesirable examples of an employee’s work-related behavior. The supervisor then reviews the record with the employee at predetermined times.
The Narrative Forms method involves rating the employee’s performance for each performance factor needed on the job. Written examples and an improvement plan is provided. The process then aids the employee in understanding where his/her performance was good or bad focusing on problem solving.
Behaviorally Anchored Rating Scales (BARS) is a method that combines the benefits of narratives, critical incidents, and quantified scales. It does so by anchoring a scale with specific behavioral examples of good or poor performance. The advantages of BARS include accuracy, clearer standards, feedback, independent dimensions, and consistency.
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34. Alternative ranking Methods
The Alternation Ranking Method ranks employees from best to worst on a specific trait, choosing highest, then lowest, until all are ranked.
The Paired Comparison Method involves ranking employees by making a chart of all possible pairs of employees for each trait. The manager then indicates which one is the better employee of the pair.
Forced Distribution Method – Predetermined percentages of employee ratings are placed in various performance categories, similar to grading on a curve.
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35. Critical Incident Method
Critical Incident Method – A supervisor keeps a record of uncommonly good and/or undesirable examples of an employee’s work-related behavior.
The supervisor then reviews the record with the employee at predetermined times.
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36. The Narrative Form
The Narrative Forms method involves rating the employee’s performance for each performance factor needed on the job. Written examples and an improvement plan is provided. The process then aids the employee in understanding where his/her performance was good or bad focusing on problem solving.
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37. BARS
Behaviorally Anchored Rating Scales (BARS) is a method that combines the benefits of narratives, critical incidents, and quantified scales.
It does so by anchoring a scale with specific behavioral examples of good or poor performance. The advantages of BARS include accuracy, clearer standards, feedback, independent dimensions, and consistency.
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38. Performance Appraisal Tools
Mixed standard scales
Management by objectives (MBO)
Computerized and web-based performance appraisal
Electronic performance monitoring (EPM)
Mixed Standard Scales are similar to BARS but generally list just three behavioral examples or standards for each of the three performance dimensions.
Management by Objectives (MBO) – The manager sets specific measurable goals with each employee and then periodically discusses the employee’s progress toward them. The process consists of six steps:
set organizational goals
set departmental goals
discuss
define expected results
conduct performance reviews
provide feedback
A computerized and web-based performance appraisal approach generally enables managers to keep notes on subordinates during the year. It allows employee ratings on a series of performance traits, and then generates text to support each part of the appraisal.
Electronic Performance Monitoring use computer network technology to allow managers access to their employees’ computers and telephones.
Note, however, the most effective appraisal forms often merge several approaches
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39. Mixed Standards Scales
Mixed Standard Scales are similar to BARS but generally list just three behavioral examples or standards for each of the three performance dimensions.
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40. MBO
Management by Objectives (MBO) – The manager sets specific measurable goals with each employee and then periodically discusses the employee’s progress toward them. The process consists of six steps:
set organizational goals
set departmental goals
discuss
define expected results
conduct performance reviews
provide feedback
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41. Web based Appraisal
A computerized and web-based performance appraisal approach generally enables managers to keep notes on subordinates during the year. It allows employee ratings on a series of performance traits, and then generates text to support each part of the appraisal.
Electronic Performance Monitoring use computer network technology to allow managers access to their employees’ computers and telephones.
Note, however, the most effective appraisal forms often merge several approaches
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42. Explain and illustrate the problems to avoid in
appraising performance.
As we said, few things managers do are fraught with more peril than appraising subordinates’ performance. We now turn to appraisal problems and how to solve them, and to several other appraisal issues.
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43. Dealing with Appraisal Problems and Interviews
Potential appraisal problems
Unclear standards
Halo effect
Central tendency
Leniency or strictness
Recency effects
Bias
If standards are unclear, ambiguous traits and degrees of merit can result in an unfair appraisal.
The influence of a rater’s general impression on ratings of specific qualities is known as the halo effect.
Central tendency occurs when supervisors stick to the middle of the rating scales, thus rating everyone average.
Leniency or strictness occurs if supervisors have a tendency to rate everyone either high or low.
Recency effects involve letting what the employee has done recently blind the manager to the employee’s performance over the entire year.
Bias is a tendency to allow individual differences such as age, race, and sex affect employee appraisal ratings.
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44. Clear Standards
If standards are unclear, ambiguous traits and degrees of merit can result in an unfair appraisal.
The influence of a rater’s general impression on ratings of specific qualities is known as the halo effect.
Central tendency occurs when supervisors stick to the middle of the rating scales, thus rating everyone average.
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45. Tendencies
Leniency or strictness occurs if supervisors have a tendency to rate everyone either high or low.
Recency effects involve letting what the employee has done recently blind the manager to the employee’s performance over the entire year.
Bias is a tendency to allow individual differences such as age, race, and sex affect employee appraisal ratings.
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46. Review Halo Effect Bias Central Tendency Unclear Standards Leniency/
Recency Effect
Bias
Leniency/
Strictness
For this learning objective, we have covered various problems to avoid while appraising performance. These include the halo effect, bias, the effect of recency, the impact of leniency or strictness, unclear standards, and the impact of central tendency.
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47. Guidelines for Effective Appraisals
Know the problems
Use the right tool
Keep a diary
Get agreement on a plan
Ensure fairness
Appraisals and the law
Appraisals can be more effective by following these five guidelines: 
know the problem
use the right appraisal tool
keep a diary
get agreement on a plan
be fair
The courts have found that inadequate appraisal systems tend to be at the root of illegal discriminatory actions. In addition to being done legally, appraisals should be handled ethically and honestly.
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48. Review Problems Tools Records Fairness Legal Ethics
For this learning objective, the best advice is to use common sense. Find out the real problem and use the right tool to address it. Keep a record, agree on a plan, be fair, and be aware of legal issues.
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49. Perform an effective appraisal interview.
To perform an effective appraisal interview, the supervisor and subordinate review the appraisal and make plans to remedy deficiencies and reinforce strengths.
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50. Managing the Appraisal Interview
Types of appraisal interviews
How to conduct the appraisal interview
Objective data
Don’t get personal
Encouragement
Agreement
Supervisors face four types of appraisal interviews, each with its unique objectives:
Satisfactory – Promotable This is the easiest interview, the objective is to make development plans.
Satisfactory – Not Promotable This type of interview has the objective of maintaining performance when promotion is not possible.
Unsatisfactory – Correctable This has the objective to plan correction via the development and successful implementation of an action plan.
Prepare for the interview by assembling the data, preparing the employee, and choosing the time and place. Be direct and specific, using objective examples. Don’t get personal. Encourage the person to talk. Plan on reaching agreement.
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51. 4 types
Supervisors face four types of appraisal interviews, each with its unique objectives:
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52. Objectives
Satisfactory – Promotable This is the easiest interview, the objective is to make development plans.
Satisfactory – Not Promotable This type of interview has the objective of maintaining performance when promotion is not possible.
Unsatisfactory – Correctable This has the objective to plan correction via the development and successful implementation of an action plan.
Prepare for the interview by assembling the data, preparing the employee, and choosing the time and place. Be direct and specific, using objective examples. Don’t get personal. Encourage the person to talk. Plan on reaching agreement.
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53. Managing the Appraisal Interview
Handling a defensive subordinate
Criticizing a subordinate
The formal written warning
Realistic appraisals
Recognize that defensive behavior is normal. Never attack or belittle a person’s defenses; they are legitimate to him or her. Postpone action as appropriate and recognize your own limitations.
When required, criticize in a private and constructive manner that lets the person maintain his/her dignity and sense of worth.
Written warnings should identify the standards by which the employee is judged, make it clear that the employee was aware of the standard. Then specify any violation of the standard, and show that the employee had an opportunity to correct the behavior. You may place this in his or her permanent personnel file. If circumstances warrant, you may remove the warning after a specified amount of time, say 90 days or longer.
Be realistic and honest when giving an appraisal. It is important that a manager be candid when a subordinate is underperforming. Focus on specifics and allow opportunities to improve.
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54. Defensive Behaviour Recognize that defensive behavior is normal.
Never attack or belittle a person’s defenses; they are legitimate to him or her.
Postpone action as appropriate and recognize your own limitations.
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55. Dignity
When required, criticize in a private and constructive manner that lets the person maintain his/her dignity and sense of worth.
Manager should be candid when a subordinate is underperforming.
Focus on specifics and allow opportunities to improve.
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56. Written Warnings
Written warnings should identify the standards by which the employee is judged, make it clear that the employee was aware of the standard.
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57. Warning
Then specify any violation of the standard, and show that the employee had an opportunity to correct the behavior. You may place this in his or her permanent personnel file.
If circumstances warrant, you may remove the warning after a specified amount of time, say 90 days or longer.
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58. Performance Management
Performance management vs. appraisals
Information technology
Talent management
Appraisal and active management
Segmenting employees
Three concepts distinguish performance management from performance appraisal:
performance management is continuous
it is goal-directed
it is continuously re-evaluating and modifying the way people accomplish their work
Using information technology to support performance management allows management to monitor and correct deficiencies in real time. The process involves:
assigning financial and nonfinancial goals
informing employees of their goals
using an IT system to monitor and assess performance and
taking corrective action
Talent management requires actively managing decisions affecting employees and making certain they have input and a clear understanding of expectations. The traditional practice of allocating pay raises, development opportunities, and other scarce resources across the board does not make for a competitive, successful firm. Today, employers must focus their attention and resources on their company’s mission-critical employees essential to the firm’s strategic needs.
Segmenting employees is a way to emphasize successful management of high potential employees. It may include such activities as identifying top performers and assessing them for promotability, time-frame, and leadership potential. You also may limit the “high potential group in whom the company invests heavily to no more than 10% to 20% of managerial and professional staff.” One company appoints “career stewards” to meet regularly with “emerging leaders.” In all situations, the goal is to focus effort and extra resources by investing in a firm’s future leaders.
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59. Performance Management Summary
Direction sharing
Goal alignment
Ongoing performance monitoring
Ongoing feedback
Coaching and developmental
Recognition and rewards
We can summarize performance management’s six basic elements as follows:
Direction sharing means communicating the company’s goals throughout the company. Then translating these into doable departmental, team, and individual goals.
Goal alignment means having a method that enables managers and employees to see the link between the employees’ goals and those of their department and company.
Ongoing performance monitoring usually includes using computerized systems that measure and then progress and exception reports. The reports are based on the person’s progress toward meeting his or her performance goals.
Ongoing feedback includes both face-to-face and computerized feedback regarding progress toward goals.
Coaching and developmental support should be an integral part of the feedback process.
6. Recognition and rewards provide the consequences needed to keep the employee’s goal-directed performance on track.
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60. 6 BASIC ELEMENTS
We can summarize performance management’s six basic elements as follows:
Direction sharing means communicating the company’s goals throughout the company. Then translating these into doable departmental, team, and individual goals.
Goal alignment means having a method that enables managers and employees to see the link between the employees’ goals and those of their department and company.
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61. Monitoring and feedback
Ongoing performance monitoring usually includes using computerized systems that measure and then progress and exception reports. The reports are based on the person’s progress toward meeting his or her performance goals.
Ongoing feedback includes both face-to-face and computerized feedback regarding progress toward goals.
Coaching and developmental support should be an integral part of the feedback process.
6. Recognition and rewards provide the consequences needed to keep the employee’s goal-directed performance on track.
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62. Employee Retention, Engagement, and Careers
Chapter 10 offers some good advice and tools for managing careers. We will discuss building effective communications through fair treatment programs and employee discipline. In addition we will discuss proper handling of dismissals and separations, including retirement.
In recent years, many employees from the “baby boom” generation have taken early retirement. However, experts believe the next generation will have to work longer than they would wish in order to fund those who are retiring now. 
The Social Security Administration has increased the age at which future generations will be eligible for benefits.
Management will need to find ways to stimulate career interests of older employees to keep them motivated and productive.
Firms also will need to find ways to ease labor shortages by attracting those to return who already have retired.  Let’s discuss these and other issues.
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63. Future trends
In recent years, many employees from the “baby boom” generation have taken early retirement.
However, experts believe the next generation will have to work longer than they would wish in order to fund those who are retiring now. 
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64. REFLECTIVE THEME 5
“There is little need for performance reviews when staff are content or have little control over their work .”
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65. Concepts
The Performance Appraisal Process - Stripped to its essentials, performance appraisal always involves the 3-step performance appraisal process:
(1) setting work standards,
(2) assessing the employee’s actual performance relative to those standards, which usually involves some rating form; and
(3) providing feedback to the employee with the aim of helping him or her to eliminate performance deficiencies or to continue to perform above par.
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66. Why Appraise performance ?
For several reasons:
1) many employers still base pay, etc. on employee appraisals;
2) appraisals play an integral role in the employer's performance management process; 3) the appraisal lets the boss and subordinate develop a plan for correcting any deficiencies, and reinforce those things the employee does correctly;
4) they serve a useful career planning purpose;
and
5) appraisals play a role in identifying training and development needs.
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67. Concepts
The Importance of Continuous Feedback - Aligning the employee’s efforts with the job’s standards should be a continuous process. When you see a performance problem, the time to take action is immediately—there is no substitute for nudging your employee’s performance back into line continuously and incrementally.
Similarly, when someone does something well, the best reinforcement comes immediately, not six months later.
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68. Performance Management
Performance Management – Includes continuously adjusting how an organization and its team members do things.
Team members who need coaching and training receive it, and procedures that need changing are changed.
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69. Goals
Defining the Employee's Goals and Work Standards – At the heart of performance management is the idea that employees’ effort should be goal directed, which involves clarifying expectations and quantifying them by setting measurable standards for each objective.
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70. GOALS Some guidelines for effective goal setting are:
1. assign specific goals;
2. assign measurable goals;
3. assign challenging but doable goals; and
4. make sure the goals are relevant
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71. Managing Employee Turnover and Retention
Costs of turnover
Managing voluntary turnover
Reducing voluntary turnover
Turnover is an expensive cost for organizations. Understanding more about the costs and causes of turnover is important.
There are tangible and intangible costs associated with turnover. Reducing turnover requires identifying and managing the reasons for both voluntary and involuntary turnover.
Voluntary turnover occurs for many reasons. Top reasons include job dissatisfaction, poor pay or health-care benefits, few promotional opportunities, and inadequate work-life balance.
Any retention strategy begins with identifying the specific causes of turnover within a particular company.
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72. comprehensive approach to retaining employees.
What is a
comprehensive approach
to retaining employees.
Experts from a top consulting company suggest building comprehensive retention programs around the steps below.
Using effective selection techniques
Offering professional growth opportunities
Providing career direction
Offering meaningful work and
Encouraging ownership of goals
Let’s discuss these in a bit more detail.
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73. Steps involved in retention
Using effective selection techniques
Offering professional growth opportunities
Providing career direction
Offering meaningful work and
Encouraging ownership of goals .
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74. A Comprehensive Approach to Retaining Employees
Selection
Professional growth
Provide career direction
Meaningful work and ownership of goals
Remember, “retention starts up front, in the selection and hiring of the right employees.” The process begins with a thorough understanding of the jobs to be filled. It includes a solid job analysis and an effective and efficient hiring process.
Professional growth is a well-thought-out training and career development program that can provide a strong incentive for staying with the company.
Providing career direction means discussing employee’s career preferences and prospects at your firm, and helping them lay out potential career plans. Furthermore, “don’t wait until performance reviews to remind top employees how valuable they are to your company.”
An important part of retaining employees is making it clear what your expectations are regarding their performance and responsibilities. This helps employees “own” their behaviors and results. A job is meaningful if the incumbent understands its relationship to the company goals and sees his or results as part of the bigger picture.
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75. Retention
Remember, “retention starts up front, in the selection and hiring of the right employees.” The process begins with a thorough understanding of the jobs to be filled. It includes a solid job analysis and an effective and efficient hiring process.
Professional growth is a well-thought-out training and career development program that can provide a strong incentive for staying with the company.
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76. Career Direction
Providing career direction means discussing employee’s career preferences and prospects at your firm, and helping them lay out potential career plans. Furthermore, “don’t wait until performance reviews to remind top employees how valuable they are to your company.”
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77. Retaining employees
An important part of retaining employees is making it clear what your expectations are regarding their performance and responsibilities.
This helps employees “own” their behaviors and results.
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78. A Comprehensive Approach to Retaining Employees
Recognition and rewards
Culture and environment
Promote work–life balance
Acknowledge achievements
Other key retention elements are recognizing and rewarding performance, learning the culture and environment, promoting work-life balance, and acknowledging achievements.  
We’ve seen that in addition to pay and benefits, employees need and appreciate recognition for a job well done.
With respect to culture and environment, companies that are very tense and “political” may prompt employees to leave. Companies that help employees feel comfortable increase the likelihood that top performers will stay.
Balancing work and life remains an important part of retaining valued employees. In one survey, workers identified “flexible work arrangements” and “telecommuting” as the two top benefits that would encourage them to choose one job over another.
Finally, when employees feel underappreciated, they’re more likely to leave. Surveys suggest that frequent recognition of accomplishments is an effective nonmonetary reward. Such recognition is likely to be helpful even though some recipients may state they don’t need a sincere “thank you.”
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79. Key retention Elements
Other key retention elements are recognizing and rewarding performance, learning the culture and environment, promoting work-life balance, and acknowledging achievements.  
We’ve seen that in addition to pay and benefits, employees need and appreciate recognition for a job well done.
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80. Culture and Environment
With respect to culture and environment, companies that are very tense and “political” may prompt employees to leave. Companies that help employees feel comfortable increase the likelihood that top performers will stay.
Balancing work and life remains an important part of retaining valued employees. In one survey, workers identified “flexible work arrangements” and “telecommuting” as the two top benefits that would encourage them to choose one job over another.
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81. Say thank You
Finally, when employees feel underappreciated, they’re more likely to leave.
Surveys suggest that frequent recognition of accomplishments is an effective nonmonetary reward.
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82. A Comprehensive Approach to Retaining Employees
Managing involuntary turnover
Talent management and employee retention
Job withdrawal
Involuntary turnover is inevitable. When jobs are restructured or when competitive or economic pressures necessitate reductions in the workforce an employer will let some employees go. However, dismissals due to poor performance sometimes are avoidable.
Poor performance and involuntary turnover can be managed by reviewing and improving:
Recruitment
Selection
Training
Appraisal
Compensation/incentive plans
Firms that take a talent management approach to retaining employees focus their efforts on the company’s mission-critical employees.
Job withdrawal is any action which places physical or psychological distance between the employee and the organization. It’s a means of escape for someone who is dissatisfied or fearful. Managing the almost limitless reasons an employee can become dissatisfied requires a complete and effective human resource system.
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83. Involuntary turnover Involuntary turnover is inevitable.
When jobs are restructured or when competitive or economic pressures necessitate reductions in the workforce an employer will let some employees go.
However, dismissals due to poor performance sometimes are avoidable. .
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84. Poor performance
Poor performance and involuntary turnover can be managed by reviewing and improving:
Recruitment
Selection
Training
Appraisal
Compensation/incentive plans
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85. Talent management approach
Firms that take a talent management approach to retaining employees focus their efforts on the company’s mission-critical employees.
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86. Job Withdrawal
Job withdrawal is any action which places physical or psychological distance between the employee and the organization. It’s a means of escape for someone who is dissatisfied or fearful. Managing the almost limitless reasons an employee can become dissatisfied requires a complete and effective human resource system.
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87. Selection
Selection is the beginning of an effective career development process. Ensuring each employee has an opportunity for growth and an understanding of possible professional directions provides a sense of security and empowerment.
Working with employees in establishing goals for meaningful work helps ensure ownership. A reward and recognition system that supports goals will be meaningful both to the employer and the employee.
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88. Culture
Establishing a culture and reinforcing the firm’s environment will maintain a well-functioning system so all will know “how we get things done around here”.
Balancing work with other aspects of life remains an important element to retaining employees.
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89. Involuntary Turnover
Involuntary turnover is inevitable but can be managed to reduce negative impact on the organization.
Firms that take a talent management approach to retaining employees focus their efforts on the company’s mission-critical employees.
Finally, job withdrawal is usually a result of employees becoming fearful or dissatisfied.
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90. Engagement
Engagement refers to being psychologically involved in, connected to, and committed to getting one’s job done.
Poor attendance, voluntary turnover, and psychological withdrawal often reflect diminished employee engagement.
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91. The Psychological Contract
One implication is that what employers and employees expect from each other is changing. What the employer and employee expect of each other is part of what psychologists call a psychological contract. This is “an unwritten agreement that exists between employers and employees. "The psychological contract identifies each party’s mutual expectations.

92. Psychological Contract
What the employer and employee expect of each other is part of what psychologists call a psychological contract.
The psychological contract identifies each party's mutual expectations.
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93. List the main decisions employers should address in
reaching promotion decisions. c
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94. Making Promotion Decisions
Is seniority or competence the rule?
How should we measure competence?
Is the process formal or informal?
Vertical, horizontal, or other?
Four important rules impact the effectiveness of promotion decisions.
Decision 1: Is Seniority or Competence the Rule? Today’s focus on competitiveness favors competence. However, union agreements and civil service regulations often emphasize seniority.
Decision 2: How Should We Measure Competence? Start by defining the job, setting standards, and using one or more appraisal tools to record the employee’s performance. Then, use a valid procedure for predicting a candidate’s potential for future performance.
Decision 3: Is the Process Formal or Informal? Each firm will determine whether the promotional process will be formal or informal.
Decision 4: Vertical, Horizontal, or Other? Promotions can be vertical (within the same functional area) or horizontal (in different functional areas).
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95. Impact
Four important rules impact the effectiveness of promotion decisions.
Decision 1: Is Seniority or Competence the Rule?
Today’s focus on competitiveness favors competence.
However, union agreements and civil service regulations often emphasize seniority.
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96. Chapter 9 Case study Carter Cleaning Company
IN GROUPS
Carter Cleaning Company – The Performance Appraisal
9-20: Is Jennifer right about the need to evaluate the workers formally? The managers?
Why or why not?
Based on the information presented in the chapter YOU need to determine if the
workers and managers should be evaluated formally or informally, and provide a
reasons for your decision.
Outcome: Describe the process of performance appraisal and
different appraisal methods.
9-21: Develop a performance appraisal method for the workers and managers in each
store.
Examine different appraisal methods discussed in the chapter.
You can use the sample appraisal forms given in the chapter as guides.
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97. Reflective Theme 5
“There is little need for performance reviews when staff are content or have little control over their work .”
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98. Concepts Concepts in Performance Management and Appraisal
The Performance Appraisal Process - Stripped to its essentials, performance appraisal always involves the 3-step performance appraisal process:
(1) setting work standards,
(2) assessing the employee’s actual performance relative to those standards, which usually involves some rating form; and
(3) providing feedback to the employee with the aim of helping him or her to eliminate performance deficiencies or to continue to perform above par.
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99. Concepts Why Appraise Performance? For several reasons:
1) many employers still base pay, etc. on employee appraisals;
2) appraisals play an integral role in the employer's performance management process; 3) the appraisal lets the boss and subordinate develop a plan for correcting any deficiencies, and reinforce those things the employee does correctly;
4) they serve a useful career planning purpose; and 4) appraisals play a role in identifying training and development
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100. Feed back The Importance of Continuous Feedback –
Aligning the employee’s efforts with the job’s standards should be a continuous process.  
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101. Problems ?
When you see a performance problem, the time to take action is immediately—there is no substitute for nudging your employee’s performance back into line continuously and incrementally.
Similarly, when someone does something well, the best reinforcement comes immediately, not six months later.
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102. Concepts
Performance Management – Includes continuously adjusting how an organization and its team members do things.
Team members who need coaching and training receive it, and procedures that need changing are changed.
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103. Defining Goals
Defining the Employee's Goals and Work Standards – At the heart of performance management is the idea that employees’ effort should be goal directed, which involves clarifying expectations and quantifying them by setting measurable standards for each objective.
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104. Guidelines Some guidelines for effective goal setting are:
1. assign specific goals;
2. assign measurable goals;
3. assign challenging but doable goals; and
4. make sure the goals are relevant and
5. timely
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