1. Applied Psychology in Human Resource Management seventh edition Cascio & Aguinis
PowerPoint Slides developed by
Ms. Elizabeth Freeman
University of South Carolina Upstate
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2. Chapter 5 Performance Management
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3. Performance Management Systematic evaluation. individual or group
Performance Management Systematic evaluation individual or group strengths and results any given job or position within an organization
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4. Performance Management. Continuous process. identifying. measuring
Performance Management Continuous process identifying measuring developing an employee or groups of employees
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5. Performance Management. Reviews (appraisals)
Performance Management Reviews (appraisals) * occur at regular intervals * observations & judgments * include feedback
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6. Annual Performance Appraisals
Annual Performance Appraisals Adult report cards Earn employees rewards Increases in hourly wages Increases in salary Renewal of contracts Increases in vacation time Recognition awards Profit sharing
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7. To minimize observation and judgments bias
To minimize observation and judgments bias Collect multiple observations Collect multiple judgments Train the raters Standardize the methods Rate the raters
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8. Performance Management supports 8 purposes
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9. 1st of 8 Strategic – links employee functions to organizations’ mission and goals
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10. 2nd of 8 Communication – employees know how well they are performing
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11. 3rd of 8 Employment decisions / predictions – promotions, transfers, training, terminations, discipline, merit recognition
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12. 4th of 8 Results can be used in test validation criteria as in Human Resources research
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13. 5th of 8 Developmental for identifying organizational training needs – help establish goals/objectives for training programs
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14. 6th of 8 Developmental for employees – provides a way to give & receive feedback
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15. 7th of 8 Developmental for the organization - diagnoses, maintains, and develops
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16. 8th of 8 Document & record HR decisions legal requirements
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17. For performance appraisers 5 realities
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18. 1st reality Appraisals happen in all organizations. large/small
1st reality Appraisals happen in all organizations large/small public/private local/multinational
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19. 2nd reality Appraisals have personal and organizational consequences
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20. 3rd reality As job complexity increases, accuracy with ratings becomes more difficult
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21. 4th reality Appraisals are inherently political
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22. 5th reality. Implementation & administration. require time and effort
5th reality Implementation & administration require time and effort must be believed in by employees & by supervision
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23. Potential barriers Organizational Political Interpersonal
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24. Organizational Barriers. Common:. prior decisions,. material defects,
Organizational Barriers Common: prior decisions, material defects, design flaws May be overcome through group cohesiveness
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25. Organizational Barriers
Organizational Barriers Special: person, event, or subgroup may cause barriers May be overcome by adapting & compensating
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26. Political Barriers Accuracy – how important Motivation – how important Reward – how important Managers may use system to make themselves look good
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27. Interpersonal Barriers Misperception
Interpersonal Barriers Misperception about actual standards Accurate ratings may intimidate rater Objection to superior - subordinate relationship Preference for continuous coaching
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28. Effective Performance Management Systems have 9 basic requirements
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29. 9 REQUIREMENTS 1. Congruence Thorough 3. Practical 4. Meaningful 5. Specific 6. Discriminant Reliable and valid 8. Inclusive 9. Fair & acceptable
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30. 1st of 9 Congruence with organizational goals Performance Management Systems should measure those behaviors that help the organization meet its goals
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31. 2nd of 9. Thoroughness. All employees. All organizational behaviors
2nd of 9 Thoroughness All employees All organizational behaviors Entire time period
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32. 3rd of 9. Practicality. Available. Plausible. Acceptable. Easy to use
3rd of 9 Practicality Available Plausible Acceptable Easy to use More benefits than costs
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33. 4th of 9 Meaningfulness. Measures behaviors that. employee controls
4th of 9 Meaningfulness Measures behaviors that employee controls Occurs at predictable intervals Adds to employee and evaluator skills Used to determine specific decisions Perceived organizationally as important
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34. 5th of 9 Specificity Rater & ratee know. what is expected
5th of 9 Specificity Rater & ratee know what is expected how expectations are measured
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35. 6th of 9 Discriminability Making it clear what the differences are between good performance and unacceptable performance
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36. 7th of 9 Reliability & Validity Consistent over time & raters Accurate measurement of past performance and of future expectations
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37. 8th of 9 Inclusiveness Raters & ratees
8th of 9 Inclusiveness Raters & ratees design the system Ratees allowed to rate own performance Rater & ratee actively participate
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38. 9th of 9 Fair & Acceptable Raters & ratees believe
9th of 9 Fair & Acceptable Raters & ratees believe process and outcomes are just and equitable
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39. Performance Appraisals. include 2 equally. important processes. 1
Performance Appraisals include 2 equally important processes Observations of behaviors Judgments about the value of behaviors
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40. 1st Observations detection perception recall recognition
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41. 2nd Judgments categorize integrate evaluate
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42. Performance Appraisals. are end result. 3-part sequence. Job Analysis
Performance Appraisals are end result 3-part sequence Job Analysis Performance Standards Performance Evaluations
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43. WHO SHOULD BE THE RATERS. Generally … the supervisor
WHO SHOULD BE THE RATERS? Generally … the supervisor controls consequences (rewards / punishments) 360-degree systems increase information but supervisor makes ultimate decision Teams require different style
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44. For teams or infrequent supervisor interactions Peer process Peer nominations – good for high & low performances Peer ratings – good for giving feedback Peer rankings – good for discriminating performance levels
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45. Other Peer advantages. Reliable. Valid
Other Peer advantages Reliable Valid Free from various biases Peer disadvantages Friendship bias Impacts cohesiveness, satisfaction & future ratings (revenge ratings) Common method variance
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46. What is Common Method Variance. Variation in performance
What is Common Method Variance? Variation in performance ratings due to method rather than actual performance Can minimize by improving: Procedures Statistical manipulations
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47. When subordinates rate managers. Delegation. Planning & organizing
When subordinates rate managers Delegation Planning & organizing Communication Leadership style
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48. When subordinates rate managers Add strength by averaging Anonymity very important Purpose of ratings important Salary & promotions Accurate for development
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49. Self ratings Improve motivation & acceptance
Self ratings Improve motivation & acceptance of process May show more bias, leniency May show less variability, less agreement with other rating sources Cultural influence may be present
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50. To strengthen self ratings. Rate relative to others in their. position
To strengthen self ratings Rate relative to others in their position Allow practice with self ratings Assure confidentiality Focus on the future
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51. Clients as raters. Can rate service. Determine promotions,
Clients as raters Can rate service Determine promotions, training, transfers Assist with HR research Assist with development planning
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52. When other sources or groups rate May influence supervisory ratings May raise high ratings higher May lower a good rating May remember specifics better May show more response bias
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53. Remember When groups rate groups, the purpose of the group and the purpose of the rating impact which rating method is most useful
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54. Agreement & Equivalence of Ratings across Sources Validity statistics
Agreement & Equivalence of Ratings across Sources Validity statistics for agreement & equivalence are not high (.14 to .22) Important to note definition of what is to be measured will increase the agreement of ratings
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55. Judgmental biases in rating? Leniency versus severity Central Tendency Halo
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56. To minimize occurrence of leniency & severity:
To minimize occurrence of leniency & severity: force normal distributions require rank ordering of subordinates schedule frequent feedback sessions hold supervisors accountable for results
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57. Others fear being too lenient or severe and opt for a middle ground…everyone is average To minimize occurrence of central tendency: Make sure raters understand meanings of the rankings Assist raters’ beliefs in usefulness of the ratings
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58. Another potential bias Haloing – general impression
Another potential bias Haloing – general impression rather than fact based Research mixed as to occurrence and to rating accuracy Some believe type of scale will impact the haloing effect
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59. Performance Measurement Categories Objective
Performance Measurement Categories Objective versus Subjective Relative versus Absolute
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60. Objective versus Subjective Objective. Production Data –
Objective versus Subjective Objective Production Data – performance outcomes Employment Data – may not exist Weaknesses Performance variations Situational influence
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61. Objective versus Subjective Subjective. May reflect judgment biases
Objective versus Subjective Subjective May reflect judgment biases May classify as relative or absolute
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62. Relative versus Absolute Relative – compared to others Simple rankings Alternation rankings Paired comparisons Forced distributions
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63. Relative versus Absolute Absolute – compared to self. Narrative essay
Relative versus Absolute Absolute – compared to self Narrative essay Behavioral checklist Forced choice system Critical incidents Graphic rating scale Behaviorally anchored scale
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64. Team Performances Individual performance important Types of Team important Work or service – routine Project – specific work Network – technology dependent
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65. Team Performances If social loafing exists, commitment to team disappears
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66. Final Points 1. Rater Training goals. Improve observational skills
Final Points 1. Rater Training goals Improve observational skills Reduce judgmental biases Improve communication skills One of best Rater Training Methods Frame of Reference (FOR)
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67. Final Points 2. Personal Development – Goal Setting
Final Points 2. Personal Development – Goal Setting Communicate Frequently Get Training in Appraisal Judge Self First Encourage Allow Subordinate Participation Use Priming Information Be Warm & Encouraging Judge Performance Tie Rewards to Performance
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68. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall