1. APPRAISAL REVISION APPRAISAL REVISION Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–1

2. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–2 Basic Concepts in Performance Management and Appraisal Performance Appraisal Setting work standards, assessing performance, and providing feedback to employees to motivate, correct, and continue their performance. Performance Management An integrated approach to ensuring that an employee’s performance supports and contributes to the organization’s strategic aims.

3. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–3 Defining the Employee’s Goals and Work Standards Set SMART goals Assign challenging/ doable goals Assign specific goals Guidelines for Effective Goal Setting Assign measurable goals Encourage participation

4. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–4 Setting SMART Goals S pecific, and clearly state the desired results.S pecific, and clearly state the desired results. M easurable in answering “how much.”M easurable in answering “how much.” A ttainable, and not too tough or too easy.A ttainable, and not too tough or too easy. R elevant to what’s to be achieved.R elevant to what’s to be achieved. T imely in reflecting deadlines and milestones.T imely in reflecting deadlines and milestones.

5. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–5 An Introduction to Appraising Performance 1 Is useful in career planning. Plays an integral role in performance management. Why Appraise Performance? Is basis for pay and promotion decisions. Helps in correcting deficiencies and reinforcing good performance. 234

6. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–6 Performance Appraisal Roles The Supervisor’s RoleThe Supervisor’s Role  Usually do the actual appraising  Must be familiar with basic appraisal techniques  Must understand and avoid problems that can cripple appraisals  Must know how to conduct appraisals fairly

7. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–7 Performance Appraisal Roles (cont’d) The HR Department’s RoleThe HR Department’s Role  Serves a policy-making and advisory role.  Provides advice and assistance regarding the appraisal tool to use.  Trains supervisors to improve their appraisal skills.  Monitors the appraisal system effectiveness and compliance with EEO laws.

8. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–8 Effectively Appraising Performance 1 Appraising performance Steps in Appraising Performance Defining the job and performance criteria Providing feedback session 23

9. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–9 Designing the Appraisal Tool What to Measure?What to Measure?  Work output (quality and quantity)  Personal competencies  Goal (objective) achievement How to Measure?How to Measure?  Generic dimensions  Actual job duties  Behavioral competencies

10. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–10 Performance Appraisal Methods 12 345 Alternation ranking Graphic rating scale Paired comparison Forced distribution Critical incident 67 8910 Behaviorally anchored rating scales (BARS) Narrative forms Management by objectives (MBO) Computerized and Web-based performance appraisal Merged methods Appraisal Methodologies

11. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–11 Behaviorally Anchored Rating Scale (BARS) Developing a BARS 1. Write critical incidents 2. Develop performance dimensions 3. Reallocate incidents 4. Scale the incidents 5. Develop a final instrument Advantages of BARS  A more accurate gauge  Clearer standards  Feedback  Independent dimensions  Consistency

12. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–12 Management by Objectives (MBO) A comprehensive and formal organizationwide goal-setting and appraisal program requiring:A comprehensive and formal organizationwide goal-setting and appraisal program requiring: 1. Setting of organization’s goals 2. Setting of departmental goals 3. Discussion of departmental goals 4. Defining expected results (setting individual goals) 5. Conducting periodic performance reviews 6. Providing performance feedback

13. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–13 Using MBO Setting unclear objective Conflict with subordinates over objectives Potential Problems with MBO Time-consuming appraisal process

14. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–14 Computerized and Web-Based Performance Appraisal Systems Allow managers to keep notes on subordinates.Allow managers to keep notes on subordinates. Notes can be merged with employee ratings.Notes can be merged with employee ratings. Software generates written text to support appraisals.Software generates written text to support appraisals. Allows for employee self-monitoring and self-evaluation.Allows for employee self-monitoring and self-evaluation. Electronic Performance Monitoring (EPM) SystemsElectronic Performance Monitoring (EPM) Systems  Use computer network technology to allow managers access to their employees’ computers and telephones.  Managers can monitor the employees’ rate, accuracy, and time spent working online.

15. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–15 Dealing with Performance Appraisal Problems Unclear standards Leniency or strictness Halo effect Potential Rating Scale Appraisal Problems Central tendency Bias

16. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–16 Guidelines for Effective Appraisals Know the problems Get agreement on a plan Use the right tool How to Avoid Appraisal Problems Keep a diary Be fair

17. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–17 TABLE 9–3Important Advantages and Disadvantages of Appraisal Tools ToolAdvantagesDisadvantages Graphic rating scaleSimple to use; provides a quantitative rating for each employee. Standards may be unclear; halo effect, central tendency, leniency, bias can also be problems. BARSProvides behavioral “anchors.” BARS is very accurate. Difficult to develop. Alternation rankingSimple to use (but not as simple as graphic rating scales). Avoids central tendency and other problems of rating scales. Can cause disagreements among employees and may be unfair if all employees are, in fact, excellent. Forced distribution method End up with a predetermined number or % of people in each group. Employees’ appraisal results depend on your choice of cutoff points. Critical incident method Helps specify what is “right” and “wrong” about the employee’s performance; forces supervisor to evaluate subordinates on an ongoing basis. Difficult to rate or rank employees relative to one another. MBOTied to jointly agreed-upon performance objectives. Time-consuming.

18. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–18 Choosing the Right Appraisal Tool AccessibilityAccuracyEase-of-use Employee acceptance Criteria for Choosing an Appraisal Tool

19. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–19 Who Should Do the Appraising? Self-rating Subordinates 360-degree feedback Potential Appraisers Immediate supervisor Peers Rating committee

20. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–20 The Appraisal Interview Satisfactory—Promotable Satisfactory—Not Promotable Unsatisfactory—Correctable Unsatisfactory—Uncorrectable Types of Appraisal Interviews

21. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–21 Appraisal Interview Guidelines Talk in terms of objective work data Get agreement Don’t get personal Encourage the person to talk Guidelines for Conducting an Interview

22. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–22 Handling Defensive Responses 1 Recognize your own limitations. Never attack a person’s defenses. How to Handle a Defensive Subordinate Recognize that defensive behavior is normal. Postpone action. 234

23. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–23 How to Deliver Criticism 12 345 How to Criticize a Subordinate Criticize in private, and do it constructively. Do it in a manner that lets the person maintain his or her dignity and sense of worth. Give daily feedback so that the review has no surprises. Never say the person is “always” wrong. Criticism should be objective and free of biases.

24. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–24 Performance Management Performance ManagementPerformance Management  Is the continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning their performance with the organization’s goals. How Performance Management Differs From Performance AppraisalHow Performance Management Differs From Performance Appraisal  A continuous process for continuous improvement  A strong linkage of individual and team goals to strategic goals  A constant reevaluation and modification of work processes

25. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall9–25 Basic Building Blocks of Performance Management Direction sharing Goal alignment Ongoing performance monitoring Rewards, recognition, and compensation Coaching and development support Ongoing feedback