1. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-1 Managing Human Resources Managing Human Resources Bohlander  Snell  Sherman Chapter 8 Appraising and Improving Performance

2. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-2 Chapter 8 Learning Objectives  Explain the purposes of performance appraisals and the reasons they fail.  Identify the characteristics of an effective appraisal program.  Describe the different sources of appraisal information.  Explain the various methods used for performance evaluation.  Outline the characteristics of an effective performance appraisal interview.

3. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-3 Presentation Slide 8-1 Performance Appraisal and other HRM Functions

4. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-4 Presentation Slide 8-2 Why Performance Appraisals May Fail

5. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-5 Performance Slide 8-3 Establishing Performance Standards Strategic Relevance Criteria Deficiency Reliability Criterion Contamination Basic Considerations for Establishing Performance Standards

6. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-6 Strategies and Competencies Performance Measure Performance Measures Presentation Slide 8-3 Establishing Performance Standards Actual Performance Criterion deficiency--aspects of actual performance that are not measured. Criterion contamination-- elements that affect the appraisal measures that are not part of actual performance. Zone of Valid Assessment Reliability--consistent measurement across raters and/or over time. Strategic relevance-- performance standards linked to organizational goals and competencies.

7. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-7 SUPERIOR CUSTOMERS TEAM SUBORDINATES PEERS SELF Presentation Slide 8-4 Alternative Sources of Appraisal

8. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-8 Manager and/or Supervisor Appraisal Performance appraisal done by an employee’s manager and often reviewed by a manager one level higher

9. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-9 Self-Appraisal Performance appraisal done by the employee being evaluated, generally on an appraisal form completed by the employee prior to the performance interview

10. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-10 Subordinate Appraisal Performance appraisal of a superior by an employee, which is more appropriate for developmental than for administrative purposes

11. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-11 Peer Appraisal Performance appraisal done by one’s fellow employees, generally on forms that are compiled into a single profile for use in the performance interview conducted by the employee’s manager

12. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-12 Team Appraisal Performance appraisal, based on TQM concepts, that recognizes team accomplishment rather than individual performance

13. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-13 Customer Appraisal Performance appraisal, which, like team appraisal, is based on TQM concepts and seeks evaluation from both external and internal customers

14. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-14 Training Appraisers Leniency or Strictness Error Similar-to-Me Error Contrast Error Error of Central Tendency Recency Error Common Appraisal Errors to Address in Training

15. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-15 Error of Central Tendency Performance ‑ rating error in which all employees are rated about average

16. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-16 Leniency or Strictness Error Performance-rating error in which the appraiser tends to give employees either unusually high or unusually low ratings

17. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-17 Recency Error Performance-rating error in which the appraisal is based largely on the employee’s most recent behavior rather than on behavior throughout the appraisal period

18. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-18 Contrast Error Performance-rating error in which an employee’s evaluation is biased either upward or downward because of comparison with another employee just previously evaluated

19. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-19 Similar-to-Me Error Performance-rating error in which an appraiser inflates the evaluation of an employee because of a mutual personal connection

20. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-20 Performance Appraisal: Trait Methods Graphic Rating Scale Mixed Standard Scale Essay Forced-Choice Common Trait Methods of Appraisal

21. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-21 Graphic Rating-Scale Method A trait approach to performance appraisal whereby each employee is rated according to a scale of characteristics

22. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-22 Mixed-Standard Scale Method A trait approach to performance appraisal similar to other scale methods but based on comparison with (better than, equal to, or worse than) a standard

23. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-23 Forced-Choice Method A trait approach to performance appraisal that requires the rater to choose from statements designed to distinguish between successful and unsuccessful performance

24. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-24 Essay Method A trait approach to performance appraisal that requires the rater to compose a statement describing employee behavior

25. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-25 Performance Appraisal: Behavioral Methods Critical Incidents Behavioral Checklist Behaviorally Anchored Rating Scale (BARS) Behavior Observation Scales Common Behavioral Appraisal Methods

26. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-26 Critical Incident Unusual event that denotes superior or inferior employee performance in some part of the job

27. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-27 Behaviorally Anchored Rating Scale (BARS) A behavioral approach to performance appraisal that consists of a series of vertical scales, one for each important dimension of job performance

28. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-28 Behavior Observation Scale (BOS) A behavioral approach to performance appraisal that measures the frequency of observed behavior

29. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-29 Management by Objectives Department-Specific Goals Joint Agreement Interim Review Subordinate Goals Supervisor Goals New Input Inappropriate Goals Eliminated Review Organizational Performance Final Review Common Goals

30. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-30 Management by Objectives (MBO) Philosophy of management that rates performance on the basis of employee achievement of goals set by mutual agreement of employee and manager

31. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-31 Step 1: Organization goals and metrics Step 1: Organization goals and metrics Step 2: Department goals and metrics Step 2: Department goals and metrics Step 5: Interim review Step 5: Interim review Step 5b: New inputs are then provided Step 5b: New inputs are then provided Step 5a: Inappropriate goals/metrics deleted Step 5a: Inappropriate goals/metrics deleted Step 4: Mutual agreement of goals and metrics Step 4: Mutual agreement of goals and metrics Step 3: Subordinate proposes goals and metrics Step 3: Subordinate proposes goals and metrics Step 3: Supervisor lists goals and metrics for subordinate Step 3: Supervisor lists goals and metrics for subordinate Step 7: Review of organization performance Step 7: Review of organization performance Step 6: Final review Step 6: Final review Performance Appraisal under an MBO Program

32. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-32 Presentation Slide 8-5 Summary of Appraisal Methods

33. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-33 Presentation Slide 8-6 Appraisal Interviews Be Supportive Follow Up Day by Day Establish Goals Focus on Problem Solving Minimize Criticism Invite Participation Express Appreciation Ask for Self- Assessment Change the Behavior, not the Person

34. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 8-34 Environment Equipment/materials Job design Economic conditions Unions Rules and policies Management support Laws and regulations Environment Equipment/materials Job design Economic conditions Unions Rules and policies Management support Laws and regulations Ability Technical skills Interpersonal skills Problem-solving Analytical skills Communication skills Physical limitations Ability Technical skills Interpersonal skills Problem-solving Analytical skills Communication skills Physical limitations Motivation Career ambition Employee conflict Frustration Fairness/satisfaction Goals/expectations Motivation Career ambition Employee conflict Frustration Fairness/satisfaction Goals/expectations P = f (A,M,E) Factors that Influence Performance