1. Human Resource Management Lecture 15
MGT 350

2. Last Lecture Performance Management System
The performance management systems need to include:
decisions about who should evaluate performance
what format should be used
how the results should be utilized
The Appraisal Process
Difficulties in Performance Management Systems
Three approaches:
Absolute standards
Relative standards
Objectives

3. Establishing the Performance Management System
Topic
Establishing the Performance Management System

4. Factors that can Distort Appraisals

5. Factors that can Distort Appraisals
Leniency error
Each evaluator has his/her own value system.
Some evaluate high (positive leniency) and others, low (negative leniency).
Halo error: Evaluator lets an assessment of an individual on one trait influence evaluation on all traits.

6. Factors that can Distort Appraisals
Similarity error: Evaluator rates others in the same way that the evaluator perceives him or herself.
Low appraiser motivation: Evaluators may be reluctant to be accurate if important rewards for the employee depend on the results.

7. Factors that can Distort Appraisals
Central tendency: The reluctance to use the extremes of a rating scale and to adequately distinguish among employees being rated.
Inflationary pressures: Pressures for equality and fear of retribution for low ratings leads to less differentiation among rated employees.
Inappropriate substitutes for performance: Effort, enthusiasm, appearance, etc. are less relevant for some jobs than others.

8. Factors that can Distort Appraisals
Attribution Theory
Evaluations are affected based on whether someone’s performance is due to
internal factors they can control
external factors which they cannot
If poor performance is attributed to internal control, the judgment is harsher than when it is attributed to external control.

9. Factors that can Distort Appraisals
Impression management:
If employee positively influences the relationship with the supervisor, he/she is likely to receive a higher rating.

10. Creating More Effective Performance Management Systems
Use Behavior-Based Measures:
Measures based on specific descriptions of behavior are more job-related and elicit more inter-rater agreement than traits, such as “loyalty” or “friendliness”.

11. Creating More Effective Performance Management Systems
Combine Absolute and Relative Standards:
Absolute standards tend to be positively lenient; relative standards suffer when there is little variability.
Combining the standards tends to offset the weaknesses of each.

12. Creating More Effective Performance Management Systems
Provide Ongoing Feedback:
Expectations and disappointments should be shared with employees on a frequent basis.

13. Creating More Effective Performance Management Systems
Use Multiple Raters:
Increasing the number of raters leads to more reliable and valid ratings.
Use peer evaluations: Coworkers offer constructive insights and more specific evaluations.
Upward appraisals allow employees to give their managers feedback.
360-Degree appraisals: Supervisors, peers, employees, team members, customers and others with relevant information evaluate the employee.

14. Creating More Effective Performance Management Systems
Rate Selectively
Appraisers only evaluate in those areas about which they have sufficient knowledge.
Appraisers should be organizationally as close as possible to the individual being evaluated.
More effective raters are asked to do the appraisals.

15. Creating More Effective Performance Management Systems
Train Appraisers:
Untrained appraisers who do poor appraisals can demoralize employees and increase legal liabilities.

16. Creating More Effective Performance Management Systems
Fundamentals of Human Resource Management 8e, DeCenzo and Robbins

17. International Performance Appraisal
Who performs the evaluation?
Different cultural perspectives and expectations between the parent and local country may make evaluation difficult.
Evaluation forms may not be translated accurately.

18. International Performance Appraisal
Evaluation Formats
May make sense to use different forms for parent-country nationals and host-country nationals.
Performance criteria for a particular position should be modified to fit the overseas position and site.
Include a current expatriate’s insights as part of the evaluation.

19. Summary Factors that can Distort Appraisals Leniency error Halo error
Similarity error
Low appraiser motivation
Central tendency
Inflationary pressures
Inappropriate substitutes for performance
Attribution Theory
Impression management

20. Summary Creating More Effective Performance Management Systems
Use Behavior-Based Measures
Combine Absolute and Relative Standards
Provide Ongoing Feedback
Use Multiple Raters
Rate Selectively
Train Appraisers
International Performance Appraisal