1. Introduction to Work and Organizational Psychology Gerhard Ohrband 6 th lecture Performance appraisal

2. Course structure Part I Introduction 1Managing diversity 2History and context for Work and Organizational Psychology / Roles and methods Part II People at work 3 Job Analysis and Design 4Personal Selection 5 Training

3. Course structure 6Performance Appraisal: Assessing and Developing Performance and Potential 7 Job Stress and Health Part III Human Factors at Work 8Workload and Task Allocation 9Work Environments and Performance 10The Design and Use of Work Technology 11 Safety at Work

4. Course structure Part IV Organizations at Work 12Leadership and management 13Work motivation 14Teams: the challenges of cooperative work 15Organizational development (OD)

5. Part II – People at work 6Performance appraisal: Assessing and developing performance and potential Outline: 1. What is Performance Appraisal? 2. The Assessment of Work Performance 3. The Social and Motivational Context of Appraisal 4. Appraising and Developing Potential 5. Organizational Change and Contemporary Trends in Performance

6. 1. What is performance appraisal? Central Purposes: 1Improving performance 2Making reward decisions 3Motivating staff 4Developing subordinates 5Identifying potential 6Formal recording of unsatisfactory performance

7. A model of performance appraisal Identification Measurement Management

8. Identification  Determining what areas of work the manager should be examining when measuring performance. Rational and legally defensible identification requires a measurement system based on job analyis.  The appraisal system, then, should focus on performance that affects organizational success rather than performance-irrelevant characteristics such as race, age or sex

9. Measurement  The centerpiece of the appraisal system, entails making managerial judgments of how “good” or “bad” employee performance was.  Good performance measurement must be consistent throughout the organization. That is, all managers in the organization must maintain comparable rating standards.

10. Management  Is the overriding goal of any appraisal system.  Appraisal should be more than a past- oriented activity that criticizes or praises workers for their performance in the preceding year.  Rather, appraisal must take a future- oriented view of what workers can do to achieve their potential in the organization.  This means that managers must provide workers with feedback and coach them to higher levels of performance.

11. 2. The Assessment of Work Performance Appraisal formats Classified by …Example The type of judgment required Relative or absolute The focus of the measure Trait, behavior, or outcome

12. Relative judgments Advantages  Forcing supervisors to differentiate between workers. Without such a system, many supervisors are inclined to rate everyone the same, which destroys the appraisal system’s value Disadvantages  Relative judgments do not make clear how great or small the differences between employees are  Do not provide any absolute information, so managers cannot determine how good or poor employees at the extreme rankings are  Force managers to identify differences among workers where none may truly exist  The “big picture” nature of relative ratings makes performance feedback ambiguous and of questionable value to workers who would benefit from specific information on the various dimension of their performance

13. The rating of performance dimensions Example of some of the competencies used by a financial institution to describe effective and ineffective performance in a sales role 1problem analysis and judgment 2planning and organizing 3motivating others 4achievement and energy 5tenacity and resilience

14. Example: 5 Tenacity and resilience  Effective: takes disappointments and rejections without being unduly upset by them. Maintains morale in the face of setbacks. Is not deterred by an initially unpromising response from a customer. Does not let rather insensitive behaviour or offhand attitude from customers affect commitment. Displays determination in the face of adversity  Ineffective: Is discouraged by rebuffs. Easily hurt by rejection and takes it too personally. Does not press on in the face of an initial lack of positive response from the customer. Easily demotivated and deflected from pursuing objectives. Reacts emotionally when under pressure

15. Behaviourally anchored rating scales (BARS) Carefully and systematically derived scales for assessing performance Improvements:  Rater error training  Performance dimension training  Frame of reference training  Behavioural observation training

16. Results-oriented appraisal  Setting objectives (or goals) and reviewing performance against those objectives.  Advantages:  More objective, because it rests on quantified measures  Strongly job-related  Less likely to engender conflict  Disadvantages:  Is it not easy to make direct comparisons between people, because the objectives will vary from person to person  Far from straightforward to express performance in terms of objectives (e.g., surgeon)

17. 3. The Social and Motivational Context of Appraisal  Quality of assessment  Communicating the assessment  Links with rewards  Personal and political agenda of the participants

18. Challenges to effective performance measurement  Rater errors and bias  The influence of liking  Organizational politics  Whether to focus on the individual or the group  Legal issues

19. Rater errors and bias  Halo effect: assessment of one quality of the individual affects the judgment of all his or her other attributes, so all ratings are highly correlated  Two causes of halo error: 1) A supervisor may make an overall judgment about a worker and then conform all dimensional ratings to that judgment and/or 2) a supervisor may make all ratings consistent with the worker’s performance level on a dimension that is important to the supervisor

20. Restriction of range error A manager restricts all of his or her ratings to a small portion of the rating scale Leniency errors Central tendency errors Severity errors

21. Personal bias  Consciously or unconsciously, a supervisor may systematically rate certain workers lower or higher than others on the basis of race, national origin, sex, age, or other factors  Conscious bias is extremely difficult, if impossible, to eliminate  Unconscious bias can be overcome once it is brought to the rater’s attention  For example, a supervisor might be unconsciously giving higher evaluations to employees who went to his alma mater

22. Effective performance management  Explore the causes of performance problems  Direct attention to the causes of problems  Develop an action plan and empower workers to reach a solution  Direct communication at performance and provide effective feedback

23. Situational (system) factors to consider in determining the causes of performance problems  Poor coordination of work activities among workers  Inadequate information or instructions need to perform a job  Low-quality materials  Lack of necessary equipment  Inability to obtain raw materials, parts or supplies  Inadequate financial resources  Poor supervision  Uncooperative coworkers and/or poor relations among people  Inadequate training  Insufficient to produce the quantity or quality of work required  A poor work environment (for example, cold, hot, noisy, frequent interruptions)  Equipment breakdown

24. Communication skills for the appraisal interview SkillsBenefitDescriptionExample Nonverbal attendingSuggests interest and active listening Rater sits with a slight forward, comfortable lean of the upper body, maintains eye contact, and speaks in a steady and soothing voice While the ratee is speaking, the rater looks at the person and gently nods head to signal interest Open and closed questions Appropriate use of open and closed questions can ensure an effective flow of communication during the interview Open questions encourage information sharing and are most appropriate early in an interview or in complex, ambiguous situations Open questions start with words like “Could”, “Would”, “How”, “What”, or “Why?” ParaphrasingParaphrasing can clarify and convey to the ratee that you are listening actively A paraphrase is a concise statement in your own words of what someone has just said. It should be factual and nonjudgmental You might begin by saying “If I have this right …” or “what you’re saying is…” and end with “Is that correct?” or “That’s what you are saying?”

25. Communication skills for the appraisal interview SkillsBenefitDescriptionExample Reflection of feelingShows that you are trying to understand the emotional aspects of the workplace. The empathy and sensitivity of such reflection can open up communication and allow the interview to move more meaningfully to task- related issues Similar to paraphrase, a reflection of feeling is a factual statement of the emotions you sense the other person is feeling. Be cautious about using this technique insincerely or with those who need professional help Start by saying something like “It sounds like you’re feeling …” End as you would with a paraphrase (“Is that right?”) Cultural sensitivityCommunication is more effective when you are sensible to the possible influence of cultural differences Pay attention to cultural differences that may influence how another person communicates and how you might communicate with others When dealing with employees from a culture that is highly formal, avoid addressing them in the workplace by their first names. Doing so may signal disrespect

26. Effective appraisal feedback (Fletcher, 1986) Feedback has to be: 1be specific and clear in content 2be given soon after the event it relates to 3be balanced in recognizing strengths as well as weaknesses in performance 4come from a credible source 5be communicated in a sensitive manner

27. 4. Appraising and Developing Potential  Psychometric tests in assessing potential  Assessment Centres in assessing potential  360 degree feedback and appraisal

28. Key steps in implementing 360 degree appraisal To create a successful 360 degree appraisal program companies should proceed as follows: 1.Top management communicates the goals of and need for 360 degree appraisal 2.Employees and managers are involved in the development of the appraisal criteria and appraisal process 3.Employees are trained in how to give and receive feedback 4.Employees are informed of the nature of the 360 degree appraisal instrument and process 5.The 360 degree system undergoes pilot testing in one part of the organization 6.Management continuously reinforces the goals of the 360 degree appraisal and is ready to change the process when necessary

29. 5. Organizational Change and Contemporary Trends in Performance Three elements of appraisal:  Performance planning session: reviewing achievement of objectives over the period in question and setting objectives for the period ahead. Performance-related pay.  Development review: based on competencies or skill dimensions  Assessment of potential: more objective methods

30. Discussion Points 1.Can line managers accurately and objectively assess the work performance of those under them? 2.How is performance appraisal supposed to motivate people to improve performance? 3.Should pay be linked to performance? 4.What are the best ways of assessing an individual’s potential? 5.How have organizational changes affected performance practices?

31. Literature  Cardy, R.L. (1997). Process and outcomes: A performance-management paradox? News: Human Resources Division, 21, 12-14.  Cascio, W.F. (1998). Applied psychology in human resource management (5 th ed.). Upper Saddle River, NJ: Prentice Hall.  Evered, R.D., and Selman, J.C. (1989). Coaching and the art of management. Organizational Dynamics, 18, 16-33.  Painter, C.N. (1999). Ten steps for improved appraisals. Supervision, 60, 11-13.