Appraising Employee Job Performance

Transcript Appraising Employee Job Performance

Chapter 8 Appraising Employee Job Performance

Chapter Outline • • • 8-1 Gaining Competitive Advantage 8-2 HRM Issues and Practices 8 3 The Manager’s Guide © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved.

• • • 8-1a Opening Case: Gaining Competitive Advantage at McKesson Information Solutions Problem: An inadequate performance appraisal system.

Solution: Develop an effective performance appraisal system.

   How the new performance appraisal system enhanced competitive advantage Workforce has become much more motivated.

Employees’ job satisfaction levels have enhanced.

Retention rates have increased.

8-1b Linking Performance Appraisal to Competitive Advantage • • Performance appraisals should accurately assess the quality of employee job performance.

  Job performance can be improved in two ways: Directing employee behavior towards organizational goals.

Monitoring behavior to ensure that goals are met.

8-2a Standards for Effective Performance Appraisal Systems • • • The quality of the rating form Accuracy of the ratings Legal standards © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved.

8-2a Standards for Effective Performance Appraisal Systems (cont.) •  The quality of the rating form Relevance The degree to which the rating form includes necessary information.

Criterion deficiency: Omission of pertinent performance criteria.

Criterion contamination: Inclusion of irrelevant criteria on the rating form.

8-2a Standards for Effective Performance Appraisal Systems (cont.) •  The quality of the rating form (cont.) Clear performance standards Indicate the level of performance an employee is expected to achieve.

Help direct employee behavior.

Help supervisors provide more accurate ratings.

8-2a Standards for Effective Performance Appraisal Systems (cont.) •   Accuracy of the ratings Accurate ratings reflect the employees’ actual job performance levels.

Inaccuracy is most often attributable to the presence of rater errors.

8-2a Standards for Effective Performance Appraisal Systems (cont.) • • • Leniency error: Raters provide ratings that are unduly high.

Severity error: Ratings are unduly low.

   Causes of leniency and severity errors: Political reasons Raters’ lack of conscientiousness Personal bias © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved.

8-2a Standards for Effective Performance Appraisal Systems (cont.) • • Central tendency error: Appraisers purposely avoid giving extreme ratings even when such ratings are warranted.

  Causes of central tendency error: Administrative procedures.

End points of the rating scale are unrealistically defined.

8-2a Standards for Effective Performance Appraisal Systems (cont.) •    Halo effect: Appraiser’s overall impression of an employee is based on a particular characteristic.

Acts as a barrier to accurate appraisals.

Caused due to vague rating standards and failure to conscientiously complete the rating form.

8-2a Standards for Effective Performance Appraisal Systems (cont.) •   The rater’s use of implicit personality theory Implicit personality theory: Rater’s estimation based on a personal “theory” of how different types of people behave in certain situations.

Using this theory, organizations are unable to identify employees’ specific strengths and weaknesses.

8-2a Standards for Effective Performance Appraisal Systems (cont.) •    Recency error Is a consequence of memory decay. Ratings are heavily influenced by recent events that are more easily remembered.

Ratings that unduly reflect recent events can present a false picture of the individual’s job performance during the entire rating period.

8-2a Standards for Effective Performance Appraisal Systems (cont.) •   Legal standards Appraisal systems must meet all the criteria imposed by EEO laws.

Specifically, a court would examine the: Nature of the appraisal instrument.

Fairness and accuracy of the ratings.

8-2b Types of Rating Instruments • • • • • Employee comparison systems Graphic rating scale (GRS) Behaviorally anchored rating scale (BARS) Behavior observation scale (BOS) Management by objectives (MBO) © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved.

8-2b Types of Rating Instruments (cont.) •    Employee comparison systems Employee performance is evaluated relative to other employees’ performances.

Uses rankings rather than ratings.

Ranking formats: Simple rankings: Require raters to rank-order their employees from best to worst, according to their job performance.

Paired comparison: A rater compares each possible pair of employees.

Forced distribution: Requires a rater to assign a certain percentage of employees to each category of excellence such as “best,” “average,” or “worst.” © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved.

8-2b Types of Rating Instruments (cont.) • • Employee comparison systems Strengths     Low cost and practical.

Take very little time and effort.

Eliminates some rating errors.

Employment decisions become much easier to make.

• Weaknesses     Disrupts teamwork.

Accuracy and fairness questioned.

Fails to adequately direct employee behavior.

Performance of people from different departments cannot be compared.

8-2b Types of Rating Instruments (cont.) •    Graphic rating scales Presents appraisers with a list of traits assumed to be necessary to successful job performance.

A five- or seven-point rating scale accompanies each trait.

Points on the scale are defined by numbers and/or descriptive words or phrases that indicate level of performance.

8-2b Types of Rating Instruments (cont.) • Graphic rating scales • Strengths • Weaknesses     Practical.

Low cost.

Can be developed quickly.

A single form is applicable to all or most jobs within an organization.

     Vaguely defined traits to evaluate (e.g. demeanor or attitude) Does not effectively direct behavior.

Fails to provide specific, nonthreatening feedback.

Accurate ratings are not likely to be achieved.

Can lead to a multitude of rating errors.

 Occurrence of bias.

8-2b Types of Rating Instruments (cont.) •     Behaviorally anchored rating scales (BARS) Similar to graphic rating scale.

Requires appraisers to rate employees on their traits.

Includes seven or eight traits, referred to as “dimensions,” each anchored by a seven- or nine-point scale.

Anchors each trait with examples of specific job behaviors that reflect varying levels of performance.

8-2b Types of Rating Instruments (cont.) • Behaviorally anchored rating scales (BARS) • Strengths  Ability to direct and monitor behavior.

• Weaknesses    Difficult to select one behavior that is most indicative of the employee’s performance.

Time consuming to develop.

Requires a lot of effort to develop.

8-2b Types of Rating Instruments (cont.) •     Behavior observation scales (BOS) Contains a list of desired behaviors required for the successful performance of specific jobs.

Developed like BARS, where critical incidents are collected and categorized into dimensions.

An appraiser rates job performance by indicating the frequency with which the employee engages in each behavior.

A five point scale is used ranging from “almost never” (1) to “almost always” (5).

8-2b Types of Rating Instruments (cont.) • Behavior observation scales (BOS) • Strengths    Is more legally defensible than BARS or graphic rating scales.

Effective in directing employees’ behavior.

Used to monitor behavior and give specific feedback.

• Weaknesses   Time consuming to develop.

Not always cost-effective.

8-2b Types of Rating Instruments (cont.) •   Management by objectives (MBO) A management system designed to achieve organizational effectiveness by steering each employee’s behavior towards the organization’s mission.

MBO process includes: Goal setting: Establishment of the organization’s mission statement and strategic goals. Planning: Identify potential obstacles to reaching goals and devise strategies to overcome these obstacles. Evaluation: Success at meeting goals is evaluated against agreed-on performance standards.

8-2b Types of Rating Instruments (cont.) • Management-by-objectives (MBO) • Strengths • Weaknesses   Outcome-focused.

Widely practiced.

 Behaviors required to reach goals not specified.

    Improves job performance.

States performance standards in relatively objective terms.

Practical and cost effective. Provides employees a greater stake in achieving their goals and more perceived control over their    Success may be attributed to factors outside employee’s control.

Performance standards vary, providing no common basis for comparison.

Creates performance pressures and stress.

work environment.

8-2c Designing an Appraisal System •   Step 1: Gaining support for the system Gain the support of upper-level managers: Make the performance appraisal process meaningful.

Get managers’ input in developing the system.

Train managers and help them find a way to keep track of things employees have done during the review period.

Hold managers accountable for providing accurate ratings on a timely basis.

Gain the support of employees: Encourage both managers and workers to participate in the planning and development of the system to enhance support for it.

8-2c Designing an Appraisal System (cont.) •    Step 2: Choosing the appropriate rating Instrument – Three important factors to be considered are: Practicality: The performance appraisal instrument must be practical.

Cost: Includes development costs, implementation costs, and utilization costs.

Nature of job: The choice of rating instrument depends, in part, on the type of data that can be realistically collected about a particular job.

Executive, managerial, and professional employees are usually rated based on results.

Lower-level jobs are most often rated on behavioral or trait-oriented criteria.

8-2c Designing an Appraisal System (cont.) •   Step 3: Choosing the rater(s) Supervisory ratings: Serve as management tools for supervisors, giving them a means to direct and monitor employee behavior.

Peer ratings: Supplement supervisory ratings, helping develop a consensus about an individual’s performance; helps eliminate biases and leads to greater employee acceptance of appraisal systems.

Competitive nature of the organization’s reward system and friendship are potential problems limiting the usefulness of peer ratings.

8-2c Designing an Appraisal System (cont.) • •   Self-ratings May be used for employee development.

May not be effective as an evaluative tool.

    360-degree feedback system Appraisal system for managers , who are evaluated by a “circle” of people who frequently interact with the manager.

Evaluations are limited to job behaviors directly observed.

Primarily used as feedback devices. Lacks accountability.

8-2c Designing an Appraisal System (cont.) •   Step 4: Determining the appropriate timing of appraisals Mostly conducted annually; frequent appraisals are considered too time-consuming.

Annual appraisals pose a problem as appraisers may have a difficult time remembering events of the past year; this can be minimized by: Maintaining records of employee performance; record keeping also serves as documentation for EEO suits.

8-2c Designing an Appraisal System (cont.) •   Step 5: Ensuring appraisal fairness Upper-level management review: Helps to ensure fairness, and may serve to keep appraisers “honest.” Appeals system Provides a means for employees to obtain a fair hearing if they are dissatisfied with their appraisals. Allows employees to voice their concerns.

Fosters more accurate ratings.

Prevents the involvement of outside third parties.

Tends to undermine the authority of the supervisor and may encourage leniency error.

8-3a Performance Appraisal and the Manager’s Job • • • Completing the ratings Providing performance feedback Setting performance goals © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved.

8-3b How the HRM Department Can Help • Developing the appraisal system •        Providing rater training: Usually focuses on: Establishing work expectations.

Observing and documenting behavior.

Conducting day-to-day performance feedback and coaching.

Appraising performance and avoiding rating errors.

Providing written justifications for ratings.

Conducting formal performance appraisal feedback conferences.

Identifying training needs and formulating a development plan for employees.

8-3b How the HRM Department Can Help (cont.) •   Monitoring and evaluating the appraisal system Monitoring means taking steps to ensure that each appraisal has been completed on time and that instructions have been followed.

Evaluation consists of gauging the users’ satisfaction with the appraisal system.

8-3c HRM Skill-Building for Managers • •   Conducting periodic performance review sessions Objective is to identify problems the employee is facing and to discuss solutions to these problems.

Should be brief, informal, and employee-centered.

 Conducting the annual performance review conference Objective is to inform employees of their ratings and how the information will be used, keep effective workers “on target,” and improve ineffective workers’ performance.

8-3c HRM Skill-Building for Managers (cont.) •     Setting goals for MBO: An individual’s goals must be: Consistent with goals set at higher organizational levels.

Specific and challenging.

Realistic and achievable.

Measurable.

Appraising Employee Job Performance

Transcript Appraising Employee Job Performance

Chapter 8 Appraising Employee Job Performance

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