Primary Purposes of Performance Evaluations

Use of Data

•

Compensation (Decision-making) Percent* 85.6

•

Performance Feedback (Development) 65.1

•

Training (Development)

•

Promotion (Decision-making) 64.3

45.3

•

Human Resource Planning 43.1

•

Retention/Discharge (Decision-making) 30.3

*Based on responses from 600 organizations

Prentice Hall, 2001 Chapter 16 1

Performance Evaluation Methods:How

• Objective – Management by objectives • Numerical counts • Units produced, sales calls made, patients seen per day • Subjective – Based on individuals perceptions – Identify performance dimensions – Develop scale or measure to assess employee’s standing on each dimension • Ranking of employees – Highest to lowest on performance measures

• • •

Subjective Scale Methods

Graphic rating scale – How courteous is the salesperson toward customers?

• (1) Very discourteous……………Very courteous (7) Behaviorally anchored rating scale – (1) Ignores customers … (2) Keeps customers waiting… (4) Answers questions promptly………….(7) Greets customers pleasantly and always tries sincerely to help customers locate items to suit their needs Behavioral observation scale – Pleasantly greets customers (1) almost never……………………almost always (7)

Subjective Scale Methods (cont.)

• BARS & BOS – More time consuming to develop and to complete in comparison to a graphic rating scale – Appraise more specific behaviors and thus provide a better source of feedback

Other Subjective Methods

• Written essays – Narrative of employees strengths and weaknesses, and suggestions for improvement • Critical incidents – Written anecdotes of effective or ineffective behaviors • Can supplement other forms of appraisal, add to one’s “file”

Who Should Evaluate Performance?

• Supervisors – 95% of immediate supervisors evaluate subordinates • Peers – Closer to the action • Potentially more interactions with workers and observations of work behaviors • More sources of data – Some hesitation to evaluate peers • Issues of friendship

Who Should Evaluate Performance? (cont)

• Self-evaluations – Advantages • Stimulates discussion, very useful as a developmental tool • Less subordinate defensiveness • Increases satisfaction with evaluations – Disadvantages • Self-evaluations tend to be inflated – Almost no one rates oneself below average – Self-serving bias

Who Should Evaluate Performance?

(cont) • Subordinates (upward evaluations) – Consistent with employee empowerment and concerns for employee development – Issues • Should the individual evaluations completed by subordinates be anonymous?

• Who should review the evaluations?

360-Degree Evaluations

• Objective is to pool feedback from all of the employees customers (internal & external) – 20% of organizations are currently using this approach & another 20% are considering implementing it this year (2001) – Alcoa, Du Pont, Levi Strauss, Sprint, – Why might organizations use this approach?

Performance Appraisal & the Fair-process Effect

• Independent of the amount of the raise, employees who perceive that performance appraisals are conducted in a fair manner, report more satisfaction with pay and more satisfaction with the appraisal itself

Attributes of a Fair Performance Appraisal

• Specific behavioral objectives (performance criteria) are identified and communicated in advance – Subordinates have an opportunity to provide input in terms of setting the performance objectives • Helps ensure that evaluation criteria are: appropriate, understood, and accepted – Behaviors - not traits- are evaluated • “Reports are finished late” versus “you are lazy”

Attributes of a Fair Performance Appraisal

(continued) • Appraisal is based upon accurate information – Supervisor diaries – Check for accuracy (does the subordinate have anything different?) • Employee provides a review of activities, accomplishments achieved, and progress made during the period (self-evaluation) • Appraisals conducted more often (timeliness) – Once a quarter as opposed to once a year

Communication & Interpersonal Relationships

• Giving feedback and criticism concerning performance issues – Fear of alienating or offending subordinates – Fear of reducing their morale/motivation • Common practices (ineffective) – “don’t worry” • To protect relationship & avoid hurting feelings – “shape up or ship out” • Ignores subordinate reactions & feelings

Supportive Communication / Criticism

• Preserves a positive relationship between the communicators and still addresses the problem at hand – Helpful attitude directed toward solving problems – Participative • Positive manager/sub interpersonal relationships – Not merely to be liked or judged as a “nice person” – Practical instrumental value: • Most powerful predictor of profitability, 3 times better than sales growth rate, firm size, & market share combined

Attributes of Supportive Communication

• Problem oriented, not person oriented – A focus on problems & issues that can be changes • “going forward, how can we solve this problem?” • NOT, “because of you….” • Participative & supportive listening • “What do you think are the obstacles standing in the way of improvement?”

Attributes of Supportive Communication

• Specific, not global – A focus on specific events & behaviors, avoiding general or extreme statements • “Your work was late 3 times this month” – NOT, “Your work is always late” • Validating, not invalidating – A focus on statements that communicate respect & collaboration • “I have some ideas, but first do you have any suggestions?” – NOT, “Here is how you will proceed”

Coaching and Counseling Situations • Coaching – When managers must pass along performance related advice, information, standards (ability issues) • “I can help you, lets work together on this” • Directive, accurate, specific • Counseling – When problems result from attitudes, personality clashes, defensiveness, or emotions • Goal: convey that a problem exists • This is what is perceived – Not directive – Effects on others

Finding the reasons for problems

• Probing responses – Asks a questions about what the person just said – Intends to acquire more information & to help the communicator say more – Neutral in tone • “Can you tell me more about that?” • “What do you mean, help me understand that” • “You are having difficulty with ..?”

Performance Appraisal Video

• Identify pros & cons of the organizations performance appraisal system • Consider the performance appraisal meeting – Was this an effective meeting?

• Why, why not?

– What could have improved the meeting?

– What should the boss and the subordinate do now? • What recommendations can you make to improve the performance appraisal experience at the company?