Date post: | 05-Dec-2014 |
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Chapter 8
Performance Appraisals
Performance Management
• Provides data to assess the current
skill, experience, and performance level
of every employee
• Impacts human resource planning,
training & development, career
development & compensation forecasts
• Requires effective performance
appraisal system i.e. valid
Uses of Performance
Appraisal
Performance improvement
Compensation adjustments
Placement decisions
Training & Development needs
Career planning & development
Identify deficiencies in staffing process
Detect informational inaccuracies
Diagnose job design errors
Avoidance of discrimination
External challenges
Key Elements
Employee
Feedback
Employee
Records &
HR Decisions
Human
Performance
Performance
Measures &
Criteria
Performance
Appraisal
Interview
Appraisal Systems
• Job-related
– System evaluates critical behaviours that
constitute job success
• Practical
– Understood and relatively simple
• Performance standards
– Related to the desired results of each job
• Performance measures
– Reports on critical behaviours
Performance Measures
Indirect
Objective
• Rater must evaluate substitutes for
performance (constructs)
• Verifiable by others
• Usually quantitative
Subjective• Not verifiable by others
• Usually rater’s personal opinions
Direct• Rater actually sees the employee’s
performance
Problems with Subjective
Measures
Rater Biases
Haloeffect
Error of central
tendency
Leniency &strictness bias
Recencyeffect
Personalprejudice
Characteristics for
Effectiveness
Effective
Performance
Appraisal
System
Validity
Reliability
Input into system development
Acceptable standards
Acceptable goals
Control of standards
more
Characteristics for
Effectiveness
Effective
Performance
Appraisal
System
Frequency of feedback
Rater training
Ratee training
Input into interview process
Appraisal consequences
Different sources (raters)
Past-Oriented:
Noncomparative
Critical
incident
Behaviourallyanchored
•Rater records performance statements
•Describes very effective/ineffective behaviour
•Behaviours are placed along a scale
•Looks at specific job-related factors
Rating scale•Oldest and most widely used method
•Subjective i.e. based on the rater’s opinion
•Responses may be given numerical values
•Appraisal based on a test
•Test may be pen & pencil or demonstration
Tests &
observations
Past-Oriented: Comparative
Forceddistributions
•Categories are developed
•Employees assigned to categories
Ranking •Employees ranked from best to worst
Future-Oriented Methods
Management-by-objectives
Assessmentcentre
•Employee & supervisor jointly establish goals
•Employee is later evaluated on the objectives
•Usually used to evaluate future potential
•Multiple types of evaluation
•Usually used for managers
Self-
Appraisals•Useful to further self-development
•Can be used with any evaluation approach
Recent Developments
• 360-degree appraisal
– In line with the trend toward flatter
organizations
– Combination of perspectives e.g. peer,
self, supervisor, client
• Balanced scorecard
– Integrates organizational performance
measures such as financial, customer
satisfaction, internal processes, learning
Evaluation Interviews
• Performance review sessions that give
employees feedback about their past
performance or future potential
• Interview should be a positive,
performance-improving dialogue
Effective Evaluation
Interviews
• Emphasize positive aspects of employee performance
• Tell each employee the evaluation session is to improve performance not to discipline
• Conduct the performance review session in private without interruptions
• Review performance formally at least annually
• Make criticisms specific, not general and vague
Effective Evaluation
Interviews
• Focus criticisms on performance, not on personality
• Stay calm and do not argue with the person being evaluated
• Identify specific actions to improve performance
• Emphasize willingness to assist the employee’s efforts to improve performance
• End the evaluation by stressing positive aspects and reviewing improvement plans