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Human ResourceHuman Resource

ManagementManagementTENTH EDITONTENTH EDITON

2003 Southwestern College Publishing. All rights reserved. PowerPoint Presentationby Charlie CookPowerPoint Presentationby Charlie Cook

Performance ManagementPerformance Management

and Appraisaland Appraisal

Chapter 11Chapter 11

SECTION 3Training and

DevelopingHuman

Resources

SECTION 3Training and

DevelopingHuman

Resources

Robert L. MathisRobert L. Mathis John H. JacksonJohn H. Jackson

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2002 Southwestern College Publishing. All rights reserved. 112

Learning ObjectivesLearning Objectives

After you have read this chapter, you should beable to:

Distinguish between job criteria and performancestandards and discuss criterion contamination and

deficiency.

Identify two major uses of performance appraisal.

Provide examples of several rater errors.

Describe both the advantages and disadvantages ofmultisource (360) appraisal.

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Learning Objectives (contd)Learning Objectives (contd)

Identify the nature of behavioral approaches toperformance appraisal and management byobjectives (MBO).

Discuss several concerns about appraisal feedback

interviews. Identify the characteristics of a legal and effective

performance appraisal system.

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Identifying and MeasuringIdentifying and Measuring

Employee PerformanceEmployee Performance

Performance Management System

Processes used to identify, encourage, measure,evaluate, improve, and reward employee

performance. Performance

What an employee does and does not do. Quantity of output Quality of output

Timeliness of output Presence at work

Cooperativeness

Job Criteria

Important elements in a given job

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LinkageLinkage

BetweenBetween

Strategy,Strategy,Outcomes,Outcomes,

andand

OrganizationalOrganizational

ResultsResults

Figure 111

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Types of Performance InformationTypes of Performance Information

TraitTrait--basedbased

InformationInformation

BehaviorBehavior--basedbased


ResultsResults--basedbased


JobJob

Performance?Performance?

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Potential Performance Criteria ProblemsPotential Performance Criteria Problems

ObjectivityObjectivity

DeficiencyDeficiency ContaminationContamination

PerformancePerformance

CriteriaCriteria

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Performance StandardsPerformance Standards

Performance Standards Expected levels of performance

Benchmarks

Goals

Targets

Characteristics of Well-defined Standards

Realistic

Measurable

Clearly understood

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Terms Defining Standards on One CompanyTerms Defining Standards on One Company

Figure 112

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Uses of Performance AppraisalUses of Performance Appraisal

Performance Appraisal (PA) The process of evaluating how well employees

perform their jobs when compared to a set ofstandards, and then communicating the information

to employees. Informal Appraisal

Day-to-day contacts, largely undocumented

Systematic AppraisalFormal contact at regular time intervals, usuallydocumented

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Uses of Performance Appraisal (contd)Uses of Performance Appraisal (contd)

PerformancePerformance

AppraisalAppraisal

Giving PerformanceGiving Performance

FeedbackFeedback

Administering WagesAdministering Wages

and Salariesand SalariesIdentifying StrengthsIdentifying Strengths

and Weaknessesand Weaknesses

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Uses of Performance Appraisal (contd)Uses of Performance Appraisal (contd)

Criticisms of Performance Appraisal Focus is too much on the individual and does little

to develop employees.

Employees and supervisors believe the appraisal

process is seriously flawed. Appraisals are inconsistent, short-term oriented,

subjective, and useful only at the extremes ofperformance.

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Conflicting Roles for Performance AppraisalConflicting Roles for Performance Appraisal

Figure 113

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Typical Division of HR ResponsibilitiesTypical Division of HR Responsibilities

for Performance Appraisalfor Performance Appraisal

Figure 114

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Who Conducts AppraisalsWho Conducts Appraisals

Supervisors who rate their subordinates Employees who rate their supervisors

Team members who rate each other

Outside sources Employees self-appraisal

Multisource (360 feedback) appraisal

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Traditional PerformanceTraditional Performance

Appraisal:Appraisal:

Logic and ProcessLogic and Process

Figure 115

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Employee Rating of ManagersEmployee Rating of Managers

Advantages Helps in identifying

competent managers

Serves to make managersmore responsive to

employees Can contribute to the

career development ofmanagers

Disadvantages Negative reactions by

managers to employeeratings

Subordinates fear of

reprisals may inhibit themfrom giving realistic(negative) ratings

Ratings are useful only forself-improvement purposes

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Team/Peer RatingsTeam/Peer Ratings

Advantages Helps improve the

performance of lower-rated individuals

Peers have opportunity to

observe other peers. Peer appraisals focus on

individual contributions toteamwork and teamperformance.

Disadvantages Can negatively affect

working relationships.

Can create difficulties formanagers in determining

individual performance. Organizational use of

individual performanceappraisals can hinder thedevelopment of teamwork

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Multisource AppraisalMultisource Appraisal

Figure 116

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Performance AppraisalMethodsPerformance AppraisalMethods

Figure 117

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Category Rating MethodsCategory Rating Methods

Graphic Rating Scale A scale that allows the rater to indicate an

employees performance on a continuum. Job criteria scales

Behavioral scales Drawbacks

Restrictions on the range of possible rater responses

Differences in the interpretations of the meanings of

scale items and scale ranges by raters

Poorly designed scales that encourage rater errors

Rating form deficiencies that limit the effectiveness of

the appraisal

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Category Rating Methods (contd)Category Rating Methods (contd)

Checklists A performance appraisal tool that uses a list of

statements or work behaviors that are checked byraters.

Can be quantified by applying weights to individual

checklist items.

Drawbacks

Interpretation of item meanings by raters

Weighting creates problems in appraisal interpretation

Assignment of weights to items by persons other than

the raters

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Sample Performance Appraisal FormSample Performance Appraisal Form

Figure 118a

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Sample Performance Appraisal FormSample Performance Appraisal Form

Figure 118b

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Comparative MethodsComparative Methods

Ranking Listing of all employees from highest to lowest in

performance.

Drawback

Does not show size of differences in performancebetween employees

Implies that lowest-ranked employees are

unsatisfactory performers.

Becomes an unwieldy process if the group to be

ranked is large.

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Comparative Methods (contd)Comparative Methods (contd)

Forced Distribution Performance appraisal method in which ratings of

employees are distributed along a bell-shapedcurve.

Drawbacks Assumes a normal distribution of performance.

Resistance by managers to placing individuals in the

lowest or highest groups.

Providing explanation for placement in a higher or

lower grouping can be difficult.

Is not readily applicable to small groups of employees.

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Forced Distribution on a BellForced Distribution on a Bell--Shaped CurveShaped Curve

Figure 119

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Narrative MethodsNarrative Methods

Critical Incident Manager keeps a written record of highly favorable

and unfavorable employee actions.

Drawbacks

Variations in how managers define a critical incident Time involved in documenting employee actions

Most employee actions are not observed and may

become different if observed

Employee concerns about managers black books

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Narrative Methods (contd)Narrative Methods (contd)

Essay Method Manager writes a short essay describing an

employees performance.

Drawbacks

Depends on the managers writing skills and theirability to express themselves.

Field Review

Outside reviewer interviews the manager about the

performance of each employee and develops arating for the employees from the interview notes.

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Behavioral/Objective MethodsBehavioral/Objective Methods

Behavioral Rating Approach Assesses employees behaviors instead of other

characteristics

Consists of a series of scales created by:

Identifying important job dimensions Creating statements describing a range of desired and

undesirable behaviors (anchors)

Types of behavioral scales Behaviorally anchored rating scales (BARS)

Behavioral observation scales (BOS)

Behavioral expectation scales (BES)

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Customer Service Skills (BOS)Customer Service Skills (BOS)

Figure 1110

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Management by ObjectivesManagement by Objectives

Management by Objectives Specifying the performance goals that an individual

and his or her manager agree to try to attain withinan appropriate length of time.

Key MBO Ideas Employee involvement creates higher levels of

commitment and performance.

Encourages employees to work effectively toward

achieving desired results. Performance measures should be measurable and

should define results.

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The MBO ProcessThe MBO Process

Job Review and AgreementJob Review and Agreement

Development of Performance StandardsDevelopment of Performance Standards

Guided Objective SettingGuided Objective Setting

Continuing Performance DiscussionsContinuing Performance Discussions

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Common Rater ErrorsCommon Rater Errors

Figure 1111

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Feedback as a SystemFeedback as a System

Action Based onAction Based on

EvaluationEvaluation

DataData

EvaluationEvaluation

of Dataof Data

FeedbackFeedback

SystemSystem

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Appraisal Interview HintsAppraisal Interview Hints

Figure 1112

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Performance Appraisals and the LawPerformance Appraisals and the Law

Legally Defensible PA System Appraisal criteria based on job analysis

Absence of disparate impact and evidence of validity

Formal evaluation criterion that limit managerial

discretion Formal rating instrument linked to job duties and

responsibilities

Personal knowledge of and contact with ratee

Training of supervisors in conducting appraisals Review process to prevent undue control of careers

Counseling to help poor performers improve

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Performance Management SystemPerformance Management System

Effective PMS systems are: Consistent with the strategic mission of the

organization

Beneficial as development tool

Useful as an administrative tool Legal and job-related

Viewed as generally fair by employees

Effective in documenting employee performance

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