CBEB 1104 Human Resource Management Lecture 7

Dessler 2013

Chapter 9: Performance Management & Appraisal

1.
2. 3. 4.

Define performance management and discuss how it differs from performance appraisal. Describe the appraisal process. Set effective performance appraisal standards. Develop, evaluate, and administer at least four performance appraisal tools.

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Chapter 92

5. Explain and illustrate the problems to avoid in appraising performance. 6. Discuss the pros and cons of using different raters to appraise a persons performance. 7. Perform an effective appraisal interview.

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Chapter 93

Define performance management and discuss how it differs from performance appraisal.

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Chapter 9-4

Basic Concepts in Performance Management and Appraisal

Performance Appraisal Performance Management
An integrated approach to ensuring that an employees performance supports and contributes to the organizations strategic aims.

Setting work standards, assessing performance, and providing feedback to employees to motivate, correct, and continue their performance.

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Describe the appraisal process.

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Chapter 9-6

Appraising Performance
Steps in Appraising Performance
1

Defining the job and performance criteria Appraising performance

2
3

Providing feedback session

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Appraising Performance
Why Appraise Performance?
1 2 3

Is basis for pay and promotion decisions. Plays an integral role in performance management.

Helps in correcting deficiencies and reinforcing good performance.

Is useful in career planning. Identify training and development needs.

4
5

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Set effective performance appraisal standards.

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Chapter 9-9

Setting SMART Goals

Specific, and clearly state the desired results.

Measurable in answering how much.

Attainable, and not too tough or too easy.

Relevant to whats to be achieved.

Timely in reflecting deadlines and milestones.

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Defining the Employees Goals and Work Standards

Guidelines for Effective Goal Setting

Set SMART goals

Assign specific goals

Assign measurable goals

Assign challenging/ doable goals

Encourage participation

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Employees Goals and Performance Standards

Basing appraisal standards on required competencies The role of job descriptions
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Who Should Do the Appraising?

Immediate supervisor

Self-rating

Peers

Potential Appraisers

Subordinates

Rating committee

360-degree feedback

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Develop, evaluate, and administer at least four performance appraisal tools.

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Chapter 9-14

Performance Appraisal Methods

Appraisal Methodologies
1

Graphic rating scale Alternation ranking Paired comparison Forced distribution Critical incident

Narrative forms

2
3 4 5

7
8 9 10

Behaviorally anchored rating scales (BARS)

Management by objectives (MBO)

Computerized and Web-based performance appraisal

Merged methods

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FIGURE 93 Sample Graphic Rating Performance Rating Form

FIGURE 94

One Item from an Appraisal Form Assessing Employee Performance on Specific Job-Related Duties

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FIGURE 95

Appraisal Form for Assessing Both Competencies and Specific Objectives

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FIGURE 95 Appraisal Form for Assessing Both Competencies and Specific Objectives (contd)

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FIGURE 96

Scale for Alternate Ranking of Appraisee

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FIGURE 97

Ranking Employees by the Paired Comparison Method

Note: + means better than. - means worse than. For each chart, add up the number of +s in each column to get the highest ranked employee.

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TABLE 91

Examples of Critical Incidents for Assistant Plant Manager

Continuing Duties
Schedule production for plant

Targets
90% utilization of personnel and machinery in plant; orders delivered on time

Critical Incidents
Instituted new production scheduling system; decreased late orders by 10% last month; increased machine utilization in plant by 20% last month Let inventory storage costs rise 15% last month; over-ordered parts A and B by 20%; underordered part C by 30% Instituted new preventative maintenance system for plant; prevented a machine breakdown by discovering faulty part

Supervise procurement Minimize inventory costs of raw materials and while keeping adequate on inventory control supplies on hand Supervise machinery maintenance No shutdowns due to faulty machinery

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FIGURE 9/8 Appraisal-Coaching Worksheet

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Behaviorally Anchored Rating Scale (BARS)

Developing a BARS
1. Write critical incidents 2. Develop performance dimensions 3. Reallocate incidents 4. Scale the incidents 5. Develop a final instrument

Advantages of BARS
A more accurate gauge

Clearer standards
Feedback Independent dimensions Consistency
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FIGURE 99 Example of a Behaviorally Anchored Rating Scale for the Dimension Salesmanship Skills

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Mixed Standard Scales

Similar to BARS, but list only a few behavioural examples (about 3 high/medium/low) as opposed to 5-10 Mix the good and bad behavioural examples, as opposed to good to bad

Examine several performance dimensions (e.g. Quality of Work, Conscientiousness, Gets Along with others) Mix for statements across dimensions.
Ideal answer less obvious
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Management by Objectives (MBO)

A comprehensive and formal organizationwide goal-setting and appraisal program requiring:
1. Setting of organizations goals 2. Setting of departmental goals 3. Discussion of departmental goals 4. Defining expected results (setting individual goals) 5. Conducting periodic performance reviews 6. Providing performance feedback
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Using MBO
Potential Problems with MBO

Setting unclear objective

Time-consuming appraisal process

Conflict with subordinates over objectives

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Computerized and Web-Based Performance Appraisal Systems

Allow managers to keep notes on subordinates. Notes can be merged with employee ratings. Software generates written text to support appraisals. Allows for employee self-monitoring and selfevaluation.
o Use computer network technology to allow managers access to their employees computers and telephones. o Managers can monitor the employees rate, accuracy, and time spent working online (e.g. data entry staff) o Can induce Stress - monitored

Electronic Performance Monitoring (EPM) Systems

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Explain and illustrate the problems to avoid in appraising performance.

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Chapter 9-30

Dealing with Performance Appraisal Problems

Potential Rating Scale Appraisal Problems

Unclear standards

Halo effect

Central tendency

Leniency or strictness

Bias

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TABLE 92

A Graphic Rating Scale with Unclear Standards

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Discuss the pros and cons of using different raters to appraise a persons performance.

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Chapter 9-33

Guidelines for Effective Appraisals

How to Avoid Appraisal Problems

Know the problems

Use the right tool

Keep a diary

Get agreement on a plan

Be fair

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TABLE 93 Tool

Important Advantages and Disadvantages of Appraisal Tools Advantages

Simple to use; provides a quantitative rating for each employee. Provides behavioral anchors. BARS is very accurate. Simple to use (but not as simple as graphic rating scales). Avoids central tendency and other problems of rating scales. End up with a predetermined number or % of people in each group. Helps specify what is right and wrong about the employees performance; forces supervisor to evaluate subordinates on an ongoing basis. Tied to jointly agreed-upon performance objectives.

Disadvantages
Standards may be unclear; halo effect, central tendency, leniency, bias can also be problems. Difficult to develop. Can cause disagreements among employees and may be unfair if all employees are, in fact, excellent. Employees appraisal results depend on your choice of cutoff points. Difficult to rate or rank employees relative to one another.

Graphic rating scale

BARS Alternation ranking

Forced distribution method Critical incident method

MBO

Time-consuming.

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Perform an effective appraisal interview.

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Chapter 9-36

The Appraisal Interview

SatisfactoryPromotable

SatisfactoryNot Promotable

Types of Appraisal Interviews

UnsatisfactoryCorrectable

UnsatisfactoryUncorrectable

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Appraisal Interview Guidelines

Guidelines for Conducting an Interview

Talk in terms of objective work data

Dont get personal

Encourage the person to talk

Get agreement

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Handling Defensive Responses

How to Handle a Defensive Subordinate
1 2 3 4

Recognize that defensive behavior is normal. Never attack a persons defenses.

Postpone action.
Recognize your own limitations.

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How to Deliver Criticism

How to Criticize a Subordinate
1 2 3 4 5

Do it in a manner that lets the person maintain his or her dignity and sense of worth. Criticize in private, and do it constructively. Give daily feedback so that the review has no surprises. Never say the person is always wrong. Criticism should be objective and free of biases.

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Formal Written Warnings

Purposes of a Written Warning
o To shake your employee out of bad habits.
o To help you defend your rating, both to your own boss and (if needed) to the courts.

A Written Warning Should:

o Identify standards by which employee is judged. o Make clear that employee was aware of the standard.

o Specify deficiencies relative to the standard.

o Indicate employees prior opportunity for correction.
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Performance Management
Performance Management
o Is the continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning their performance with the organizations goals.

How Performance Management Differs From Performance Appraisal

o A continuous process for continuous improvement o A strong linkage of individual and team goals to strategic goals

o A constant reevaluation and modification of work processes

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Basic Building Blocks of Performance Management

Ongoing performance monitoring
Rewards, recognition, and compensation

Direction sharing

Goal alignment

Ongoing feedback

Coaching and development support

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Tutorial and Reminders

Tutorial 7 (Week 8):
Carter Cleaning Company (page 341) Questions 1 and 2
Have a good semester break See you after the break
REFRESHED, REENERGIZED AND READY TO LEARN MORE THINGS ON H.R.M.
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Chapter 9-45