8 2010 SouthWestern a part of Cengage Learning

8 © 2010 South-Western, a part of Cengage Learning All rights reserved. Power. Point Presentation by Charlie Cook The University of West Alabama

Performance Appraisal Programs • Performance Appraisal Ø A process, typically performed annually by a supervisor for a subordinate, designed to help employees understand their roles, objectives, expectations, and performance success. • Performance Management Ø The process of creating a work environment in which people can perform to the best of their abilities. © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 2

FIGURE 8. 1 Purposes for Performance Appraisal © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 3

Developing an Effective Appraisal Program • • What are the performance Standards? Are You Complying with the law? Who should Appraise performance? ( Sources) Putting it all together : 360 – degree Appraisal • Training Appraisers © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 4

Developing an Effective Appraisal Program • Performance Standards Ø Must be based on job-related requirements derived from job analysis and reflected in job description and job specifications. Ø Help translate an organization’s goals and objectives into job requirements that define acceptable and unacceptable performance levels. © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 5

FIGURE 8. 4 Alternative Sources of Appraisal © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 6

Sources of Performance Appraisal • Manager and/or Supervisor Ø Appraisal done by an employee’s manager and reviewed by a manager one level higher. • Self-Appraisal Ø Appraisal done by the employee being evaluated, generally on an appraisal form completed by the employee prior to the performance interview. • Subordinate Appraisal Ø Appraisal of a superior by an employee, which is more appropriate for developmental than for administrative purposes. © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 7

Sources of Performance Appraisal • Peer Appraisal Ø Appraisal by fellow employees, compiled into a single profile for use in an interview conducted by the employee’s manager. © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 8

Sources of Performance Appraisal • Team Appraisal Ø Based on TQM concepts; recognizes team accomplishment rather than individual performance • Customer Appraisal Ø A performance appraisal that, like team appraisal, is based on TQM concepts and seeks evaluation from both external and internal customers © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 9

360 -Degree Performance Appraisal System Integrity Safeguards Jobs are multifacted and different people see different things. As the name implies , 360 degree feedback is intended to provide employees with as accurate a view of their performance as possible by getting input from all angles : supervisors, peers, subordinates , customers and the like. © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 10

Training Performance Appraisers Common rater-related errors Error of central tendency Leniency or strictness errors Similar-to-me errors Recency errors Contrast errors © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 11

Rater Errors • Error of Central Tendency Ø A rating error in which all employees are rated about average. • Leniency or Strictness Error Ø A rating error in which the appraiser tends to give all employees either unusually high or unusually low ratings. • Recency Error Ø A rating error in which appraisal is based largely on an employee’s most recent behavior rather than on behavior throughout the appraisal period. © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 12

Rater Errors • Contrast Error Ø A rating error in which an employee’s evaluation is biased either upward or downward because of comparison with another employee just previously evaluated. • Similar-to-Me Error Ø An error in which an appraiser inflates the evaluation of an employee because of a mutual personal connection. © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 13

Performance Appraisal methods • Trait methods • Behavoiural methods • Results methods © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 14

Performance Appraisal Methods Graphic Rating Scale Trait Methods Mixed Standard Scale Forced-Choice Essay © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 15

Trait Methods • Graphic Rating-Scale Method Ø A trait approach to performance appraisal whereby each employee is rated according to a scale of individual characteristics. • Mixed-Standard Scale Method Ø An approach to performance appraisal similar to other scale methods but based on comparison with (better than, equal to, or worse than) a standard. © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 16

2 Graphic Rating Scale with Provision for Comments © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 17

3 Example of a Mixed-Standard Scale © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 18

Trait Methods • Forced-Choice Method Ø Requires the rater to choose from statements designed to distinguish between successful and unsuccessful performance. Ø 1. ______ a) Works hard Ø 2. ______ a) Shows initiative Ø 3. ______ a) Produces poor quality _____ b) Works quickly _____ b) Is responsive to customers _____ b) Lacks good work habits • Essay Method Ø Requires the rater to compose a statement describing employee behavior. © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 19

Behavioral Methods Critical Incident Behavioral Checklist Behavioral Methods Behaviorally Anchored Rating Scale (BARS) Behavior Observation Scale (BOS) © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 20

Behavioral Methods • Critical Incident Method Ø Critical incident v An unusual event that denotes superior or inferior employee performance in some part of the job v The manager keeps a log or diary for each employee throughout the appraisal period and notes specific critical incidents related to how well they perform. • Behavioral Checklist Method Ø The rater checks statements on a list that the rater believes are characteristic of the employee’s performance or behavior. © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 21

Results Methods • Productivity Measures Ø Appraisals based on quantitative measures (e. g. , sales volume) that directly link what employees accomplish to results beneficial to the organization. • Management by Objectives (MBO) Ø A philosophy of management that rates performance on the basis of employee achievement of goals set by mutual agreement of employee and manager. © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 22

FIGURE 8. 6 Performance Appraisal under an MBO Program © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 23

The Balanced Scorecard • The appraisal focuses on four related categories Ø Financial, customer, processes, and learning • Ensuring the method’s success: Ø Translate strategy into a scorecard of clear objectives. Ø Attach measures to each objective. Ø Cascade scorecards to the front line. Ø Provide performance feedback based on measures. Ø Empower employees to make performance improvements. Ø Reassess strategy. © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 24

FIGURE 8. 7 Summary of Various Appraisal Methods © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 25

Appraisal Interviews Types of Appraisal Interviews Tell and Sell - persuasion Tell and Listen - nondirective Problem Solving - focusing the interview on problem resolution and employee development © 2010 South-Western, a part of Cengage Learning. All rights reserved. 8– 26