Gary Dessler

tenth edition

Chapter 9

Part 3 Training and Development

Performance Management and Appraisal

2005 Prentice Hall Inc. All rights reserved. PowerPoint Presentation by Charlie Cook The University of West Alabama

After studying this chapter, you should be able to:

1. Describe the appraisal process. 2. Develop, evaluate, and administer at least four
performance appraisal tools.

3. 4.

Explain and illustrate the problems to avoid in appraising performance. List and discuss the pros and cons of six appraisal methods.

5. Perform an effective appraisal interview. 6. Discuss the pros and cons of using different raters
to appraise a persons performance.
2005 Prentice Hall Inc. All rights reserved. 92

Comparing Performance Appraisal and Performance Management

Performance appraisal
Evaluating an employees current and/or past performance relative to his or her performance standards.

Performance management
The process employers use to make sure employees are working toward organizational goals.

2005 Prentice Hall Inc. All rights reserved.

93

Why Performance Management?

Increasing use by employers of performance management reflects:
The popularity of the total quality management (TQM) concepts. The belief that traditional performance appraisals are often not just useless but counterproductive. The necessity in todays globally competitive industrial environment for every employees efforts to focus on helping the company to achieve its strategic goals.

2005 Prentice Hall Inc. All rights reserved.

94

An Introduction to Appraising Performance

Why appraise performance?
Appraisals play an integral role in the employers performance management process. Appraisals help in planning for correcting deficiencies and reinforce things done correctly. Appraisals, in identifying employee strengths and weaknesses, are useful for career planning Appraisals affect the employers salary raise decisions.

2005 Prentice Hall Inc. All rights reserved.

95

Classroom Teaching Appraisal By Students

Source: Richard I. Miller, Evaluating Faculty for Promotional and Tenure (San Francisco: Jossey-Bass Publishers, 1987), pp. 164165. Copyright 1987, Jossey-Bass Inc., Publishers. All rights reserved. Reprinted with permission.

Figure 91
2005 Prentice Hall Inc. All rights reserved. 96

Realistic Appraisals
Motivations for soft (less-than-candid) appraisals
The fear of having to hire and train someone new The unpleasant reaction of the appraisee A company appraisal process thats not conducive to candor

Hazards of giving soft appraisals

Employee loses the chance to improve before being forced to change jobs. Lawsuits arising from dismissals involving inaccurate performance appraisals.
2005 Prentice Hall Inc. All rights reserved. 97

Continuous improvement
A management philosophy that requires employers to continuously set and relentlessly meet ever-higher quality, cost, delivery, and availability goals by:
Eradicating the seven wastes:
overproduction, defective products, and unnecessary downtime, transportation, processing costs, motion, and inventory.

Requiring each employee to continuously improve his or her own personal performance, from one appraisal period to the next.

2005 Prentice Hall Inc. All rights reserved.

98

The Components of an Effective Performance Management Process

Direction sharing

Role clarification
Goal alignment Developmental goal setting

Ongoing performance monitoring

Ongoing feedback Coaching and support Performance assessment (appraisal) Rewards, recognition, and compensation Workflow and process control and return
Figure 92
2005 Prentice Hall Inc. All rights reserved. 99

Defining Goals and Work Efforts

Guidelines for effective goals
Assign specific goals Assign measurable goals Assign challenging but doable goals Encourage participation 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.
910

SMART goals are:

2005 Prentice Hall Inc. All rights reserved.

Performance Appraisal Roles

Supervisors
Usually do the actual appraising. Must be familiar with basic appraisal techniques. Must understand and avoid problems that can cripple appraisals. Must know how to conduct appraisals fairly.

2005 Prentice Hall Inc. All rights reserved.

911

Performance Appraisal Roles (contd)

HR department
Serves a policy-making and advisory role. Provides advice and assistance regarding the appraisal tool to use. Prepares forms and procedures and insists that all departments use them. Responsible for training supervisors to improve their appraisal skills. Responsible for monitoring the system to ensure that appraisal formats and criteria comply with EEO laws and are up to date.

2005 Prentice Hall Inc. All rights reserved.

912

Steps in Appraising Performance

Defining the job
Making sure that you and your subordinate agree on his or her duties and job standards.

Appraising performance
Comparing your subordinates actual performance to the standards that have been set; this usually involves some type of rating form.

Providing feedback
Discussing the subordinates performance and progress, and making plans for any development required.
2005 Prentice Hall Inc. All rights reserved. 913

Designing the Appraisal Tool

What to measure?
Work output (quality and quantity) Personal competencies Goal (objective) achievement

How to measure?
Graphic rating scales Alternation ranking method

MBO

2005 Prentice Hall Inc. All rights reserved.

914

Performance Appraisal Methods

Graphic rating scale
A scale that lists a number of traits and a range of performance for each that is used to identify the score that best describes an employees level of performance for each trait.

2005 Prentice Hall Inc. All rights reserved.

915

Graphic Rating Scale with Space for Comments

Figure 93
2005 Prentice Hall Inc. All rights reserved. 916

Portion of an Administrative Secretarys Sample Performance Appraisal Form

Source: James Buford Jr., Bettye Burkhalter, and Grover Jacobs, Link Job Description to Performance Appraisals, Personnel Journal, June 1988, pp. 135136.

Figure 94
917

2005 Prentice Hall Inc. All rights reserved.

Performance Management Outline

Source: www.cwru.edu.

Figure 95a
918

2005 Prentice Hall Inc. All rights reserved.

Performance Management Outline (contd)

Source: www.cwru.edu.

Figure 95b
919

2005 Prentice Hall Inc. All rights reserved.

Performance Management Outline (contd)

Source: www.cwru.edu.

Figure 95c
920

2005 Prentice Hall Inc. All rights reserved.

Performance Appraisal Methods (contd)

Alternation ranking method
Ranking employees from best to worst on a particular trait, choosing highest, then lowest, until all are ranked.

Paired comparison method

Ranking employees by making a chart of all possible pairs of the employees for each trait and indicating which is the better employee of the pair.

2005 Prentice Hall Inc. All rights reserved.

921

Alternation Ranking Scale

Figure 96
2005 Prentice Hall Inc. All rights reserved. 922

Ranking Employees by the Paired Comparison Method

Note: + means better than. means worse than. For each chart, add up the number of 1s in each column to get the highest-ranked employee.
Figure 97
2005 Prentice Hall Inc. All rights reserved. 923

Performance Appraisal Methods (contd)

Forced distribution method
Similar to grading on a curve; predetermined percentages of ratees are placed in various performance categories. Example:
15% high performers 20% high-average performers 30% average performers 20% low-average performers 15% low performers

Narrative Forms
924

2005 Prentice Hall Inc. All rights reserved.

Performance Appraisal Methods (contd)

Behaviorally anchored rating scale (BARS)
An appraisal method that uses quantified scale with specific narrative examples of good and poor performance.

Developing a BARS:
Generate critical incidents Develop performance dimensions Reallocate incidents Scale the incidents Develop a final instrument

2005 Prentice Hall Inc. All rights reserved.

925

Performance Appraisal Methods (contd)

Advantages of using a BARS
A more accurate gauge Clearer standards Feedback Independent dimensions Consistency

2005 Prentice Hall Inc. All rights reserved.

926

AppraisalCoaching Worksheet

Source: Reprinted with permission of the publisher, HRnext.com; copyright HRnext.com, 2003.

Figure 98
2005 Prentice Hall Inc. All rights reserved. 927

Examples of Critical Incidents for an Assistant Plant Manager

Table 91
2005 Prentice Hall Inc. All rights reserved. 928

Salesmanship Skill

Example of a Behaviorally Anchored Rating Scale for the Dimension

Source:Walter C. Borman, Behavior Based Rating, in Ronald A. Berk (ed.), Performance Assessment: Methods and Applications (Baltimore, MD: Johns Hopkins University Press, 1986), p. 103.

Figure 99
2005 Prentice Hall Inc. All rights reserved. 929

Management by Objectives (MBO)

Involves setting specific measurable goals with each employee and then periodically reviewing the progress made.
1. 2. 3. 4. 5. 6. Set the organizations goals. Set departmental goals. Discuss departmental goals. Define expected results (set individual goals). Performance reviews. Provide feedback.

2005 Prentice Hall Inc. All rights reserved.

930

Computerized and Web-Based Performance Appraisal

Performance appraisal software programs
Keep notes on subordinates during the year. Electronically rate employees on a series of performance traits. Generate written text to support each part of the appraisal.

Electronic performance monitoring (EPM)

Having supervisors electronically monitor the amount of computerized data an employee is processing per day, and thereby his or her performance.
2005 Prentice Hall Inc. All rights reserved. 931

Potential Rating Scale Appraisal Problems

Unclear standards
An appraisal that is too open to interpretation.

Halo effect
Occurs when a supervisors rating of a subordinate on one trait biases the rating of that person on other traits.

Central tendency
A tendency to rate all employees the same way, such as rating them all average.

2005 Prentice Hall Inc. All rights reserved.

932

A Graphic Rating Scale with Unclear Standards

Note: For example, what exactly is meant by good, quantity of work, and so forth?

Table 92
2005 Prentice Hall Inc. All rights reserved. 933

Potential Rating Scale Appraisal Problems (contd)

Strictness/leniency
The problem that occurs when a supervisor has a tendency to rate all subordinates either high or low.

Bias
The tendency to allow individual differences such as age, race, and sex to affect the appraisal ratings employees receive.

2005 Prentice Hall Inc. All rights reserved.

934

How to Avoid Appraisal Problems

Learn and understand the potential problems, and the solutions for each.

Use the right appraisal tool. Each tool has its own pros and cons.
Train supervisors to reduce rating errors such as halo, leniency, and central tendency. Have raters compile positive and negative critical incidents as they occur.

2005 Prentice Hall Inc. All rights reserved.

935

Who Should Do the Appraising?

The immediate supervisor Peers Rating committees Self-ratings Subordinates 360-Degree feedback

2005 Prentice Hall Inc. All rights reserved.

936

Advantages and Disadvantages of Appraisal Tools

Table 93
2005 Prentice Hall Inc. All rights reserved. 937

The Appraisal Interview

Types of appraisal interviews
SatisfactoryPromotable SatisfactoryNot promotable UnsatisfactoryCorrectable UnsatisfactoryUncorrectable

How to conduct the appraisal interview

Talk in terms of objective work data. Dont get personal. Encourage the person to talk. Dont tiptoe around.
2005 Prentice Hall Inc. All rights reserved. 938

Performance Contract

Source: David Antonion, Improving the Performance Management Process Before Discontinuing Performance Appraisals, Compensation and Benefits Review May June 1994, p. 33, 34.

Figure 910
2005 Prentice Hall Inc. All rights reserved. 939

Checklist During the Appraisal Interview

Source: Reprinted with permission of the publisher, HRnext.com. Copyright HRnext.com, 2003.

Figure 911
2005 Prentice Hall Inc. All rights reserved. 940

The Appraisal Interview (contd)

How to handle a defensive subordinate
Recognize that defensive behavior is normal. Never attack a persons defenses. Postpone action. Recognize your own limitations.

2005 Prentice Hall Inc. All rights reserved.

941

The Appraisal Interview (contd)

How to criticize a subordinate
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. Avoid once-a-year critical broadsides by giving feedback on a daily basis, so that the formal review contains no surprises. Never say the person is always wrong

Criticism should be objective and free of any personal biases on your part.
2005 Prentice Hall Inc. All rights reserved. 942

The Appraisal Interview (contd)

How to ensure the interview leads to improved performance
Dont make the subordinate feel threatened during the interview.
Give the subordinate the opportunity to present his or her ideas and feelings and to influence the course of the interview. Have a helpful and constructive supervisor conduct the interview. Offer the subordinate the necessary support for development and change.
2005 Prentice Hall Inc. All rights reserved. 943

The Appraisal Interview (contd)

How to handle a formal written warning
Purposes of the written warning
To shake your employee out of bad habits. Help you defend your rating, both to your own boss and (if needed) to the courts.

Written warnings should:

Identify standards by which employee is judged. Make clear that employee was aware of the standard. Specify deficiencies relative to the standard. Indicates employees prior opportunity for correction.

2005 Prentice Hall Inc. All rights reserved.

944

Creating the Total Performance Management Process

What is our strategy and what are our goals? What does this mean for the goals we set for our employees, and for how we train, appraise, promote, and reward them? What will be the technological support requirements?

2005 Prentice Hall Inc. All rights reserved.

945

Information Required for TRWs Web-Based Performance Management System

Source: D. Bradford Neary,Creating a Company-Wide, Online, Performance Management System: A Case Study at TRW, Inc., Human Resource Management 41, no 4 (Winter 2002), p. 495.

Figure 912
946

2005 Prentice Hall Inc. All rights reserved.

HR Scorecard for Hotel Paris International Corporation*

Note: *(An abbreviated example showing selected HR practices and outcomes aimed at implementing the competitive strategy, To use superior guest services to differentiate the Hotel Paris properties and thus increase the length of stays and the return rate of guests and thus boost revenues and profitability)

Figure 13
2005 Prentice Hall Inc. All rights reserved. 947

Key Terms
performance appraisal performance management graphic rating scale alternation ranking method paired comparison method forced distribution method critical incident method management by objectives (MBO) electronic performance monitoring (EPM) unclear standards halo effect central tendency

strictness/leniency
bias appraisal interview

behaviorally anchored rating scale (BARS)

2005 Prentice Hall Inc. All rights reserved.

948