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91

Performance

Appraisal and

Management

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After studying this chapter,you should be able to:

1. Describe the appraisal process.

2. Develop, evaluate, and administer at least fourperformance appraisal tools.

3. Explain and illustrate the problems to avoid inappraising performance.

4. List and discuss the pros and cons of six appraisalmethods.

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93

Comparing Performance Appraisal andPerformance Management

Performance appraisal

Evaluating an employees current and/or pastperformance relative to his or her performance

standards.Performance management

The process employers use to make sureemployees are working toward organizational

goals.

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Performance Management

What do you th ink o f when you hear

Performance Management?

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An effective PerformanceManagement System is

A com prehensive process that maximizes engagement, development, andperformance by al l employ ees in the emplo yment l i fecycle by:

Defining and communicating performance expectations in a regular, on-going manner

Aligning position responsibilities with competencies (skills, attributes,talents) needed to successfully perform role

Remaining flexible, efficient, measurable, fair, and transparent

Proactively focusing on employee development and talent management toenable succession planning and career development to retain employeesand to build skills for future needs

Linking performance to compensation, recognition, and rewards

Aligning employees work to department goals and objectives

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Why is Performance ManagementImportant? No matter how large an organization is all

performance begins with the individual

Individual performance impacts teams ,divisions,

business units, and the organization

Success is achieved throu gh people

If people know what they are suppose to do, get feedback on howthey are or are not doing it, and get rewarded for doing they aresupposed to be doing, companies will be more likely to get the

results they desire.

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97

Why Performance Management?

Increasing use by employers of performancemanagement reflects:

The popularity of the total quality management(TQM) concepts.

The belief that traditional performance appraisalsare often not just useless but counterproductive.

The necessity in todays globally competitiveindustrial environment for every employees

efforts to focus on helping the company toachieve its strategic goals.

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Managerial ction

Quality

improvement

efforts

Policy change

Resource

allocation

change

Program change

Using Data to chieve Results

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In a performancemanagementsystem...

All components shouldbe driven by the publichealth mission andorganizational strategy

Activities should beintegrated into routine

public health practices

The goal is continuousperformance andquality improvement

Source: Turning Point Performance ManagementCollaborative.

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The Management Challenge9 of 10 companies fail to execute strategy

Vision Barrier: Only 5% of

the workforce understands

the strategy

People Barrier: Only 25%

of managers have

incentives linked to

strategy

Management Barrier:

85% of executive teams

spend

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911

An Introduction to AppraisingPerformance

Why appraise performance?

Appraisals play an integral role in the employersperformance management process.

Appraisals help in planning for correctingdeficiencies and reinforce things done correctly.

Appraisals, in identifying employee strengths andweaknesses, are useful for career planning

Appraisals affect the employers salary raisedecisions.

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Universi ty Mission

Unit Values and Goals

Department Goals

Individual Goals

Components of Cornells PMP

Planning

Establish unit strategy & goals

Align goals of employee & unit

Determine performance level criteria

Assessment

On-going feedback

Annual PD

Talent Discussion (Criteria)

Recognition

Correlate SIP and performance

Correlate promotions and bonuses

Utilize low-cost, no-cost ideas

Career Development

Create Individual Development Plan(IDP)

Utilize rotations and on-campusand off-campus training

Talent Discussion (Development)

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How is an effective PerformanceManagement System achieved?

Training

Train supervisors and employees

Planning

Establish unit strategy & goalsAlign goals of employee & unit

Determine performance level criteria

Assessment

Annual PDOn-going feedbackTalent Discussion

Recognition

Correlate SIP and performanceCorrelate promotions and bonuses

Utilize low-cost, no-cost ideas

CareerDevelopment

Create Individual Development Plan (IDP)Utilize rotations and on-campus and

off-campus trainingUniversity Mission

Unit Values and GoalsDepartment Goals

Individual Goals

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PMP Tools:Performance Dialogue (PD)

Individual Goal Alignment worksheet

Individual Development Plan (IDP)

PMP Instruction SheetSupervisor e-mail requesting feedback

Performance Dialogue Definitions page

Rating Scale and Definitions formPerformance Level Matrix (Skills for Success)

Talent Management Matrix

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915

Continuous improvement

A management philosophy that requiresemployers 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 improvehis or her own personal performance, from oneappraisal period to the next.

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916

The Components of an EffectivePerformance 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 returnFigure 92

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917

Defining Goals and Work Efforts

Guidelines for effective goalsAssign specific goals

Assign measurable goals

Assign challenging but doable goals

Encourage participation

SMART goals are:

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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918

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.

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919

Performance Appraisal Roles (contd)

HR department Serves a policy-making and advisory role.

Provides advice and assistance regarding theappraisal tool to use.

Prepares forms and procedures and insists that alldepartments use them.

Responsible for training supervisors to improvetheir appraisal skills.

Responsible for monitoring the system to ensurethat appraisal formats and criteria comply withEEO laws and are up to date.

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921

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

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922

Performance Appraisal Methods

Graphic rating scaleA scale that lists a number of traits and a range of

performance for each that is used to identify thescore that best describes an employees level ofperformance for each trait.

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923

GraphicRating Scalewith Space

forComments

Figure 93

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924

Portion of an Administrative Secretarys SamplePerformance Appraisal Form

Figure 94Source: James Buford Jr., Bettye Burkhalter, and Grover Jacobs, Link Job Descriptionto Performance Appraisals, Personnel Journal, June 1988, pp. 135136.

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925

Performance

Management Outline

Figure 95aSource: www.cwru.edu.

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926

Figure 95b

PerformanceManagement

Outline(contd)

Source: www.cwru.edu.

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927

PerformanceManagement

Outline(contd)

Figure 95cSource: www.cwru.edu.

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928

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 andindicating which is the better employee of the

pair.

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929

Alternation Ranking Scale

Figure 96

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930

Ranking Employees by thePaired Comparison Method

Figure 97

Note: + means better than. means worse than. For each chart, add up

the number of 1s in each column to get the highest-ranked employ ee.

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931

Performance Appraisal Methods (contd)

Forced distribution method Similar to grading on a curve; predetermined

percentages of ratees are placed in variousperformance categories.

Example: 15% high performers 20% high-average performers

30% average performers

20% low-average performers

15% low performers

Narrative Forms

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932

Performance Appraisal Methods (contd)

Behaviorally anchored rating scale (BARS)An appraisal method that uses quantified scale

with specific narrative examples of good and poorperformance.

Developing a BARS: Generate critical incidents

Develop performance dimensions

Reallocate incidents

Scale the incidents

Develop a final instrument

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933

Performance Appraisal Methods (contd)

Advantages of using a BARSA more accurate measure

Clearer standards

Feedback

Independent dimensions Consistency

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934

Appraisal-Coaching

Worksheet

Figure 98

Source: Reprinted with permission of

the publisher, HRnext.com; copyright

HRnext.com, 2003.

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935

Examples of Critical Incidents foran Assistant Plant Manager

Table 91

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936

Example of aBehaviorally

Anchored Rating

Scale for theDimension

Salesmanship Skill

Figure 99

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.

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937

Management by Objectives (MBO)

Involves setting specific measurable goalswith each employee and then periodically

reviewing the progress made.

1. Set the organizations goals.

2. Set departmental goals.3. Discuss departmental goals.

4. Define expected results (set individual goals).

5. Performance reviews.

6. Provide feedback.

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938

Computerized and Web-BasedPerformance 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 theamount of computerized data an employee isprocessing per day, and thereby his or herperformance.

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939

Potential Rating Scale AppraisalProblems

Unclear standardsAn 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 onother traits.

Central tendency

A tendency to rate all employees the same way,

such as rating them all average.

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940

A Graphic Rating Scale with Unclear Standards

Table 92

Note: For example, what exactly is meant by

good, quantity of work, and so forth?

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941

Potential Rating Scale Appraisal Problems(contd)

Strictness/leniency

The problem that occurs when a supervisor has atendency to rate all subordinates either high orlow.

Bias

The tendency to allow individual differences suchas age, race, and sex to affect the appraisal

ratings employees receive.

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942

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.

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943

Who Should Do the Appraising?

The immediate supervisor

Peers

Rating committees

Self-ratings

Subordinates

360-Degree feedback

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944

Advantages and Disadvantages of Appraisal Tools

Table 93

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945

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 crawl around.

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946

PerformanceContract

Figure 910

Source: David Antonion, Improving the

Performance Management Process Before

Discontinuing Performance Appraisals,

Compensation and Benefits Review May

June 1994, p. 33, 34.

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947

ChecklistDuring the

AppraisalInterview

Figure 911

Source: Reprinted with permission of

the publisher, HRnext.com. Copyright

HRnext.com, 2003.

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948

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.

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949

The Appraisal Interview (contd)

How to criticize a subordinate

Do it in a manner that lets the person maintain hisor her dignity and sense of worth.

Criticize in private, and do it constructively.

Avoid once-a-year critical broadsides by givingfeedback on a daily basis, so that the formalreview contains no surprises.

Never say the person is always wrong Criticism should be objective and free of any

personal biases on your part.

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950

The Appraisal Interview (contd)

How to ensure the interview leads to

improved performance

Dont make the subordinate feel threatened duringthe interview.

Give the subordinate the opportunity to presenthis or her ideas and feelings and to influence thecourse of the interview.

Have a helpful and constructive supervisor

conduct the interview. Offer the subordinate the necessary support for

development and change.

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951

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.

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952

Creating the Total PerformanceManagement 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?

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953

Information Required for TRWs Web-BasedPerformance Management System

Figure 912Source: 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.

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954

Figure13

HR Scorecardfor Hotel Paris

InternationalCorporation*

Note: *(An abbreviated example showing selected

HR practices and outcomes aimed at implementing

the competitive strategy, To use superior guestservices 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)

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Key Terms

performance appraisalperformance management

graphic rating scale

alternation ranking method

paired comparison method

forced distribution method

critical incident method

behaviorally anchored rating

scale (BARS)

management by objectives(MBO)

electronic performance

monitoring (EPM)

unclear standards

halo effect

central tendency

strictness/leniency

bias

appraisal interview