HR (Chapter 7-Performance Management & Appraisal)

(Appraisal Methods and Forms) Critical Incident Method

• A performance appraisal method in which a manager keeps a written record of the critical positive and negative performance of employees throughout the performance period. • A list of documented critical incidents is especially important to have leading up the evaluative decision of firing employees.

*The Developmental Performance Appraisal Interview

(preparation for the appraisal interview) 1.make an appointment 2.have the employee develop objectives and plans for improving performance 3.develop objectives and plans for improving performance -- (conducting the appraisal interview) 1.open the interview 2.agree on objectves 3.develop plances for meeting the objectives 4.make a follow-up appointment 5.conclude the intrview

*The Evaluative Performance Appraisal Interview

(preparation for the appraisal interview) 1.make an appointment 2.have the employee perform a self-assessment 3.assess the employee's performance 4.identify strengths and areas for improvement 5. predict the employee's reactions and plan how to handle them -- (conducting the appraisal interview) 1.open the interview 2.go over the assessment form 3. agree on strengths and areas for improvement 4. conclude the interview

What need to be evaluated?

-Traits identify the physical or psychological characteristics of a person. We can evaluate the traits of an individual during the performance appraisal process -Behavioral Behavioral appraisals measure what individuals do at work, not their personal characteristics -Results results are simply a measure of the goals achieved through a work process

(Appraisal Methods and Forms) Management by Objectives (MBO)

The management by objectives (MBO) method is a process in which managers and employees jointly set objectives for the employees, periodically evaluate performance, and reward employees according to the results. ------ MBO is a three-step process, discussed below. Step 1: Set individual objectives and plans. Step 2: Give feedback and continually evaluate performance. Communication is the key factor in determining MBO's success or failure, and employees should continually critique their own performance. Thus, the manager and employee must communicate often to review progress. Step 3: Reward according to performance.

*The Performance Appraisal Process

step 1: Job analysis >organizational mission and objective step 2: develop standards and measurement method; communication step 3: Informal PA- coaching and discipline step 4: Prepare for and conduct the formal PA

*Why Do We Conduct Performance Appraisals?

• Communication (Informing) To communicate employee's strengths and needs and to motivate performance • Decision-Making (Evaluating) To make employment-related decisions (i.e., salaries, promotions, training, development, termination) • Motivation (Engaging) To motivate employees to improve the way they work, which will in turn improve organizational productivity overall. • Planning Future career goals

Trends in Performance Appraisal

• Competency-Based Performance Management: With the nature of work in today's companies and the fact that competencies are becoming a significant issue, performance management systems need to be redesigned so that we can evaluate the skills and capabilities that are most important to the business. > Competency: The combination of observable and measurable knowledge, skills, abilities and personal attributes that contribute to enhanced employee performance and ultimately result in organizational success.

Performance Appraisal Errors

• Halo Error. >This occurs when the evaluator forms a generally positive or negative impression of an individual and then artificially extends that general impression to an overall evaluation of the individual. • Similarity Error. >This error, also called "like me," occurs when the rater gives better evaluations to subordinates whom they consider more similar to themselves and poorer evaluations to subordinates whom they consider to be different from themselves. • Proximity Error. >This error states that similar marks may be given to items that are near (in other words, proximate to) each other on the performance appraisal form, regardless of differences in performance on those measures. • Recency Error. >This occurs when the rater uses only the last few weeks of a rating period as evidence when putting together performance ratings. • Stereotyping. >Mentally classifying a person into an affinity group and then identifying the person as having the same assumed characteristics as the group. • Bias. >Bias is simply a personality-based tendency, either toward or against something.

(Appraisal Methods and Forms) Narrative Method or Form

• Managers keep written records about employees' performance. • Used for ongoing feedback and employee development planning. • Narratives capture employees' values and contributions.

Debriefing the Appraisal

• Managers prepare for and communicate analysis of each employee's performance with the employee. • There are two major reasons for assessing performance: >For evaluative decisions >For development

(Appraisal Methods and Forms) Ranking Method

• Managers rank employees by comparing best to worst. • Forced distribution ranking of best to worst is the most used measure when companies resort to downsizing and layoffs. • It is typically used for evaluative decision-making and development.

(Appraisal Methods and Forms) Graphic Rating Scale Forms

• Managers use appraisal checklists to rate employee performance, often expressed as a numerical scale. • Typically used for evaluative decisions, but should also steer development decisions. • An effective rating is possible using a 1-5 Likert Scale, but examples provide greater clarity.

(Appraisal Methods and Forms) Behaviorally Anchored Rating Scales (BARS)

• Managers use behaviorally-based continuum to rate employee performance, often expressed as a numerical scale. • It's perhaps the best and most effective appraisal measurement. • It is typically used for evaluative decision-making, but should also steer development decisions.

Who Should Assess Performance?

• Supervisors • Peers (Teams) • Subordinates • Customers (e,g., positions that include frequent contact with customers) • Employees themselves • 360-Degree Evaluations (every one that the employee comes in contact with; supervisors, subordinates, self, customers, peers)

How Do We Use Appraisal Methods and Forms?

• The formal performance appraisal usually involves the use of a standard form developed by the HR department to measure employee performance. • Employees need to know the standards and understand what good performance looks like, and they need to be able to measure their own performance.

*(Appraisal Methods and Forms) Which Option Is Best?

• Using a combination of the methods and forms is usually superior to using just one. • For developmental objectives, the critical incidents, MBO, and narrative methods work well. But you can't decide who gets the promotion or merit raise without an evaluative method. • For administrative decisions, a ranking method based on the evaluative methods and especially graphic rating scales or BARS forms work well.

*Performance Management vs Performance Appraisal

• Performance Management >Identifying, measuring, managing, and developing HR performance; serves as systematic measurement of performance (and communication of that assessment to the individual) that we use to improve performance over time. •Performance Appraisal >Performance appraisal means evaluating an employee's current and/or past performance relative to his or her performance standards. >Evaluating individual employee performance; vital component of performance management process