HRM - Performance Management and Training

Limitations of Performance Appraisal

1. Appraiser discomfort 2. Subjectivity of performance evaluation 3. Bias Error 4. Contrast error 5. Error of central tendency 6. Error of leniency or strictness Employee anxiety

The uses of performance appraisal

1. Human Resource Planning 2. Training and development 3. Career Planning and Development 4. Compensation Programs 5. Internal Employee Relations 6. Assessment of employee potential

Responsibility for performance appraisal

1. Immediate supervisor 2. Employees 3. Peers and team member 4. Self-appraisal 5. Customer appraisal 6. 360-Degree Feedback

Evaluation of Performance (Steps)

1. Objective Setting 2. Performing, mid-year review 3. Performance evaluation 4. Feedback discussion

Tools that organizations use to judge whether employees are meeting expectations

1. Performance Management 2. Performance Appraisal 3. Performance Appraisal Process

Performance appraisal interview

1. Scheduling the interview 2. Interview structure 3. Use of praise and criticism 4. Employee's role 5. Concluding the interview

Appraisal method

1. Trait systems 2. Comparison systems 3. Behavioral systems 3a. Critical incident technique 3b. Behaviorally anchored rating scales 3c. Behavioral observation scale 4. Results-Based Systems: 4a. MBO 4b. Work Standards Method

Performance Criteria

1. Traits, behaviors, and competencies 2. Goal Achievement 3. Improvement potential

Comparison systems

1. evaluate one employee's performance against that of other employees. Employees are ranked from the best performance to the poorest. a. Forced distribution method: Performance appraisal method in which the rater is required to assign individuals in a work group to a limited number of categories like a normal frequency distribution. b. Paired comparisons method: Supervisors compare each employee to every other employee, identifying the better performer in each pair.

Performance Appraisal Process

1. in order to work, managers should select the specific goals it believes to be most important and realistically achievable 2. ongoing cycle continues with establishing performing criteria (standards) and communicating these performance expectations to those concerned 3. The work is performed and the supervisor appraises the performance 4. The appraiser reviews work performance and evaluates it against established performance standards

Performance Management

1. is a goal-oriented process directed toward ensuring that organizational processes are in place to maximize the productivity of employees, teams, and ultimately the organization - includes incentive goals and the corresponding incentive values so that the relationship can be clearly understood and communicated - PM is a dynamic, continuous process, every individual is a part of the PM system. - A well-developed job description is needed to determine whether performance expectations have ben achieved - in PM systems, training has a direct tie-in to achieving organizational effectiveness, as does pay and performance - a good PM system ensures that people make good, effective use of their time

Behavioral systems

1. rate employees on the extent to which they display successful job performance behaviors. Behavioral methods rate objective job behaviors and provide results that are relatively free of rater errors and biases. Three main types of behavioral systems: 3a. Critical incident technique 3b. Behaviorally anchored rating scales 3c. Behavioral observation scale

Continuous open communication

A good appraisal system provides highly desired feedback on a continuing basis. There should be few surprises in the performance review.

Conduct performance reviews

A specific time should be set for a formal discussion of an employee's performance. A performance review allow them to detect any errors or omissions in the appraisal or an employee may disagree with the evaluation and want to challenge it. Constant employee performance documentation is vitally important for accurate Pas.

Peers and team members

Advantage: they work closely with the evaluated employee and probably have an undistorted perspective on typical performance, especially in team assignments. Disadvantage: reluctance of some people who work closely together to criticize each other + peers who interact infrequently and lack the information needed to make an accurate assessment.

Performance expectations

Employees must be understand in advance what is expected of them à so they also can evaluate their own performance and make timely adjustments as they perform their jobs without having to wait for the formal evaluation review.

Improvement potential

Firms should emphasize the future, including the behaviors and outcomes needed to develop the employee, and in the process, achieve the firm's goals. This involves an assessment of the employee's potential. Including potential in the evaluation process helps to ensure more effective career planning and development

Standardization

Firms should use the same evaluation instrument for all employees in the same job category who work for the same supervisor. Supervisors should also conduct appraisal covering similar periods for these employees. Formal documentation of appraisal data serves several purposes, including protection against possible legal action. Employees should sign their evaluations.

Appraiser discomfort

If a PA system has a faulty design, or improper administration, employees will dread receiving appraisals and the managers will despite giving them.

Employee anxiety

It may also create anxiety for the appraised employee. This may take the form of discontent apathy, and turnover.

Legal considerations

Lawsuits may result from negative evaluations. The courts normally require an absence of adverse impact on members of protected classes or validation of the process. lt also expects a system that keeps one manager from directing or controlling an employee's career. There should also be a system whereby the appraisal is reviewed and approved by someone or some group in the organization. Another requirement is that the evaluator must have personal knowledge of the employee's job performance. In addition, the system uses predetermined norms that limit the manager's discretion.

Internal employee relations

PA data are also used for promotion, demotion, termination, layoff, and transfer.

Compensation Programs

PA results provide basis for rational decisions regarding pay adjustments. Rewarding behaviors necessary for accomplishing organizational objectives is at the heart of a PM system - firm should design and implement a reliable PA system and reward the best employees -> to encourage good performance

Training and development

PA should point out an employee's specific needs for training and development - An appraisal system does not guarantee properly trained and developed employees - determining T&D more precise!

360-Degree feedback

People all around the employee whose performance is being judged may provide input - Having multiple raters also makes the process more legally defensible. However, it is important for all parties to know the evaluation criteria, the methods for gathering and summarizing the feedback, and the use to which the feedback will be put - the 360-degree feedback evaluation method is based on the reliance of multiple sources to provide information about an employee's performance.

Work standards method

Performance appraisal method that compares each employee's performance to a predetermined standard or expected level of output.

Career Planning and Development

Planning: is an ongoing process whereby an individual sets career goals and identifies the means to achieve them. Development: is a formal approach used by the organization to ensure that people with the proper qualifications and experiences are available when needed. PA date is essential in assessing an employee's strengths and weaknesses and in determining the person's potential

Characteristics of an effective appraisal system

Reliability and Validity job related criteria performance expectations standardization qualified appraisers Conduct open communication Conduct performance review Due process

SMART (objective setting)

S: Specific M: Measurable A: Achievable R: Relevant T: Time Bound

1. Traits, behaviors, and competencies

Traits: represent an individual's predisposition to think, feel, and behave, and many traits are usually thought of as being biologically created. Behaviors: are typically viewed as resulting from variety of sources including traits and situational context - a behavior can be changed, but traits are usually more established. Competencies: refer to an individual's capability to orchestrate and apply combinations of knowledge, skills, and abilities consistently over time to perform work successfully in the required work situations - certain traits, behaviors, and competencies may relate to job performance and, if this connection is established, using them may be appropriate

Contrast errors:

a rating error in which a rater compares an employee to other employees rather than to specific explicit performance standards.

Errors of leniency or strictness

a. Giving an undeserved high performance appraisal rating to an employee - to avoid controversy over the appraisal - strictness errors: being unduly critical of an employee's work performance.

Behaviorally anchored rating scales (bars)

a. are based on the CIT, and theses scales are developed in the same fashion with one exception. The designers of BARS write the incidents as expectations to emphasize the fact that the employee does not have to demonstrate the exact behavior that is used as an anchor to be rated at that level. Advantage: BARS is the most defensible in court because it is based on actual observable job behaviors and encourages all raters to make evaluations in the same way. Disadvantage: the difficulty of developing and maintaining the volume of data necessary to make it effective. The BARS method requires companies to maintain distinct appraisal documents for each job. As jobs change over time, the documentation must be updated for each job.

Bias errors

a. occur when the rater evaluates the employee based on a personal negative or positive opinion of the employee rather than on the employee's actual performance. Four ways may bias evaluation results are: i. First-impression effect: an initial favorable or unfavorable judgment about an employee's which is ignored or distorted ii. Positive halo effect: occurs when a manager generalizes one positive performance feature or incident to all aspects of employee performance, resulting in a higher rating. iii. Negative halo effect: occurs when a manger generalizes one negative performance feature or incident to all aspects of employee performance, resulting in a lower rating. iv. Similar-to-me effect: refers to the tendency on the part of raters to judge favorably employees whom they perceive as like themselves. v. Illegal discriminatory bias: a bias error for which a supervisor rates member of his or her race, gender, nationality, or religion more favorably than members of other classes.

Employees

anonymity is very important - employees viewing manager's effectiveness

Trait systems

ask raters to evaluate each employee's trait or characteristics. Appraisals are typically scored using descriptors ranging from unsatisfactory to outstanding. Limitations: Traits are highly subjective they assume that every supervisor's perception of a given trait is the same (solution: managers can work together in advance to specify the definition of traits clearly). Systems rate individuals on subjective personality factors rather than on objective job performance data - focuses attention on employees rather than on job performance.

1. Human Resource Planning

data must be available to identify those who have the potential to be promoted or for any area of internal employee relations - a well designed appraisal system provides a profile of the organization's human resource strengths and weakness to support this effort

Behavioral observation scale

displays illustrations of positive incidents (or behaviors) of job performance for various job dimensions. The evaluator rates the employee on each behavior according to the extent to which the employee performs in a manner consistent with each behavioral description - it incorporates only positive performance behaviors and tend to be time-consuming to develop and maintain

Self-appraisal

employee needs to understand their objectives and the criteria used for evaluation. lf they have the opportunity, they will criticize their own performance objectively and act to improve it. Many times, employees are tougher on themselves than the supervisor will be. Also, because employee development is self-development, employees who appraise their own performance may become more highly motivated.

Due Process

ensuring due process Is vital - to provide employees an opportunity to appeal appraisal results that they consider inaccurate or unfair,

Errors of central tendency

evaluations appraisal error that occurs when employees are incorrectly rated near the average or middle of a scale.

Results-Based Systems

focus on measurable outcomes such as individual's or team's sales., customer service ratings, productivity etc. The selection of results largely depends on three factors. 1) The relevance of the results that may be used to judge a company's progress toward meeting its strategic goals. 2) The reliability with which results can be measured. 3) The extent to which the results measure is truly a measure of performance over which an employee has the resources and latitude to achieve the designated results. - MBO - Work standards method

Goal achievement

if organizations consider ends more important than means, goal achievement outcomes become an appropriate factor to evaluate - the outcomes should lead to the firm's success. Manager and Employee should agree as to the employee's goals for the next evaluation period and the assistance and resources the manager needs to provide

Immediate supervisor

in excellent position to observe the employee's job performance, and the supervisor has the responsibility for managing a unit. Employee T&D is an important element in every manager's job, and as previously mentioned, appraisal programs and employee development are usually closely related. The immediate supervisor may emphasize certain aspects of employee performance and neglect others. Managers can also manipulate evaluations to justify pay increases and promotions.

Performance Appraisal

is a formal system of review and evaluation of individual or team task performance (managers should be reviewing an individual's performance on a continuing basis) - PA is a vital component of PM, in that it directly reflects the organization's strategic plan - PA serves many purposes, and improved results and efficiency

Customer appraisal

it demonstrated commitment to the customer, holds employees accountable and fosters change

Job-related criteria

it should tie in closely to the accomplishment of organizational goals. Evaluation criteria should be determined through job analysis.

Performance appraisal period

more significant than annually or semiannually, is the continuous interaction (primarily informal), including coaching and other development activities, that continues throughout the appraisal period - if firms do not conduct all appraisals at the same time, it may be impossible to make needed comparisons between employees.

Assessment of employee potential

overemphasizing technical skills and ignoring other equally important skills is a common error in promoting employees into management jobs. Recognition of this problem has led some firms to separate the appraisal of performance, which focuses on past behavior, from assessment of potential, which is future oriented

Critical incident technique

requires job incumbents and their supervisors to identify performance incidents that distinguish successful performances from unsuccessful ones. Advantage: requires extensive documentation that identifies successful behaviors by employee and supervisor. Disadvantage: implementation of the CIT demands continuous and close observation of the employee.

Management by objectives (MBO):

supervisors and employees determine objectives for employees to meet during the rating period and employees appraise how well they have achieved their objectives. MBO can promote effective communication between employees and their supervisors. Performance is evaluated based on progress toward objective attainment. Having specific performance objectives provides management with a basis for comparison. However, it is time-consuming and requires constant flow of information between employee and employers.

Trained appraisers

the evaluators seldom receive training on how to conduct evaluations. The training should be an ongoing process to ensure accuracy and consistency.

Subjectivity of performance evaluations

the lack of objectivity (e.g. traits, behaviors, competencies) - these factors may have a little to do with an employee's job performance. Rating errors: difference between human judgment processes versus objective, accurate assessments uncolored by bias, prejudice, or other subjective, extraneous influences