Performance Appraisals

Management by objectives

A philosophy of management that rates performance on the basis of employee achievement of goals set by mutual agreement of employee and manager

Contrast error:

an employee's evaluation is biased based on the performance appraisal comparison of the previous evaluatee

Seven key feedback points:

Give specific examples of desirable and undesirable behaviours Focus feedback on behaviour, not the person Frame the feedback in terms of helping the employee be successful Direct the feedback toward behaviour the employee can control The feedback should be timely Limit feedback to the amount the employee can process Use active communication skills and confirm that the employee is engaged in the conversation

Trait methods:

Graphic rating scale method Mixed-standard scale method Forced-choice method Essay method Critical incident Behavioural checklist method Behaviour observation scale

Improving performance:

Identifying sources of ineffective performance Performance diagnosis Managing ineffective performance

Behaviour observation scale

a behavioural approach to performance appraisal that measures the frequency of observed behaviour

Performance management:

the process of creating a work environment in which people can perform to the best of their abilities

Mixed-standard scale method

A trait approach to performance appraisal similar to other scale methods but based on comparison with (better than, equal to, or worse than) a standard

Forced-choice method

A trait approach to performance appraisal that requires the rater to choose from statements designed to distinguish between successful and unsuccessful performance

Essay method

A trait approach to performance appraisal that requires the rater to compose a statement describing employee behavior.

Conducting the interview:

Ask for self-assessment Invite participation Express appreciation Minimize criticism Change the behaviour, not the person Focus on problem-solving Be supportive Establish goals Follow up day-to-day

Administrative purposes:

Document personnel decisions Promote employees Determine transfers and assignments Identify performance problems and develop ways to correct them Make retention, termination, and layoff decisions Validate selection criteria Meet legal requirements Evaluate training programs/progress Assist with human resources planning Make reward and compensation decisions

Safeguards for a 360-degree appraisal program:

Ensure anonymity Make respondents accountable Prevent "gaming" of the system Use statistical procedures Identify and quantify biases

Training appraisers:

Establishing an appraisal plan Eliminating rater error

Why appraisal programs fail:

Inadequate preparation by manager Employee not given clear objectives at the beginning of the performance period Performance standards may not be clear Inconsistency in ratings among supervisors Rating personality rather than performance The halo effect, contrast effect Overemphasis on uncharacteristic performance

Results method:

Productivity measures Management by objectives Balanced scorecard

Developmental purposes:

Provide performance feedback Identify individual strengths and weaknesses Help employees identify goals Recognize individual performance achievements Evaluate goal achievement of employees Identify individual training needs Determine organizational training needs Reinforce authority structure Allow employees to discuss concerns Improve communication Provide a forum for leaders to help employees

Legal issues:

Ratings must be job related Employees must have written copy of job standards in advance of appraisals Measurable standards Performance problems should not continue unchecked Supervisors should be trained to use the appraisal form correctly An appeals procedure must be established

Performance standards:

Strategic relevance Criterion deficiency Criterion contamination Reliability

Appraisal interviews:

Tell-and-sell interview Tell-and-listen interview Problem-solving interview

Balanced scorecard

Translate the strategy into a scorecard with clear objectives Attach measures to each objectives Cascade scorecards to the front line Provide performance feedback based on measures Empower employees to make performance improvements Reassess strategy

Manager appraisal:

a performance appraisal done by an employee's manager and often reviewed by a manager one level higher

Peer appraisal

a performance appraisal done by fellow employees, generally on forms that are compiled into a single profile for use in the performance interview conducted by the employee's manager

Self-appraisal:

a performance appraisal done by the employee being evaluated, generally on an appraisal form completed by the employee prior to the performance interview

Subordinate appraisal

a performance appraisal of a superior by an employee, which is more appropriate for developmental purposes

Team appraisal:

a performance appraisal, based on total quality management concepts, that recognizes team accomplishment rather than individual performance

Error of central tendency

a performance rating error where all employees are rated about the same

Calibration:

a process whereby managers meet to discuss the performance of individual employees to ensure that their employee appraisals are in line with one another

Graphic rating scale method

a trait approach to performance appraisal whereby each employee is rated according to a scale of characteristics

Focal performance appraisal:

an appraisal system in which all of an organization's employees are reviewed at the same time of the year rather than on the anniversaries of the individual hire dates

Similar-to-me error:

an appraiser inflated the evaluation of an employee because of a mutual personal connection

Critical incident

an unusual event that denotes superior or inferior employee performance in some part of the job

Customer appraisal:

performance appraisal that, like team appraisals, is based on total quality management concepts and seeks evaluation from both external and internal customers

Recency error:

the rating is largely based on the employee's most recent behaviour

Performance appraisals

the result of an annual or biannual process in which a manager evaluates an employee's performance relative to the requirements of his or her job and uses the information to show the person where improvements and needed and why

Leniency error

the appraiser tends to give employees either unusually high or unusually low ratings