Ch. 9: Performance Management and Appraisal

Steps to ensure your appraisals are legally defensible

- Base the duties and criteria you appraise on a job analysis - Communicate performance standards to employees in writing - Courts generally require combining separate ratings for each performance dimension - Include an employee appeals process - One appraiser should never have absolute authority to determine a personnel action - Document all information - Train supervisors - Actions reflecting fairness and due process were most important

Techniques for appraising performance

- Graphic rating scale - Alternation ranking method - Paired comparison method - Forced distribution method - Critical incident method - Narrative forms - Behaviorally anchored rating scales - Mixed standard scales - Management by objectives - Computerized and web-based performance appraisal - Electronic performance monitoring - Conversation days

Reasons to appraise subordinates' performance

- Most employers base pay, promotion, and retention decisions on the employee's appraisal.4 Appraisals play a central role in the employer's performance management process. Performance management means continuously ensuring that each employee's performance makes sense in terms of the company's overall goals. - The appraisal lets the manager and subordinate develop a plan for correcting any deficiencies, and to reinforce the subordinate's strengths. Appraisals provide an opportunity to review the employee's career plans in light of his or her exhibited strengths and weaknesses. - Appraisals enable the supervisor to identify if there is a training need, and the remedial steps required

Who should do the appraising?

- Peer appraisals - Rating committees - Self-ratings - Appraisal by subordinates - 360-degree feedback

Use the appraisal interview to build engagement

- Take the opportunity to show the employee how his or her efforts contribute to the "big picture." - Use the interview to emphasize the meaningfulness to the company of what the employee is doing. - Be candid and objective but do so supportively and without unnecessarily undermining the employee's self-image. - Make sure your employee has what he or she needs to do a good job. - Focus on strengths. - Show your employees that you listen to their ideas and value their contributions. - Discuss the person's evaluation in the context of where he or she sees himself or herself heading career-wise. - Make sure that the interviewee views the appraisal and the rewards or remedial actions as fair.

Management by objectives (MBO)

- a multistep company-wide goal-setting and appraisal program - requires the manager to set specific measurable, organizationally relevant goals with each employee, and then periodically discuss the latter's progress toward these goals

Graphic rating scale

- a scale that lists a number of traits and a range of performance for each - the employee is then rated by identifying the score that best describes his or her level of performance for each trait

Conversation days

- an appraisal method that focuses on areas for improvement and growth, and on setting stretch goals that align with the employee's career interests - no explicit performance ratings

How to criticize a subordinate

- in private - constructively - emphasize strengths - get agreement on a plan for what the employee must do to improve his or her efforts

How to handle a formal written warning

- list the employee's standards - make it clear that the employee was aware of the standard - specify any deficiencies relative to the standard - show the employee had an opportunity to correct his or her performance

Mixed standard scales

- method of performance measurement that uses several statements describing each trait to produce a final score for that trait - aims to reduce rating errors by making it less obvious to the appraiser (1) what performance dimensions he or she is rating; and (2) whether the behavioral example statements represent high, medium, or low performance

Total quality management (TQM) programs

- organization-wide programs that integrate all functions and processes of the business such that all aspects of the business including design, planning, production, distribution, and field service are aimed at maximizing customer satisfaction through continuous improvements - cease dependence on inspection to achieve quality - aim for continuous improvement - institute extensive training; drive out fear so that everyone may work effectively - remove barriers that rob employees of their pride of workmanship - institute a vigorous program of self-improvement

Computerized performance appraisal

- presents written examples to support part of the appraisal - combine several appraisal tools, usually graphic ratings anchored by critical incidents

Forced distribution method

- similar to grading on a curve - predetermined percentages of ratees are placed in various performance categories

Purpose of formal written warnings

- to shake your employee out of his or her bad habits - to help you defend your rating to your own boss and (if needed) to the courts

Rater error appraisal problems

- unclear standards - halo effect - central tendency - leniency or strictness - recency effects

Set effective goals

1. Assign specific goals. 2. Assign measurable goals. 3. Assign challenging but doable goals 4. Encourage participation.

How to handle defensive subordinate

1. Recognize that defensive behavior is normal. 2. Never attack a person's defenses. 3. Postpone action. 4. Recognize your limitations.

Management by objectives (MBO) program

1. Set the organization's goals. 2. Set departmental goals. 3. Discuss departmental goals. 4. Define expected results (set individual goals). 5. Conduct performance reviews. 6. Provide feedback.

Coaching guidelines

1. Talk in terms of objective work data. 2. Don't get personal. 3. Encourage the person to talk. 4. Get agreement.

Developing a behaviorally anchored rating scale

1. Write critical incidents. 2. Develop performance dimensions. 3. Reallocate incidents. 4. Scale the incidents. 5. Develop a final instrument

Performance appraisal process

A three-step appraisal process involving (1) setting work standards, (2) assessing the employee's actual performance relative to those standards, and (3) providing feedback to the employee with the aim of helping him or her to eliminate performance deficiencies or to continue to perform above par.

Employment law: appraising performance

Courts have often found that an inadequate appraisal system lay at the root of illegal discriminatory actions, particularly in cases concerning layoffs, promotions, discharges, or merit pay.

How to conduct the appraisal interview

Prepare Plan Coach Be objective

Peer appraisal

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

Appraisal by subordinates

a performance appraisal method that can make managers more aware of their impact on employees without feeling threatened.

360-degree feedback

a performance appraisal process in which feedback is obtained from the boss, subordinates, peers and coworkers, and the employees themselves

Self-ratings

a performance appraisal technique in which managers assess their own abilities and job performance

Rating committees

a performance appraisal technique used by some companies and are usually composed of an employee's immediate supervisor, and three to four other supervisors

Central tendency

a tendency to rate all employees the same way, such as rating them all average

Behaviorally anchored rating scale (BARS)

an appraisal method that aims at combining the benefits of narrative critical incidents and quantified ratings by anchoring a quantified scale with specific narrative examples of good and poor performance

Unclear standards

an appraisal that is too open to interpretation

Appraisal interview

an interview in which the supervisor and subordinate review the appraisal and make plans to remedy deficiencies and reinforce strengths

Narrative forms

determining performance based on a written example of past behavior and future plans

Performance appraisal

evaluating an employee's current and/or past performance relative to his or her performance standards

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

Manager's role in performance management

having the right philosophy and on-the-job behaviors

Halo effect

in performance appraisal, the problem that occurs when a supervisor's rating of a subordinate on one trait biases the rating of that person on other traits

Critical incident method

keeping a record of uncommonly good or undesirable examples of an employee's work-related behavior and reviewing it with the employee at predetermined time

Recency

letting what the employee has done recently blind you to what his or her performance has been over the year

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

Alternation ranking method

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

Performance management

the continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning their performance with the organization's goals

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

Performance management elements

● Direction sharing ● Goal alignment ● Ongoing performance monitoring ● Ongoing feedback ● Coaching and developmental support ● Recognition and rewards

Appraisal situations

● Satisfactory - Promotable ● Satisfactory - Not promotable ● Unsatisfactory - Correctable ● Unsatisfactory - Uncorrectable