Chapter 11 - Performance Appraisals

What processes occur when raters process information?

Observe Encodes Stores information in short-term/long-term memory Recall Consider and integrate

What is rater error training?

enables performance appraisers to identify and suppress psychometric errors such as leniency, severity, central tendency, and halo errors when evaluating employee performance

What is paired comparison ranking?

involves forcing raters to make ranking judgements about discrete pairs of people Method cannot go above 10 employees

which errors are the MOST DIFFICULT form of error to eliminate

leniency errors

Each level has objectives which support organizational goals Performance rating depends on how well objectives were met Tend to be well received by both employee and managers

management by objectives

Good performance appraisal formats score well on potential research potential in what ways:

Does the instrument lend itself well to validating employment tests? As with the administrative criterion, evaluations typically need to be quantitative to permit the statistical tests so common in personal research.

Good performance appraisal formats score well on administrative ease in what ways:

Ease of use of evaluation results for administrative decisions concerning wage increases, promotions, demotions, terminations, and transfers. Comparisons among individuals for personnel action require some common denominator. Typically, this is a numerical rating of performance.

Describe the rating process when your suboridinate is the rater

More reliable if anonymous Hearing how they are viewed by their subordinates gives them the chance to both see their strengths and their weaknesses as a leader and to modify their behavior. The difficulty with this type of rating is in attaining candid reviews and also in counseling the ratee on how to deal with the feedback. Research shows that subordinates prefer to give their feedback to managers anonymously.

What are disadvantages with 360-feedback?

Most companies still use it only for evaluation of their top-level personnel For employee development rather than for appraisal or pay decisions A lot of survey to complete within a time limit Differing views can cause confusion Overrating oneself is common Self-awareness is critical factor in acceptance of feedback Accurate self-assessors improve more than inaccurate ones

There are several reasons for why raters may give unjustifiably lenient ratings:

No reward for accurate appraisals Raters are motivated to secure rewards for subordinates and... Are also motivated to give higher ratings as subordinate's performance is a reflection on the raters job performance Wish to avoid negative reactions from low ratings Office politics can further promote ratings inflation.

Performance ratings are influenced by a host of factors besides the employee behaviors observed by raters. What are they?

Organizational values Competition among departments Difference in status between departments Economic conditions These are all the ways raters rate employees

Explain why pay increase guidelines generally have little motivational impact.

Pay increase guidelines are mechanism through which levels are translated into pay increases and, therefore, dictate the size and time of the pay reward for good performance.

Organizations frequently grant increases that are not designed or communicated to be related to performance. Why?

Perhaps the central reason for this is the way merit pay is managed. Many companies view raises not as motivational tools to shape behavior but as budgetary line items to control costs

What are performance metrics?

Quantitative measures of job performance Results-oriented Behaviorally-oriented

Describe the rating process when you, yourself, are the rater and ratee

Ratings may be too lenient and unreliable generally more lenient and possibly more unreliable than ratings from other sources. More a developmental tool rather than an administrative one

Managers should be grouped into three categories:

Strictly for task performance Counterproductive performance (negative behaviors of employees) Both types of behavior

researchers and compensation people devote energy to defining job performance: what exactly should be measured when we evaluate employees?

The answer depends on such factors as job: Level Type of occupation The way work is organized The organization's strategic goals May also focus on competencies or skills like planning, technical proficiency, developing subordinates, etc.

What is the balance scorecard approach?

The approach is a way to look at what contributes value in an organization. Too often we just look at the bottom line, as measured by financial goals. The balanced scorecard acknowledges that bottom-line success doesn't just happen. It depends on satisfied customers buying products and services from effective and satisfied employees who both serve the customers and produce goods in the most efficient way possible.

What are advantages with 360-feedback?

The flexibility of this process makes it more appeal to employees at all levels within an organization. Employees are satisfied with the results generally Improves employee understanding and awareness Betters communication between supervisors and staff and performance results

this is a session that involves higher-level managers and same-level managers who meet to review draft performance ratings and modify them as necessary to improve consistency and accuracy/validity. Use of such sessions may also help supervisors deliver less positive feedback to low performance, but it may also serve to make high performance more visible.

calibration session

what is performance-dimension training?

exposes supervisors to the performance dimensions to be used in rating, thus making sur everyone is on the same page when thinking about a specific performance dimension

To lessen the impact of a single reviewer, and to increase participation in the process, a method known as 360-feedback has grown more popular. What is that?

feedback that assesses employee performance from five points of view: supervisor, peer, self, customer, and subordinate.

What are rating systems?

generally more popular and provide more convenience than credibility. They require raters to evaluate employees on some absolute standard rather than relative to other employees. Each performance standard is measured on a scale whereby appraisers can check the point that best represents the employee's performance.

what is the horn error?

happens as the opposite of the halo error; when you downgrade an employee across all performance dimensions exclusively because of poor performance on one dimension

what are central tendency errors?

happens by avoiding extremes in ratings across employees

What is the halo error?

happens when an appraise gives favorable ratings to all job duties based on impressive performance in just one job function.

Merit grids combine four variables:

level of performance, distribution of employees, their job's pay range, and merit increase percentages.

a group of subordinates or a subordinate and supervisor jointly identify and establish common performance goals. Employee performance on the absolute standards is evaluated at the end of the specified period. Each level has objectives which support organizational goals Performance rating depends on how well objectives were met Tend to be well received by both employees and managers

management by objectives

what is performance-standard training?

provides raters with a standard of comparison or frame of reference for making appraisals (what constitutes good, average, bad)

what is criterion deficiency?

when criterion fails to include all of the dimensions relevant to job performance

What is alternation ranking?

when raters are asked to indicate the best employee and then the worst employee Permits raters to get more practice prior to making harder distinctions in the middle ground of employees

what is the spillover error?

happens when you continue to downgrade an employee for performance errors in prior rating periods (WTF dude...back off!)

what is clone error?

happens when you give better ratings to individuals who are like the rater in behavior and/or personality

what is conscious rating distortion?

refers to the deliberate distortion of ratings (either higher or lower ratings). Rating distortions typically occur to achieve some result.

Behaviorally anchored rating scales work when employees are..

evaluated against specific performance expectations

Evaluation forms can be divided into two general categories:

ranking and rating.

What are some criticisms of performance appraisals?

Appraisals are too subjective and always under the possibility of unfair treatment of a supervisor May not tell the whole story Objective data can be deficient

Why should we care about measuring performance?

Because it is a critical component of linking total rewards to employee outcomes.

use behaviors as anchors, makes evaluations less subjective by having a common definition of performance of each level

Behaviorally anchored rating scales

Good performance appraisal formats score well on validity in what ways:

By far the most research on formats in recent years has focused on reducing error and improving accuracy. Success in this pursuit would mean that decisions based on performance ratings could be made with increased confidence.

How can we improve performance appraisal as HR managers?:

Expand the definition of performance Use the most appropriate appraisal format Understand how raters process information and translate it into a rating Enhance rater training

Good performance appraisal formats score well on employee development potential in what ways:

Feedback has a positive impact on job performance. There is also evidence that different kinds of feedback have different effects. Respond to feedback about what went wrong and how to improve. The desire for feedback doesn't extend across all cultures.

These potential for errors cause employees to lose faith in the performance appraisal process. Several factors that lead raters to give inaccurate appraisals are:

Guilt Embarrassment about giving praise Taking things for granted Not noticing good or poor performance The halo effect Disliking confrontation Spending too little time on preparation of the appraisal

Which performance appraisal is best?

It depends. Format choice depends on the types of tasks performed You need to match the format with tasks meeting that format's assumptions

What are the factors in organizations inhibit accurate evaluations:

No real rewards for accurate appraisals: willingness vs. capacity to rate Need to obtain valued rewards for employees Ratings reflect raters' performances, too "Appraisal politics"

Designing merit guidelines involves answering four questions:

What should the poorest performance be paid as an increase? Regarding average performance, how should they be paid as an increase? How much should top performers be paid? How does this matrix difference in the size of the differential between different levels of performance?

What is multisource feedback?

a target employee is rated by those who interact in their social network such as their manager, peers, subordinates and even customers.

these increases are often linked to cost-of-living changes. When the Consumer Price Index (CPI) rises, some companies adjust base pay for all employees to reflect the rising costs.

across-the-board increases

For less routine tasks, an what strategy may be appropriate

an MBO strategy may be appropriate (management by objective)

Researchers have varied three types of input information to see what raters pay attention to when they are collecting information for performance appraisals:

appearance (attractiveness) gender (men rated higher than women)/race (whites rated higher than minorities) change in performance (people who have high then low get lower ratings than those who are consistently low)

What is straight ranking?

employees are ranked relative to each other

supervisors answer open-ended questions in this rating format

essay format

What is criterion contamination?

it happens when you allow nonperformance factors to affect performance scores

what is the recency error?

it is the opposite of the first-impression error; when you allow performance , either good or bad, at the end of the review period to play too large a role in determining an employee's rating for the entire period.

What is leniency error?

occurs when you consistently rate someone higher that they deserve (playing favorites!)

there are increases that come closer to tying pay to performance.

seniority increases

comes somewhat closer to tying pay to performance. These increases tie pay increases to a preset progression pattern based on seniority.

seniority pay increases

use adjectives to anchor the continuum from "good" to "bad" 1-2: exceeds standards 3-5: meets standards 6-7: does not meet standards

standard rating scale

what is severity error?

the opposite of the leniency error; rating individuals consistently lower than they deserve (haters gonna hate ;P)

For highly uncertain tasks, what rating scale may work?

the standard rating scales may work

what are general increases?

they are for all employees regardless of performance. Across the board increases are cost-of-living changes.

what is a merit increase grid?

ties pay not only to performance but also to position in the pay range. Two patterns are giving in these guidelines: Lower performance is tied to lower pay increases Pay increases at a decreasing rate as employees move through a pay range

T or F: Ideally, raters should notice only performance-related factors when they observe employee behavior. Unless a behavior/personality trait affects performance, it should not influence performance ratings. However, performance-irrelevant factors appear to influence ratings, and they can cause errors in the evaluation process.

true

T or F: Research suggests that MSF (multisource feedback) captures idiosyncrasies in rating tendencies rather than variations in performance

true

T or F: Straightforward lecturing to ratees about ways to improve rating quality are INEFFECTIVE

true

t or F; Performance-dimension training and performance-standard training generally work better than rater-error training, usually when they're combined

true

t or f: The greatest success has come from efforts to reduce halo effects

true

t or f; Rating accuracy improves when combined with extensive practice and feedback

true

t or f; Recently, attention has focused less on the rating format and more on the raters themselves.

true

What are the key elements of the performance evaluation process?

1. Figure out what your culture and strategy are. 2. Make sure your job descriptions are up to date and employees know what is expected of them 3. Periodically have informal discussions with employees about progress and any barriers that the supervisor needs to remove 4. When evaluating performance, focus on behavior, not the person, in providing feedback

What are the five dimensions of a good performance appraisal format?

1. employee development potential 2. administrative ease 3. personnel research potential 4. cost 5. validity

Data suggests implementing a balance scorecard approach can have positive impacts on the bottom line and on rating accuracy The vision and strategy of this approach includes:

Customer perspective Financial perspective Learning and growth perspective Internal business process perspective

Good performance appraisal formats score well on cost in what ways:

Does the evaluation form initially require a long time to be developed? Is it time-consuming for supervisors to use the form in rating their employees? Is it expensive to use?

Describe the rating process where you have a supervisor as the rater:

More than 80% of input but prone to halo and leniency errors Supervisors assign what work employees are to perform, which makes them knowledgeable about the job and the dimensions to be rated. Also, supervisors have considerable prior experience in rating employees, thus giving them some pretty firm ideas about what level of performance is required for any given level of performance rating.

Choose an appraisal method depends on a few things:

The types of tasks performed The level of which we are analyzing performance (person, team, unit, etc.) How much time and investment you want to put into the process

t or F: Just because something is quantifiable, doesn't mean it is an objective measure of performance - it could be criterion deficient

True

Describe the rating process when you have your peer as a rater

Undistorted perspective but may have no appraisal experience, creating group tension or yields to leniency Peers work more closely with the ratee and probably have an undistorted perspective of typical performance, particularly in group assignments Peers may have little or no experience in conducting appraisals Placing the burden of rating peers on co-workers can either create group tensions or yield ratings second only to self-ratings in level of leniency

What are the three key elements tying pay to performance?

We need some definition of performance We need some continuum that describes different levels from low to high on the performance measure We need to decide how much of a merit increase will be given for different levels of performance

T or F: A review of firms using MBO indicates generally little improvements in performance both for individuals and for the organization.

false; A review of firms using MBO indicates generally positive improvements in performance both for individuals and for the organization.

t or f: Longer training programs are generally less successful that shorter programs (2 hours or more)

false; Longer training programs are generally more successful that shorter programs (2 hours or more)

T or F; Most research indicates that ranker training is an effective method for reducing appraisal errors. They can be divided into three distinct categories:

false; Most research indicates that rater training is an effective method for reducing appraisal errors. They can be divided into three distinct categories:

t or F: Individualized or small-group discussion sessions are less effective in conveying proper rating procedures

false;Individualized or small-group discussion sessions are more effective in conveying proper rating procedures

typically found in unionized firms. A contract is negotiated that specified an across-the-board, equal increase for each year of the contract.

general increase

What are ranking formats?

they require that the rater compare employees against each other to determine the relative ordering of the group on some performance measure (usually some measure of overall performance):