Chapter 7- PERFORMANCE APPRAISAL AND FEEDBACK

Stages of the Performance Management Process (4 Stages)

1. Specify Relevant Aspects of Performance 2. Appraise Performance 3. Provide Performance and Feedback 4. Problem solving and Rewards

Levels of Feedback (how many are there)

4

Performance Management

The process through which managers ensure that employees' activities and outputs contribute to the organizations goals

What are the Factors which lead to Effective Performance Feedback?

Good Performance Feedback is: - Well Timed - Specific - Objective - Job Related - Desired by the recipient - Checked for understanding - Credible source -Allows for choice - The best performance feedback acceptance happens when the recipient desires it. - The recipient at the end makes the choice whether to adhere to the feedback given or not

To protect Against Lawsuits that might arise regarding discrimination, unjust discharge, etc.:

It is important to have a LEGALLY DEFENSIBLE PERFORMANCE MANAGEMENT SYSTEM -

Do most employees think their company does a good job differentiating between High and low performers?

No and they also don't believe that management is able to make tough decisions regarding poor performers who don't improve

Feedback Level 1

Not an uncommon level of feedback. • Unfocused, Emotional, and imprecise - You are lazy... helpless...rigid...incompetent...paranoid... valuable... considerate... helpful... nice...etc. "

First Impression Error (Rating Errors in Performance Appraisal)

The first impression is the most lasting one most of the time

A legally Defensible performance Management system includes:

o Based on valid job analyses o Performance measurement that evaluates behaviors rather than traits o Multiple raters should be used (including self appraisers) o All performance ratings should be reviewed by upper level management o There should be an appeals process for employees.

Feedback Level 4

• Action Focused and Precise - "You are not answering the phone within three rings, you are not caling your coordinate supervisors each morning to determine potential scheduling conflicts... You are making 15 sales calls on clients each day"

Tell & Sell (approach for feedback sessions)

• One- Way communication from the person in authority to the person involved. • The emphasis is on informing the employee and then persuading him or her to change - or else! • (Some consequence; no raise, layoff etc.) • Emphasis on extrinsic motivation • Doing it for a reward or punishment instead of being internally motivated • Ideas come from TOP DOWN • The process is consistent with authority flow in a hierarchical organization • This approach may be an appropriate method when instructing a new hire.

Scheduling Performance Feedback

• Performance feedback should be a regular expected management activity • Annual feedback is not enough • Employees should receive feedback so often that they know what the manager will say during their annual performance review. - INFORMAL FEEDBACK

Feedback Level 2

• Problem Focused, but imprecise - "You don't listen ... don't understand ... lack initiative... are cooperative... do communicate... etc."

The Halo And Horn Effect (Rating Errors in Performance Appraisal)

• Rater Bias: Raters often let their opinion of one quality color their opinions of others • Halo Error- When the bias is in a favorable direction. This can mistakenly tell employees they don't need to improve in any area. • Horn Error: When the bias involves negative ratings. This can cause employees to feel frustrated and defensive.

Similar-to-Me Error (Clone Error) (Rating Errors in Performance Appraisal)

• They like the same football team, same college, same fraternity. • You rate them highly because they're similar to me! And I'm a good guy! Right?

Tell & Listen (approach for feedback sessions)

• Two-way communication between supervisor and employee. Supervisor tells and then listens to employee response/input • Unlike tell and sell, now there is a 2 way dialogue • Active listening is required - use of pauses, developing feeling of acceptance, permitting catharsis and respect for the individual • There are exchanges of ideas - and learning may take place (boss may change and learn) • There is a risk that the interview may not give the employee clear indications of where he/she stands • It is more threatening for the supervisor since he/she can be challenged

Recent-cy Error (Rating Errors in Performance Appraisal)

• Your assessment of someone is skewed by something Positive or Negative they did right before the evaluation

What are the Purposes of Performance Management? (4 Reasons)

1. Strategic Purpose- Effective PM helps the organization achieve its business objectives (the least used) 2. Administrative Purpose- Refers to the ways in which organizations use PM to provide info to the basic HR decisions in play, recognition, promos, etc. - (the most widely used purpose of this is; Pay, Promotions, or Recognition) 3. Developmental Purpose- Means that it serves as a basis for developing employees' knowledge and skills (identify development needs, career directions, etc.) 4. Research Purpose- Relates to the use of performance data as criteria for assessing effectiveness of personnel selection methods and training activity. (a criterion for identifying the effectiveness of correlation variables)

Who can can give feedback in an organization?

Any member of an organization can receive and give feedback - but it will often vary in type, amount and timing by the job and organizational level. -The highest levels in organizations often receive the least feedback and the feedback cycles are longer.

Draw or Describe the 'Contamination and Deficiency of a job Performance Measure' Venn Diagram (in book)

(Description of the Venn Diagram below) Job performance measure (on outside) Contamination (one Circle) Validity (shared section) Deficiency (Other Circle) Actual or True job performance on this end

Common Problems of Appraisal Systems

- Appraisal instruments are not job related - Methods/tools are inadequate (prone to error, incomplete, use vague or inferential traits) - Lack of rater training - Conflicting objectives (the 4 objectives we talked about) and expectations o Different purposes require different measures - Appraisals done in inappropriate time frames (typically looking back through the entire year o Not related to actual performance timing

Feedback! An important competency When does it occur? What does it make possible?

- Feedback occurs when a portion of a person's process output (behavior & outcomes) is returned as input. - It allows adjustment and change in behavior and enables learning. - It can also affect individual feelings, self-confidence and self-esteem - which can affect attitudes, behavior and performance.

Types of Rating Errors

- Restriction of range (central tendency, leniency, severity) - Halo error & Horn effort - First impression error - Personal bias - Recency error - Similar-to-me error (clone error) - Contrast error -Spillover error (from past evaluations)

The Quality Method (of performance Measurement) (based on Total Quality Management: attributes, results)

- The principles of Total Quality Management provide methods for performance measurement & management. - Employees & their customers work together to set standards and measure performance- the goal is to improve customer satisfaction - Performance measure combines assessments of ATTRIBUTES (subjective feedback - based on employees personal actions & qualities that affect success) and RESULTS (objective feedback that is based on information from statistical quality control and objective measures of performance) - TQM is important to know about but it isn't very emphasized today. MBO IS Very Important today!

Calibrating Performance Reviews-

- The vast majority (98%) of organizations report that they have a formal employee performance evaluation process. Slightly more than half of these have a formal calibration or group review process to ensure consistency across ratings/reviews - Groups of supervisors are brought together (typically by division or department), to discuss the rationale behind each employee's performance rating and adjust the ratings up or down as needed.

How does Feedback Typically flow in an organization?

- Typically flows downward from those in authority • Typical of classic hierarchal company design • Superior to subordinate • Increasingly however, feedback is being solicited from more channels then normal.

Who does the Performance Appraisal?

- Typically, the supervisor does the evaluation - 360- Degree Performance Appraisal: o Performance measurement that combines info from the employees': • Managers • Peers • Subordinates • Self-Evaluation • External Customers • Internal Customers • Coworkers o A lot of times, employees are asked to do a self-evaluation as part of their performance review. How good do you think these are?

The "Above Average Effect" in self Evaluation

- When asked, most individuals will describe themselves as better than average in areas such as leadership, social skills, written expression, or any area in which the person has interest. - Poor performers tend to overrate; better performers tend to underrate themselves

The Whirlpool Approach to Feedback (H.O.T system)

- Whirlpool Crop has developed a HOT feedback system •Honest, Open, Timely - It is a key part of the company performance, recognition and development program - Employees receive quarterly updates on how the company is doing in terms of its annual objectives AND AT THE SAME TIME... • Each employee receives feedback from his or her supervisor on how he or she is performing against individual performance and developmental objectives.

The Goal of Performance Review and appraisal (3 points)

1. Assess and record employee performance (e.g behaviors, outcomes, relative contributions, etc) in an accurate and consistent manner 2. Provide useful feedback 3. Define how performance can be improved

The Basic Methods for Measuring Performance (List all 5 of them)

1. Comparative- (simple Ranking, Forced Dist., Paired Comparison) 2. Attribute- (graphic rating scales, mixed standard scales) 3. Behavior- (Critical incidents, behaviorally anchored rating scales {BARS}, Behavior Observation Sclaes {BOS}) 4. Results- (Management by objectives {MBO}) 5. Quality - (based on TQM: Attributes, results)

Key Dimensions of Feedback- (3 key Dimensions)

1. Content- What is given in the feedback communication (the substantive information) • It can be objective - (visible behavior, actual performance, etc) • It can be subjective - (informal judgments, personal feelings, etc) 2. Process- How the feedback communication is given. (the style used by the person giving the feedback) • (e.g. respectful, positive, interested, caring, open, suspicious, uninterested, etc.) 3. Purpose- The perceived objective (by the recipient) for the feedback intervention • Recipient sees it as intended to help, punish, dominate, intimidate, facilitate, etc.

The Behavior Method (of Performance Measurement) What are the 3 subsystems

1. Critical-Incident Method o Based on managers records of specific examples of the employee acting in ways that are either effective or ineffective o Employees receive feedback about what they do well and what they do poorly and how they are helping the organization achieve its goals 2. Behaviorally Anchored Rating Scale (BARS) - Rates behavior in terms of a scale scoring specific statements of behavior that describe different levels of performance 3. - Behavioral Observation Scale (BOS) (Rating Individuals)- BOS - a variation of BARS which uses all behaviors necessary for effective performance to rate performance at a task. Each behavior is rated in regard to its exhibition by the employee. In general Behavioral Methods can be quite high with fit in strategy - High in specificity - Can be costly and time consuming to set up

What Criteria is used to evaluate effective Performance Management? (5 things)

1. Fits with the strategy- Does it support value creation? 2. Validity - actually measures performance 3. Reliability- Is a consistent measure 4. Acceptability- Accepted by one being rated and the rater 5. Specific Feedback- useful to improve

The Attribute Based Method (of performance measurement) What are the 2 subsystems

1. Graphic Rating Scale- A series of traits that you rate an employee on in each of the characteristics. 2. Mixed Standard Scale- Uses Several Statements describing Each trait to produce a final score for that trait. - Hard to understand and semi related to Graphic rating scale - not widely used - The Prof Doesn't really like it either. IN general the Attribute approaches aren't really helpful or specific. Their validity is questionable and it's too relative.

Performance Management Requires: (3 Things)

1. Knowing what activities and outputs are desired 2. Observing whether they occur and accurately assessing and recording their occurrence 3. Providing feedback so they can improve

The Result Method (of performance Measurement) and the 1 subsystem

1. Management by Objectives (MBO) o Personnel at each level of the org set goals in a process that flows from top to bottom, so that all levels are focused in the organizations overall goals o These goals become the standard for evaluating someone's performance

Comparison Method (of performance Measurement) (what are the 3 sub systems)

1. Simple Ranking- Requires managers to rank employees in their group from the highest performer to the lowest performer 2. Forced Distribution- manager assigns certain percentage of employees to each level. (GE example, where the bottom 10% were fired every period) (Ford Example, where they had to stop this because it was singling out the elderly to get fired) - Emphasis on this seems to be declining 3. Paired Comparison- Compares each employee with each other employee to get ranking. Ex: • Compare one person to all the other people in the dept and give them a plus or a minus relative to the other person. • The person with the most +'s is determined to be the best, and the person with the most -'s is determined to be the worst. • Specificity isn't very good because it this method only tells you where you stand relative to other workers.

Restriction of Range (Rating Errors in Performance Appraisal)

o Restriction of Range (Central tendency (most common error), leniency (common error), severity (less common error)) • 80% of employees are rated in the 3-4 range on a 5 point scale. • This is because it's difficult to give harsh feedback to the employee because the manager wasn't good at collecting accurate data to justify the grade. • No 1-2's given to avoid confrontation, no 5's given to avoid explaining to management why this person is above and beyond • A groundbreaking study found that unlike a standard distribution of employees, they discovered that the larger # of employees have low productivity, and the companies with lower # of employees have Highly productive employees.

Problem Solving (approach for feedback sessions)

• 2-way communication - but the employee plays the dominant role in the discussion • Less focused on the supervisor saying "right! Wrong! Good or bad?" • Supervisor does not evaluate or judge (poses questions, uses reflective comments, pauses, summarizes responses, asks employee about performance, probes strengths, weaknesses, problems, successes, etc) • Supervisor summarizes and asks employee how he or she will respond to the identified issues • Supervisor facilitates solving identified problems and works with the employee to develop plans • Generally there is a high acceptance by the employee. It can promote change. Process and counseling skills are critical for the supervisors • Perhaps not enough direction for a new employee who needs more guidance

Feedback Level 3

• Activity Focused but Imprecise - "You are not answering the phone promptly... You don't talk with coordinate managers... you have done satisfactory work on the budget... do listen to your employees, etc"

Spillover Error (From Past Evaluations) (Rating Errors in Performance Appraisal)

• Assuming someone's current performance based on how they did last period.

Contrast Error (Rating Errors in Performance Appraisal)

• Cassandra is excellent but Lauren is just 'good' • Now you rate Lauren lower then you would have

Cognitive Appraisal and the perception of feedback-

• Cognitive appraisal is the personal interpretation of a situation • It is an evaluative framework that a person uses to immediately make sense of a situation and relate the situation to their personal well- being • It can lead to an action or event being interpreted negatively or positively.

Ethical Issues in Performance Management:

• Deal with respect for the individual and adherence to accepted societal norms • Possible issue: Employee monitoring via electronic devices and computers may raise concerns over employee privacy

Preparing for a Feedback Session (what are the 3 approaches)

• During the feedback session, managers can take any of the three approaches. (One isn't necessarily better than another. You need to pick and choose the appropriate methods given each situation) 1. Tell & Sell 2. Tell & Listen 3. Problem Solving

Personal Bias (Rating Errors in Performance Appraisal)

• Example: "I don't like people with Eastern European names" so I let that but a black mark on my opinion of them. • This could be racial, genderwise, or any other characteristic

360 Degree Appraisal/Feedback What parties are involved?

• Multisource Feedback: - Internal Customers - Coworkers - External Customers - Team Members - Supervisor (most common) - Peers - Subordinates

Legal Issues In performance Management

• typically relate to Performance management processes and procedures in regard to cases of alleged discrimination or unjust discharge. • Some advice: Give feedback ONLY on job related issues! - Nothing related to any discrimination towards a protected class!

What are the 2 Types of Feedback?

•Informal- • Usually offered verbally • An immediate ongoing activity • Is information offered to inform, often neutral • Can come from a variety of sources •Formal- • Is usually written down • Event-based and occurs on a designated interval • Is typically judgment or evaluation based • Frequently comes from authority. (downward flow)

The Effects of Cognitive Appraisal (an example)

•Your boss says "... Your report is incomplete..." • 2 ways it could be perceived - Positive Cognitive Appraisal • This is good, honest feedback. I can do better with a boss who is trying to help me. - Negative Cognitive appraisal • My boss calls me incompetent. That's hard to take. It makes me feel terrible