CH.7- Evaluating Employee Performance

What are the advantages and disadvantaged of objective methods?

*Advantages* -easy to interpret -easy to compare individuals -tied to org objectives -easy to collect because of records *Disadvantages* -not suitable for all jobs, no countable output -meaning of #s may not be obvious -records may be incorrect -deficiency and contamination

Step 4: Select Method

*Decision 1*: Focus of dimensions *Decision 2*: Should we use employee comparisons, objective measures, or ratings?

What should happen prior to the results review interview?

*Employee Prep* -allow employee to rate self *Schedule* -at least an hour to review in private *Supervisor Prep* -review ratings and reasons for ratings -determine goals

Halo/Horns Error

*Halo or Horn* -rater allows a single attribution or overall impression to affect each rating of job dimension -generalizations

What are some common rating errors?

*Halo or Horns* *Range Restriction* *Location Errors*

what are some examples of objective measures?

*Production records* *salary* *job level* *sales* *tenure* *attendance* *absences/lates* *incidents*

Location Errors

*Proximity* -rating made on one dimension affects the rating on the dimension that immediately follows -how close is it to the time of the performance? *Contrast* -affect of who was rated right before

Range Restriction/Distribution Errors

*leniency* -rater consistently gives all employees high ratings, regardless of actual performance *Strictness* -rater consistently gives all employees low ratings, regardless of actual performance *Central Tendency* -rater consistently rates every employee in the middle of the scale *problem because employees doing different work receive the same ratings; solution would be to have multiple people rate if possible

Employee Comparisons

*overall rank order* -tells order but doesn't give distance btwn performance *paired comparison* -better used w small # *forced distribution* -lower workers may not be bad workers, just not as good -restricted range

What are the Legal Reasons for terminating an employee?

*public sector* -probation period -violation of rules -inability to perform -layoffs *private sector* -employment-at-will

Progressive Discipline

*punishment must fit offense* *Reasonable attempts to change behavior* -counseling/training -warning -probation -suspension -transfer -reduced pay/demotion -termination

Inability to perform

*standard of performance* -concrete -reasonable -job-related *documented failure to meet the standard* -critical incident logs -work samples -performance ratings *progressive discipline*

Critical Incidents

-Examples of poor or excellent behavior -Usually recorded in logs -Important to document employee behavior -basically a *performance record*

Step 5: Train Raters

-Few orgs spend the time/$ to train supervisors on how to rate properly -research shows training increases accuracy, decreases errors -makes employees more satisfied w the appraisal system

Step 6: Observe and Document Performance

-forces supervisors to look for behaviors -aids in recall during evaluation; provides examples to use -concrete data to support personnel decisions -critical incidents

Step 7: Evaluate Pereformance

-obtain/review objective data -read critical incidents logs -try to avoid rating errors

What should happen during the results review interview?

-quiet, private, neutral location -establish rapport -employee discuss self-ratings -discuss supervisor ratings -identify problems and possible solutions -set goals

Violation of Organization Rules

-rule must exist -employee knew about the rule -violation of the rule proven -rule must be equally enforced -progressive discipline must occur

Step 2: Identify Environmental and Cultural Limitations

-supervisors don't always have the time for lengthy methods -don't always have the money available for merit pay -peer ratings might reduce cohesiveness in very cohesive environments

Graphic rating scale

1-5, poor to excellent -rate different criteria -easy to use but might create error -halo/leniency

How can performance be appraised?

1. *Employee Comparisons* 2. *Objective Measures* 3. *Subjective Ratings*

What are some other Rating Issues to take into consideration?

1. *Evaluation Frequency* -semi-annual, annual, probation period 2. *Formal v Informal*

What do supervisors tend to remember?

1. *First Impressions* -behaviors consistent w first imp; even though behaviors change 2. *Recent Behaviors* -during the evaluation period 3. *Unusual/Extreme Behaviors* -more than common behaviors; stand out 4. *Behavior Consistent with Opinion* -once we form an opinion, look for behaviors that confirm it

Ratings of Performance

1. *Graphic Rating Scales* 2. *Behavior-Based Methods* -behavioral checklists -behavioral anchored scales -behavioral observation scales -behavioral expectation scales -mixed-standard scales -forced choice scales

Types of Rating Scales

1. *Performance Based* -extent to which expectations have been met -meets/exceeds 2. *Normative Based* -comparisons to other employees -at or above average 3. *Frequency Based* -always/sometimes

Why is there often Low Rater Reliability?

1. *Recency Effect* -recent behaviors given more weight 2. *Infrequent Observation* -most supervisors don't have the opportunity to observe representative sample of employee behavior -Not enough time; Behave differently when around -so don't have enough data/make it up 3. *Different Standards and Comparisons* -raters interpret scales differently 4. *Emotional State* -stress, mood 5. *Bias* -leniency/strictness /CT

What are the Effective/Legal aspects of appraisal systems?

1. *are job-related and based on job-analysis* 2. *properly administered* 3. *provide specific feedback* 4. use appropriate raters

Step 1: Purpose of Appraisal

1. *provide employees with training and feedback* -good time to meet and discuss what they are doing right/wrong, strength/weaknesses -how to correct those weaknesses -65% 2. *Determine Salary Increases* -btwn two individuals in the same job -raises 86% 3. *Promotion Decisions* -sometimes companies use seniority -45% 4. *Termination Decisions* -30% 5. *Personnel Research*

What do supervisors tend to forget?

1. Details 2. Sources of information

What are the Steps of Appraisal?

1. Determine Purpose 2. Identify Environmental and Cultural Limitations 3. Determine who will evaluate 4. select method 5. train raters 6. observe and document performance 7. evaluate 8. communicate results with employees 9. employee termination 10. monitor legality/fairness of system

What are the different dimensions of focus?

1.*Goal Focus* -goals to bee accomplished by the employee; results -easy to understand why certain behaviors are expected 2. *Trait Focus* -employee attributes -ex: dependability, honestly, responsibility -not the best bc don't provide valuable feedback 3. *Task Focus* -group similar tasks together -often includes multiple competencies 4. *Competency Focus* -KSAOs displayed -easy to provide feedback/suggestions

mixed-standard scale

similar to anchor scale but the behaviors are not already ranked

Step 8: Communicating Results

Effect Review interviews: -should be a fair system with appeals process -employee input before meeting -employee participation/chance to give own opinions -focus on behavior rather than traits, because those can be changed -identify solutions to problems -mutually set specific goals -consistent standards

Employment-at-Will Doctrine

Employment at the company is *voluntary* and *subject to termination at will*, with or without cause/notice *limitations* -federal/state law -public policy -implied contracts -covenants of good faith and fair dealing

Criteria Dimensions

Standards/reference points used in making judgments 1. Relevance 2. Reliability 3. Discriminability 4. Practicality

Step 3: Determine who will evaluate

Supervisors see only certain aspects of employee behavior; customers, peers, other staff may see more *Upper management* *Supervisor* -used most often, see final result *Peers* -see actual behavior, fairly reliable, but compare to themselves *Subordinates* -formal methods not common/well-regarded by managers, difficult bc fear of backlash *Support staff* *Customers* -feedback surveys, secret shoppers *Vendors* *Self* -lenient, moderate correlation w actual performance/other ratings *multiple-source feedback* *360-degree feedback*

Relevance

The amount of overlap between the conceptual criterion and the actual criterion (how important is the factor that is being measured to evaluate performance?) *Conceptual Criterion* -the ideal measure of the construct, ultimate/perfect (unmeasurable) *Actual Criterion* -the methods of measuring the construct -Deficiency vs. Contamination

Practicality

The practical usefulness of using the criterion -cost, convenience, difficulty, likelihood of errors

Objective Measures

Usually involve *quantifiable* criteria -usually obtained from personnel records -no subjective evaluation -job related-behaviors and results *Quantity of Work* -# of relevant job behaviors that take place -not always appropriate dep on job *Quality of Work* -in terms of errors *Attendance* -absenteeism, tardiness, tenure *Safety* -# of accidents

behavioral observation scale

checklist of behaviors observed

contamination

employee can do everything asked of the org but still not get the desired results due to factors outside of their control

forced-choice scale

gives behavioral statements and rater forced to answer yes/no, always/never "teller smiles at each customer"

Behavioral checklist

list of behaviors, expectations, and results for each dimension -use task statements -*contamination* problem

360-degree Feedback

primarily used for training/development -28% orgs use it -4 to 10 raters -often little agreement among raters

Behavioral Anchored Scale

rank of behaviors done according to expectations, will poor behaviors ranked low and excellent behaviors ranked high

Reliability

the consistency of a measure -inter-rater reliability

Discriminability

the extent to which the criterion is sensitive enough to pick up actual differences

Performance Appraisal

the formal procedures used by an organization to assess the job performance of its employees