appraising and improving performance

1. Appraising and Improving Performance Lecture Nine

3. Performance Appraisal Programs The most successful organizations use performance appraisals as a basis for HR activity. The recent interest in total-quality management (TQM) has caused many organizations to rethink their approach to performance appraisals.

4. Purposes of Performance Appraisal ( Administrative Purpose) Performance appraisal programs benefit both the employee and the organization. Administrative Purposes - For the organization, performance appraisals provide inputs for many other HR functions. The concept of “pay-for-performance” has gained wide acceptance among employers. It is important to correctly administer performance appraisals as a key to the proper compensation of employees.

5. Purposes of Performance Appraisal ( Developmental Purpose) For the employee, performance appraisals provide feedback about daily performance while also stressing employee training, development, and growth plans.

6. Developing An Effective Appraisal Program Development of an appraisal system is normally the joint responsibility of the HR department and line and staff managers. The HR department is responsible for overseeing and coordinating the appraisal program while other managers assist in establishing objectives for the program. Studies have shown that employees have greater trust and respect for appraisal systems when they participate in the development of the rating instrument.

7. Developing An Effective Appraisal Program Establishing Performance Standards Before mangers can appraise the performance of employees, appropriate performance standards must be established and communicated to employees. These standards, or criteria, must be job related requirements. The basic considerations for establishing performance standards are:

8. Developing An Effective Appraisal Program Strategic Relevance - This refers to how the standards relate to the strategic objectives of the organization. Criterion Deficiency - Performance standards must capture the full range of a person’s job. When standards focus on only one element of the job, they may leave out some important area.

9. Developing An Effective Appraisal Program Criterion Contamination - Performance standards should not be influenced by factors outside the employee’s control. For example, if an employee’s performance is affected by bad materials or poor equipment, his or her performance standards may be contaminated.

10. Developing An Effective Appraisal Program Reliability - This refers to the stability or consistency of a standard, or the extent to which individuals tend to maintain a certain level of performance over time. Performance standards should be written and they should be defined in quantifiable and measurable terms.

11. Developing An Effective Appraisal Program Complying with the Law Based on recent court rulings, HR managers recommend that performance appraisals meet these legal guidelines: (1) performance ratings must be job-related (based on job analysis), (2) employees should have a copy of their job standards (3) employee performance should be observable,

12. Developing An Effective Appraisal Program Complying with the Law (4) supervisors should be properly trained in the appraisal process, (5) managers should openly discuss performance with employees and offer help where needed, and (6) an appeals procedure should be developed whereby employees can voice disagreement with the appraisal received.

13. Developing An Effective Appraisal Program Deciding Who Should Appraise Performance Just as there are multiple standards by which to evaluate performance, there are a multitude of persons with valuable information about a person’s work effectiveness. The following are the different types of appraisal's:

14. Developing An Effective Appraisal Program Manager/Supervisor Appraisal - Since managers and supervisors work directly with their employees, they are the logical choice to appraise the performance of their employees. Mangers and supervisors can use daily work records and the direct observation of employees to complete the appraisal review.

15. Developing An Effective Appraisal Program Self-Appraisal - Self-appraisals are used when managers seek to increase employees’ involvement in the appraisal process. One problem with this method is that appraisers may evaluate their performance higher than the supervisor would.

16. Developing An Effective Appraisal Program Subordinate Appraisal - Appraisal by subordinates has been used when supervisors seek feedback on how subordinates view them. Employees are in a good position to evaluate the leadership, communications, planning, and delegation of authority of their managers.

17. Developing An Effective Appraisal Program Peer Appraisal - Appraisal by peer’s who are in a good position to evaluate the leadership, communications, planning of their fellow workers. Team Appraisal - This is an extension of the peer appraisal. In a team setting, it may be nearly impossible to separate out an individual’s contribution. In such cases, individual appraisal may detract from the critical issues of the team. Team appraisals are designed to evaluate the performance of the team as a whole.

18. Developing An Effective Appraisal Program Customer Appraisal - Driven by TQM concerns, internal and external customers are increasingly used as sources of performance appraisal information. Internal customers may include anyone within the organization who depends on the employee’s work output.

19. Developing An Effective Appraisal Program 360-Degree Appraisal - Major companies have begun to use a multirater approach, referred to as 360 degree appraisal to evaluate employees. The system is intended to give employees the most accurate view by getting input from supervisors, peers, subordinates, customers, etc.

20. Developing An Effective Appraisal Program Training Appraisers Although performance appraisal is widely practiced by organizations, many managers must perform the process without the benefit of training. Performance appraisal training programs should focus on the following:

21. Developing An Effective Appraisal Program Establishing an Appraisal Plan - this systematic process covers (1) the objectives of the performance appraisal system, and (2) the mechanics of the rating system (including the method, frequency, and strengths/weaknesses of the system).

22. Developing An Effective Appraisal Program Eliminating Rater Error Research has shown that appraisers are prone to make several different types of rating errors. Distribution errors - involve the arrangement of a group of ratings across several employees. Forced distribution is a technique that some organizations use to eliminate these types of errors. However, the result may be a distribution that is more distorted than the original. Behavioral anchors may be a more effective approach to minimizing distribution errors.

23. Developing An Effective Appraisal Program Temporal errors - are the result of how a person evaluates information over time. Contrast error - occurs when an employee’s evaluation is biased either favorably or unfavorably because of a previous employee’s performance evaluation.

24. Developing An Effective Appraisal Program Similar-to-me error - occurs when an appraiser inflates the evaluation of a person with whom they have something in common.

25. Developing An Effective Appraisal Program Feedback Training - Feedback not only provides employees with knowledge of results, but it also allows the manager and employee to discuss current problems and set future goals.

26. Performance Appraisal Methods This section presents the major contemporary methods of performance appraisal. Other, less frequently used systems are also reviewed. Performance appraisal systems can be broadly classified as trait methods, behavioral methods, or result-oriented methods.

27. Performance Appraisal Methods Trait Methods Graphic Rating Scales - With a graphic rating scale, traits or characteristics are rated on a line or scale. Rating scale forms may differ between organizations based on the dimensions to be appraised, the degree to which the performance dimensions are defined, and the degree to which the points on the scale are defined.

28. Performance Appraisal Methods Mixed-Standard Scales - These scales are extensions of the basic rating scale. Here the manager evaluates the trait under consideration against three specific behavioral descriptions relevant to each trait to be rated.

29. Performance Appraisal Methods Mixed-Standard Scales (continued) Each descriptor for the trait should reflect different levels of performance - superior, average, below average. Managers appraise their employees by indicating that the employees are better than, equal to, or worse than the standard for each behavioral descriptor.

30. Performance Appraisal Methods Forced-Choice Method - Forced choice methods require managers to choose from a pair of statements that appear equally favorable or unfavorable, selecting the one statement that best describes the employee’s behavior. The manager selects the statement without knowing which statement correctly describes successful job performance.

31. Performance Appraisal Methods Essay Method - The essay method of performance appraisal requires the supervisor to write a statement that describes the employee’s behavior. Normally both strengths and weaknesses are described, along with a plan for future employee development.

32. Performance Appraisal Methods Behavioral Methods Critical Incident Method - The critical incident method appraisers employees based on favorable or unfavorable critical incidents related to the job. Managers keep a log on employees and note the critical incidents in the log as they occur.

33. Performance Appraisal Methods Behavioral Checklist Method - Checklists consist of groups of statements that pertain to a given job. The rater checks those statements that apply to the ratee.

34. Performance Appraisal Methods Behaviorally Anchored Rating Scale (BARS) A BARS is often mentioned as one way to improve rating scales. It does this by providing a description of behavior along the scale, or continuum. A BARS is based on critical incidents of job performance. Normally, a BARS consists of a series of five to ten vertical scales, one for each important dimension of job performance.

35. Performance Appraisal Methods While BARS instruments have been widely publicized as a more effective way to appraise performance, at present there is no strong evidence that a BARS reduces all of the rating errors mentioned earlier.

36. Performance Appraisal Methods Behavior Observation Scales (BOS) - BOS is similar to BARS but asks raters to evaluate how frequently each behavior has been observed. In contrast to BARS, this approach allow the appraiser to play more the role of observer than judge.

37. Performance Appraisal Methods Results Methods Productivity Measures - A number of measures can be used to assess results achieved. Salespeople, for example, are evaluated based on sales volume. Production workers can be evaluated based on output produced, scrap rate, defects, and the like.

38. Performance Appraisal Methods Management by Objectives Developed in 1954, MBO is a philosophy of management as well as a goal-setting and performance appraisal system. At periodic time intervals, employees set goals with their supervisors and are evaluated against those goals on specified review dates.

39. Performance Appraisal Methods Requirements for a Successful MBO Program To be successful, MBO programs must meet several characteristics. Established goals should be quantifiable and set for both the long run and the short run. Goals must be realistically set and under the employee’s control. Managers and employees must establish specific times when goals are to be reviewed and evaluated. Accompanying the goals should be a detailed description of how the goals will be achieved.

40. Performance Appraisal Methods Requirements for a Successful MBO Program Advantages of MBO include the following: (1) employees can measure their own performance; (2) quantifiable goals are set; (3) goal setting is a joint effort between the employee and the manager; and (4) employees have the satisfaction of achieving mutually established objectives.

41. Performance Appraisal Methods Criticisms of MBO - Disadvantages of MBO include (1) some studies show that MBO programs have achieved only mediocre success; (2 goals may be unrealistically set; (3) employees and managers may not be fully committed to the MBO process; and (4) some goals may be hard to quantify but, nevertheless, are important to employee job success.

42. Performance Appraisal Methods Which Performance Appraisal Method to Use? The choice of which appraisal method to use largely depends on the intended purpose of the appraisal program. It is common for a supervisor’s appraisal of an employee to be reviewed by higher levels of management. This is often done by the supervisor's superior. Review of an evaluator's appraisal helps to ensure objectivity and fairness. This method also can serve to train new supervisors in the proper application of performance appraisal.

43. Appraisal Interviews Appraisal interviews are a very important part of the entire appraisal process. Unfortunately, many supervisors do not devote the time or attention needed to conduct the interview properly. Appraisers should remember that employees want and deserve an honest appraisal of their performance.

44. Appraisal Interviews This only comes through a well-planned and well-conducted appraisal interview. The form of the interview will depend mostly on the purpose of the interview. Generally, feedback sessions will have a different approach from growth and development interviews. Employees should have adequate time in the interview to ask questions and provide additional input, if needed.

45. Appraisal Interviews Three types of Appraisal Interviews (1) Tell and Sell Interview This method requires that the supervisor use persuasion to change an employee in a desired manner. This can be accomplished by having the employee see how the changed behavior will benefit him or her.

46. Appraisal Interviews (2) Tell and Listen Interview When using this method, the supervisor discussed the employee’s strong and weak points during the first half of the interview. During the second half of the interview, the employee’s feelings about the interview are thoroughly explored. At this time the supervisor attempts to deal with the objections of the employee through nondefensive behavior. It is assumed that the opportunity to release frustrated feelings through catharsis will help to reduce or remove unpleasant feelings.

47. Appraisal Interviews (3) Problem-Solving Interview The supervisor who uses the problem-solving method employees nondirective interviewing procedures, but in addition, the supervisor seeks to develop a growth and development approach tot he interview. This method is recommended, since the appraisal process should exist to help employees grow and develop.

48. Appraisal Interviews Conducting the Appraisal Interview One important rule to follow is not to discuss too much information at one time. Dividing the appraisal interview into two sessions, one for the performance review and the other for future development plans, can reduce time constraints.

49. Appraisal Interviews Conducting the Appraisal Interview By dividing the appraisal interview into two sessions, the supervisor can serve as evaluator at one period and counselor at the other period. This relieves the burden of performing both tasks during one session.

50. Appraisal Interviews Conducting the Appraisal Interview Some specific guidelines about conducting an appraisal interview may increase employees’ acceptance of feedback, their satisfaction with the interview, as well as their intention to improve in the future. Many of the principles of good selection interviewing apply to appraisal interviews.

51. Appraisal Interviews Principles of Interviewing Ask for a self-assessment. Self-assessment gets employees thinking about their performance and assures that they know the standards against which they will be evaluated. Invite participation. Participation helps bring out some of the root causes of performance problems and may increase an employee’s satisfaction with the process.

52. Appraisal Interviews Principles of Interviewing Express appreciation. Praise is a powerful motivator. However, avoid the “sandwich technique.” With this method, positive statements are given first, followed by negative statements, which are followed by more positive remarks. For many years HR professionals recommended that managers use the sandwich technique when giving appraisal information to employees.

53. Appraisal Interviews Principles of Interviewing Currently, this technique is not recommended for these reasons; (1) giving praise first signals to the employee that bad news is on the way; (2) the final positive comments indicate to the employee that no more negative comments will follow; and (3) employees may simply see this approach as a way to ease through the appraisal interview without any real communication between those involved.

54. Appraisal Interviews Principles of Interviewing Minimize criticism. Criticism leads to defensiveness, and this may hurt the chances of solving the problem. Change the behavior, not the person. Instead of focusing on traits that are personal characteristics (and difficult to change), focus on behaviors that can be corrected or improved.

55. Appraisal Interviews Principles of Interviewing Focus on solving problems. Rather that blaming, focus on remedying the situation. Be supportive. Some of the best leaders are those who focus on finding ways to help employees eliminate obstacles to successful performance.

56. Appraisal Interviews Principles of Interviewing Establish goals. Try to focus the employee on the future rather than the past. Follow up day to day. Feedback is more powerful when it occurs frequently. Informal talks reinforce the goals and objectives laid out in the formal appraisal interview.

57. Appraisal Interviews Improving Performance Employees cannot improve their performance unless they know exactly what is expected of them. Supervisors have the responsibility to inform employees of their job standards at the start of the review period. By doing this, employees can adjust their behavior to conform to performance criteria, and surprises can be avoided at the appraisal interview.

58. Appraisal Interviews Identifying Sources of Ineffective Performance The major sources of ineffective job performance, broken into four categories; (1) organization policies and practices; (2) job concerns; (3) personal problems; and (4) external factors.

59. Appraisal Interviews Identifying Sources of Ineffective Performance It is recommended that ineffective employee job performance be diagnosed according to three interactive factors: The employee’s skill, the employee’s effort levels, and the external conditions surrounding the job.

60. Appraisal Interviews Managing Ineffective Performance A three step process is recommended to correct poor employee performance. First, identify the source of poor performance. Second, develop a course of action to improve performance. Third, motivate the employee to correct undesirable job behavior.