1. Chapter 5 Performance Measurement Royalty-Free/CORBIS

2. Module 5.1: Basic Concepts in Performance Measurement • Uses for performance information • Criterion data • Employee development • Motivation/satisfaction • Rewards • Promotion • Layoff

3. Types of Performance Data • Objective • Personnel • Judgmental

4. Performance Measurement (cont'd) • Relationships among performance measures • Hands-on performance measures • Include carefully constructed simulations • Walk-through testing • Employee describes in detail how to do a job

5. Performance Measurement (cont'd) • Electronic performance monitoring • Attaining positive employee feedback • Improving performance

6. Performance Management • Emphasizes link between individual behavior & organizational strategies & goals • Components • Definition of performance • Actual measurement process • Communication between supervisor & subordinate about individual behavior & organ. expectations

7. Sequence for Performance Measurement and Feedback Figure 5.1

8. Perceptions of Fairness in Performance Measurement • Factors associated with fairness measurement • Appraisal frequency “+” related to fairness perceptions • Joint planning with supervisor to eliminate weaknesses enhances fairness perception • Supervisor’s knowledge of duties of person being measured • Supervisor’s knowledge of actual performance of person being rated

9. Perceptions of Fairness in Performance Measurement (cont'd) • Distributive justice • Fairness of outcomes related to decisions • Procedural justice • Fairness of process by which ratings are assigned & a decision is made • Interpersonal justice • Respectfulness & personal tone of communications surrounding evaluation

10. Module 5.2: Performance Rating—Substance • Theories of performance rating • Process model • Addresses various factors comprising rating process • Content model • Addresses content input to supervisory ratings • Rating context • Includes both announced purpose & other, non-announced agendas surrounding ratings

11. Process Model ofPerformance Rating Figure 5.2

12. Content Model ofPerformance Rating Figure 5.3

13. Focus on Performance Ratings • Overall performance ratings • Influenced by 3 factors • Task performance • Contextual performance • Counter-productive performance

14. Performance Ratings (cont'd) • Trait ratings – a warning • Task-based ratings • Effectiveness of employee in accomplishing duties • Most easily defended in court • Critical incidents method • Examples of critical behaviors that influence performance PhotoLink/Getty Images

15. Performance Ratings (cont'd) • Structural characteristics of performance rating scale • Extent to which duty/characteristic being rated is behaviorally defined • Extent to which meaning of response categories is defined • Degree that person interpreting ratings can understand response that rater intended

16. Rating Formats • Graphic rating scales • Graphically display performance scores running from high to low

17. Graphic Rating Scales Figure 5.4

18. Rating Formats (cont'd) • Checklist • List of behaviors presented to rater who places a check next to items that best (or least) describe the ratee • Weighted checklist • Included items have assigned values or weights

19. Behaviorally anchored rating scales (BARS) Rating format that includes behavioral anchors describing what worker has done, or might be expected to do, in a particular duty area Rating Formats (cont'd) Figure 5.4 Behaviorally Anchored Rating Scale for Firefighters

20. Employee Comparison Methods • Involve direct comparison of 1 person w/another • Simple ranking • Employees ranked from top to bottom according to assessed proficiency • Paired comparison • Each employee in a group is compared with each other individual in the group

21. Employee Comparison Methods • Useful in making layoff or downsizing decisions • Feedback is difficult because there is no clear standard of performance • Difficulty in comparing individuals in different groups

22. Module 3: Performance Rating—Process • Rating sources • Supervisors • Most common information source • Many actively avoid evaluation & feedback Ryan McVay/Getty Images

23. Rating Sources (cont'd) • Peers • More likely to know about a worker’s typical performance • Conflict of interest likely when competing for fixed resources

24. Self-Ratings • Discussion of ratings with supervisor increases perceptions of procedural fairness • Potential for distortion & inaccuracy • Minimized with supervisor discussion • Conflict of interest if used for administrative purposes

25. Perceived Percentile Rankings for Mastery of Course Material as Function of Actual Perf. Rank Figure 5.6 (Dunning et al., 2003)

26. Rating Sources • Subordinate ratings • Critical that subordinate feedback be kept anonymous • Customer & supplier ratings • Important from business strategy vantage point

27. Rating Sources • 360 degree systems • Collect & provide an employee with feedback that comes from many sources • Often used for feedback & employee development

28. Potential Sources for 360 Degree Feedback Figure 5.7 Potential Sources for 360 Degree Feedback

29. Rating Distortions • Central tendency error • Raters choose mid-point on scale to describe performance when more extreme point is more appropriate • Leniency-severity error • Raters are unusually easy or harsh in their ratings

30. Rating Distortions (cont'd) • Halo error • Same rating is assigned on a series of dimensions causing them all to be similar • A “halo” surrounds the ratings

31. Rater Training • Some distortions (errors) may be corrected through training • Administrative training • Important for uncommon rating systems (e.g., BARS) or if 1 or more structural characteristics are deficient

32. Rater Training (cont'd) • Psychometric training • Makes raters aware of common rating errors in hopes of reducing such errors

33. Frame of Reference Training • Based on assumption that rater needs context for providing rating • Basic steps • Provide information about multidimensional nature of performance • Ensure raters understand meaning of scale anchors • Engage in practice rating exercises of standard performance • Provide feedback on practice exercise

34. Reliability & Validity of Perf. Ratings • Reliability • Currently the subject of lively debate • Inter-rater reliability considered poor but this isn’t necessarily bad considering each rater relies on a different perspective • Validity • Depends on manner by which rating scales were conceived & developed

35. Module 5.4: Social & Legal Context of Perf. Evaluation • Motivation to rate • Suggestion that raters use process as a means to an end, either personal or organizational • Performance appraisal as a goal-directed activity with 3 stakeholders

36. Rater goals Task performance Interpersonal Strategic Internalized Ratee goals Information gathering Information dissemination Motivation to Rate (cont'd)

37. Motivation to Rate (cont'd) • Organizational goals • Between-person uses • Within-person uses • Systems-maintenance uses

38. Goal Conflict • When single system is used to satisfy multiple goals from different stakeholders, rater must choose which goal to satisfy before assigning a rating • Possible solutions • Use multiple performance evaluation systems • Obtain involvement of stakeholders in developing the system • Reward supervisors for accurate ratings

39. Performance Feedback • Problematic when same information is used for multiple purposes • Feedback (especially negative) should be stretched over several sessions • “Praise-criticism-praise sandwich”

40. Performance Feedback • Employee more likely to accept negative feedback if he/she believes: • Supervisor has sufficient “sample” of subordinate’s actual behavior • Supervisor & subordinate agree on subordinate’s job duties • Supervisor & subordinate agree on definition of good & poor performance • Supervisor focuses on ways to improve performance

41. “Destructive” Criticism • Feedback that is cruel, sarcastic, & offensive • Usually general rather than specific • Often directed toward personal characteristics of employee • Leads to anger, tension, & resentment on part of employee • Apology best to repair damage of such criticism

42. Implementing 360 Degree Feedback • Ensure anonymity of sources • Rater & ratee should jointly identify the evaluator • Use for developmental & growth purposes • Train information sources & those giving feedback • Follow up feedback session with regular opportunities for progress assessment

43. Performance Evaluation & Culture • Hofstede’s 5 dimensions of culture might affect performance evaluations • Modesty bias • When raters give themselves lower ratings than warranted • Prevalent in cultures with high power distance

44. Performance Evaluation & the Law • Ford Motor Company & its forced distribution rating system • Evaluators were required to place managers into performance categories based on predetermined percentages • Ford sued by managers & eventually paid over $10 million to litigants

45. Performance Evaluation & the Law (cont'd) • Review of court cases from 1980-1995 • Judges primarily concerned with issues of fairness rather than technical characteristics of the system C. Sherburne/PhotoLink/Getty Images

46. Performance Evaluation & the Law (cont'd) • Recommendations regarding substance of appraisal criteria Table 5.9 Source: Malos (1998).

47. Performance Evaluation& the Law • Lawsuits most often brought against trait-based systems • Arguments • Ratings unduly subjective & decisions based on those ratings are unreliable or invalid • Ratings have no basis in actual behavior due to subjectivity • Little evidence of such unfairness has been found • Research suggests performance evaluations do not systematically discriminate against protected subgroups