Human Resource Management Chapter 6: Performance Appraisal and Management

1. Human Resource ManagementChapter 6: Performance Appraisal and Management Ass. Prof. Ipek Kalemci TUZUN

2. ComparingPerformance Appraisal and Performance Management Performance Appraisal:Setting work standards, assessing performance, and providing feedback to employees to motivate, correct, and continue their performance. Performance Management:An integrated approach to ensuring that an employee’s performance supports and contributes to the organization’s strategic aims. Basic Concepts in PerformanceManagement and Appraisal

3. The Appraisal Process Definition • Performance Appraisal is the periodic evalutaion of an employees job performance. The evaluation of an employee’s current and past performance relative to performance standards • Employees are judged in threee ways; • What they achieve (results and outcomes) • What they do (behavior and actions) • What they are (knowledge, skills and abilities)

4. Performance Appraisal Standarts • Performance Apprasisals standarts can be quantitaive or qualitative • An appraisal involves: • Setting work standards - Specific - Measurable - Agreed - Realistic - Timely • Assessing actual performance vs. these standards • Providing feedback to the employee

5. Why Appraise Performance? • Appraisals provide information for promotion and salary decisions • Provides opportunity to review an employee’s work related behavior ,increase morale, improve communication • Is part of the career-planning process • Appraisals help manage and improve your firm’s performance • Determine training needs

6. The Supervisor’s Role • Must be familiar with basic appraisal techniques • Be candid but fair when delivering bad news • HR will often outline guidelines but leave implementation to supervisors

7. Step in Appraising Performance • Defining job • Appraising Performance • Provide feedback

8. How to clarify Expectations • Job descriptions are usually written for a group of jobs leaving many aspects of a job without specific goals • Quantify expectations with explicit goals for each expectation • Employee should know basis of appraisal ahead of time

9. Appraisal Methods • Graphic rating scale • Alternation ranking • Forced distribution • Narrative Forms • Critical Incident • Paired comparison • BARS( Behaviorally Anchored Rating Scales • MBO (Management by Objectives)

10. Graphic Rating Scale Unsatisfactory Outstanding • Lists traits like quality and reliability • Versus a range of performance values (from unsatisfactory to outstanding) • Each subordinate is rated for each quality • Ratings total ranks appraisal

12. Alternation Ranking Method - Ranking employees from best to worst on a trait or traits. Paired Comparison Method • Ranking employees by makin chart of all possible pairs of the employees for each trait and indicating which is the better employee of the pair.

13. FIGURE 9–6 Scale for Alternate Ranking of Appraisees

14. FIGURE 9–7 Ranking Employees by the Paired Comparison Method Note: + means “better than.” – means “worse than.” For each chart, add up the number of +’s in each column to get the highest-ranked employee.

15. Forced Distribution Predetermined percenatges of rates are placed in various performance categories Narrative Forms Final appraisals are frequently in a written narrative form • Supervisor rates employee’s: • Performance factor or skill • Give examples & an improvement plan • Explains good & bad performance areas

16. Critical Incident • Keeping a record of positive and negative examples of subordinate’s work related behaviour

17. Behaviorally Anchored Rating Scales BARS combine best features of narrative, critical incidents, and quantified scales in five steps • Generatecritical incidents • Developperformance dimensions • Reallocate incidents • Scale the incidents • Develop a final instrument

18. BARS for Grocery Clerks • Researchers developed a BARS for grocery clerks by collecting critical incidents in 8 areas (rating scale given below): • Knowledge and judgment • Conscientiousness • Skill in human relations • Skill in operation of register • Skill in bagging • Ability of checkout work • Skill in monetary transactions • Observational ability 9 1 Extremely Poor Poor Average Good Extremely Good

19. A more accurate gauge of performance Clearer standards – critical incidents along the scale make it clear Feedback – its easier to explain ratings to appraisees Independent dimensions – clustering critical incidents make dimensions more independent Consistency – different raters appraisals of same individual are similar Advantages of BARS

20. Management by Objectives • MBO refers to a organizational 6 step goal setting and appraisal program Set the organization’s goals Set the departmental goals Discuss developmental goals Define expected results Performance reviews Provide feedback

21. Unclear standards – use of words like “good” or “fair” on appraisals Halo effect – one trait affects all ratings positively Central tendency – everyone’s in the middle Leniency or strictness – no middle Bias – characteristics affect rating Horns Effect; one trait affects all ratings negatively Recency Error: Rating only recent performance First Impression Fixed Impression Appraisal Rating Problems

22. How to Avoid Appraisal Problems • Learn and understand the problems • Use the right appraisal tool • Train supervisors • Conduct consistent policy, procedures and performance standards • Reduce outside factors: time constraints, union pressures & turnover • Keep a diary of critical incidents

23. Conduct a job analysis to determine “successful performance” Use these criteria in a rating instrument Use exact performance metrics Tell employees and evaluators these metrics Train supervisors Allow appraisers daily contact Rate on each of job’s dimensions Use multiple appraisers Document everything Provide consistent help to poor performers Guidelines for Effective Appraisals

24. Most Commonly Used Appraisal Methods Society for Human Resource Management reports about 89% of surveyed managers use performance appraisal for all their employees