Appraising and Improving Performance Managing Human Resources Belcourt * Bohlander * Snell 5th Canadian edition PowerPoint Presentation by Copyright © 2008 by Nelson, a division of Thomson Canada Limited All rights reserved Monica Belcourt, York University and Charlie Cook, The University of West Alabama Objectives After studying this chapter, you should be able to: Explain the purposes of performance appraisals and the reasons they can sometimes fail Identify the characteristics of an effective appraisal program Describe the different sources of appraisal information Explain the various methods used for performance evaluation Outline the characteristics of an effective performance appraisal interview Copyright © 2008 by Nelson, a 8–2 Performance Appraisal and Other HRM Functions Performance Performanceappraisal appraisaljudges judges effectiveness of recruitment effectiveness of recruitment efforts efforts Performance Performanceappraisal appraisal validates selection validates selectionfunction function Performance Performanceappraisal appraisal determines training determines trainingneeds needs Performance Performanceappraisal appraisalisisaa factor factorin indetermining determiningpay pay Performance Performanceappraisal appraisal justifies justifiespersonnel personnelactions actions Recruitment Recruitment Quality Qualityof ofapplicants applicants determines determinesfeasible feasible performance performancestandards standards Selection Selection Selection Selectionshould shouldproduce produce workers best able workers best ableto tomeet meet job requirements job requirements Training Trainingand and Development Development Training Trainingand anddevelopment development aids achievement aids achievementof of performance standards performance standards Compensation Compensation Compensation Compensationcan canaffect affect appraisal of performance Management appraisal of performance Management Labour Labour Relations Relations Copyright © 2008 by Nelson, a Appraisal Appraisalstandards standardsand and methods may be subject methods may be subjectto to negotiation negotiation 8–3 Performance Appraisal Programs • Performance Appraisal A process, typically performed annually by a supervisor for a subordinate, designed to help employees understand their roles, objectives, expectations, and performance success • Performance management The process of creating a work environment in which people can perform to the best of their abilities Copyright © 2008 by Nelson, a 8–4 Performance Appraisal Appraisal Appraisal Programs Programs Administrative Administrative Developmental Developmental Compensation Compensation Ind Ind.Evaluation Evaluation Job JobEvaluation Evaluation Training Training EE EESupport Support Career CareerPlanning Planning Copyright © 2008 by Nelson, a 8–5 Reasons Appraisal Programs Sometimes Fail • Lack of top-management information and support • Unclear performance standards • Rater bias • Too many forms to complete • Use of the appraisal program for conflicting (political) purposes Copyright © 2008 by Nelson, a 8–6 Managerial Issues Concerning Appraisals There is little face-to-face discussion between the manager and the employee being appraised The relationship between the employee’s job description and the criteria on the appraisal form isn’t clear Managers feel that little or no benefit will be derived from the time and energy spent in the process, or they are concerned only with bad performances Managers dislike the face-to-face confrontation of appraisal interviews Copyright © 2008 by Nelson, a 8–7 Managerial Issues Concerning Appraisals (cont’d) Managers are not sufficiently adept at rating employees or providing them with appraisal feedback The judgmental role of appraisal conflicts with the helping role of developing employees The appraisal is just a once-a-year event, and there is little follow-up afterward Copyright © 2008 by Nelson, a 8–8 Performance Standards Characteristics Strategic Strategic Relevance Relevance Individual Individual standards standardsdirectly directly relate relateto tostrategic strategicgoals goals Criterion Criterion Deficiency Deficiency Standards Standardscapture captureall all of ofan an individual’s individual’scontributions contributions Criterion Criterion Contamination Contamination Performance Performancecapability capabilityis isnot not reduced reduced by byexternal external factors factors Reliability Standards Reliability Standardsare arequantifiable, quantifiable, (Consistency) (Consistency) measurable, measurable,and and stable stable Copyright © 2008 by Nelson, a 8–9 Guidelines for Appraisals Performance ratings must be job-related Employees must be given a written copy of their job standards in advance of appraisals Managers who conduct the appraisal must be able to observe the behavior they are rating Supervisors must be trained to use the appraisal form correctly Appraisals should be discussed openly with employees and counseling or corrective guidance offered An appeals procedure should be established to enable employees to express disagreement with the appraisal Copyright © 2008 by Nelson, a 8–10 Behavioural Methods Critical CriticalIncident Incident Behavioural BehaviouralChecklist Checklist Behavioural Behavioural Methods Methods Behaviourally BehaviourallyAnchored Anchored Rating RatingScale Scale(BARS) (BARS) Behaviour BehaviourObservation Observation Scale Scale(BOS) (BOS) Copyright © 2008 by Nelson, a 8–25 Behavioural Methods • Critical Incident Method Critical incident An unusual event that denotes superior or inferior employee performance in some part of the job The manager keeps a log or diary for each employee throughout the appraisal period and notes specific critical incidents related to how well they perform • Behavioural Checklist Method The rater checks statements on a list that the rater believes are characteristic of the employee’s performance or behaviour Copyright © 2008 by Nelson, a 8–26 Behavioural Methods • Behaviourally Anchored Rating Scale (BARS) Consists of a series of vertical scales, one for each dimension of job performance; typically developed by a committee that includes both subordinates and managers • Behaviour Observation Scale (BOS) A performance appraisal that measures the frequency of observed behaviour (critical incidents) Preferred over BARS for maintaining objectivity, distinguishing good performers from poor performers, providing feedback, and identifying training needs Copyright © 2008 by Nelson, a 8–27 Highlights in HRM Example of a BARS for Municipal Fire Companies FIREFIGHTING STRATEGY: Knowledge of Fire Characteristics [EDITOR USE HRM FROM CDN 5TH FOR CORRECT SPELLING] Highlights 8.4 Source: Adapted from Landy, Jacobs, and Associates Reprinted with permission Copyright © 2008 by Nelson, a 8–28 Highlights in HRM Highlights 8.4 Copyright © 2008 by Nelson, a 8–29 Results Methods • Productivity Measures Appraisals based on quantitative measures (e.g., sales volume) that directly link what employees accomplish to results beneficial to the organization Criterion contamination Focus on short-term results • Management by Objectives (MBO) A philosophy of management that rates performance on the basis of employee achievement of goals set by mutual agreement of employee and manager Copyright © 2008 by Nelson, a 8–30 Highlights in HRM The Balanced Scorecard Source: Robert Kaplan and David Norton, “Strategic Learning and the Balanced Scorecard,” Strategy & Leadership 24, no (September/October 1996): 18–24 Copyright © 2008 by Nelson, a Highlights 8.6 8–31 The Balanced Scorecard • The appraisal focuses on four related categories Financial, customer, processes, and learning • Ensuring the method’s success Translate strategy into a scorecard of clear objectives Attach measures to each objective Cascade scorecards to the front line Provide performance feedback based on measures Empower employees to make performance improvements Reassess strategy Copyright © 2008 by Nelson, a 8–32 Summary of Appraisal Methods • Trait Methods Advantages Are inexpensive to develop Use meaningful dimensions Are easy to use Disadvantages Have high potential for rating errors Are not useful for employee counseling Are not useful for allocating rewards Are not useful for promotion decisions Copyright © 2008 by Nelson, a 8–33 Summary of Appraisal Methods (cont’d) • Behavioural Methods Advantages Use specific performance dimensions Are acceptable to employees and superiors Are useful for providing feedback Are fair for reward and promotion decisions Disadvantages Can be time-consuming to develop/use Can be costly to develop Have some potential for rating error Copyright © 2008 by Nelson, a 8–34 Summary of Appraisal Methods (cont’d) • Results Methods Advantages Have less subjectivity bias Are acceptable to employees and superiors Link individual to organizational performance Encourage mutual goal setting Are good for reward and promotion decisions Disadvantages Are time-consuming to develop/use May encourage short-term perspective May use contaminated criteria May use deficient criteria Copyright © 2008 by Nelson, a 8–35 Appraisal Interviews Types Types of of Appraisal Appraisal Interviews Interviews Tell Telland andSell Sell persuasion persuasion Tell Telland andListen Listen nondirective nondirective Problem ProblemSolving Solving focusing focusingthe the interview interview on onproblem problemresolution resolution and andemployee employeedevelopment development Copyright © 2008 by Nelson, a 8–36 Appraisal Interview Guidelines Invite Participation Ask for a Self-Assessment Change Behaviour Problem Solving Focus Minimize Criticism Express Appreciation Establish Goals Be Supportive Follow Up Day by Day Copyright © 2008 by Nelson, a 8–37 Highlights in HRM Highlights 8.9 Source: Scott Snell, Cornell University Copyright © 2008 by Nelson, a 8–38 Key Terms • behaviour observation scale (BOS) • behaviourally anchored rating scale (BARS) • contrast error • critical incident • customer appraisal • error of central tendency • essay method • forced-choice method • graphic rating-scale method • leniency or strictness error • management by objectives (MBO) Copyright © 2008 by Nelson, a • manager and/or supervisor appraisal • mixed-standard scale method • peer appraisal • performance appraisal • performance management • recency error • self-appraisal • similar-to-me error • subordinate appraisal • team appraisal 8–39 [...]... feedback, and identifying training needs Copyright © 20 08 by Nelson, a 8 27 Highlights in HRM Example of a BARS for Municipal Fire Companies FIREFIGHTING STRATEGY: Knowledge of Fire Characteristics [EDITOR USE HRM 4 FROM CDN 5TH FOR CORRECT SPELLING] Highlights 8. 4 Source: Adapted from Landy, Jacobs, and Associates Reprinted with permission Copyright © 20 08 by Nelson, a 8 28 Highlights in HRM Highlights 8. 4... than) a standard Copyright © 20 08 by Nelson, a 8 21 Highlights in HRM Graphic Rating Scale with Provision for Comments Copyright © 20 08 by Nelson, a Highlights 8. 2 8 22 Highlights in HRM Example of a Mixed-Standard Scale Highlights 8. 3 Copyright © 20 08 by Nelson, a 8 23 Trait Methods • Forced-Choice Method Requires the rater to choose from statements designed to distinguish between successful and unsuccessful... employee and manager Copyright © 20 08 by Nelson, a 8 30 Highlights in HRM The Balanced Scorecard Source: Robert Kaplan and David Norton, “Strategic Learning and the Balanced Scorecard,” Strategy & Leadership 24, no 5 (September/October 1996): 18 24 Copyright © 20 08 by Nelson, a Highlights 8. 6 8 31 The Balanced Scorecard • The appraisal focuses on four related categories Financial, customer, processes, and. .. Diagnosing the root causes of performance problems Setting goals and objectives Copyright © 20 08 by Nelson, a 8 18 Highlights in HRM Supervisor’s Checklist for the Performance Appraisal Scheduling 1 Schedule the review and notify the employee ten days to two weeks in advance 2 Ask the employee to prepare for the session by reviewing his or her performance, job objectives, and development goals 3 Clearly... Copyright © 20 08 by Nelson, a 8 12 Sources of Performance Appraisal • Team Appraisal Based on TQM concepts, that recognizes team accomplishment rather than individual performance • Customer Appraisal A performance appraisal that, like team appraisal, is based on TQM concepts and seeks evaluation from both external and internal customers Copyright © 20 08 by Nelson, a 8 13 360-Degree Performance Appraisal... descriptive, not general and judgmental Report occurrences rather than evaluating them 4 Discuss your differences and resolve them Solicit agreement with the evaluation 5 Jointly discuss and design plans for taking corrective action for growth and development 6 Maintain a professional and supportive approach to the appraisal discussion Copyright © 20 08 by Nelson, a Highlights 8. 1 8 19 Performance Appraisal... Copyright © 20 08 by Nelson, a 8 35 Appraisal Interviews Types Types of of Appraisal Appraisal Interviews Interviews Tell Telland andSell Sell persuasion persuasion Tell Telland andListen Listen nondirective nondirective Problem ProblemSolving Solving focusing focusingthe the interview interview on onproblem problemresolution resolution and andemployee employeedevelopment development Copyright © 20 08 by Nelson,... Identify and quantify biases Copyright © 20 08 by Nelson, a 8 14 Training Performance Appraisers Common Common rater-related rater-related errors errors Error Errorof ofcentral centraltendency tendency Leniency Leniencyor orstrictness strictnesserrors errors Similar-to-me Similar-to-meerrors errors Recency Recencyerrors errors Contrast Contrastand andhalo haloerrors errors Copyright © 20 08 by Nelson, a 8 15... for a few days and then review it again 5 Follow whatever steps are required by your organization’s performance appraisal system Conducting the Review 1 Select a location that is comfortable and free of distractions The location should encourage a frank and candid conversation 2 Discuss each topic in the appraisal one at a time, considering both strengths and shortcomings 3 Be specific and descriptive,... Trait Trait Methods Methods Mixed MixedStandard Standard Scale Scale Forced-Choice Forced-Choice Essay Essay Copyright © 20 08 by Nelson, a 8 20 Trait Methods • Graphic Rating-Scale Method A trait approach to performance appraisal whereby each employee is rated according to a scale of individual characteristics • Mixed-Standard Scale Method An approach to performance appraisal similar to other scale