CHAPTER 11 Performance Management and Appraisal Section Developing Human Resources © 2008 Thomson/South-Western All rights reserved PowerPoint Presentation by Charlie Cook The University of West Alabama Chapter Chapter Objectives Objectives After you have read this chapter, you should be able to: ■ Identify the components of performance management systems ■ Distinguish between performance management and performance appraisal ■ Explain the administrative and developmental uses of performance appraisal ■ Describe the advantages and disadvantages of multisource (360°) appraisals ■ Discuss the importance of training managers and employees about performance appraisal and give examples of several rater errors ■ Identify several concerns about appraisal feedback and ways to make it more effective © 2008 Thomson/South- 11–2 The Nature of Performance Management Provide performance information to employees Make clear what the organization expects Effective Performance Management System Identify areas of success and needed development © 2008 Thomson/South- Document performance for personnel records 11–3 FIGURE 11-1 Performance Management Linkage © 2008 Thomson/South- 11–4 Performance Management versus Performance Appraisal Performance Management Performance Appraisal Processes used to identify, encourage, measure, evaluate, improve, and reward employee performance The process of evaluating how well employees perform their jobs and then communicating that information to the employees © 2008 Thomson/South- 11–5 FIGURE 11-2 Components of a Performance-Focused Culture © 2008 Thomson/South- 11–6 Identifying and Measuring Employee Performance Common Performance Measures Quantity of Output Quality of Output © 2008 Thomson/South- Timeliness of Output Presence at Work 11–7 Identifying and Measuring Employee Performance (cont’d) • Job Duties Important elements in a given job as identified from job descriptions What an organization pays an employee to © 2008 Thomson/South- 11–8 FIGURE 11-3 Types of Performance Information Subjective © 2008 Thomson/South- Objective 11–9 Relevance of Performance Criteria Factors Affecting Relevance Deficient Measures Contaminated Measures © 2008 Thomson/South- Overemphasized Measures 11–10 Category Scaling Methods (cont’d) • Behaviorally Anchored Rating Scale (BARS) A rating scale composed of job dimensions (specific descriptions of important job behaviors) that “anchor” performance levels on the scale • Developing a BARS Identify important job dimensions Write short statements of job behaviors Assign statements (anchors) to job dimensions Set scales for anchors © 2008 Thomson/South- 11–25 FIGURE 11-10 Sample Terms for Defining Standards © 2008 Thomson/South- 11–26 FIGURE 11-11 Behaviorally-Anchored Rating Scale for Customer Service Skills © 2008 Thomson/South- 11–27 Comparative Methods • Ranking A listing of all employees from highest to lowest in performance Drawbacks Does not show size of differences in performance between employees Implies that lowest-ranked employees are unsatisfactory performers Becomes an unwieldy process if the group to be ranked is large © 2008 Thomson/South- 11–28 Comparative Methods (cont’d) • Forced Distribution Performance appraisal method in which ratings of employees are distributed along a bell-shaped curve Advantages Disadvantages • Helps deal with “rater inflation • Managers resist placing people in the lowest or highest groups • Explanation for placement can be difficult • Performance may not follow normal distribution • Managers may make false distinctions between employees • Makes manages identify high, average, and low performers • Ensures that compensation increases reflect performance differences among individuals © 2008 Thomson/South- 11–29 FIGURE 11-12 Forced Distribution on a Bell-Shaped Curve © 2008 Thomson/South- 11–30 Narrative Methods • Critical Incident Manager keeps a written record of highly favorable and unfavorable employee actions Drawbacks Variations in how managers define a “critical incident” Time involved in documenting employee actions Most employee actions are not observed and may become different if observed Employee concerns about manager’s “black books” © 2008 Thomson/South- 11–31 Narrative Methods (cont’d) • Essay Manager writes a short essay describing an employee’s performance Drawback Depends on the managers’ writing skills and their ability to express themselves © 2008 Thomson/South- 11–32 Management by Objectives (MBO) • Management by Objectives Specifying the performance goals that an individual and his or her manager agree the employee will to try to attain within an appropriate length of time • Key MBO Ideas Employee involvement creates higher levels of commitment and performance Employees are encouraged to work effectively toward achieving desired results Performance measures should be measurable and should define results © 2008 Thomson/South- 11–33 The MBO Process Job review and agreement Development of performance standards Setting of objectives Continuing performance discussions © 2008 Thomson/South- 11–34 Training Of Managers And Employees in Performance Appraisal Appraisal process and timing Common rating errors Performance Appraisals Training Topics Compensation reviews Performance criteria and job standards Positive and negative feedback Training and development goals © 2008 Thomson/South- 11–35 FIGURE 11-13 Common Rater Errors © 2008 Thomson/South- 11–36 FIGURE 11-14 Appraisal Interview Hints for Supervisors and Managers © 2008 Thomson/South- 11–37 Appraisal Feedback Components of a Feedback System Data on Actions Data Evaluation © 2008 Thomson/South- Action Based on Evaluation 11–38 Performance Management System (PMS) Consistent with the strategic mission Effectively documents performance Effective Performance Management System Viewed as fair by employees Beneficial as a development tool Useful as an administrative tool Is legal and job related © 2008 Thomson/South- 11–39 [...]... Manager writes a short essay describing an employee’s performance Drawback Depends on the managers’ writing skills and their ability to express themselves © 2008 Thomson/South- 11–32 Management by Objectives (MBO) • Management by Objectives Specifying the performance goals that an individual and his or her manager agree the employee will to try to attain within an appropriate length of time • Key... individual contributions to teamwork and team performance © 2008 Thomson/South- • Organizational use of individual performance appraisals can hinder the development of teamwork 11–19 FIGURE 11-7 Performance Management Linkage © 2008 Thomson/South- 11–20 FIGURE 11-8 Multisource Appraisal © 2008 Thomson/South- 11–21 Category Scaling Methods • Graphic Rating Scale A scale that allows the rater to indicate