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After reading chapter 10, you should be able to: Distinguish between involuntary and voluntary turnover, and describe their effects on an organization; discuss how employees determine whether the organization treats them fairly; identify legal requirements for employee discipline; summarize ways in which organizations can fairly discipline employees.
Fundamentals of Human Resource Management 11e Chapter 10 Establishing the Performance Introduction Employees see performance evaluations as having a direct effect on their work lives § Questions regarding the performance management process: • • • • What is the purpose of the evaluation? Who should be evaluated? What format should be used? Who will do the evaluation? Fundamentals of Human Resource Performance Management Systems Performance management systems have three main purposes: • • • Twoway feedback – performance measures mutually set between employee and employer Development – identify areas in which employees have deficiencies or weaknesses Documentation to meet legal requirements Fundamentals of Human Resource Performance Management Systems Improving performance management systems § Focus on the individual • § Focus on the process • § Discussions of performance may be emotional and may generate conflicts when subordinates and supervisors do not agree Company policies and procedures may present barriers to a properly functioning appraisal process Train appraisers • Training reduces appraiser uncertainty and errors in the process Fundamentals of Human Resource Performance Management and EEO EEO laws require performance management systems to be objective and jobrelated § ADA: performance management systems must measure “reasonable” success. • § § § Click here to see EEOC guidelines for appraising employees with disabilities Valid performance appraisals are conducted at established intervals Evaluations done by trained appraisers Poorly trained supervisors may show bias Fundamentals of Human Resource Appraisal Process establish performance standards with employees communicate expectations and set goals measure actual performance compare actual performance with standards discuss the appraisal with the employee Fundamentals of Human Resource if necessary, initiate corrective action AppraisalProcess Đ Establishperformancestandards ã ã Đ Derivedfromcompanysstrategicgoals Basedonjobanalysisandjobdescription Communicateexpectations ã Goalsmustbearticulatedfromsupervisorto employeeandfromemployeetosupervisor FundamentalsofHumanResource AppraisalProcess Đ Measureactualperformanceusing • • • • § Personal observation Statistical reports Oral reports Written reports Compare performance with standards • Explain different levels of performance and how acceptable they are compared to the standard Fundamentals of Human Resource Appraisal Process § Discuss appraisal with the employee • • § Feedback has strong impact on employee self esteem and future performance Feedback can be positive or negative Initiate corrective action if necessary • • Immediate action deals with symptoms of the problem Basic corrective action deals with the source of the problem Fundamentals of Human Resource Appraisal Process Five common mistakes managers can make in giving a performance review: waiting for the performance appraisal to give feedback overemphasizing recent performances being too positive or negative being critical without being constructive talking not listening Fundamentals of Human Resource 10 Behaviorally Anchored Rating Scale Fundamentals of Human Resource 16 AppraisalMethods relativestandards Đ Grouporderranking ã Đ Individualranking ã Đ Employees are placed in a classification reflecting their relative performance, such as “top onefifth” Employees are ranked from highest to lowest Paired comparison • Each individual is compared to every other final ranking is based on number of times the individual is preferred member in a pair Fundamentals of Human Resource 17 Appraisal Methods achievedoutcomes Đ ManagementbyObjectives(MBO) ã ã Includesmutualobjectiveưsettingandevaluationbasedonthe attainmentofthespecificobjectives Theorganizationalobjectivestranslateintospecificobjectivesforthe divisional/departmental/individuallevels FundamentalsofHumanResource 18 AppraisalMethods achievedoutcomes Đ CommonelementsinanMBOprogramare: ã ã ã ã Đ Goal specific Participative decision making Specific time period Performance feedback Effectively increases employee performance and organizational productivity, especially when goals are difficult enough to require stretching Fundamentals of Human Resource 19 Factors that distort appraisals FundamentalsofHumanResource 20 FactorsThatDistortAppraisals Đ Leniencyerror ã Đ Eachevaluatorhashis/herownvaluesystem;Some evaluatehigh(positiveleniency)andothers,low(negative leniency) Haloerror ã Evaluatorletsanassessmentofanindividualononetrait influenceevaluationonalltraits FundamentalsofHumanResource 21 FactorsThatDistortAppraisals Đ Similarityerror ã § Evaluator rates others in the same way that the evaluator perceives him or herself Low appraiser motivation • Evaluator may be reluctant to give an accurate appraisal if it means the employee may not attain expected rewards as a result Fundamentals of Human Resource 22 FactorsThatDistortAppraisals Đ Centraltendency ã Đ Thereluctancetousetheextremesofaratingscale resultinginallemployeesbeingratedclosetoaverage Inflationarypressures ã ã Raterfeelspressuresforequalityorfearofretributionfrom unhappyemployees Raterranksemployeesbetterthantheydeservetoavoid conflict FundamentalsofHumanResource 23 FactorsThatDistortAppraisals Đ Inappropriatesubstitutesforperformance ã § Effort, enthusiasm, appearance, etc., are less relevant for some jobs than others Attribution theory • Evaluations are affected based on whether someone’s performance is due to: § Internal factors they can control § External factors they cannot control If poor performance is attributed to internal control, the judgment is harsher than when it is attributed to external control Fundamentals of Human Resource 24 Creating effective performance management systems To create better performance management systems: § Use behaviorbased measures • § Combine absolute and relative standards • • § They’re more jobrelated and elicit more interrater agreement than traits such as “loyalty” or “friendliness” Absolute standards tend to be positively lenient Relative standards suffer when there is little variability Provideongoingfeedback ã Expectationsanddisappointmentsshouldbesharedwithemployeeson afrequentbasis FundamentalsofHumanResource 25 Creatingeffectiveperformance managementsystems Tocreatebetterperformancemanagementsystems: Đ Usemultipleraters ã ã Đ Rateselectively ã Đ Themoreused,themorereliableandvalidtheresults Peerevaluations,Upwardevaluationsand360ưdegreeappraisals) Appraisersshouldevaluateonlyinareasaboutwhichtheyhave sufficient knowledge, they should be organizationally close the individual being evaluated, and should be an effective rater Train appraisers • Poor appraisals can demoralize employees and increase legal liabilities Fundamentals of Human Resource 26 Creating effective performance management systems Fundamentals of Human Resource 27 Creating effective performance management systems For an effective performance appraisal meeting § Prepare/schedule meeting in advance § Create supportive aura about meeting § Describe appraisal’s purpose § Involve employee in appraisal discussion § Focus on behaviors, not employee § Cite specific examples § Give positive and negative feedback § Ensure employee understood appraisal § Generate a development plan Fundamentals of Human Resource 28 International Performance Appraisal Challenges in evaluating overseas employees: § Different cultural perspectives and expectations between the parent and local country may make evaluation difficult § Evaluation forms may not be translated accurately § Quantitative measures may be misleading Fundamentals of Human Resource 29 Matching three appraisal approaches communicate expectations three purposes of performance management systems internal and external control factors weigh heavily in the appraisal two-way feedback, development, documentation factors that can distort appraisals attribution theory leniency error, halo error, similarity error, central tendency, inflationary pressures, inappropriate substitutes Fundamentals of Human Resource absolute standards, relative standards, achieved outcomes step in the appraisal process 30 ... descriptions illustrating various dimensions along each rating scale Fundamentals? ?of? ?Human? ?Resource? ? 14 Graphic Rating Scale Fundamentals? ?of? ?Human? ?Resource? ? 15 Behaviorally Anchored Rating Scale Fundamentals? ?of? ?Human? ?Resource? ? 16 Appraisal Methods... Poor appraisals can demoralize employees and increase legal liabilities Fundamentals? ?of? ?Human? ?Resource? ? 26 Creating effective performance management? ?systems Fundamentals? ?of? ?Human? ?Resource? ? 27 Creating effective performance management? ?systems... organizational productivity, especially when goals are difficult enough to require stretching Fundamentals? ?of? ?Human? ?Resource? ? 19 Factors that distort appraisals Fundamentals? ?of? ?Human? ?Resource? ? 20 Factors That Distort Appraisals § Leniencyerror