performance management and appraisal

Performance Appraisal

• evaluating an employee’s current and/or past performance relative to his or her performance standards

• Also known as a performance review or performance evaluation

• Serves as a formal opportunity to provide feedback, set new goals, and inform decisions about raises, bonuses, promotions, or necessary training

• Requires setting performance standards, and assumes that the employee receives the training, feedback, and incentives required to eliminate performance deficiencies

Characteristics of an Effective Appraisal System

● Job-related Criteria

● Performance Expectations

● Standardization

● Trained Appraisers

● Continuous Open Communication

● Conduct Performance Reviews

● Due Process

Purpose of an Appraisal System

• Most employers base pay, promotion, and retention decisions

• Play a central role in the employer’s performance management process

• Lets the manager and subordinate develop plans for correcting deficiencies, and to reinforce strengths

• Provides an opportunity to review the employee’s career plans in light of their strengths and weaknesses

• Enable supervisors to identify if there is a training need, and the training required

performance management

in terms of termination, performance appraisal is used when what techniques are not successful

PERFORMANCE APPRAISAL PROCESS

Defining Goals and Performance Standards

Set effective goals (SMART)

○ Specific

○ Measurable

○ Attainable

○ Relevant

○ Timely

Traits

commonly subjective and may be unrelated to job performance or difficult to define

Behaviors

when task outcome is difficult to determine, task-related behavior or competencies may be evaluated

Supervisors

• most common type of performance appraisal

• The heart of most appraisals

• Usually in the best position to observe and evaluate the subordinate’s performance

HR Department

provide the advice on what appraisal tool to use, but leave final decisions on procedures to operating managers

Peers:

• often see the actual behavior as they work directly with the employee

• Reliable only when they are similar and well acquainted to the employees being rated

• Employees tend to react worse to negative feedback

Subordinates

• also called upward feedback

• Difficult because of the fear of backlash if they unfavorable rate their supervisor

• Correlate highly with upper-management ratings of supervisors’ performance

Customers

provide feedback on employee performance by filling complaints or complimenting the manager about one of her employees

Secret Shoppers:

current customers who have been enlisted by a company to periodically evaluate the service their receive

Self-Appraisal

• allowing an employee to evaluate her own behavior and performance

• Suffer from leniency and correlate moderately to actual performance

• Most accurate when the self-appraisal will not be used for such administrative purposes as raises or promotions

Graphic Rating Scale

an employee is rated on different job-related traits or performance factors using a numerical scale.

Alternation Ranking Method

Best employee and worst employee are identified first, then the next best and next worst, until all are ranked

Ranking Method

• Employees are ranked from best to worst overall

• Rater ranks all employees from a group in order of overall performance

• Makes the ranking method more precise

Paired Comparison

performance of each employee is compared with that of every other employee in the group

Forced Distribution Method

• Predetermined percentages of ratees are placed in various performance categories

• Prevents supervisors from simply rating all or most employees satisfactory or high

• May increase risk of discriminatory adverse impact

Critical Incident Method

• Keeping a record of uncommonly good or undesirable examples of an employee’s work-related behavior and reviewing it with the employee at predetermined times

• Makes the supervisor think about the subordinate’s appraisal all during the year

Narrative Forms

Behaviorally Anchored Rating Scale (BARS)

• performance appraisal method that combines:

• ✅ Numerical ratings (like a Graphic Rating Scale)
  ✅ Specific behavioral examples (critical incidents)

• numerical rating scale with specific illustrative examples of good or poor performance

• Combines the elements of the traditional rating scales and critical incidents methods

Results-Based System

Management by Objectives (MBO)

Multistep company-wide goal-setting and appraisal program

Behaviorally Anchored Rating Scale (BARS) Process

Management by Objectives (MBO) Process

Distribution Errors

• involves distribution of ratings on a rating scale

• Made when rater uses only one part of a rating scale

Low Reliability Across Raters

two people rating the same employee seldom agree with each other

Infrequent Observation

supervisors do not have the opportunity to observe a representative sample of employee behavior

legal requirements conditions required

• Either the absence of adverse impact on members of protected classes or validation of the process

• A system that prevents one manager from directing or controlling a subordinate's career

• Appraisal should be reviewed and approved by someone or some group in the organization

• The rater/s must have personal knowledge of the employee's job performance

• Systems must use predetermined criteria that

  limit the manager's discretion

negligent retention claim

• if an employee who continually receives unsatisfactory ratings in safety practices is kept on the payroll and he/she causes injury to a third party

• an employer keeps an employee despite knowing (or having reason to know) that the employee poses a risk to others, and that employee later causes harm

Appraisal Interviews

• supervisor and subordinate review the appraisal and make plans to remedy deficiencies and reinforce strengths

• Conducted periodically

Satisfactory-Promotable

• easiest interview

• objective is to develop specific development plans for promotion

Satisfactory-Not Promotable

• for employees whose performance is satisfactory

• objective is to find incentives that maintain performance

Unsatisfactory but Correctable

objective is to lay out an action / development plan for correcting the unsatisfactory performance

Unsatisfactory

• situation is uncorrectable

• dismissal is often the usual option

Preparation

in effective coaching this means understanding the problem and employee

Planning

in effective coaching this means reaching an agreement on the problem and laying out a change plan

Actual Coaching

in effective coaching this means, offers ideas in a way that subordinates hear and respond to them, and appreciate their value

Performance Management

• continuous process of identifying, measuring, and developing the performance of individuals and teams

• Also known as a performance review or performance evaluation

• Goal-oriented process directed towards ensuring that organizational processes are in place to maximize productivity of employees, teams, and the organization

• Aligning employee performance with the organization’s goals

• a dynamic, ongoing, continuous process

Direction Sharing

• Communicating the company’s goals to all employees

• Translating company’s goals into departmental, team, and individual goals

Goal Alignment

enables managers and employees to see the link between the employees’ goals and those of the department and company

Ongoing Performance Monitoring

continuously measuring the team’s and/or employee’s progress towards meeting performance goals

Ongoing Feedback

continuous feedback regarding progress towards goals