Chap 11 performance appraisal (part 2)

performance appraisal

Process of identifying, measuring, and managing human performance in organizations

• one of the least favorite activities of managers

Purposes of PA

• administrative

• developmental

• legal

• strategic

Administrative purpose

•Provide information for day-to-day HR decisions about people (raise, promote, train, discipline, etc.)

Developmental purpose

•Developing employees’ knowledge and skills. Let employees know how they’re doing, how to improve.

Legal Purpose

•Provide legal basis for company to defend admin HR decisions

Strategic Purpose

•Align interests and direct / motivate specific behavior. Helps organization achieve business objectives

Common Problems with PA

1. Poorly defined performance metrics

   1. Lack of standards; Irrelevant, subjective, or  unrealistic standards

2. Poor Measurement

   1. Not accurate and / or measure wrong things

   2. Rater errors

3. Poor Feedback

   1. Content and Frequency

What to Do

• Improve appraisal formats: Appropriate for purpose.

• Select the right raters

• Train raters: Understand why raters make errors

• Improve communication / feedback process

Choosing Appropriate Performance Appraisal Methods

• Relative Judgements

• Trait Approach

• Behavioral Approach

• Outcomes Approach

Relative Judgements

• ranking

• forced distribution

• only one that isn’t absolute

• Purpose: admin

  • ex. if you want to give a raise to one person you would use relative

Trait Approach

(e.g. leadership)

• standards rating scale

• Absolute

• Purpose: Small d, s, a, l

  • Does a lot of things, inexpensive, but doesn’t necessarily maximize any purposes

  • several people can have the same rating

Behavioral Approach

• BARS

• Purpose: Heavily development

• ex. this explains why the employee isn’t meeting standards. Whats wrong with the outcome? This actually tells you what you should do differently to improve

Outcomes Approach

• Management by objectives (MBO)

• Absolute

• Purpose: Big S- strategic

  Getting company goals and telling them what you need them to do to reach company outcome. Aligning individual performance with what the company is trying to do. could suggest actions that people could make to change but it doesn’t do so explicitly

  • Little d development

Addressing rating errors

• “Idiosyncratic rater errors”—rating reflects beliefs (bias) of individual raters, not actual employee performance

• Gets in the way of achieving PA purposes

Rating Errors

• halo/horn

• first impression error

• recency error

• personal bias - “clone error”

• restriction of range

  • leniency, severity, central tendency

halo/horn error

a cognitive bias that causes people to make unfair judgments based on a single positive or negative trait

first impression error

a cognitive bias that occurs when someone forms an initial judgment of a person or situation based on superficial factors. This judgment can be positive or negative, and can lead to inaccurate decisions. 

examples:

• Forming a positive impression of a job candidate based on their appearance or charisma 

• Ignoring information that doesn't support an initial judgment 

recency error

a cognitive bias that occurs when people give more weight to recent events when making judgments or decisions

• ex. Performance appraisals

  When an employee's most recent behavior is the main focus of their evaluation, even if it's at odds with their overall performance 

personal bias - “clone error”

learned beliefs, opinions, or attitudes that people are unaware of and often reinforce stereotypes

• Performance reviews

  When a manager's personal bias affects how they evaluate an employee's performance. 

restriction of range

leniency, severity, central tendency…

(insert photo)

Training raters to rate more accurately

• rater-error training

• performance-dimension training

• performance-standard trianing

rater-error trianing

reduces psychometric errors by familiarizing raters with their existence

performance-dimension training

exposes supervisors to the performance dimensions to be used in rating

Performance-standard training

provides raters with a standard or frame of reference for making appraisals

Addressing restriction of range errors

• leniency errors are generally the most difficult to overcome. Why?

  • the effect on employees is less if we default with saying everyone is a top performer

• Is forced distribution the answer? Is it fair to employees

  • ex. being required to rate one person at a 5

  • Not fair, not based on the person

Choosing who should do PA

insert photo

• supervisors

• peers

• self

• customers

• subordinates

Provide effective performance feedback

• frequent

• focus on behavior and not the person

• praise as well as criticize

• problem solving and participative

Performance appraisal summary

Know:

1.Goals / purposes of P.A.

2.Measurement issues and types of performance

3.Common problems with P.A.

4.Strengths and weaknesses of P.A. methods

5.Rating errors and what to do (Training raters)

6.Who should do P.A. (360 degree feedback)

7.Effective performance feedback techniques