iop: evaluating employee performance

Performance Appraisal

• process of evaluating an employee’s current and/or past performance relative to the company’s performance standards

• Formal system of review and evaluation of individual or team task performance

• Component of performance management

inability to perform

need to prove that the employee could not perform the job and that progressive discipline was taken to allow the employee to improve.

reduction in force (layoffs)

Employees can be terminated if it is in the best economic interests of an organization to do so; to save money

halo effect

Raters allow either a single attribute or an overall impression of an individual to affect the ratings

SYSTEMATIC BIAS

Source of error in performance based on the different standards used by raters

RECENCY ERROR

Tend to evaluate employees ’ most recent job behavior rather than behavior throughout the period since the last appraisal.

INADEQUATE INFO ERROR

Rates subordinates even though they may not know enough about them to do so fairly and accurately.

RATER MOTIVATION

organizationally induced pressures that compel raters to rate positively

assessment centers

Employees are evaluated through simulations, interviews, and role-playing exercises, often used for identifying leadership potential.

management by objective (MBO)

• Managers and employees jointly define, plan, and monitor specific, measurable goals (KPIs).

• Setting organization goals

• Jointly set departmental goals

• Discuss goals and expectation

• Performance review

• Give feedback

peers

find employees abilities to work in a team, coopreration and sensitivity toward others.

superior’s appraisal

employee ’ s performance and responsibilities are rated by supervisors

subordinates appraisal

gives chance to judge the employee on the parameters like communication and motivating abilities.

human resource accounting

Measures performance based on the cost and contribution of the employee to the organization’ s monetary success

BARS

Combines qualitative narratives with quantitative ratings and critical incident methods.

critical incident method

Managers record specific, documented examples of highly effective or ineffective incidents/behaviors throughout the year.

field review

a training officer is appointed by or someone from HR department and discusses with and interviews the supervisor about how they appraise their respoctive subordinates; the method reduces supervisor biasing.

group appraisal method

the appraisal should be done by the group of assessors; supervisors, and few others, with knowledge of respective subordinate performance

straight ranking method

ranks employee from best to poorest in the department; one of the oldest and simplest methods

checklist method

HR provides a set of statements (Yes/No) about employee behaviors to the rater

essay appraisal method

free essay method; qualitative appraisal of an employee’s strengths, weaknesses, and potential by the supervisor

how to improve performance evaluation

• Employees should be allowed to participate actively in the evaluation process.

• The post-evaluation interviewer should adopt a positive, constructive, and supportive attitude.

• The interview should focus on specific job problems rather than on employees ’ personal characteristics.

• The employee and the supervisor should jointly establish specific goals to be achieved in the period before the next evaluation.

• The employee should be allowed to question, challenge, and rebut the evaluation without fear of retribution.

• The discussion of changes in salary and rank should be linked directly to the performance evaluation criteria.

appraisal

the formal review process (often annual/semiannual) where performance is documented and discussed.

assessment

It is identifying the strengths, weaknesses, and the potential for development.

performance

It is what people actually do, and it can be observed

performance management

• It is a systematic process that ensures employees’ work aligns with organizational goals.

• not just about evaluating past performance; it’s about developing employees for future success

• identifies what needs improvement

performance evaluation

a structured, systematic process that incorporates appraisal and feedback to make performance -based administrative decisions and help employees improve.

360-Degree Feedback

multi-rater feedback; most comprehensive wherein all sources comes from a circle of influence, including supervisors, peers, selfappraisals, subordinates, and customers

EVALUATION

It is judging how well tasks and goals are achieved.

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

• also known as internal customers

Customers

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

Self-Appraisal

• gives chance to the employees to look at their strengths and weaknesses

• allowing an employee to evaluate her own behavior and performance

• Suffer from leniency and correlate moderately to actual performance

Trait-focused Performance Dimensions

• concentrates on such employee attributes such as dependability, honesty, and courtesy

• Provides poor feedback and thus will not result in employee development and growth

Competency-Focused Performance Dimensions

oncentrates on employee’s knowledge, skills, and abilities

Task-Focused Performance Dimensions

• organized by the similarity of tasks that are performed

• Supervisor are concentrating on tasks that occur together and can thus visualize an employee’s performance, it is often easier to evaluate performance than with other dimensions

• More difficult to offer suggestions for how to correct the deficiency if an employee scores low on a dimension

Goal-Focused Performance Dimensions

• organize the appraisal based on the goals to be accomplished by the employee

• Easier to understand why certain behaviors are expected

Paired Comparisons

• involves comparing each possible pair of employees and choosing which one of each pair is the better employee

• The time necessary to male all of the comparisons becomes prohibitive

• “Compare two people at a time—who is better?”

Graphic Rating Scale

an employee’s quality and quantity of work is assessed in a graohic rating scale indicating different degrees of a particular trait

Distribution Errors

• Rater uses only one part of a rating scale when evaluating employee performance

Leniency Error

• Rater consistently gives all employees high ratings, regardless of their actual levels of performance

Central Tendency Errors

Raters consistently rate all employees in the middle of the scale, regardless of their actual level of performance

Strictness Error

Raters consistently give all employees low ratings, regardless of their actual level of performance

Halo Errors

• occurs when a rater allows either a single attribute or an overall impression of an individual to affect the ratings that she makes on each relevant job dimensions

• Statistically determined by correlating the ratings for each dimension with those for the other dimensions

• If they are highly correlated, this occurs

• They can be reduced by having supervisors rate each trait at separate times

Contrast Errors

The rating of the performance level of one employee affects the ratings given to the next being rated

Recency Effect

recent behaviors have given more weight in the performance behavior than behaviors occurred during the first few months

Bias

• falsely inflate or deflate performance metrics, giving you a false reading of the performance levels of your company.

Probationary Period

Employees are given a probationary period(3 to 6 months) in which to prove that they can perform well

Violation of Company rules

• Courts consider five factors in determining the legality of a decision to terminate an employee for violating company rules

• Rule against a particular behavior must actually exist

• Company must prove that the employee knew the rule

• Ability of the employer to prove that an employee actually violated the rule

• The extent to which the rule has been equally enforced

• Extent to which the punishment fits the crime