Lec 7 Spring 2014
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Performance
Appraisal and
Management
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M. Khasro Miah Ph.D.
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After studying this chapter,you should be able to:
1. Describe the appraisal process.
2. Develop, evaluate, and administer at least fourperformance appraisal tools.
3. Explain and illustrate the problems to avoid inappraising performance.
4. List and discuss the pros and cons of six appraisalmethods.
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Comparing Performance Appraisal andPerformance Management
Performance appraisal
Evaluating an employees current and/or pastperformance relative to his or her performance
standards.Performance management
The process employers use to make sureemployees are working toward organizational
goals.
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Performance Management
What do you th ink o f when you hear
Performance Management?
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An effective PerformanceManagement System is
A com prehensive process that maximizes engagement, development, andperformance by al l employ ees in the emplo yment l i fecycle by:
Defining and communicating performance expectations in a regular, on-going manner
Aligning position responsibilities with competencies (skills, attributes,talents) needed to successfully perform role
Remaining flexible, efficient, measurable, fair, and transparent
Proactively focusing on employee development and talent management toenable succession planning and career development to retain employeesand to build skills for future needs
Linking performance to compensation, recognition, and rewards
Aligning employees work to department goals and objectives
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Why is Performance ManagementImportant? No matter how large an organization is all
performance begins with the individual
Individual performance impacts teams ,divisions,
business units, and the organization
Success is achieved throu gh people
If people know what they are suppose to do, get feedback on howthey are or are not doing it, and get rewarded for doing they aresupposed to be doing, companies will be more likely to get the
results they desire.
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Why Performance Management?
Increasing use by employers of performancemanagement reflects:
The popularity of the total quality management(TQM) concepts.
The belief that traditional performance appraisalsare often not just useless but counterproductive.
The necessity in todays globally competitiveindustrial environment for every employees
efforts to focus on helping the company toachieve its strategic goals.
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Managerial ction
Quality
improvement
efforts
Policy change
Resource
allocation
change
Program change
Using Data to chieve Results
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In a performancemanagementsystem...
All components shouldbe driven by the publichealth mission andorganizational strategy
Activities should beintegrated into routine
public health practices
The goal is continuousperformance andquality improvement
Source: Turning Point Performance ManagementCollaborative.
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The Management Challenge9 of 10 companies fail to execute strategy
Vision Barrier: Only 5% of
the workforce understands
the strategy
People Barrier: Only 25%
of managers have
incentives linked to
strategy
Management Barrier:
85% of executive teams
spend
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An Introduction to AppraisingPerformance
Why appraise performance?
Appraisals play an integral role in the employersperformance management process.
Appraisals help in planning for correctingdeficiencies and reinforce things done correctly.
Appraisals, in identifying employee strengths andweaknesses, are useful for career planning
Appraisals affect the employers salary raisedecisions.
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Universi ty Mission
Unit Values and Goals
Department Goals
Individual Goals
Components of Cornells PMP
Planning
Establish unit strategy & goals
Align goals of employee & unit
Determine performance level criteria
Assessment
On-going feedback
Annual PD
Talent Discussion (Criteria)
Recognition
Correlate SIP and performance
Correlate promotions and bonuses
Utilize low-cost, no-cost ideas
Career Development
Create Individual Development Plan(IDP)
Utilize rotations and on-campusand off-campus training
Talent Discussion (Development)
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How is an effective PerformanceManagement System achieved?
Training
Train supervisors and employees
Planning
Establish unit strategy & goalsAlign goals of employee & unit
Determine performance level criteria
Assessment
Annual PDOn-going feedbackTalent Discussion
Recognition
Correlate SIP and performanceCorrelate promotions and bonuses
Utilize low-cost, no-cost ideas
CareerDevelopment
Create Individual Development Plan (IDP)Utilize rotations and on-campus and
off-campus trainingUniversity Mission
Unit Values and GoalsDepartment Goals
Individual Goals
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PMP Tools:Performance Dialogue (PD)
Individual Goal Alignment worksheet
Individual Development Plan (IDP)
PMP Instruction SheetSupervisor e-mail requesting feedback
Performance Dialogue Definitions page
Rating Scale and Definitions formPerformance Level Matrix (Skills for Success)
Talent Management Matrix
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Continuous improvement
A management philosophy that requiresemployers to continuously set and relentlessly
meet ever-higher quality, cost, delivery, and
availability goals by:
Eradicating the seven wastes: overproduction, defective products, and unnecessary
downtime, transportation, processing costs, motion,
and inventory.
Requiring each employee to continuously improvehis or her own personal performance, from oneappraisal period to the next.
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The Components of an EffectivePerformance Management Process
Direction sharing
Role clarification
Goal alignment
Developmental goal setting
Ongoing performance monitoring
Ongoing feedback
Coaching and support
Performance assessment (appraisal)
Rewards, recognition, and compensation
Workflow and process control and returnFigure 92
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Defining Goals and Work Efforts
Guidelines for effective goalsAssign specific goals
Assign measurable goals
Assign challenging but doable goals
Encourage participation
SMART goals are:
Specific, and clearly state the desired results.
Measurable in answering how much.
Attainable, and not too tough or too easy.
Relevant to whats to be achieved.
Timely in reflecting deadlines and milestones.
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Performance Appraisal Roles
Supervisors Usually do the actual appraising.
Must be familiar with basic appraisal techniques.
Must understand and avoid problems that can
cripple appraisals. Must know how to conduct appraisals fairly.
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Performance Appraisal Roles (contd)
HR department Serves a policy-making and advisory role.
Provides advice and assistance regarding theappraisal tool to use.
Prepares forms and procedures and insists that alldepartments use them.
Responsible for training supervisors to improvetheir appraisal skills.
Responsible for monitoring the system to ensurethat appraisal formats and criteria comply withEEO laws and are up to date.
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Designing the Appraisal Tool
What to measure? Work output (quality and quantity)
Personal competencies
Goal (objective) achievement
How to measure?
Graphic rating scales
Alternation ranking method
MBO
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Performance Appraisal Methods
Graphic rating scaleA scale that lists a number of traits and a range of
performance for each that is used to identify thescore that best describes an employees level ofperformance for each trait.
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GraphicRating Scalewith Space
forComments
Figure 93
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Portion of an Administrative Secretarys SamplePerformance Appraisal Form
Figure 94Source: James Buford Jr., Bettye Burkhalter, and Grover Jacobs, Link Job Descriptionto Performance Appraisals, Personnel Journal, June 1988, pp. 135136.
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925
Performance
Management Outline
Figure 95aSource: www.cwru.edu.
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Figure 95b
PerformanceManagement
Outline(contd)
Source: www.cwru.edu.
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PerformanceManagement
Outline(contd)
Figure 95cSource: www.cwru.edu.
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Performance Appraisal Methods (contd)
Alternation ranking method Ranking employees from best to worst on a
particular trait, choosing highest, then lowest,until all are ranked.
Paired comparison method Ranking employees by making a chart of all
possible pairs of the employees for each trait andindicating which is the better employee of the
pair.
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Alternation Ranking Scale
Figure 96
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Ranking Employees by thePaired Comparison Method
Figure 97
Note: + means better than. means worse than. For each chart, add up
the number of 1s in each column to get the highest-ranked employ ee.
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Performance Appraisal Methods (contd)
Forced distribution method Similar to grading on a curve; predetermined
percentages of ratees are placed in variousperformance categories.
Example: 15% high performers 20% high-average performers
30% average performers
20% low-average performers
15% low performers
Narrative Forms
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Performance Appraisal Methods (contd)
Behaviorally anchored rating scale (BARS)An appraisal method that uses quantified scale
with specific narrative examples of good and poorperformance.
Developing a BARS: Generate critical incidents
Develop performance dimensions
Reallocate incidents
Scale the incidents
Develop a final instrument
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Performance Appraisal Methods (contd)
Advantages of using a BARSA more accurate measure
Clearer standards
Feedback
Independent dimensions Consistency
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Appraisal-Coaching
Worksheet
Figure 98
Source: Reprinted with permission of
the publisher, HRnext.com; copyright
HRnext.com, 2003.
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Examples of Critical Incidents foran Assistant Plant Manager
Table 91
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Example of aBehaviorally
Anchored Rating
Scale for theDimension
Salesmanship Skill
Figure 99
Source:Walter C. Borman, Behavior
Based Rating, in Ronald A. Berk (ed.),
Performance Assessment: Methods and
Applications (Baltimore, MD: Johns
Hopkins University Press, 1986), p. 103.
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937
Management by Objectives (MBO)
Involves setting specific measurable goalswith each employee and then periodically
reviewing the progress made.
1. Set the organizations goals.
2. Set departmental goals.3. Discuss departmental goals.
4. Define expected results (set individual goals).
5. Performance reviews.
6. Provide feedback.
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Computerized and Web-BasedPerformance Appraisal
Performance appraisal software programs
Keep notes on subordinates during the year.
Electronically rate employees on a series of
performance traits. Generate written text to support each part of the
appraisal.
Electronic performance monitoring (EPM)
Having supervisors electronically monitor theamount of computerized data an employee isprocessing per day, and thereby his or herperformance.
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Potential Rating Scale AppraisalProblems
Unclear standardsAn appraisal that is too open to interpretation.
Halo effect
Occurs when a supervisors rating of a subordinate
on one trait biases the rating of that person onother traits.
Central tendency
A tendency to rate all employees the same way,
such as rating them all average.
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A Graphic Rating Scale with Unclear Standards
Table 92
Note: For example, what exactly is meant by
good, quantity of work, and so forth?
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Potential Rating Scale Appraisal Problems(contd)
Strictness/leniency
The problem that occurs when a supervisor has atendency to rate all subordinates either high orlow.
Bias
The tendency to allow individual differences suchas age, race, and sex to affect the appraisal
ratings employees receive.
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How to Avoid Appraisal Problems
Learn and understand the potential problems,and the solutions for each.
Use the right appraisal tool. Each tool has its
own pros and cons.
Train supervisors to reduce rating errors such
as halo, leniency, and central tendency.
Have raters compile positive and negative
critical incidents as they occur.
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Who Should Do the Appraising?
The immediate supervisor
Peers
Rating committees
Self-ratings
Subordinates
360-Degree feedback
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Advantages and Disadvantages of Appraisal Tools
Table 93
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The Appraisal Interview
Types of appraisal interviews
SatisfactoryPromotable
SatisfactoryNot promotable
UnsatisfactoryCorrectable
UnsatisfactoryUncorrectable
How to conduct the appraisal interview
Talk in terms of objective work data.
Dont get personal.
Encourage the person to talk.
Dont crawl around.
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PerformanceContract
Figure 910
Source: David Antonion, Improving the
Performance Management Process Before
Discontinuing Performance Appraisals,
Compensation and Benefits Review May
June 1994, p. 33, 34.
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ChecklistDuring the
AppraisalInterview
Figure 911
Source: Reprinted with permission of
the publisher, HRnext.com. Copyright
HRnext.com, 2003.
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The Appraisal Interview (contd)
How to handle a defensive subordinate
Recognize that defensive behavior is normal.
Never attack a persons defenses.
Postpone action.
Recognize your own limitations.
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The Appraisal Interview (contd)
How to criticize a subordinate
Do it in a manner that lets the person maintain hisor her dignity and sense of worth.
Criticize in private, and do it constructively.
Avoid once-a-year critical broadsides by givingfeedback on a daily basis, so that the formalreview contains no surprises.
Never say the person is always wrong Criticism should be objective and free of any
personal biases on your part.
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The Appraisal Interview (contd)
How to ensure the interview leads to
improved performance
Dont make the subordinate feel threatened duringthe interview.
Give the subordinate the opportunity to presenthis or her ideas and feelings and to influence thecourse of the interview.
Have a helpful and constructive supervisor
conduct the interview. Offer the subordinate the necessary support for
development and change.
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The Appraisal Interview (contd)
How to handle a formal written warning
Purposes of the written warning
To shake your employee out of bad habits.
Help you defend your rating, both to your own boss and
(if needed) to the courts.
Written warnings should:
Identify standards by which employee is judged.
Make clear that employee was aware of the standard.
Specify deficiencies relative to the standard.
Indicates employees prior opportunity for correction.
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Creating the Total PerformanceManagement Process
What is our strategy and what are our goals?
What does this mean for the goals we set for our
employees, and for how we train, appraise,
promote, and reward them?
What will be the technological support
requirements?
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Information Required for TRWs Web-BasedPerformance Management System
Figure 912Source: D. Bradford Neary,Creating a Company-Wide, Online, Performance Management System:
A Case Study at TRW, Inc., Human Resource Management 41, no 4 (Winter 2002), p. 495.
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954
Figure13
HR Scorecardfor Hotel Paris
InternationalCorporation*
Note: *(An abbreviated example showing selected
HR practices and outcomes aimed at implementing
the competitive strategy, To use superior guestservices to differentiate the Hotel Paris properties
and thus increase the length of stays and the return
rate of guests and thus boost revenues and
profitability)
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Key Terms
performance appraisalperformance management
graphic rating scale
alternation ranking method
paired comparison method
forced distribution method
critical incident method
behaviorally anchored rating
scale (BARS)
management by objectives(MBO)
electronic performance
monitoring (EPM)
unclear standards
halo effect
central tendency
strictness/leniency
bias
appraisal interview