Employee Performance AppraisalEmployee Performance Appraisal

Topics

1.What is Performance Appraisal?1.What is Performance Appraisal?

2. Purposes of Performance Appraisal.

3. The Appraisal Process (Model).

4. Challenges to Performance Appraisal.

5. Appraisal Methods.

6. Feedback in Appraisals.

1.1.What is Performance Appraisal?What is Performance Appraisal?

Performance Appraisal can be defined as evaluating an employee’s current and/or past evaluating an employee’s current and/or past

performance relative to his or her performance performance relative to his or her performance standards.standards.

The The identificationidentification, , measurementmeasurement, and , and managementmanagement of human performance in organizationsof human performance in organizations

The process of assessing and recording staff The process of assessing and recording staff performance for the purpose of making judgments performance for the purpose of making judgments about staff that lead to decisions.about staff that lead to decisions.

2. Purposes of Performance Appraisal2. Purposes of Performance Appraisal

Need documentation for legal defense related to HR decisions.

Provides a rational basis for pay and promotion decisions.

Help clarify strategic goals and performance expectations.

Provides individual feedback to aid performance improvement.

Appraisal of teams can strengthen team performance.

Identification of individuals needs.

3. Appraisal Process (Fig. 7.1)3. Appraisal Process (Fig. 7.1)

I. IDENTIFICATION

II. MEASUREMENT

III. MANAGEMENT

I. IDENTIFICATION

Identifying the important aspects of job duties that should be evaluated based on Job Analysis.

That is, to conduct a job analysis ( e.g., specify tasks and KSAs).

Then, develop performance standards (e.g., define what is superior, acceptable, and poor job performance)

Identification of performance factors to be assessed

Example Performance Domains for job of “Firefighter”

developed by Center for Governmental Services, Auburn University

Training/Technical Knowledge Pre-fire Planning Hydrant Testing Fire Prevention/Public Relations Fire Suppression Emergency Response Equipment and Station Maintenance Coordination with Other Departments Reports and Forms

II. MEASUREMENT

Developing reliable and valid appraisal methods.

Two types of measures:

a. Results – “What”

b. Process – “How”

Development of measurement methods to be used.

III. MANAGEMENT

Providing feedback to employees about their appraisals and following-up to insure improvement and to offer support.

Management of the feedback process.

4. Challenges to Appraisal4. Challenges to Appraisal

1. Errors/Bias

Liking

3. Politicsa. Errors and Bias

b. Liking

c. Politics

d. Legality

Challenges: Errors and Biases

1. Halo

2. Recency

3. Primacy

4. Rating Tendencies

5. Escalation of Commitment

6. Anchoring and Adjustment

1. Halo ErrorAllowing a few

behaviors of employees to influence the perception and rating of other behaviors.

Observation of specific behavior (s) (e.g., volunteers to work overtime) High ratings on other performance dimensions

2. Recency Effect

Allowing the most recent behavior of an employee to overly influence the overall appraisal.

3. Primacy Effect

Allowing first impressions of employees to overly influence subsequent perceptions of performance.

4. Rating Tendencies Leniency -rating everyone high. _____ _____ _____ _____ __ X ___ Very Average Excellent Poor

Strictness - rating everyone low.

___ X__ _____ _____ _____ _____ Very Average Excellent Poor

Central tendency - rating everyone at the middle.

_____ _____ ___ X __ _____ _____ Very Average Excellent Poor

5. Escalation of Commitment

When supervisors use appraisals to support their views of and intentions toward employees – e.g. to promote, dismiss, or punish.

6. Anchoring and Adjustment Bias

When past ratings of employees overly influence their current appraisal.

Challenges: Liking (individual favoritism)

Often, interpersonal attraction affects appraiser perceptions of employees. Events and actions are seen through “rose colored lenses”. Also referred to as “favoritism”.

Challenges: Politics

Often, supervisors allow “politics” to affect their appraisals. For example, a lower than justified rating may be used to “punish” an employee, or supervisors may avoid a pattern of low ratings to hide poor supervisory practices.

Challenges: Legality

How to insure legal compliance in performance appraisal?

See text (P.239): Supreme Court in Brito v. Zia (1973) ruled that same standards used for testing apply to appraisals. Recent study of 295 federal court cases identified factors related to legality of appraisals:

Base appraisal system on job analysis. Provide written instructions to raters. Allow employees to review and discuss

their appraisals. Get agreement among multiple raters. Implement rater training.

5. Appraisal Methods5. Appraisal Methods

Rating Process (See Course Packet)

Relative vs. Absolute

Results vs. Process

Process Methods – Traits vs. Behaviors

Methodology Issues

Relative Relative

Results Results N/AN/A

Process Process Ranking ofRanking of

EmployeesEmployees

Absolute Absolute

Sales/ProductionSales/Production

Rating ofRating of

Employees Employees

Methodology Issues in Appraisal “Relative” versus “Absolute” Judgments

Comparing one employee to another.Advantages Aids promotion decisions. Aids in making assignments.Disadvantages Employee resentment & divisiveness. Low reliability. Difficult to give feedback. Difficult to use with a large number of subordinates

Relative

Methodology Issues in Appraisal “Relative” versus “Absolute” Judgments

Evaluating employees on an agreed upon set of standards._____ _____ _____ _____ _____ Very Average Excellent Poor Advantages More reliable and valid. Perceived as fair. Provides concrete feedback.Disadvantages Takes more time. Must identify factors.

Absolute

Methodology Issues in Appraisal “Results” versus “Process”

Measures of outcomes such as sales, units produced, costs, etc.

Advantages Reliable and valid. Objective/legally defensible..

Disadvantages Difficult to identify individual

contributions. Difficult to provide feedback.

Results

Methodology Issues in Appraisal “Results” versus “Process”

Assessment of job behaviors – i.e.,

“how” the job is performed. Advantages Reliability/validity depend on

method. Perceived as fair by employees. Provides specific feedback for

improvement.Disadvantages Takes more time for appraiser. More costly to develop.

Process

Methodology Issues in Appraisal“Traits” versus “Behaviors”

Traits

Assess personal characteristics of employees, which are “global” in nature.

PROS Lower cost to develop. Less time and effort.CONS Low reliability/validity. Difficult to give feedback. Causes defensiveness

(resentment)) Legally indefensible.

BehaviorsBehaviors

Assess actual behaviors, which are “specific” to each job.

PROS More reliable and valid than trait ratings. Allows specific and job-relevant

feedback. Perceived as fair. Legally defensible.CONS Higher development costs. Takes more rater time.

Traits Behaviors

6. Managing Appraisals6. Managing Appraisals

IssuesIssues::

1. Understanding potential causes of performance deficits. (Figure 7.10)

2. Providing effective feedback (Notes)

3. Appraisal interview skills (Figure 7.9)

4. 360-Degree appraisals (pp. 244-245)

Contributing Factors to Performance DeficitsFigure 7.10

o Poor coordination among units.o Inadequate information or instructions.o Inadequate procedures and methods.o Low quality materials or equipmento Lack of materials or equipment.o Inadequate financial resources.o Poor training.o Poor interpersonal relations or morale.o Poor work environment.o Insufficient time.o Low individual motivation.

Factors Contributing to Performance DeficitsFigure 7.10

Recommendations for Effective Feedback Recommendations for Effective Feedback

1. Frequent observation of performance and feedback (both positive and negative)

2. Recordkeeping (ongoing if possible)3. Encourage self-assessment of employees4. Focus on behaviors (not traits)5. Use specific behavioral criteria and standards6. Set goals for employees (specific and challenging

ones)7. Develop an action plan (to be followed-up).8. Focus on how to observe job behaviors and

provide incentives to do so

Recommendations for Effective Feedback

360 Degree Appraisals

Supervisors

Peers Outsiders

Subordinates

360 Degree Appraisals

360-degree feedback360-degree feedback, also known as 'multi-rater , also known as 'multi-rater feedback', 'multisource feedback', or 'multisource feedback', 'multisource feedback', or 'multisource assessment‘.assessment‘.

is employee development feedback that comes from all is employee development feedback that comes from all around the employee. "360" refers to the 360 degrees in a around the employee. "360" refers to the 360 degrees in a circle. The feedback would come from subordinates, peers, circle. The feedback would come from subordinates, peers, and managers in the organizational hierarchy, as well as and managers in the organizational hierarchy, as well as self-assessment, and in some cases external sources such self-assessment, and in some cases external sources such as customers and suppliers or other interested stakeholders.as customers and suppliers or other interested stakeholders.

It may be contrasted with upward feedback , where It may be contrasted with upward feedback , where managers are given feedback by their direct reports, or a managers are given feedback by their direct reports, or a traditional performance appraisal, where the employees are traditional performance appraisal, where the employees are most often reviewed only by their manager. most often reviewed only by their manager.