chapter 11: performance appraisal pt. 1

Question 1

performance appraisal

Answer 1

• Provide critical information for day-to-day decisions about salary, benefits, and recognition programs.
• Effective performance appraisals helps the organization achieve its business objectives.

Question 2

performance metrics

Answer 2

• Is the measure (metric) results-oriented or
  behaviorally oriented?
  * Quantifiable ≠ Objective
• Does the measure focus on individual employees,
  teams or the whole organization?
• Most companies use multiple measures of performance linking to pay increases and bonuses

Question 3

choice of performance measures

Answer 3

Balanced Scorecard Approach

Question 4

balanced scorecard approach

Answer 4

Looks at what contributes value in an organization.
Bottom line success depends on several key aspects:
* Customer
* Internal business processes
* Innovation and learning
* Financial

Question 5

customer (BSA)

Answer 5

attraction of new customers, improving relations w/ customers, improving company image

Question 6

internal process (BSA)

Answer 6

optimizing internal processes and improving performance

Question 7

financial (BSA)

Answer 7

all indicators related to profitability and financial goals

Question 8

learning and growth (BSA)

Answer 8

education of personnel, growth strategies

Question 9

performance appraisal methods

Answer 9

two major methods: Ranking and Rating

Question 10

forms of ranking

Answer 10

• straight ranking
• alternation ranking
• paired comparison

Question 11

straight ranking

Answer 11

ranking employees from best to next best, and so on

Question 12

alternation ranking

Answer 12

ranking employees from best performer to worst performer

i.e.
best performer
next best
next best
etc
next worst
next worst
worst performer

Question 13

paired comparison

Answer 13

ranking employees based on how they compare to other employees

Question 14

forced ranking

Answer 14

Also called: Forced Distribution, Top Grading, or
Stack Ranking

• Initiated at GE: Vitality Curve (20-70-10)
• Employees are ranked in groups
• Variations: AIG (10-20-50-20) with no dismissal of
  the bottom 20%
• Other companies using forced distribution: Enron, IBM, Motorola, Yahoo!, Microsoft, Google, Amazon, Adobe, Ford
• Highly controversial
• Worked well for some but not for all

Question 15

rating

Answer 15

• Require raters to evaluate employees on some
  absolute standard rather than relative to other
  employees.
• Each performance standard is measured on a scale; performance variation is described along a continuum.
• The types of descriptors used in anchoring this
  continuum that provide the major difference in rating scales.

Question 16

two types of rating methods

Answer 16

• standard rating scale
• behaviorally anchored rating scales

Question 17

standard rating scale

Answer 17

when adjectives are used as anchors

example:
1 - well above average
2 - above average
3 - average
4 - below average

Question 18

behaviorally anchored rating scales (BARS)

Answer 18

when behaviors are used as anchors

example:
- exceeds standards:
* seeks out or is regularly requested for group assignments
* seen as a positive contributor in group assignments
- meets standards:
* positive contributor, works well with most people
* strong contributor when a certain skill is required
* contribution depends on skill / group mission match
- does not meet standards
* seldom chosen for teams, unresponsive to group goals
* has reputation for noncontribution and creating conflicts

Question 19

management by objective (MBO)

Answer 19

uses outcomes as the standard performance measure

Question 20

who provides info for evaluation?

Answer 20

360 degree performance evaluation based on:
- managers
- customers
- peers
- self
- subordinates

Question 21

supervisors as raters

Answer 21

• Majority (80%) of performance ratings come from supervisors.
• They understand the job and the dimensions to be rated.
• They have experience rating employees and know the job requirements.
• They may not observe employees on daily basis

Question 22

peers as raters

Answer 22

• They work closely with the employee and can provide important performance information, particularly for group work.
• Can exert pressure on coworkers to perform better.
• Peers may have little or no experience in conducting performance appraisals (whether the rating is reliable).
• Peer evaluation may create group tensions or could be lenient.

Question 23

self as rater

Answer 23

• have complete knowledge of own performance
• BUT self-ratings are generally the most lenient
• used for development rather than administrative purposes

Question 24

customer as rater

Answer 24

• customer satisfaction is important
• surverys and mystery shoppers rate performance

Question 25

subordinate as rater

Answer 25

• offers a chance for supervisors to see if they are successful leaders
• may be difficulty to attain candid reviews
• should be administered anonymously (grade inflation otherwise)

Question 26

360-degree performance evaluation

Answer 26

• More fair, reliable, and valid than single-source approaches.
• Promotes equity
• More appropriate for team-based system
• Time consuming
• Create tensions: “Psychological safety”

Question 27

rater errors

Answer 27

Recognizing and understanding errors is the first step to communicating and building a more effective appraisal process.

Types of Rater Errors (9)
- Halo error
- Horn error
- First impression error
- Recency error
- Leniency error
- severity error
- central tendency error
- clone error
- spillover error

Question 28

halo error

Answer 28

an appraiser giving favorable ratings to all job duties based on impressive performance in just ONE job fn

example:
- a rater who hates tardiness rates a prompt subordinate high across all performance dimensions exclusively b/c of this one characteristic

Question 29

horn error

Answer 29

opposite of halo error

DOWNGRADING an employee across all performance dimensions excluseively b/c of poor performance on ONE dimension

Question 30

first impression error

Answer 30

developing a - or + opinion of an employee early in the review period and allowing that to NEGATIVELY or POSITIVELY influence all later perceptions of perf

Question 31

performance evaluation process: Key elements in a good appraisal.

Answer 31

• Culture and strategy determine key factors to measure.
• involve employees in all stages of the process.
• Raters should be trained and employees understand the system.
• Raters are motivated to rate accurately.
• Raters should maintain a diary of employee performance.
• Feedback must be timely.

Question 32

recency error

Answer 32

opposite of first impression error

allowing per, either GOOD or BAD, at the END of review period to play too large a role in determining an employee’s rating for the entier period

Question 33

leniency error

Answer 33

consistently rating someone HIGHER than is deserved

Question 34

severity error

Answer 34

opposite of leniency error

rating individuals consistently LOWER than is deserved

Question 35

central tendency error

Answer 35

avoiding extremes in ratings across employees

Question 36

clone error

Answer 36

giving BETTER ratings to individuals who are LIKE the rater in BEHAVIOR and/or PERSONALITY

Question 37

spillover error

Answer 37

continuing to DOWNGRADE an employee for perf ERRORS in PRIOR rating periods