chapter 11: performance appraisal pt. 1 Flashcards
performance appraisal
- Provide critical information for day-to-day decisions about salary, benefits, and recognition programs.
- Effective performance appraisals helps the organization achieve its business objectives.
performance metrics
- 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
choice of performance measures
Balanced Scorecard Approach
balanced scorecard approach
Looks at what contributes value in an organization.
Bottom line success depends on several key aspects:
* Customer
* Internal business processes
* Innovation and learning
* Financial
customer (BSA)
attraction of new customers, improving relations w/ customers, improving company image
internal process (BSA)
optimizing internal processes and improving performance
financial (BSA)
all indicators related to profitability and financial goals
learning and growth (BSA)
education of personnel, growth strategies
performance appraisal methods
two major methods: Ranking and Rating
forms of ranking
- straight ranking
- alternation ranking
- paired comparison
straight ranking
ranking employees from best to next best, and so on
alternation ranking
ranking employees from best performer to worst performer
i.e.
best performer
next best
next best
etc
next worst
next worst
worst performer
paired comparison
ranking employees based on how they compare to other employees
forced ranking
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
rating
- 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.
two types of rating methods
- standard rating scale
- behaviorally anchored rating scales
standard rating scale
when adjectives are used as anchors
example:
1 - well above average
2 - above average
3 - average
4 - below average
behaviorally anchored rating scales (BARS)
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
management by objective (MBO)
uses outcomes as the standard performance measure
who provides info for evaluation?
360 degree performance evaluation based on:
- managers
- customers
- peers
- self
- subordinates
supervisors as raters
- 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
peers as raters
- 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.
self as rater
- have complete knowledge of own performance
- BUT self-ratings are generally the most lenient
- used for development rather than administrative purposes
customer as rater
- customer satisfaction is important
- surverys and mystery shoppers rate performance
subordinate as rater
- 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)
360-degree performance evaluation
- More fair, reliable, and valid than single-source approaches.
- Promotes equity
- More appropriate for team-based system
- Time consuming
- Create tensions: “Psychological safety”
rater errors
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
halo error
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
horn error
opposite of halo error
DOWNGRADING an employee across all performance dimensions excluseively b/c of poor performance on ONE dimension
first impression error
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
performance evaluation process: Key elements in a good appraisal.
- 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.
recency error
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
leniency error
consistently rating someone HIGHER than is deserved
severity error
opposite of leniency error
rating individuals consistently LOWER than is deserved
central tendency error
avoiding extremes in ratings across employees
clone error
giving BETTER ratings to individuals who are LIKE the rater in BEHAVIOR and/or PERSONALITY
spillover error
continuing to DOWNGRADE an employee for perf ERRORS in PRIOR rating periods
