PERFORMANCE APPRAISAL (7)

Question 1

Basics of Performance Appraisal

1. Performance Appraisal
2. Performance Appraisal Process
3. Reasons to Appraise Performance
4. Defining Employee Goals and Performance Standards
5. Who Should do the Appraising?

Question 2

—evaluating an employee’s current and/or past performance relative to their performance standards

—formal system of review and evaluation of individual or team task performance

—it is a component of performance management

Answer 2

Performance Appraisal

Question 3

1. setting work standards
2. assessing employee’s actual performance relative to standards
3. providing feedback with the aim of eliminating performance deficiencies or reinforcing performance strengths

Answer 3

Performance Appraisal Process

Question 4

—most employers base pay, promotion, and retention decision in large part on the
appraisal

—play a central role in the employer’s performance management
•continuously ensuring that each employee’s peformance makes sense in terms of company’s overall goals

—allows subordinate and manager to develop plans for correcting deficiencies and reinforcing strengths

—provide an opportunity to review the employee’s career plans in line with their strengths and weaknesses

—allows identification of a training need and (if so), what training is required

Answer 4

Reasons to Appraise Performance

Question 5

—performance appraisal should compare “what should be” (performance standard) with “what is” (current performance)

Three bases:
–extent to which employee is attaining numerical goals
•overall profitabilit, cost reduction, or efficiency goals

–basic job dimensions or traits
•assumes that a trait is a useful standard for “what should be”

–mastery of competencies
•skills, knowledge, and/or personal behaviors

Answer 5

Defining Employee Goals and Performance Standards

Question 6

Who Should do the Appraising?

Question 7

—heart of most appraisals

—in the best position to observe and evaluate performance

—responsible for employee’s performance

—HR department provides advice on what appraisal tools to use, but leave final
decisions on procedures to operating managers
•appraisal tool ⇒ HR dept;
appraisal procedure ⇒ operating managers

—there is the danger of bias

Answer 7

Immediate Supervisor

Question 8

—appraisals by one’s peers

—an employee due for appraisal chooses an appraisal chairperson.

—the chairperson selects a supervisor and several peers to evaluate the employee’s
work

—peers see aspects of the person that the boss may never see

—knowing colleagues will appraise you can change behavior

—Crowd appraisals
•almost everyone in the company continuously appraising one’s work through social media tools

—Virtual games
•helps employees evaluate and reqrd each other
•employees have avatars used to give real-time feedback to each other, along
with gifts and points

Answer 8

Peer Appraisals

Question 9

—consists to employee’s immediate supervisor and three or four other supervisors
•immediate supervisor, supervisor’s boss, another manager who is familiar with
the work of the worker

Advantages:
•cancels out problems such as bias on the part of individual raters
•picks up different facets of an employee’s performance observed by different appraisers

Answer 9

Rating Committees

Question 10

—these are obtained along with supervisor’s ratings

—employees usually rate themselves higher than do their supervisors or peers

—incompetent performers are not capable of objectively rathing themselves

Answer 10

Self-Ratings

Question 11

—subordinates rating their managers

—usually for developmental purposes rather than for pay

—anonymity affects feedback
•receiving feedback from non-anonymous subordinates view upward feedback positively

—upward feedback improve managers’ performance

Answer 11

Appraisal by Subordinates

Question 12

—collecting performance information all around the employee
•supervisors, subordinates, peers, and internal or external customers

—for developmental purposes rather than for pay

—usual process is to have all raters complete online appraisal surveys

—make sure that the feedback the person is receiving is productive, unbiased, and
development-oriented

Answer 12

360-Degree Feedback

Question 13

Establishing Performance Criteria

Question 14

—these are commonly subjective and may be unrelated to job performance or difficult to define

—it is important to establish a connection between a trait and its relation to the job
performance

—examples: adaptability, judgment, appearance, attitude

Answer 14

Traits

Question 15

—when task outcome is difficult to determine, task-related behavior or competencies may be evaluated

—desired behaviors may be appropriate as evaluation criteria because if they are
recognized and rewarded, employees tend to repeat them

Answer 15

Behaviors

Question 16

—broad range of knowledge, skills, traits, and behaviors that may be technical in nature, relate to interpersonal skills, or are business-oriented

—competencies selected for evaluation purposes should be those that are closely
associated with job success

Answer 16

Competencies

Question 17

Five Key Areas of Competencies linked to success in HR

Question 18

—connecting firms to makets

—aligning employee behaviors with organizational needs

Answer 18

Strategic contribution

Question 19

knowing how businesses are run and translating this into action

Answer 19

Business Knowledge

Question 20

measurable value

Answer 20

Personal credibility

Question 21

efficient and effective service to customers in areas of staffing, performance
management, development, and evaluation

Answer 21

HR delivery

Question 22

using technology and Web-based means to deliver value to customers

Answer 22

HR technology

Question 23

—outcomes established should be within the control of the individual or team and should be those results that lead to organizational success

—Upper level goals ⇒ financial aspects and market considerations

—Lower level goals ⇒ meeting customer’s needs and delivering according to schedule

Answer 23

Goal Achievement

Question 24

—provides emphasis into the future

—assessment of the employees potential

—helps ensure more effective career planning and development

Answer 24

Improvement Potential

Question 25

Traditional Tools for Appraising Performance

Question 26

—simplest and most popular method

—lists job dimensions or traits and a range of performance values (”unsatisfactory” to
“outsrtanding”)

—supervisor rates each subordinate by identifying the score that best describes the subordinate’s performance for each trait, and the ratings are totaled

Answer 26

Graphic Rating Scale Method

Question 27

—assesses the person’s competencies and skills

—scale might rate how well the employee did with respect to achieving specific profit,
cost, or efficiency goals

—Summary: rating scales based on either trait, competencies, or goals

Answer 27

Competency-based graphic rating scale

(Graphic Rating Scale Method)

Question 28

—ranking employees from best to worst on a trait

Process:

•list all subordinates to be rated

•cross out names of any not known well enough to be ranked

•indicate the employee who is highest, then the lowest in the performance dimesion

•choose the next highest and lowest in alternating fashion until all employees have
been ranked

Answer 28

Alternation Ranking Method

Question 29

—for every trait, every employee is compared with every other employee

—uses a chart of all possible pairs of employees for each trait

—choose who the better employee of the pair is for each trait

Answer 29

Paired Comparison Method

Question 30

—similar to grading on a curve

—manager places predetermined percentages of ratees into performance categories (top 20%, middle 70%, and bottom 10%)
•most of bottom 10% lost their jobs

—advantage is preventing supervisors from simply rating all or most employees
“satisfactory” or “high”

—disadvantage: increase risk of discriminatory adverse impact

—disadvantage: may motivate effort and performance, but leaves many employees feeling that their appraisal were dyfunctional

—a committe should review any employee’s low ranking

Answer 30

Forced Distribution Method

Question 31

—supervisor keeps a log of positive and negative examples (critical incidents) of a
subordinate’s work-related behaviors

—these are used as examples in performance appraisal

—anchors the eventual appraisal in reality and this improves outcomes

—makes the supervisor think about the subordinate’s appraisal all during the year (not just recent performance)

Answer 31

Critical Incident Method

Question 32

supervisor’s narrative assessment helps employee undestand where his or her
performance was good or bad, and how to improve that performance

Answer 32

Narrative Forms

Question 33

anchors a numerical rating scale with specific illustrative examples of good or bad
performance

Answer 33

Behaviorally Anchored Rating Scales (BARS)

Question 34

1. Write Critical Incidents
2. Develop Performance Dimensions
3. Reallocate Incidents
4. Scale the Incidents
5. Develop a final instrument

Answer 34

5 steps of Behaviorally Anchored Rating Scales (BARS)

Question 35

ask jobholders or supervisors to write specific critical incidents indicative of
effective and ineffective performance

Answer 35

Write critical incidents

Question 36

have them cluster incidents into performance dimensions

Answer 36

Develop performance dimensions

Question 37

—have a second team verify groupings

—have them reallocate original critical incidents into the dimension they think it
fits best

—retain a critical incident if most of the second team assigns it to the same
cluster as did the first

Answer 37

Reallocate incidents

Question 38

second group rates the behavior described by the incident as to how effectively or ineffectively represents performance on the dimension

Answer 38

Scale the incidents

Question 39

choose six or seven critical incidents as the performance dimensions’ behavioral anchors

Answer 39

Develop a final instrument

Question 40

Summary:
write critical incidents ⇒ group into clusters according to performance dimension
⇒ have second team reallocate clusters ⇒ in each dimension, rate each critical
incident from least effective to most effective ⇒ choose behavioral anchors
(critical incidents in the same dimension)

Question 41

Advantages:

—illustrates what to look for in terms of superior, average, and poor performance

—make it easier to explain the ratings to apraisees

—clustering similar critical incidents into performance dimensions help make
dimensions more independent of one another

Question 42

multistep company-wide goal-setting and appraisal program

Answer 42

Management by Objectives (MBO)

Question 43

STEPS OF MBO:

1. Set organization goals
   •establish a company-wide plan and set goals
2. Set departmental goals
   •department heads and superiors jointly set goals for each department
3. Discuss departmental goals
   •department goals are discussed to subordinates
   •subordinates come up with individual goals to help the department attain
   departmental goals
4. Define expected results
   •setting short-term performance targets for each individual goal
5. Conduct performance review
   •compare actual and expected results
6. Provide feedback
   •holding periodic review meetings

Summary: company-wide plan and goals ⇒ departmental goals ⇒ individual goals ⇒
short-term performance targets for each individual goal ⇒ performance review ⇒
providing feedback

Question 44

Potential Rating Problems

Question 45

—Result in unfiar appraisals because traits and degrees of merit are ambiguous

—Fix:
•include descriptive phrases that define or illustrate each trait

Answer 45

Unclear Standards

Question 46

—the influence of a rater’s general impression on rating of specific ratee qualities
•tendency to have a general impression only based on one specific quality

—Fix:
•supervisory training
•using BARS wherein performance dimensions are independent of each other

Answer 46

Halo Effect

Question 47

—rating all employees average
distorts evaluations

Fix:
ranking employees

Answer 47

Central Tendency

Question 48

—rating all subordinates high or low (two extremes)

—especially severe with graphic rating scales

Fix:
•ranking employees

•employer recommendation to avoid leniency and/or strictness error for all
employees

•require a forced distribution

Answer 48

Leniency or Strictness

Question 49

—letting what the employee has done recently overshadow what they did for the past year

Fix:
accumulate critical incidents throughout the year to use as examples in appraisal

Answer 49

Recency Effects

Question 50

Managing the Appraisal Interview

1. Appraisal Interview
2. How to Conduct an Appraisal Interview
3. Defensive Subordinate
4. Criticizing a Subordinate
5. Handling a Written Warning

Question 51

culmination of appraisals

the manager and subordinate review the appraisal and make plans to remedy
deficiencies and reinforce strengths

Answer 51

Appraisal Interview

Question 52

FOUR TYPES OF APPRAISAL INTERVIEW

Satisfactory-Promotable
•easiest interview
•objective: develop specific development plans (reinforce strengths)

Satisfactory-Not promotable
•objective: maintain satisfactory performance (through incentives)

Unsatisfactory-Correctable
•objective: lay out an action/development plan for correcting unsatisfactory
performance (remedy deficiencies)

Unsatisfactory-Uncorrectable
•particularly tense
•objective: dismissal

Question 53

Before

•review the person’s job description
•compare performance to standards
•review previous appraisals
•give employee a week’s notice and set date and time for the interview

During
•conduct the interview with no interruptions
•duration for lower-level personnel ⇒ less than an hour
•duration for management employees ⇒ 1 to 2 hours

Effective interview requires effective coaching skills

Process:
•Preparation - understanding the problem and employee
•Planning - reaching agreement on the problem and laying out a change plan
through steps to take, measures of success, and date to complete
•Actual Coaching - offers ideas in a way that subordinates hear and respond to
them, and appreciate their value

Answer 53

How to Conduct an Appraisal Interview

Question 54

Guidelines:

•Talk in terms of objective work data
•Don’t go personal (compare performance to standard and to not compare
performance to that of others)
•Encourage the person to talk
•Get agreement (having the subordinate leave with an impression of strengths and
weaknesses as well as an action plan)

The best appraisal interviews are dialogues between equal partners (meaning
subordinate is also heard and given the chance to voice out)

Answer 54

How to Conduct an Appraisal Interview

Question 55

—first reaction to being told poor performance feedback is denial

—denial is a defense mechanism

Guidelines:
•Recognize that defensive behavior is normal
•Never attack, but rather concentrate on facts (e.g. sales is down)
•Postpone action
•Recognize limitations

Answer 55

Defensive Subordinate

Question 56

—criticize in a manner that lets the person maintain their dignity ⇒ private and
constructively

—provide examples of critical incidents and specific suggestions

—should be objective and unbiased

Answer 56

Criticizing a Subordinate

Question 57

—written warnings are given to employees who have very weak performance

Purpose:
•shake the mployee out of their bad habits
•helps manager defend their rating to their boss and (if needed) to the courts

Warnings should:
•list employee’s standards
•make it clear that the employee is aware of the standard
•specify deficiencies relative to the standard
•show that the employee had an opportunity to correct performance

Answer 57

Handling a Written Warning

Question 58

—continuous process of identifying, measuring, and developing the performance of individuals and teams

—goal-oriented process directed towards ensuring that organizational processes are in place to maximize productivity of employees, teams, and the organization

—aligning employee performance with the organization’s goals

—appraisal occurs at a specific time while performance management is a dynamic, ongoing, continuous process

Answer 58

Performance Management

Question 59

6 basic elements of Performance Management

1. Direction Sharing
   2: Goal alignment
2. Ongoing performance monitoring
3. Ongoing feedback
4. Coaching and developmental support
5. Recognition and rewards

Question 60

-communicating the company’s goals to all employees

-translating company’s goals into departmental, team, and individual goals

Answer 60

1. Direction Sharing

Question 61

having a method that enables managers and employees to see the link between the
employees’ goals and those of the department and company

Answer 61

Goal alignment

Question 62

continuously measuring the team’s and/or employee’s progress towards meeting
performance goals

Answer 62

Ongoing performance monitoring

Question 63

continuous feedback regarding progress towards goals

Answer 63

Ongoing feedback

Question 64

part of the feedback process

Answer 64

Coaching and developmental support

Question 65

provide incentives to keep the employee’s goal-directed performance on track

Answer 65

Recognition and rewards