Performance Management and Appraisal: Part Three - Training and Development

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Chapter 9

Performance
Management
and Appraisal

Part Three | Training and Development


Copyright 2011 Pearson Education, Inc.
publishing as Prentice Hall

PowerPoint Presentation by Charlie Cook


The University of West Alabama

WHERE WE ARE NOW

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92

LEARNING OUTCOMES
1. Define performance management and discuss how it
differs from performance appraisal.
2. Set effective performance appraisal standards.
3. Describe the appraisal process.
4. Develop, evaluate, and administer at least four
performance appraisal tools.
5. Explain and illustrate the problems to avoid in
appraising performance.
6. Discuss the pros and cons of using different raters to
appraise a persons performance.
7. Perform an effective appraisal interview.
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93

Basic Concepts in
Performance
Management and Appraisal
Performance
Appraisal

Performance
Management

Setting work
standards,
assessing
performance, and
providing feedback
to employees to
motivate, correct,
and continue their
performance.

An integrated
approach to
ensuring that an
employees
performance
supports and
contributes to the
organizations
strategic aims.

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FIGURE 91
Online Faculty
Evaluation Form

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Defining the Employees


Goals and Work Standards
Guidelines for
Effective
Goal Setting

Set
SMART
goals

Assign
specific
goals

Assign
measurable
goals

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Assign
challenging
/ doable
goals

Encourage
participatio
n

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Setting SMART Goals


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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97

An Introduction to Appraising
Performance
Why Appraise Performance?
1

Is basis for pay and promotion decisions.

Plays an integral role in performance management.

Helps in correcting deficiencies and reinforcing good


performance.

Is useful in career planning.

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(Un)Realistic Appraisals
Motivations for Soft Appraisals
The fear of having to hire and train someone new.
The unpleasant reaction of the appraisee.
An appraisal process thats not conducive to candor.

Hazards of Soft Appraisals


Employee loses the chance to improve before being discharged

or forced to change jobs.


Lawsuits arising from dismissals involving inaccurate

performance appraisals.

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Performance Appraisal Roles


The Supervisors Role
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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910

Performance Appraisal Roles


(contd)
The HR Departments Role
Serves a policy-making and advisory role.
Provides advice and assistance regarding the appraisal

tool to use.
Trains supervisors to improve their appraisal skills.
Monitors the appraisal system effectiveness and

compliance with EEO laws.

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911

Effectively Appraising Performance


Steps in Appraising
Performance
1

Defining the job and performance criteria

Appraising performance

Providing feedback session

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912

Designing the Appraisal Tool


What to Measure?
Work output (quality and quantity)
Personal competencies
Goal (objective) achievement

How to Measure?
Generic dimensions
Actual job duties
Behavioral competencies

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913

Performance Appraisal Methods


Appraisal Methodologies
1

Graphic rating scale

Narrative forms

Alternation ranking

Behaviorally anchored rating


scales (BARS)

Paired comparison

Management by objectives (MBO)

Forced distribution

Computerized and Web-based


performance appraisal

Critical incident

10

Merged methods

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914

FIGURE 92
Sample Graphic
Rating Performance
Rating Form

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FIGURE 93

One Item from an Appraisal Form Assessing Employee


Performance on Specific Job-Related Duties

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FIGURE 94

Appraisal Form for Assessing Both Competencies and Specific Objectives

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FIGURE 94 Appraisal Form for Assessing Both Competencies and Specific Objectives (contd)

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FIGURE 95

Scale for Alternate Ranking of Appraisee

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FIGURE 96

Ranking Employees by the Paired Comparison Method

Note: + means better than. - means worse than. For each chart, add up
the number of +s in each column to get the highest ranked employee.

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920

TABLE 91

Examples of Critical Incidents for Assistant Plant Manager

Continuing Duties

Targets

Critical Incidents

Schedule production
for plant

90% utilization of
personnel and machinery
in plant; orders delivered
on time

Instituted new production


scheduling system; decreased
late orders by 10% last month;
increased machine utilization in
plant by 20% last month

Supervise procurement Minimize inventory costs


of raw materials and
while keeping adequate
on inventory control
supplies on hand

Let inventory storage costs rise


15% last month; over-ordered
parts A and B by 20%; underordered part C by 30%

Supervise machinery
maintenance

Instituted new preventative


maintenance system for plant;
prevented a machine breakdown
by discovering faulty part

No shutdowns due
to faulty machinery

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921

FIGURE 97
Appraisal-Coaching
Worksheet

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922

Behaviorally Anchored Rating Scale


(BARS)
Developing a BARS
Advantages of BARS
1. Write critical incidents

A more accurate gauge

2. Develop performance

Clearer standards

dimensions
3. Reallocate incidents
4. Scale the incidents

Feedback
Independent dimensions
Consistency

5. Develop a final

instrument

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923

FIGURE 98
Example of a
Behaviorally
Anchored Rating
Scale for the
Dimension
Salesmanship Skills

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924

Management by Objectives (MBO)


A comprehensive and formal organizationwide
goal-setting and appraisal program requiring:
1. Setting of organizations goals
2. Setting of departmental goals
3. Discussion of departmental goals
4. Defining expected results (setting individual goals)
5. Conducting periodic performance reviews
6. Providing performance feedback

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925

Using MBO

Potential Problems with


MBO

Setting unclear
objective

Time-consuming
appraisal process

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Conflict with
subordinates
over objectives

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Computerized and Web-Based


Performance Appraisal Systems

Allow managers to keep notes on subordinates.


Notes can be merged with employee ratings.
Software generates written text to support appraisals.
Allows for employee self-monitoring and self-evaluation.

Electronic Performance Monitoring (EPM) Systems


Use computer network technology to allow managers access to

their employees computers and telephones.


Managers can monitor the employees rate, accuracy, and time
spent working online.

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FIGURE 99
Online Performance
Appraisal Tool

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Dealing with
Performance Appraisal
Problems
Potential Rating
Scale Appraisal
Problems

Unclear
standards

Halo
effect

Central
tendency

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Leniency or
strictness

Bias

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TABLE 92

A Graphic Rating Scale with Unclear Standards

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Guidelines for Effective Appraisals


How to Avoid
Appraisal Problems

Know the
problems

Use the
right tool

Keep a
diary

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Get
agreement
on a plan

Be
fair

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TABLE 93

Important Advantages and Disadvantages of Appraisal Tools

Tool

Advantages

Disadvantages

Graphic rating scale

Simple to use; provides a quantitative


rating for each employee.

Standards may be unclear; halo


effect, central tendency, leniency,
bias can also be problems.

BARS

Provides behavioral anchors. BARS


is very accurate.

Difficult to develop.

Alternation ranking

Simple to use (but not as simple as


graphic rating scales). Avoids central
tendency and other problems of rating
scales.

Can cause disagreements among


employees and may be unfair if all
employees are, in fact, excellent.

Forced distribution
method

End up with a predetermined number


or % of people in each group.

Employees appraisal results


depend on your choice of cutoff
points.

Critical incident
method

Helps specify what is right and


wrong about the employees
performance; forces supervisor to
evaluate subordinates on an ongoing
basis.

Difficult to rate or rank employees


relative to one another.

MBO

Tied to jointly agreed-upon


performance objectives.

Time-consuming.

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Choosing the Right Appraisal Tool


Criteria for Choosing an
Appraisal Tool

Accessibility

Ease-of-use

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Employee
acceptance

Accuracy

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FIGURE 910 Selected Best Practices for Administering Fair Performance Appraisals
Base the performance review on duties and standards from a job analysis.
Try to base the performance review on observable job behaviors or objective
performance data.
Make it clear ahead of time what your performance expectations are.
Use a standardized performance review procedure for all employees.
Make sure whoever conducts the reviews has frequent opportunities to observe
the employees job performance.
Either use multiple raters or have the raters supervisor evaluate the appraisal
results.
Include an appeals mechanism.
Document the appraisal review process and results.
Discuss the appraisal results with the employee.
Let the employees know ahead of time how youre going to conduct the review and
use the results.
Let the employee provide input regarding your assessment of him or her.
Indicate what the employee needs to do to improve.
Thoroughly train the supervisors who will be doing the appraisals.
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FIGURE 911 Guidelines for a Legally Defensible Appraisal


1.

Preferably, conduct a job analysis to establish performance criteria and standards.

2.

Communicate performance standards to employees and to those rating them, in writing.

3.

When using graphic rating scales, avoid undefined abstract trait names (such as loyalty or
honesty).

4.

Use subjective narratives as only one component of the appraisal.

5.

Train supervisors to use the rating instrument properly.

6.

Allow appraisers substantial daily contact with the employees theyre evaluating.

7.

Using a single overall rating of performance is usually not acceptable to the courts.

8.

When possible, have more than one appraiser, and conduct all such appraisals
independently.

9.

One appraiser should never have absolute authority to determine a personnel action.

10. Give employees the opportunity to review and make comments, and have a formal appeals
process.
11. Document everything: Without exception, courts condemn informal performance evaluation
practices that eschew documentation.
12. Where appropriate, provide corrective guidance to assist poor performers in improving.

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Who Should Do the Appraising?

Immediate
supervisor

Peers

Self-rating

Potential
Appraisers

Rating
committee

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Subordinates

360-degree
feedback

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The Appraisal Interview

SatisfactoryPromotable

Types of
Appraisal
Interviews

SatisfactoryNot
Promotable
UnsatisfactoryCorrectable
Unsatisfactory
Uncorrectable

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FIGURE 912 Sample Employee Development Plan

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Appraisal Interview Guidelines


Guidelines for
Conducting
an Interview

Talk in terms
of objective
work data

Dont get
personal

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Encourage
the person to
talk

Get
agreement

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FIGURE 913
Checklist During
Appraisal Interview

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Handling Defensive Responses


How to Handle a Defensive Subordinate
1

Recognize that defensive behavior is normal.

Never attack a persons defenses.

Postpone action.

Recognize your own limitations.

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How to Deliver Criticism


How to Criticize a
Subordinate
1
2

Do it in a manner that lets the person maintain


his or her dignity and sense of worth.
Criticize in private, and do it constructively.

Give daily feedback so that the review has no


surprises.
Never say the person is always wrong.

Criticism should be objective and free of biases.

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Formal Written Warnings


Purposes of a Written Warning
To shake your employee out of bad habits.
To help you defend your rating, both to your own boss and (if

needed) to the courts.

A Written Warning Should:


Identify standards by which employee is judged.
Make clear that employee was aware of the standard.
Specify deficiencies relative to the standard.
Indicate employees prior opportunity for correction.

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Performance Management
Performance Management
Is the continuous process of identifying, measuring, and

developing the performance of individuals and teams and


aligning their performance with the organizations goals.

How Performance Management Differs From


Performance Appraisal
A continuous process for continuous improvement
A strong linkage of individual and team goals to strategic goals
A constant reevaluation and modification of work processes

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Basic Building Blocks of


Performance Management

Direction
sharing

Goal
alignment

Ongoing
performance
monitoring

Ongoing
feedback

Coaching and
development
support

Rewards,
recognition,
and
compensation

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Why Performance Management?

Total Quality Management


The
Performance
Management
Approach

Resolution of Appraisal Issues


Strategic Goal Alignment

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Using Information Technology to


Support Performance Management
Assign financial and nonfinancial goals to each teams
activities along the strategy map chain of activities
leading up to the companys overall strategic goals.
Inform all employees of their goals.
Use IT-supported tools like scorecard software and
digital dashboards to continuously monitor and assess
each teams and employees performance.
Take corrective action at once.

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FIGURE 914

Performance Management Report

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KEY TERMS
performance appraisal
graphic rating scale
alternation ranking method
paired comparison method
forced distribution method
critical incident method
behaviorally anchored rating scale (BARS)
electronic performance monitoring (EPM)
unclear standards
halo effect
central tendency
strictness/leniency
bias
appraisal interview
performance management
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All rights reserved. No part of this publication may be reproduced,


stored in a retrieval system, or transmitted, in any form or by any
means, electronic, mechanical, photocopying, recording, or
otherwise, without the prior written permission of the publisher.
Printed in the United States of America.

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