Performance Management and Appraisal: Part Three - Training and Development

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
Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall
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.
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.
94
FIGURE 91
Online Faculty
Evaluation Form
95
Defining the Employees

Goals and Work Standards
Guidelines for
Effective
Goal Setting
Set
SMART
goals
Assign
specific
goals
Assign
measurable
goals
Assign
challenging
/ doable
goals
Encourage
participatio
n
96
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.
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.
98
(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.
99
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
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.
911
Effectively Appraising Performance

Steps in Appraising
Performance
1
Defining the job and performance criteria
Appraising performance
Providing feedback session
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
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
914
FIGURE 92
Sample Graphic
Rating Performance
Rating Form
915
FIGURE 93
One Item from an Appraisal Form Assessing Employee

Performance on Specific Job-Related Duties
916
FIGURE 94
Appraisal Form for Assessing Both Competencies and Specific Objectives
917
FIGURE 94 Appraisal Form for Assessing Both Competencies and Specific Objectives (contd)
918
FIGURE 95
Scale for Alternate Ranking of Appraisee
919
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.
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
921
FIGURE 97
Appraisal-Coaching
Worksheet
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
923
FIGURE 98
Example of a
Behaviorally
Anchored Rating
Scale for the
Dimension
Salesmanship Skills
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
925
Using MBO
Potential Problems with

MBO
Setting unclear
objective
Time-consuming
appraisal process
Conflict with
subordinates
over objectives
926
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.
927
FIGURE 99
Online Performance
Appraisal Tool
928
Dealing with
Performance Appraisal
Problems
Potential Rating
Scale Appraisal
Problems
Unclear
standards
Halo
effect
Central
tendency
Leniency or
strictness
Bias
929
TABLE 92
A Graphic Rating Scale with Unclear Standards
930
Guidelines for Effective Appraisals

How to Avoid
Appraisal Problems
Know the
problems
Use the
right tool
Keep a
diary
Get
agreement
on a plan
Be
fair
931
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.
932
Choosing the Right Appraisal Tool

Criteria for Choosing an
Appraisal Tool
Accessibility
Ease-of-use
Employee
acceptance
Accuracy
933
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.
934
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.
935
Who Should Do the Appraising?
Immediate
supervisor
Peers
Self-rating
Potential
Appraisers
Rating
committee
Subordinates
360-degree
feedback
936
The Appraisal Interview
SatisfactoryPromotable
Types of
Appraisal
Interviews
SatisfactoryNot
Promotable
UnsatisfactoryCorrectable
Unsatisfactory
Uncorrectable
937
FIGURE 912 Sample Employee Development Plan
938
Appraisal Interview Guidelines

Guidelines for
Conducting
an Interview
Talk in terms
of objective
work data
Dont get
personal
Encourage
the person to
talk
Get
agreement
939
FIGURE 913
Checklist During
Appraisal Interview
940
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.
941
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.
942
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.
943
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
944
Basic Building Blocks of

Direction
sharing
Goal
alignment
Ongoing
performance
monitoring
Ongoing
feedback
Coaching and
development
support
Rewards,
recognition,
and
compensation
945
Why Performance Management?
Total Quality Management

The
Performance
Management
Approach
Resolution of Appraisal Issues

Strategic Goal Alignment
946
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.
947
FIGURE 914
Performance Management Report
948
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
949
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.
950

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Chapter 9

Part Three | Training and Development

PowerPoint Presentation by Charlie Cook

WHERE WE ARE NOW

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Defining the Employees

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Setting SMART Goals

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Is basis for pay and promotion decisions.

Plays an integral role in performance management.

Helps in correcting deficiencies and reinforcing good

Is useful in career planning.

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Hazards of Soft Appraisals

or forced to change jobs.

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Performance Appraisal Roles

problems that can cripple

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Performance Appraisal Roles

compliance with EEO laws.

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Effectively Appraising Performance

Defining the job and performance criteria

Providing feedback session

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Designing the Appraisal Tool

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Performance Appraisal Methods

Graphic rating scale

Behaviorally anchored rating

Management by objectives (MBO)

Computerized and Web-based

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

One Item from an Appraisal Form Assessing Employee

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Appraisal Form for Assessing Both Competencies and Specific Objectives

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Scale for Alternate Ranking of Appraisee

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Ranking Employees by the Paired Comparison Method

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Examples of Critical Incidents for Assistant Plant Manager

Instituted new production

Supervise procurement Minimize inventory costs

Let inventory storage costs rise

Instituted new preventative

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Behaviorally Anchored Rating Scale

A more accurate gauge

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Management by Objectives (MBO)

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Potential Problems with

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Computerized and Web-Based