- performance management and appraisal -

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LO 9.1 Describe The Performance Appraisal Process

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Performance Appraisal
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Performance Appraisal – Evaluating an employee’s current and/or past performance relative
to his or her performance standards
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Involve setting performance standards, and assumes that the employee receives the training,
feedback, and incentives required to eliminate performance deficiencies


3 step of performance appraisal process
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Setting work standards
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Assessing the employee’s actual performance relative to those standards [ often involves
some rating form ]
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Providing feedback to the employee with the aim of helping him or her to eliminate
performance deficiencies or to continue to perform above bar


Why do we need appraise performance
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Used for pay, promotion and retention decision
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Link performance management to company goals (ensuring each employees performance help
in reaching company’s overall goals)
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The manager can develop plan to correct deficiencies and reinforce strength
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With appraisal employees can review career plans
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Training needs are identified


Effective appraisal goasl should be SMART
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Specific
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Measurable
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Attainable
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Relevant
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timely


How to set effective goals
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Assign specific goals
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Assign measurable goals [include deadline and the result ]
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Assign challenging but doable goals
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Encourage participation [ employee participation will lead to improve in performance and
allow manager to set higher standard ]


Who should do the appraising
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The supervisors

HR department provide advice on what appraisal tools to use and operating managers will
take the final decision. HR team also train supervisors to improve their appraisal skills,
monitor the appraisal system’s effectiveness and ensure that it complies with EEO laws
 Advantages : supervisor have the position to observe and evaluate subordinate’s performance
and is responsible for their performance

Disadvantages : supervisor might not appreciate how customers and colleagues see the
employee’s performance and bias might happened

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Peer Appraisal

Ex : facebook (every 6 month), google (annual feedback from supervisor and peers)

Advantages : peers might see aspect that supervisors may never see, an immediate positive
impact on improving perception of open communication, task motivation, social loafing,
group viability, cohesion and satisfaction

Disadvantages : change in behaviour toward certain peers to gain good result

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Crowd appraisals

Social media allow everyone in company to appraise their peers’ work

Ex : LivingSocial [ use the comment for formal employee appraisal and use Globoforce
to automate the reward and recognition of colleague ]
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Virtual Games

Company create a virtual game that help employee evaluate and reward each other.
Allow employee to give real time feedback to each other and virtual gift and points

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Rating Committees

Consist of employee’s immediate supervisor and three or four other supervisors

Advantages : eliminate problem like individual bias, help pick up the different facets of an
employee’s performance

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Self-Rating

Usually done along with supervisor’s rating. Best to ask employee to list their
accomplishment of the period for the manager to appraise

Disadvantages : employee rate themselves higher than the rating given by supervisors’ or
peers’, incompetent performers can’t objectively assessing themselves

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Subordinates

Subordinate will rate their managers. Usually twice a year

Disadvantages : if it is not anonymous subordinate will rate it higher than usual

Glassdoor app allow employee to apprise their boss anonymously

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360 Degree Feedback

Employer collect performance information all around employees including supervisors,

subordinates, peers, and internal or external customers [ generally for developmental rather
than pay purpose ]

Make sure the feedback are productive, unbiased, and development oriented
LO 9-2 The Pros and Cons of at Least 8 Traditional Performance Appraisal Methods


Graphic Rating Scale Method
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A scale that lists a number of traits [ communication, teamwork ] and a range of performance
for each [ below expectation, unsatisfactory ]. Those traits will be. Then the employee is
rated by identifying the score that best describes his/ her performance level for each trait
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Managers must decide which job performance aspects to measure
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Some options include generic dimension, actual job duties, or behaviourally recognizable
competencies

Advantages : simple to use, provides a quantitative rating for each employee

Disadvantages : standard may be unclear, halo effect, central tendency, leniency, problem
caused by bias


Alternation Ranking Method
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Employees are ranked from best to worst on a particular trait, choosing highest, then lowest,
until all are ranked

Advantages : simple to use (not as simple as rating scales), avoid central tendency and other
problem of rating scales

Disadvantages : can cause disagreement among employees and may be unfair if all employees
are excellent


Paired comparison method
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ranking employees by making a chart of all possible pairs of the employees for each trait and
indicating which is better employee of the pair

Advantages : more precise

Disadvantages : time consuming


Forced Distribution Method
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Predetermined percentages of ratees are placed in various performance categories, which is
similar to grading on a curve

Advantages : prevent supervisor to grade every employee satisfactory or high [end up with a
predetermined number or % of people in each group ]

Disadvantages : increase the risk of discriminatory, damage morale


Critical Incident Method
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A supervisor keep a record of positive and negative example of a subordinates’ work-related
behaviour, and review the record with the employee at predetermined times.

Advantages : improve appraisal outcome, supervisor appraise the subordinate’s all year
performance and not just recent performance, help specify what is right and wrong about the
employee’s performance

Disadvantages : don’t produce relative ratings for pay raise purpose, difficult to rate or rank
employees relative to one another


Narrative Forms
 -
Supervisor assesses the employee’s past performance and required areas of improvement.
help employee to understand where his/her performance was good or bad and how to improve
that performance


Computerized and Web-Based Methods
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Employers use hard copy forms, installed appraisal software packages, or cloud-based
systems to actually conduct appraisal

Advantages : simple

Disadvantages : time consuming on big company


Electronic Performance Monitoring (EPM)
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supervisor electronically monitor the amount of computerized data an employee is processing
per day and thereby his or her performance.
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Manager will monitor employee’s rate, accuracy, and time spend working online

Advantages : improve productivity

Disadvantages : cause stress


Behaviourally anchored rating scales (bars)
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Method that combines the benefits of narratives, critical incidents, and quantified scales by
anchoring a scale with specific behavioural example of good or poor performance
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Steps of developing BARS:
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Generate critical incidents [ of effective and ineffective performance ]
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Develop performance dimensions
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Reallocate incidents [ group the incident into the suitable performance dimension ]
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Scale the incidents [ is it effective or not ]
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Develop a final instrument

Advantages : provide behavioural “anchors”, BARS is very accurate, easier to explain the rating to
appraisees, make sure the appraisal is based on several dimension

Disadvantages : difficult to develop


Mixed standard scale
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The employer ‘mixes’ together sequentially the good and poor behavioural example
statement when listing them
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The aim is to reduce rating errors by making it less obvious to the appraiser
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What performance dimensions he/she is rating
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Whether the behavioural example statement represent high, medium, or low performance


Management by objectives (MBO)
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The manager set specific measurable goals with each employee and then periodically
discusses the employee’s progress toward these goals
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Steps of MBO :
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Set the organization’s goals
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Set departmental goals
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Discuss departmental goals [ ask employee to develop individual goals ]
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Define expected result (set individual goals) [ short term performance target for each
employee ]
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Conduct performance reviews [ compare each employee actual and expected result ]
 +
Provide feedback [ make a plan to correct or continuing the person performance ]

Advantages : tied to jointly agreed upon performance objectives

Disadvantages : time consuming

LO 90-3 how to deal with potential appraisal error problem


Potential Rating Problem
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Unclear standards
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Halo effect
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Central tendency
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Leniency or strictness
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Recency effect
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explanation


managing appraisal interview
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Appraisal interview – An interview in which the supervisor and subordinate review the
appraisal and make plan to remedy deficiencies and reinforce strengths
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4 types of appraisal situation
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Satisfactory – promotable
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Satisfactory – unpromotable
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Unsatisfactory but correctable
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Unsatisfactory uncorrectable


How to conduct appraisal interview
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Prepare
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Plan
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Measure success
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Date to complete
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Coach


Guideline to conduct appraisal interview
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Objective data
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Don’t get personal
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Encouragement
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Agreement


How to handle defensive subordinate
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Recognize behaviour
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Never attract defences
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Postpone action
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Recognize limitation


Performance management
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Performance Management – The continuous process of identifying, measuring, and
developing the performance of individuals and teams and aligning their performance with the
organization goals
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6 basic element of performance management
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Direction sharing
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Goal alignment
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Ongoing performance monitoring
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Ongoing feedback
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Coaching and developmental support
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Recognition and reward


Total Quality Management
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TQM program are organization wide program that integrate all function and processes of the
business
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TQM aimed the maximizing customer satisfaction through continuous improvement
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TQM advocates argue that the organization is a system of interrelated parts, and that
employees’ performance is more a function of things like training, communication, tools and
supervision than of their motivation

Topic 1

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Sub topic
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Nama - pengertian
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content:
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explanation

Definition :

Business Any activity that seeks to provide goods and services to others while
operating at a profit
Goods Tangible products such as computer, food, clothing, cars and appliances
Services Intangible products that can’t be held in your hand like education,
healthcare, insurance, recreation and travel