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Chapter 9: Appraising and Managing Performance Performance management is the process by whcih executives, managers and supervisors work

to align employee performance wtih the firms goals. Performance evaluation is the activity used to determine the extent to which an employee performs work effectively. Purposes of evaluation: Development. It can determine which emloyees need more training and it can help evaluate the results of training programs Motivation encourage initiative, develop a sense of responsibility and stimulate efforts to perform better Human resource and employment planning- can serve as a valuable input to skills inventories and human resource planning Communications- can serve as a basis for an on going discussion between superior and subordinate about job related matters. Legal compliance- can serve as a legally defensible reason for promotions, transfers, rewards and discharges. HRM research- can be used to validate selection tools such as a testing program

1. Establish performance standards for each position and the criteria for evaluation 2. Establish performance evaluation policies on when to rate, how oftern to rate and who should rate 3. Have raters gather data employees performance on

4. Have raters (and employees in some systems)evaluate

5. Discuss the evaluation with the employee 6. make decisions evaluation Criteria of evaluation reliability: measure of performance must be consisten relevance: a measuer of performance must be related to the actual output of an incumberrnt as logically as possible sensitivity: any criterion must be able to reflect the difference between high and low performers practicality: the criterion must be measurable and data collection cannot be inefficient or too disruptive who should evaluate employee? Rating by committee of several supervisors: the supervisor chosen are those most likely to come into contact with the employee and file the

Format of evaluation: Six steps that provide the basis for systematic process of evaluation:

Rating by employees peers: coworkers must know the level of performance of the employee being evaluated Rating by the employees subordinates: more acceptable if the managers believe that their subordinates are familiar with the job. Rating by someone outside the immediate work situation: known as the field review technique, method uses a specialized appraiser from outside the job setting such as HR specialist to rate the employee. Self evaluation: used more oftern for developmental aspects of performance evaluation Rating by a combination approaches: uses multiple appraisers, including supervisors, subordinates and peers of the target person.

which the employee performs the job.... 3. Essay evaluation: rater maybe asked to describe the strong and weak aspects of the employees behavior. 4. Critical incident technique: requires raters to maintain a log of behavioral incidents that represents either effective or ineffective performance for each employee being rated Ex. May 1- Dan listened patiently to the customers complaint, answered the womans questions, took back the merchandise, giving cutomer full credit for the returned product. He was polite, prompt and interested in her problem

Individual evaluation method: 1. Graphic rating scale: a technique where the rater is presented with a set of traits and asked to rate employees on each of the characteristics. Ex. Quantity of work; quality of work, knowledge of the job, cooperation, dependability, initiative etc.

5. Checklists and weighted checklists. Checklist is a set of objectives or descriptive statements. If the raters believes that the employee possesses a trait listed, the rater checks the items; if not the rater leaves it blank. The weight is the average score of the raters
Potential problems evaluations in performance

Opposition to evaluation because: They focus too much attention on alleviating symptoms of poor performance rather than identifying the underlying causes. Managers and employees dislike the evaluation process because raters have problems with

2. Forced choice: the rater must choose from a set of descriptive statements about an employee. Ex. Rank from 1 to 4 the following sets of statements according to how they describe the manner in

reaching decisions about the performance levels of employees Employees who are not evaluated in the top performance category experience a reverse motivation: they slow down employee performance.

Rater problems:

Problems with standards of evaluation: good, adequate, satisfactory and excellent may mean different things to different evaluators. Halo effect:occurs when raters assigns ratings for several dimensions of performance on the basis of an overal general impressions of the ratee Leniency or harshness: being objective is difficult for everyone Central tendency error: occurs when a rater avoids using high or low ratings and assigns average ratings Recency of events error: raters forget more about past behavior than current behavior Contrast effects: If a supervisor lets another employees performance influence the ratings that are given to someone else Personal bias: blatant discrimination against someone because of sex or race, or play favorites.