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Performance Appraisal

Session 5

Performance Appraisal
The process of considering and evaluating the performance of an employee with the objective of improving job performance The information generated during appraisal can be used as a basis for career planning, training and as a basis for deciding levels of pay

PA integration
Citibank, Senior Management:
If peoples jobs are dictated by who they know and networking why do Personnel wants these 35 boxtick forms? all Im rebelling against is why do I have to fill out this form that just gets stuffed in a drawer downstairs and is never looked at again in anyones life. My sense is that its not used.

Two sides of appraisal


Making a judgement
about the employee which follows from historical analysis of the performance against objectives; linked to pay and rewards

DEVELOPMENTAL: The needs of employee are evaluated in terms of the training required to improve skill and knowledge in line with future performance objectives; linked to career planning and management succession

Three assumptions of PA
1. Work arrangements allow reliable & valid collection of information 2. Raters can assess performance accurately 3. Rational criteria exist

What should be assessed?

Focus can take number of forms: attitudes, behavior in work tasks, meeting of objectives

Task Performance - job specific behaviors and core responsibilities Contextual Performance - non-job-specific behaviors such as dedication, co-operation, enthusiasm and persistence

Result driven PA
Lloyds: Line Management Majority of people are really only judged on their results, and that is very bad because you are always result driven, you tend to wash over those issues that really need to be assessed My Area Director only sees my results, he doesnt see how I deal with the situations, he doesnt know really how I motivate the staff, he does not know how good I am in delegating because all he knows is what gets done.

Methods of measurement
Ranking - making comparison in the group from the highest to the poorest performer Rating - measurement of employees performance according to set of standards/traits (i.e. communication skills from 1 to 5) Critical incident method - records of specific examples of the employee acting in ways that are either effective or ineffective

Multi-source feedback
Self-appraisal - less judgmental feedback Downward and upward feedback - works in particular type of organisations and cultures Peer feedback paradox of roles 360-degree feedback individual receiving feedback from anyone he/she comes to contact in organisation 560-degree feedback process goes beyond organization and includes customers/clients and suppliers

Self- appraisal
DISADVANTAGES Leniency error, bias and poor validity Potential for conflict and disagreement Increased expectations regarding the impact on PA ADVANTAGES
Employee involvement More satisfaction with appraisal More likely to accept criticism Catalyst for discussion (more opportunities for corrections)

The role of affect in appraisal

"I decided in favour of X" is no more than "I liked X"' (Zajonc, 1980)
Determinants of interpersonal attraction:
physical attractiveness (Park & Flink, 1989) similarity between people (opinions, attitudes and values; pastimes; motivation; reciprocity of liking; compatibility of roles; socio-economic status and bio-social attributes like age, sex, ethnicity, and level of education) (Wayne & Liden, 1995)

A rater's affective regard for a ratee is associated with:

higher ratings; a higher quality relationship; less inclination to punish poor performance; greater halo effect and less accuracy

Attribution theory
Explains how people evaluate the behavior of others All behavior is determined by: internal factors which are within our own control external factors which are outside our control Attribution errors: tendency to attribute the success of others to external factors and their failures to internal factors tendency to attribute our own success to internal factors and our own failures to external factors

Errors in PA
Similar-to-me error - higher evaluation to people who seem similar to oneself Hallo error - rater reacts to one positive aspect by rating positively in all other areas Horns error - rater reacts to one negative aspect by rating negatively in all other areas Leniency error - high ratings to all Strictness error - low ratings to all Central tendency error - middle ratings to all

Cultural differences in PA:

Delivery of feedback:
Explicitness versus indirectness Verbal versus nonverbal

Focus on individual versus group Degree of formality/structure/objective criteria Degree of employee input
Participative versus autocratic management

Organisational justice
Study of fairness/justice perceptions in organisational procedures (i.e. selection, performance appraisal, pay/reward, decision-making) Impacts on commitment, trust, satisfaction, citizenship, revenge behaviors Types of justice: distributive, procedural and interactional justice

Procedural justice
Rules of fair procedures (Leventhal, 1980): Consistency - Equal treatment across persons and over time Accuracy - Using accurate information and informed opinions Correctability - Opportunities for review Representativeness- Everyone is involved in decisionmaking

Bias suppression - Avoiding self-interest Ethicality - Compatibility with fundamental moral and ethical

Lack of consistency in PA
BT/Line Management: I feel that the more senior in the business you get the less seriously performance appraisal is taken. Therefore, I dont think my manager gets a decent appraisal The top management think that this is something which middle and junior management need and they dont, its not sort of in
the blood.

Voice and choice in procedures

Allows people an opportunity to provide inputs and present their opinions (i.e. self-appraisal) Mute procedures - do not provide opportunity to provide voice (i.e. recruitment, selection, budget decisionmaking, compensation plans)

The presence or an absence of an option given to employees (i.e. choice of referent) Employees are freely offered the opportunity to accept or reject an offer involving disadvantageous outcome (i.e. work for lower pay)

Role of voice
Any manner of communication with the decision-maker which allows to convey the message about your interests
Provides the perception of indirect control over decision when direct control is impossible - belief that input increase the chances of receiving desired outcome Voice is valued because it is indicative of ones status respect to employees is communicated and their selfesteem enhanced

Role of choice
Refers to the opportunity of the employees to make decisions about what happens to them
Decision giving an employee a choice - an employee is at least partially accountable for the decision-making process Decision without allowing a choice decision makers are held fully responsible and accountable for the negative outcome

Interactional justice
The quality of interpersonal treatment received during implementation of the organisational procedures
The social determinants of fairness

When people are asked about unfairness they tend to focus on the interpersonal factors

Interactional justice (Bies & Moag, 1986)

1. Informational part - Adequacy and clarity of the

information provided by decision-makers: i.e. quality of excuses, justifications, explanations, apologies, rationale for unfavourable outcomes, honesty, truthfulness. 2. Interpersonal part - Degree of sensitivity and politeness during treatment of employees i.e. respect, concern, considerations for feelings, kindness. The Churchill effect When you have to kill a man, it costs nothing to be polite.

Poor interactional justice

Advertising agency, Staff: First, he tore my advertising campaign strategy apart. I know the ideas needed more development, but he went way beyond that. He was vicious in his attacks on me. I dont think anyone, including my boss, is justified in calling me stupid or an idiot.

Fair PA: Summary

Provides for the setting of both performance and developmental goals Link to goal setting (MBO) and career paths Based on behaviours not personal traits BARS (Behavioural Anchored Rating Scales) Based on detailed information Record keeping, diaries Usage of different sources of ratings Supervisor, peers, self-ratings Interpersonal fairness (interactional justice) Supportive, participative, respectful