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1. Chapter Performance Management & Appraisal App Human Resource Management

2. Chapter 9: Performance Management & Appraisal Learning Objectives 1. Define performance management and discuss how it differs from performance appraisal . 2. Describe the appraisal process . 3. Set effective performance appraisal standards . 4. Develop, evaluate, and administer at least four performance appraisal tools. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 9- 3 Performance Management & Appraisal Learning Objectives

3. Performance Management & Appraisal Learning Objectives 5. Explain and illustrate the problems to avoid in appraising performance . 6. Discuss the pros and cons of using different raters to appraise a person’s performance. 7. Perform an effective appraisal interview . Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 9- 4

4. Define performance management and discuss how it differs from performance appraisal. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 9- 5

5. Basic Concepts in Performance Management and Appraisal Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 6 Performance Appraisal Setting work standards, assessing performance, and providing feedback to employees to motivate, correct, and continue their performance. Performance Management An integrated approach to ensuring that an employee’s performance supports and contributes to the organization’s strategic aims.

6. Basic Concepts in Performance Management and Appraisal Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 7

7. Describe the appraisal process. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 9- 8

8. Appraising Performance Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 9 1 Appraising performance Steps in Appraising Performance Defining the job and performance criteria Providing feedback session 2 3

9. Appraising Performance Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 10 1 Is useful in career planning. Plays an integral role for company’s objectives . Why Appraise Performance? Is basis for pay and promotion decisions. Helps in correcting deficiencies and reinforcing good performance. 2 3 4 5 Identify training and development needs.

10. Set effective performance appraisal standards. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 9- 11

11. Set effective performance appraisal standards. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 9- 12

12. Setting SMART Goals S pecific, and clearly state the desired results. M easurable in answering “how much.” A ttainable, and not too tough or too easy. R elevant to what’s to be achieved. T imely in reflecting deadlines and milestones. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 13

13. Defining the Employee’s Goals and Work Standards Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 14 Set SMART goals Assign challenging/ doable goals Assign specific goals Guidelines for Effective Goal Setting Assign measurable goals Encourage participation

14. Employee’s Goals and Performance Standards B asing appraisal standards on required competencies The role of job descriptions Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 9- 15

15. Who Should Do the Appraising? Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 16 Self-rating Subordinates 360-degree feedback Potential Appraisers Immediate supervisor Peers Rating committee

16. Performance Appraisal Methods Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 17 1 2 3 4 5 Alternation ranking Graphic rating scale Paired comparison Forced distribution Critical incident 6 7 8 9 10 Behaviorally anchored rating scales (BARS) Narrative forms Management by objectives (MBO) Computerized and Web-based performance appraisal Merged methods Appraisal Methodologies

17. FIGURE 9 –3 Sample Graphic Rating Performance Rating Form

18. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 19 FIGURE 9 –4 One Item from an Appraisal Form Assessing Employee Performance on Specific Job-Related Duties

19. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 20 FIGURE 9 –5 Appraisal Form for Assessing Both Competencies and Specific Objectives

20. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 21 FIGURE 9 –5 Appraisal Form for Assessing Both Competencies and Specific Objectives (cont’d)

21. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 22 FIGURE 9 –6 Scale for Alternate Ranking of Appraisee

22. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 23 FIGURE 9 –7 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.

23. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 24 TABLE 9 –1 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 of raw materials and on inventory control Minimize inventory costs while keeping adequate supplies on hand Let inventory storage costs rise 15% last month; over-ordered parts “A” and “B” by 20%; under-ordered part “C” by 30% Supervise machinery maintenance No shutdowns due to faulty machinery Instituted new preventative maintenance system for plant; prevented a machine breakdown by discovering faulty part

24. Management by Objectives (MBO) A comprehensive and formal organizationwide goal-setting and appraisal program requiring: Setting of organization’s goals Setting of departmental goals Discussion of departmental goals Defining expected results (setting individual goals) Conducting periodic performance reviews Providing performance feedback Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 25

25. Using MBO Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 26 Setting unclear objective Conflict with subordinates over objectives Potential Problems with MBO Time-consuming appraisal process

26. 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 (e.g. data entry staff) Can induce Stress - monitored Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 27

27. Chapter 9- 28

28. Explain and illustrate the problems to avoid in appraising performance. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 9- 29

29. Dealing with Performance Appraisal Problems Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 30 Unclear standards Leniency or strictness Halo effect Potential Rating Scale Appraisal Problems Central tendency Bias

30. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 31 TABLE 9 –2 A Graphic Rating Scale with Unclear Standards

31. Discuss the pros and cons of using different raters to appraise a person’s performance. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 9- 32

32. Guidelines for Effective Appraisals Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 33 Know the problems Get agreement on a plan Use the right tool How to Avoid Appraisal Problems Keep a diary Be fair

33. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 34 TABLE 9 –3 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 employee’s 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.

34. Perform an effective appraisal interview. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 9- 35

35. The Appraisal Interview Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 36 Satisfactory—Promotable Satisfactory—Not Promotable Unsatisfactory—Correctable Unsatisfactory—Uncorrectable Types of Appraisal Interviews

36. Appraisal Interview Guidelines Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 37 Talk in terms of objective work data Get agreement Don’t get personal Encourage the person to talk Guidelines for Conducting an Interview

37. Handling Defensive Responses Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 38 1 Recognize your own limitations. Never attack a person’s defenses. How to Handle a Defensive Subordinate Recognize that defensive behavior is normal. Postpone action . 2 3 4

38. How to Deliver Criticism Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 39 1 2 3 4 5 How to Criticize a Subordinate Criticize in private, and do it constructively. Do it in a manner that lets the person maintain his or her dignity and sense of worth. 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.

39. 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 employee’s prior opportunity for correction. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 40

40. 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 organization’s 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 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 41

41. Basic Building Blocks of Performance Management Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9– 42 Direction sharing Goal alignment Ongoing performance monitoring Rewards, recognition, and compensation Coaching and development support Ongoing feedback

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