Chapter 10
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  • 1. Dessler, Cole, and Sutherland Human Resources Management in Canada Canadian Ninth Edition Chapter Ten Performance Appraisal: The Key to Effective Performance Management © 2005 Pearson Education Canada Inc., Toronto, Ontario 10 10-1
  • 2. Performance Management
    • -process encompassing all activities related to improving employee performance, productivity,and effectiveness
  • 3. The Performance Appraisal Process -three steps: 1. Setting work standards 2. Assessing actual performance relative to standards 3. Providing feedback to employee regarding performance
  • 4. The Performance Appraisal Process 1. Provides information for promotion and salary decisions 2. Provides opportunity for reinforcement and/or corrective action regarding performance 3. Provides opportunity to review career plans Why Should Performance Be Appraised?
  • 5. The Performance Appraisal Process
    • Lack of standards; irrelevant, subjective,
      • unrealistic standards
    • Poor measures of performance
    • Rater errors
    • Poor feedback to employees eg. arguing
    • Failure to use evaluation results for decision
    • making
    Performance Appraisal Problems
  • 6. Defining Performance Expectations -job description often insufficient to clarify performance expectations -measurable standards should be developed for each position
  • 7. Appraisal Methods Trait: _____ ____ Outstanding ____ Very Good ____ Good ____ Improvement Needed ____ Unsatisfactory ____ Not Rated Graphic Rating Scale
  • 8. Appraisal Methods Trait: ____________ Highest-ranking employee 1. _________________ 4. ____________ 2. _________________ 5. ____________ 3. _________________ 6. ____________ Lowest-ranking employee Alternation Ranking Scale
  • 9. Appraisal Methods Trait: ____________ Employee As Compared to: Art Bob Carl Diane Art + + - Bob - - - Carl - + + Diane + + - 1 3 1 1  Bob ranks highest Paired Comparison Method
  • 10. Appraisal Methods Forced Distribution Method High Performers 15% of employees High-Average Performers 20% of employees Average Performers 30% of employees Low-Average Performers 20% of employees Low Performers 15% of employees
  • 11. Appraisal Methods Critical Incident Method -keep a record of: -uncommonly good -undesirable work-related behaviours -review with employee at predetermined times
  • 12. Appraisal Methods Narrative Forms 1. Rate performance 2. Note performance analysis and examples 3. Create improvement plan, including a timetable and follow-up process 4. Discussion with employee
  • 13. Appraisal Methods Behaviourally Anchored Rating Scales (1 of 2)
    • Generate critical incidents (job experts specify
    • effective and ineffective job-related behaviours)
    • Develop performance dimensions (experts
    • group incidents into clusters)
    • Reallocate incidents (different experts group
      • incidents into same clusters; retain incidents
      • similarly assigned twice)
  • 14. Appraisal Methods Behaviourally Anchored Rating Scales (2 of 2)
    • Scale the incidents (from effective to
    • ineffective behaviour)
    • Develop final instrument (6-7 incidents
    • used as behavioural anchors for each
    • performance dimension)
  • 15. Appraisal Methods Behaviourally Anchored Rating Scales Advantages -more accurate measure -clearer standards -assists feedback -independent dimensions -consistency
  • 16. Appraisal Methods Management by Objectives (MBO)
    • Set the organization’s goals
    • Set departmental goals
    • Discuss departmental goals
    • Define expected results (individual)
    • Performance reviews: measure the results
    • Provide feedback
  • 17. Appraisal Methods Management by Objectives (MBO) Problems 1. Setting unclear, unmeasurable objectives 2. Time consuming 3. Tug of war between manager and employee
  • 18. Performance Appraisal: Problems and Solutions Reliability -criteria must be precise enough to result in consistent measures when applied across many employees by many different raters Validity -criteria must be accurate to be valid; must be relevant to the job; broad enough to cover all aspects of job; specific
  • 19. Performance Appraisal: Problems and Solutions -unclear standards -halo effect -central tendency -leniency/strictness Rating Scale Problems -appraisal bias -recency effect -similar-to-me bias
  • 20. Performance Appraisal: Problems and Solutions Avoiding Appraisal Problems Ensure rater awareness of problems Choose the right appraisal tool Train supervisors to eliminate rating errors
  • 21. Performance Appraisal: Problems and Solutions Who Should Do the Appraising? -immediate supervisor -peers -rating committees -self -employees/subordinates -360-degree appraisal (all of the above)
  • 22. The Appraisal Interview Types of Appraisal Interview
    • performance is satisfactory; employee is
      • promotable
    • performance is satisfactory; employee is
    • not promotable
    • performance is unsatisfactory, but correctable
  • 23. The Appraisal Interview How to Conduct an Appraisal Interview
    • be direct and specific
    • don’t get personal
    • encourage the person to talk
    • develop an action plan
  • 24. The Appraisal Interview How to Handle a Defensive Employee
    • recognize that defensive behaviour is normal
    • never attack a person’s defenses
    • postpone action
    • recognize human limitations
  • 25. Role of Appraisals in Managing Performance
    • central role in performance management
    • quality-based appraisals:
      • avoid forced distribution
      • use objective performance criteria
      • 360-degree feedback
      • atmosphere of partnership and constructive
      • advice