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Chapter 7 Performance Appraisal INP3004/MAN3360 Dr. Steve
Performance Appraisals <ul><li>How do performance appraisals benefit the organization? </li></ul><ul><li>Help orgs make de...
Performance Appraisal Development and Applications Job Analysis   Criterion Development Performance Appraisal Personnel Tr...
Performance Appraisal Applications <ul><li>Personnel Training  – Determine employees strengths & weaknesses to determine n...
<ul><li>Promotion  – Typically based on performance (P.A.), seniority, and available opening </li></ul><ul><ul><li>Good P....
Performance Appraisal Systems <ul><li>Performance Appraisal Systems  should: </li></ul><ul><li>Be relevant to the job </li...
Performance Appraisal  Employee Data Objective Data Personnel Data Judgmental Data Conceptual Criterion
Performance Appraisal  Employee Data <ul><li>Objective data </li></ul><ul><ul><li>Ex: # cars sold, time to completion, eff...
<ul><li>Personnel data </li></ul><ul><ul><li>Absenteeism  - # of days missed from work </li></ul></ul><ul><ul><ul><li>How ...
<ul><li>Judgmental data  – subjective ratings </li></ul><ul><ul><li>Majority of performance appraisal systems </li></ul></...
Performance Appraisal  Methods <ul><li>Graphic Rating Scales  – rate worker on number of different dimensions by checking ...
<ul><li>Graphic Rating Scales  (continued) </li></ul><ul><li>Common Problems: </li></ul><ul><li>Halo Errors  – Overall imp...
<ul><li>Rank-Order  – rank all employees from best to worst on performance (ordinal scale) </li></ul><ul><li>Ex : </li></u...
<ul><li>Paired Comparison  – compare each employee to every other employee </li></ul><ul><li>Example: </li></ul>Performanc...
<ul><li>Forced Distribution  – Use normal curve to place workers into categories of performance </li></ul><ul><ul><li>Usef...
Performance Appraisal Methods using Specified Behaviors <ul><li>Critical Incidents  – Those behaviors that are particularl...
<ul><li>Weighted Checklists  – Takes critical incidents and weights each one according to importance </li></ul><ul><ul><li...
Weighted Checklist <ul><li>Position:  Secretary </li></ul><ul><li>Critical Incident   Scale Value </li></ul><ul><li>- Know...
Behaviorally Anchored Rating Scales BARS <ul><li>BARS  – Rating scale which uses specific behaviors as anchor points </li>...
Behaviorally Anchored Rating Scales BARS Example Position : Patrol officer Job Knowledge :  Awareness of procedures, laws,...
Behavioral-Observation Scales BOS <ul><li>BOS  – Supervisor rates employee on frequency of how often each critical inciden...
Performance Appraisals Other Factors <ul><li>Rater Training  – try to minimize errors such as leniency, halo, central tend...
Performance Appraisal Rater Motivation
Other Types of Appraisals <ul><li>Self Assessment  – appraise oneself on how well you think you are doing. </li></ul><ul><...
Performance Appraisal Follow-Up <ul><li>Post-appraisal interview with subordinate to discuss evaluation </li></ul><ul><li>...
Performance Appraisal Acceptance <ul><li>Seven things that contribute to employee acceptance of their evaluations as fair ...
Top 10 Military Performance Appraisal Comments <ul><li>Got a full 6-pack, but lacks the plastic thingy to hold it all toge...
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  1. 1. Chapter 7 Performance Appraisal INP3004/MAN3360 Dr. Steve
  2. 2. Performance Appraisals <ul><li>How do performance appraisals benefit the organization? </li></ul><ul><li>Help orgs make decisions about promotions and firing </li></ul><ul><li>Provide feedback to employees that serves to motivate or convince poor workers to leave </li></ul><ul><li>Improve commitment and satisfaction </li></ul><ul><li>Provide documentation in case an employee sues for wrongful termination </li></ul>
  3. 3. Performance Appraisal Development and Applications Job Analysis Criterion Development Performance Appraisal Personnel Training Wage Determination Placement Promotion Discharge Personnel Research
  4. 4. Performance Appraisal Applications <ul><li>Personnel Training – Determine employees strengths & weaknesses to determine need for training </li></ul><ul><ul><li>Diagnostic tool to help employee improve </li></ul></ul><ul><li>Determining Wages – Determine who should get a raise and how much </li></ul><ul><ul><li>This issue may interfere with employee development, employees may become defensive to protect salary </li></ul></ul><ul><ul><li>Possible solution: intermediate appraisals for diagnosis, and year end for wage determination </li></ul></ul><ul><li>Placement – Use P.A. data to re-assign workers to tasks they are best suited for </li></ul>
  5. 5. <ul><li>Promotion – Typically based on performance (P.A.), seniority, and available opening </li></ul><ul><ul><li>Good P.A. needed to legally defend choice of employee for promotion </li></ul></ul><ul><li>Discharge – Organization that fires an employee may be asked to defend appraisal system </li></ul><ul><ul><li>Should demonstrate firing was last alternative </li></ul></ul><ul><li>Personnel research – Provides database for determining level of performance expected </li></ul><ul><ul><li>Establish criteria for training and selection validities </li></ul></ul>Performance Appraisal Applications (continued)
  6. 6. Performance Appraisal Systems <ul><li>Performance Appraisal Systems should: </li></ul><ul><li>Be relevant to the job </li></ul><ul><li>Not be used to assess non-observable behavior </li></ul><ul><li>Not be overly vague </li></ul><ul><li>Not show adverse impact </li></ul><ul><li>Use job analysis for establishing criteria </li></ul><ul><li>Show construct validity </li></ul><ul><li>Be used by supervisors trained in its proper use </li></ul><ul><li>Provide employees opportunity to appeal evaluation and opportunity to improve before discharge </li></ul>
  7. 7. Performance Appraisal Employee Data Objective Data Personnel Data Judgmental Data Conceptual Criterion
  8. 8. Performance Appraisal Employee Data <ul><li>Objective data </li></ul><ul><ul><li>Ex: # cars sold, time to completion, efficiency, etc </li></ul></ul><ul><ul><li>Problem : Criterion contamination </li></ul></ul><ul><li>Conceptual Criteria : </li></ul><ul><li>Salesmanship </li></ul><ul><li>Actual Criteria : </li></ul><ul><li># cars sold/month </li></ul><ul><li>Criterion Contamination : </li></ul><ul><li>Geographic region worker is assigned </li></ul><ul><li>Criterion Deficiency : </li></ul><ul><li>total revenue </li></ul><ul><li>profit </li></ul><ul><li>markup </li></ul><ul><li>repeat customers </li></ul><ul><li>time spent on customer. </li></ul>
  9. 9. <ul><li>Personnel data </li></ul><ul><ul><li>Absenteeism - # of days missed from work </li></ul></ul><ul><ul><ul><li>How well does absences discriminate good from bad employee? </li></ul></ul></ul><ul><ul><ul><li>Are unexcused absences more harmful than excused? </li></ul></ul></ul><ul><ul><ul><li>Voluntary (requested time off) vs Involuntary (medical) </li></ul></ul></ul><ul><ul><li>Turnover – how long employee stays on job </li></ul></ul><ul><ul><ul><li>Voluntary (quit) vs Involuntary (discharged) </li></ul></ul></ul><ul><ul><ul><li>Why appraise length of time workers stay? </li></ul></ul></ul><ul><ul><ul><ul><li>May be a reflection of management, procedures, pay, etc </li></ul></ul></ul></ul><ul><ul><li>Accidents – cost to the company in terms of damage and time off work </li></ul></ul><ul><ul><ul><li>Typically used for truckers, machinists, production workers, etc. </li></ul></ul></ul><ul><ul><li>Problem : Criterion Deficiency </li></ul></ul><ul><ul><ul><li>Appear to be only measures of ‘poor’ performance </li></ul></ul></ul>Performance Appraisal Employee Data
  10. 10. <ul><li>Judgmental data – subjective ratings </li></ul><ul><ul><li>Majority of performance appraisal systems </li></ul></ul><ul><ul><li>Can be used in any type of job </li></ul></ul><ul><ul><li>May be correlated with other measures (objective or personnel) </li></ul></ul><ul><ul><li>Problem : Rater must be skilled at identifying relevant behaviors </li></ul></ul>Performance Appraisal Employee Data
  11. 11. Performance Appraisal Methods <ul><li>Graphic Rating Scales – rate worker on number of different dimensions by checking a box, circling a #, Likert scale, etc. </li></ul><ul><li>Examples: </li></ul>X X Job Knowledge: 5 4 3 2 1 Quality of Work: Superior Above Average Average Below Average Unacceptable
  12. 12. <ul><li>Graphic Rating Scales (continued) </li></ul><ul><li>Common Problems: </li></ul><ul><li>Halo Errors – Overall impression of worker biases individual ratings </li></ul><ul><li>Leniency Errors – Particularly hard grader (negative) or easy grader (positive) </li></ul><ul><li>Central Tendency Errors – Tendency to select the mid point of scale particularly when unsure </li></ul>Performance Appraisal Methods
  13. 13. <ul><li>Rank-Order – rank all employees from best to worst on performance (ordinal scale) </li></ul><ul><li>Ex : </li></ul><ul><li>Sally </li></ul><ul><li>Charlie </li></ul><ul><li>Lucy </li></ul><ul><li>Linus </li></ul><ul><li>PigPen </li></ul><ul><li>Problems : </li></ul><ul><li>Employee rankings are relative to each other rather than a standard. </li></ul><ul><li>Difficult with large number of workers </li></ul>Performance Appraisal Methods
  14. 14. <ul><li>Paired Comparison – compare each employee to every other employee </li></ul><ul><li>Example: </li></ul>Performance Appraisal Methods           Lucy – 3 PigPen – 2 Linus – 3 Charlie - 0 Sally – 2 <ul><li>Problem: # comparisons = n(n-1) / 2 </li></ul>Sally-Charlie Sally-Lucy Sally-Linus Sally-PigPen Charlie-Lucy Charlie-Linus Charlie-PigPen Lucy-Linus Lucy-PigPen Linus-PigPen
  15. 15. <ul><li>Forced Distribution – Use normal curve to place workers into categories of performance </li></ul><ul><ul><li>Useful when large number of workers </li></ul></ul><ul><ul><li>Forces distribution to be normal, so that most workers are average </li></ul></ul>Performance Appraisal Methods Problem : No reason to believe distribution to be normal Poor performers are weeded out
  16. 16. Performance Appraisal Methods using Specified Behaviors <ul><li>Critical Incidents – Those behaviors that are particularly important for doing the job </li></ul><ul><ul><li>Supervisor keeps a running list of employees’ critical incidents as they relate to various job-related behaviors such as job knowledge, decision making, leadership, etc. </li></ul></ul><ul><ul><li>Used mainly as a diagnostic tool </li></ul></ul><ul><ul><li>Examples: </li></ul></ul><ul><ul><li>“ Failed to complete report” </li></ul></ul><ul><ul><li>“ Decision to use fluorescent bulbs instead of incandescent saved company $600 on year’s electric bill” </li></ul></ul>
  17. 17. <ul><li>Weighted Checklists – Takes critical incidents and weights each one according to importance </li></ul><ul><ul><li>SMEs list of critical incidents from good to bad for completing the job. </li></ul></ul><ul><ul><li>Supervisor then uses scale to identify behaviors worker engaged in, then computes score </li></ul></ul>Performance Appraisal Methods using Specified Behaviors
  18. 18. Weighted Checklist <ul><li>Position: Secretary </li></ul><ul><li>Critical Incident Scale Value </li></ul><ul><li>- Knows the difference between correcting the +6.5 </li></ul><ul><li>grammar in the boss’s letter and correcting writing style </li></ul><ul><li>Knows various postal rates and mails material in +4.2 </li></ul><ul><li>a cost-efficient manner </li></ul><ul><li>Knows what typing is to be done on plain vs. company letterhead +3.1 </li></ul><ul><li>Keeps a running count on the use of office supplies +2.5 </li></ul><ul><li>Opens all mail whether or not it is marked “confidential” -1.9 </li></ul><ul><li>Confuses priorities on typing that needs immediate attention -3.8 </li></ul><ul><li>and projects that have no established deadlines </li></ul><ul><li>Files away correspondence so that it can rarely be found for -5.2 </li></ul><ul><li>later reference </li></ul><ul><li>Leaves many mistakes in typing from failing to proofread the -7.1 </li></ul><ul><li>typed copy </li></ul>
  19. 19. Behaviorally Anchored Rating Scales BARS <ul><li>BARS – Rating scale which uses specific behaviors as anchor points </li></ul><ul><li>Five step development process: </li></ul><ul><li>Create list of critical incidents </li></ul><ul><li>Group incidents into meaningful dimensions </li></ul><ul><li>Sort incidents (assess goodness of fit in groups) and discard inconsistent ones </li></ul><ul><li>Rate remaining incidents on representativeness of the dimension (those with low inter-rater agreement are discarded) </li></ul><ul><li>Incidents are placed on scale according to their rating </li></ul>
  20. 20. Behaviorally Anchored Rating Scales BARS Example Position : Patrol officer Job Knowledge : Awareness of procedures, laws, and court rulings and changes in them Could be expected to follow correct procedures for evidence preservation at scene of crime Could be expected to be fully aware of recent court rulings and conduct him/herself accordingly Could be expected to know s/he could break down locked door while in hot pursuit and thus arrest fleeing suspect Could be expected to occasionally have to ask other officers about points of law 6 8 7 5 9 4 3 2 1 Very High Moderate Very Low Could be expected to misinform public on legal matters through lack of knowledge Could be expected to search suspect’s car two hours after suspect was booked
  21. 21. Behavioral-Observation Scales BOS <ul><li>BOS – Supervisor rates employee on frequency of how often each critical incident occurs </li></ul>Position : Student <ul><li>Comes to class on time </li></ul><ul><li>Asks intellectual questions </li></ul><ul><li>Does not interrupt class </li></ul><ul><li>Takes detailed notes </li></ul>Never Seldom Sometimes Generally Always 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
  22. 22. Performance Appraisals Other Factors <ul><li>Rater Training – try to minimize errors such as leniency, halo, central tendency, etc. </li></ul><ul><ul><li>Perhaps videotaped performance with known rating (est by SMEs) and have rater match ratings to expert opinion </li></ul></ul><ul><li>Rater Motivation – provide motivation for giving accurate ratings </li></ul><ul><ul><li>Are supervisor’s rewards tied to performance of subordinate ratees? </li></ul></ul>
  23. 23. Performance Appraisal Rater Motivation
  24. 24. Other Types of Appraisals <ul><li>Self Assessment – appraise oneself on how well you think you are doing. </li></ul><ul><ul><li>Likely positive leniency </li></ul></ul><ul><ul><li>People generally acknowledge their weaknesses when not tied to monetary considerations </li></ul></ul><ul><ul><li>Can help diagnose training needs </li></ul></ul><ul><li>Peer Assessment – evaluate co-workers </li></ul><ul><ul><li>Peer Nomination – nominate specified # of top coworkers </li></ul></ul><ul><ul><li>Peer Ratings – rate co-workers on various dimensions </li></ul></ul><ul><ul><li>Peer Rankings – rank co-workers from top to bottom </li></ul></ul>
  25. 25. Performance Appraisal Follow-Up <ul><li>Post-appraisal interview with subordinate to discuss evaluation </li></ul><ul><li>Identify both strengths and weaknesses </li></ul><ul><li>Set goals for improvement (motivate) </li></ul><ul><ul><li>Factors affecting motivation of appraisal </li></ul></ul><ul><ul><ul><li>Does employee agree with assessment? </li></ul></ul></ul><ul><ul><ul><li>Does employee approve and accept the goals? </li></ul></ul></ul>
  26. 26. Performance Appraisal Acceptance <ul><li>Seven things that contribute to employee acceptance of their evaluations as fair </li></ul><ul><li>Was input solicited from employee and used in appraisal? </li></ul><ul><li>Was there 2-way communication in feedback interview? </li></ul><ul><li>Was there opportunity for employee to challenge evaluation? </li></ul><ul><li>Was rater well-acquainted with employee’s work? </li></ul><ul><li>Are performance standards applied uniformly? </li></ul><ul><li>Are ratings based on actual performance (not personality)? </li></ul><ul><li>Are salary & promotion decisions based on ratings? </li></ul>
  27. 27. Top 10 Military Performance Appraisal Comments <ul><li>Got a full 6-pack, but lacks the plastic thingy to hold it all together </li></ul><ul><li>This man is depriving a village somewhere of an idiot </li></ul><ul><li>He has the wisdom of youth and the energy of old age </li></ul><ul><li>Wheel is turning but the hamster is dead </li></ul><ul><li>Was left on the tilt-whirl too long as a baby </li></ul><ul><li>If he were any more stupid, he’d have to be watered twice a week </li></ul><ul><li>She sets low personal standards and consistently fails to achieve them </li></ul><ul><li>So dense, light bends around him </li></ul><ul><li>Got into the gene pool while the lifeguard wasn’t watching </li></ul><ul><li>A prime candidate for natural de-selection </li></ul>
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