Introduction to Performance Appraisal
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Most people dread performance appraisals. This lesson is an introduction to the process in hopes of making your appraisal sessions useful and productive.
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Introduction to Performance Appraisal
- 1. Evaluating Employee Performance The Appraisal Process Duane Lakin, Ph.D. Lakin Associates
- 2. LEARNING OBJECTIVES ✤ Understand why people do not like performance appraisals. ✤ Know the role the rater plays in appraisals. ✤ Recognize there is no SINGLE approach to giving an appraisal. ✤ Know how to improve the chances that a review will be received in a positive manner. ✤ Understand the conflict of linking a performance appraisal with pay. ✤ Know the legal requirements of a good performance review. ✤ Discover some new ideas and trends on evaluating performance.
- 3. Discuss: It is often said: It is a failed performance measurement system if the individual is surprised by an appraisal. Agree or disagree? Why?
- 4. Few people like performance reviews “At all levels in the organization, there is often the feeling that appraisals are done because they have to be done but that nothing productive ever comes out of the process.” (DeNisis & Sonesh, 2011)
- 5. –from NPR, September 28, 2016 “Only 4 percent of HR managers think their system of assessing employees is effective at measuring performance.” Few people like performance reviews “90% of performance systems do not work .” –from SHRM Survey
- 6. Traditional appraisal process ❖ Done annually ❖ Supervisor prepares written evaluation based on information gathered from coworkers, customers, performance data, observation, and any other data available. ❖ Meets with employee to review job description, performance against description, and organization goals ❖ Supervisor addresses the employee’s career progress and future opportunities and development ❖ Information goes to higher management for promotion/salary decisions
- 7. REALITIES of Performance Appraisal ❖ Exists even when officially doesn’t exist ❖ Always has consequences for participants ($) ❖ Accurate ratings of increasingly complex jobs become very difficult ❖ People judging people: What could go wrong? ❖ Takes time and effort and money to do well
- 8. Muchinsky, 2012 1. Justify organization’s decisions on pay, promotions, discharges 2. Enhance individual decisions on career direction and development of future strengths 3. Affect employees’ view of and attachment to the organization 4. Provide rational, legally defensible basis for personnel decisions So why do appraisals?
- 9. Appraisal overview: Have a structured conversation ❖ What is your goal for meeting? ❖ Limit your focus to 3-5 things ❖ Review role, goals and success in achieving goals ❖ Be specific about behaviors or outcomes, not character traits How is it being received? (The meaning of a communication is how it is received!)
- 10. ❖ Recognize POSITIVES and how to keep building on those positives ❖ If there is a problem, explain why X is a problem, where you’ve seen it ❖ Ask about person’s expectations & self-assessment of X How is it being received? Appraisal overview: Have a structured conversation
- 11. ❖ Make it pleasant as possible, point out things that you have seen that are positive ❖ Discuss strengths as resources to help accomplish action plan ❖ Talk about how to use strengths more frequently and powerfully (Appreciate Inquiry) to benefit performance Appraisal overview: Have a structured conversation
- 12. ❖ Be an active listener ❖ Don’t say “BUT…” Refer to goals, outcomes that fell short. “…and let’s talk about these. They didn’t quite hit the mark, did they?” ❖ If consensus that X is a problem, brainstorm solutions ❖ Make an action plan, set a re-evaluate date, use SMART goals How is it being received? Appraisal overview: Have a structured conversation
- 13. GENERAL REACTIONS TO APPRAISALS Is it fair? Did I learn something? Is it credible (rater score)? Does it matter (pay, bonus, commitment to new goals and/or behavior change)?
- 14. To improve satisfaction… ❖ Must be clear ❖ Must be understandable ❖ Must be seen as fair Necessary for FEEDBACK ACCEPTANCE
- 15. Must not threaten self-concept Must not be perceived as impossible Must not be continually negative… …or performance will suffer. To improve satisfaction…
- 16. Sandwich technique or no? NO!!
- 17. Avoid appraisal cliches • “You need to improve your productivity.” • “You get along well with others” • “Your skills are not up to par.” • You’re not trying to do your best” • You’re a pleasure to supervise.” • You have to prove yourself before I can give you any more responsibility.”
- 19. MOST IMPORTANT ASPECT OF CONDUCTING AN APPRAISAL:
- 20. Adapting feedback for Enneagram types Ones…start with a sincere compliment; be accurate and detailed; avoid words that imply right/wrong; help One feein control of the outcome Twos…Sound friendly and optimistic; make certain there is absolute privacy; give details only if asked; reinforce the value of positive relationships; emphasize impact of behavior on others; make it clear you support the Two; reinforce your positive regard for the person Threes…Find convenient time & place; frame process as way to help the person be more successful; get person’s agreement on examples used; reinforce person’s desire for goal achievement; highlight difference between intention and impact; use Three’s competitiveness; keep conversation upbeat; take a problem-solving approach; be concrete and practical; make it clear you trust the Three to take positive action following feedback. Compiled from Ginger Lapid-Bogda, Bringing out the Best in Yourself at Work
- 21. Adapting feedback for Enneagram types Fours…Develop rapport; use personal pronouns (I, we, me); do not accuse the person of anything; be clear and direct and honest; ask about the person’s feelings; listen until person is through talking; make it clear you understand the person; show your empathy; make Four feel the choice of response is his/hers to make; maintain attention to the Four’s feelings throughout the conversation. Fives…State clear expectations for the time required for the meeting; be specific and fact-based; give space for Five to process what is said; define what is to be discussed; give time for Five to reflect; explain rationale behind actions you are recommending; maybe do a two-part meeting Sixes…Be concrete and specific; reassure about the magnitude of the problem; give tentative suggestions early on to encourage a positive view of outcome; help prevent “catastrophizing”; make it clear you support the Six; assure the Six that his/her concerns are normal; provide several choices of action for the Six to choose from. review data several times as needed. Compiled from Ginger Lapid-Bogda, Bringing out the Best in Yourself at Work
- 22. Adapting feedback for Enneagram types Sevens…Generate ideas from Seven first; use Seven’s ideas whenever possible; keep attitude upbeat; keep Seven thinking through problem and frame the issue in a larger context; don’t act as Boss; use positive reinforcement; give choice of options. Eights…Be brief, direct, and truthful; give the big picture; let Eight respond as often as he/she wishes; help Eight to focus on what is and is not true; indicate your belief in the Eight’s ability to handle the situation; demonstrate that you are not taking sides and will be fair; subtly indicate there is support for Eight; let Eight feel in control of meeting and keep hour comments straightforward. Nines…Develop rapport; be as non-judgmental as possible; try to elicit the Nine’s t thought process; try to see the situation from multiple points of view; add your ideas but do not demand that the Nine take a particular action; help the Nine feel comfortable with the action he/she decides to take Compiled from Ginger Lapid-Bogda, Bringing out the Best in Yourself at Work
- 23. SIOP: recommended changes to improve performance appraisals ❖ Set frequent, shorter scope objectives that are CHALLENGING and MEANINGFUL ❖ Give feedback on an ongoing basis…’teachable moments’ ❖ Reduce documentation, written self-assessments ❖ Reduce or eliminate ratings ❖ Change annual review to annual career conversation
- 24. ❖ Must be objective, not subjective ❖ Must be based on job analysis and criteria of “job performance” ❖ Best if raters have been trained ❖ Best if rating based on observable behaviors, not traits ❖ Best if within control of the person rated ❖ Best if relates to specific functions, not overall assessment of an individual (From Malos, 1998) Appraisal overview: Summary
- 25. Last thoughts on Performance Appraisal How do you appraise employees you never see or don’t see regularly? How do you assess employees in cultures where such interactions are differently defined and surveys viewed differently? What if measurement creates undue stress on individuals, as seen in call centers? Data says that most managers dislike performance appraisals. Why might that be? What could be done to improve this situation? (Holman, et al, 2002?)
- 26. Summary of Evaluating Employee Performance ✤ Most people do not like appraisals ✤ Fairness is critical in appraisals ✤ An appraisal should be like a good conversation ✤ No one should ever be surprised by the results of an appraisal ✤ Ideally, appraisals should be separated from pay considerations, but this rarely happens ✤ Appraisals should focus on behaviors and outcomes, not traits or the whole person (global assessment) ✤ The appraisal process has cultural risks…must be adapted to respect culture of individuals involved
Editor's Notes
- I/O psychologists typically get involved in this process, most commonly to train managers and supervisors how to do a better job. The reason: NO ONE LIKES THE TYPICAL APPRAISAL PROCESS Can be so-called “formal” appraisal…usually tied in with yearly raises or bonuses Can be in response to a specific problem…fierce conversations Most critical element?/\????? Relationship between the individuals involved. Key predictor of perceived “FAIRNESS” of process. (text) But even that is not enough: Enneagram experience!!! 9 views, ranging from OK, to well done, to ‘I would have walked out of that meeting”!!!!
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- Why????? Feedback should be frequent; outcomes should be recognizable to all; individual should be encouraged to self-monitor results.
- Too little linkage between individual appraisals and organizational performance is seen. If they can be aligned, greater acceptability of the process will occur. Combine staffing alignment and succession planning, performance feedback, goal setting and incentives….Good idea but not much being done to test impact.
- Performance appraisals often DAMAGE THE REPUTATION OF THE HR DEPARTMENT…seen as not in touch, not helpful, disruptive, etc.
- Talked about this earlier….Purpose is key. Often determines what is measured, how it is measured, attitude of rater, and especially attitude of person being rated. Develop: for future or to fix existing problem? To decide who gets training? Many “why’s” in this heading
- What might be some limitations: Supervisors resist, time consuming; no relationship to actual development and/or pay; resent peer ratings; process seen as waste of time, others?
- DEL and Casio
- Example: Goal was to choose and test new software for tracking shipments. IT was too busy to install for testing. Who’s fault?
- The bottom two are the official reason for feedback sessions. The top: usually the REAL reason. Some people seek “attitude” change…how successful do you suspect that is??? Tend to be negative focused…what needs improvement…so called “deficit” model. Positive psychology and appreciative inquiry change this model.
- More on this later when we look at individual differences and appraisal acceptance.
- If no consensus, then data is bad..not clear.
- And herein lies the issue. By asking “WHO” the appraisal is blaming rather than problem-solving or seeking performance improvement. “WHY” or “HOW” did this happen…that is the best approach, and within the context of appraisals, it invites DISCUSSION rather than JUDGMENT. DEL
- Yet we keep doing them…usually in the same way as the year before.
- 1st focus on behaviors and related outcomes. Purpose is developmental—how to improve performance OR recognize good performance QUALITATIVE…Then later translate into dollars once budgets are received and you know how much you have to work with. 2nd focused on measurable results only against goals, all quantitative.?? Can you determine RELATIVE CONTRIBUTION TO THE ORGANIZATION??? NOT; when employee has little control over outcome…food server measured against profit of restaurant. What WOULD be a good outcome measure? It DEPENDS….Would BEHAVIOR or TRAIT appraisal be best? (Trait when work env. constantly changing. Behavior..if can be measured.,critical incident, for instance?) HOW: clear bonus/goal achievement rubric; less clear re: salary increases…can still relate to overall evaluation but in different settings and AFTER appraisal discussed.
- This is the kind of question a researcher might wonder about? Practitioners know better. Can you see a couple of things wrong with this? Overall Dow mentality causing swings (’08 for instance)….buy-backs, similar manipulation of stock price…stock price almost never relates to short-term performance…stock price is a psychological measurement…stock price can be anticipated measure rather than actual reflection of performance…stock price is manipulated by hedge funds and short-term automated systems, etc. etc. ALSO: how can an individual relate his/her performance to something as distant as stock price??? That is what is wrong with most GROUP goals…how do I impact what the group does in most cases? Suppose IT simply doesn’t respond to my need for a new software system…is that my performance; yet my meeting my goal depends on that software being installed. ???
- It is PERCEPTION…even if the real money involved is minuscule. IT will be perceived as significant. (“If I had received a better rating, my pay increase would’ve been MORE…HUGE…ENORMOUS..the more I think about it, the bigger it gets.”)
- How person perceives the rater…credibility and raters ability to influence rewards…is big determinant as to whether the person being appraised understands, sees info as correct, and is willing to consider behavior change. (Ilgen, et al, 1979)
- keep in mind: Employee may NOT agree, even if the meeting is nice and people like each other! Much more on this later (ENneagram)
- Mel: imagine this year has been a movie and you are editor…what parts to highlight in a trailer, to cut and delete, to change with careful editing to make them better? How was as a producer?
- Otherwise, ratings not seen as FAIR. FAIRNESS is an absolute clear necessity if process is to impact performance. Called: FEEDBACK ACCEPTANCE Dissatisfaction can result in anger and impact employee attitudes toward work and supervisors. Also more satisfied with appraisals that are aimed toward improvement rather than being critical.
- Yelling at someone…You are SO STUPID…actually makes someone stupid. In that it reduces the functioning of the cerebral cortex…moves brain into FLIGHT mode—-signals to outer shell of human (muscles) rather than thinking— it triggers a processes that bypass cognitive processing. Can take as long as a day or more to recover. !!! Want someone to get really useless? Yell at them!
- Has NOT helped solve those problem listed.
- Versus Tell—and-Sell…where supervisor tells, tries to convince someone about results and hopes employee sees benefit.
- Yelling at someone…You are SO STUPID…actually makes someone stupid. In that it reduces the functioning of the cerebral cortex…moves brain into FLIGHT mode—-signals to outer shell of human (muscles) rather than thinking— it triggers a processes that bypass cognitive processing. Can take as long as a day or more to recover. !!! Want someone to get really useless? Yell at them!
- What is it? People learn to ignore positives and wait for that “BUT”. Not recommended.
- Remember: what you write may be seen by others!
- I did over 300 360’s with CEO. Only once did I get a call from a manager: ‘ARE YOU SURE HE WON”T KNOW WHO SAID WHAT?”…needless to say, ratings were bad. I won’t report scores unless I have at least 4 people rating someone…protects identity. I also won’t report scores with a big standard deviation…distorts actual message of rating. I only report “big range”…meaning person is not consistent on whatever behavior is being rated. Important info, too. Choice of raters…often boss picks a few; ratee picks a few. My associate did her PHD thesis on follow-up of 360 with CEOs. When they did follow-up work, improvement was evident. Without it, improvement was lacking.
- SMART: Specific, Measurable, achievable, results based, time specific (or realistic/relevant, attainable..lots of variations) Some advise to ask employee to bring in examples of results from time period under consideration. Good priming, but can also
- This is not on any test…but it may be the most important part of this lesson. Different people need a different approach when you are giving feedback. You must be flexible and respect those individual differences. I watched a demonstration of a performance review with all 9 Enneagram types observing. When asked “how did it go”, responses went from “Great” to “I would have stood up and walked out the door, I was so offended.” !!! Different strokes is key to leading a successful performance appraisal session with someone.
- story: Wendell and Tim….oil and water
- Ran a “text analysis” for themes! Only IBM. But idea is to change context of measurement toward future. Also, short-term focus enables adjustment of goals as needed BY BUSINESS. GE has done the same…old method ended up doing ratings on goals that were no longer relevant to THE BUSINESS…business changes too rapidly today in some industries to make MBOs and yearly appraisals meaningful.
- Problem if knowledge is lacking. Ex from Landy: Frontier Airlines mechanic, reported problems with plane, was ignored, tossed a wheel chock into an engine to keep plane from taking off! Arrested, no charges. (but I wonder if he kept his job!) Ex: Train stalled in Chicago subway for an hour. some riders knocked out a window and left the train. Stranded 1000 people on other trains as system was shut down. Proactive? or STUPID? In modern factories, operators are given power to shut down the line if something is wrong. Suppose they are just tired? or upset at supervisor? Proactive or sabotage? New research area…for you to explore, I hope.
- A hot research topic since 2000. Good test..James, et al 2008…Test of Conditional Reasoning is actually a test of aggressive tendencies. Research has looked at personality conditions but nothing firm yet. N: Grandiocity, pride, egotism, lack of empathy; M: manipulation, exploitation, P: antisocial, impulsive, selfish, lack of remorse. Not much has been researched about how to best roll these into a performance appraisal, because appraisals are about PERFORMANCE and OUTCOMES.
- Time limit important to allow people to schedule the meeting and be fully prepared to give it uninterrupted attention. Good idea? Not sure yet.
- BUT: I heard a well-known I/O psychologist (at METRO) talking about an also-well-known company that had eliminated performance reviews. He was doing a project with them and discovered that performance reviews were being done everywhere…underground. Not officially but still throughout the company. How else could bonuses and promotions be determined? It was just hidden now. GE is rumored to already have moved back into a form of performance reviews again. Simply more frequent. In practice…they still do performance reviews. THEY MUST. They are only changing how, how often, and what is being appraised.
- No data yet on how this is working long term.
- I’ll be talking more about Elliott Jaques later…he’s a controversial figure in organizational psychology…but his ideas are very interesting. Evaluating managers on quality and quantity of communication. ???? Rating still often used but with much greater data! And more frequently discussed.
- Goals, supposedly, no longer top down. Start with individual goals that are challenging and meaningful to the individual…solution to “ENGAGEMENT” it seems to me. Evaluating managers on quality and quantity of communication. ???? Rating still often used but with much greater data! And more frequently discussed.
- A hedge fund company records EVERY conversation, every meeting, everything and makes the data available for evaluation. !!! Yipes! How do you keep people from being paranoid? From figuring out how to game the system? Challenge for next generation of I/O psychologists!!!
- Like a “diary” only online and crowd-sourced…open to all, real time Can report top 10% of employees with this data!!
- Task: KPI…key performance indicators… Contextual…communication, social interaction, support of team, broader scope (“How did you help promote achievement of company goals or hinder them?”)
- Beyond the scope of this class..but you need to know that this is a critical link from the concept of appraisal to the desire to impact organizational performance. Same holds true for ORGANIZATIONAL APPRAISAL…a different course…The “o” in I/O psychology.
- equity….making sure pay is distributed fairly; comparable pay for comparable work…regardless of performance!!! Companies following Deloitte model report large improvement in “engagement” and quality of conversations about performance between employees and managers. (Neuroleadership Institute, 2015)
- Aren’t they by definition: outside the job description? Can they actually be a source of rater bias and impact the rating someone gets? Research seems to support this. Is is fair for a rater to expect these behaviors? Shouldn’t they then be in the job analysis/description?
- Uniqueness of adverse impact laws: COMPANY IS GUILTY UNTIL PROVEN INNOCENT! negligence…breach of duty to conduct appraisals Def: untrue, unfavorable
- Whew. As I said, when money is involved….don’t get sloppy.
- Fact: whenever money is involved, lawyers are involved. Simple as that. Most critical for terminating, but can also get sued for not giving fair raise, for bias in ratings that impacted salary/bonus. Whenever money is involved, legal can or has been involved. Needs to be connected:
- ESSAY QUESTION CHOICE?????..use some concept from class as reference, justification for your position/argument. ANSWER: IT DEPENDS…but we don’t yet know what it depends on. Hopefully, some of you can give some answers some day. Virtual offices, multi-national offices. It’s estimated that at least 45 MILLION workers work remotely at least one day per month.
- Less likely to align personal goals with org. goals. Cascio has good test questions. p. 109