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schultz10e_ch05.ppt
- 1. •Schultz & Schultz 10e •1
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Psychology and Work Today
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- 2. •Schultz & Schultz 10e •2
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Learning Objectives
After reading this chapter, you should be able to:
• Define performance appraisal and specify related HR
functions
• Describe how to ensure appraisal systems comply with EEOC
guidelines
• Understand the nature of opposition to appraisal systems from
labor unions, employees, and managers
• Explain and provide examples of the two approaches to
measuring performance
• Identify the techniques used to evaluate managerial
performance
• Describe and control for sources of rater error
• Understand how to improve the effectiveness of performance
appraisal systems and how to best conduct the post-appraisal
interview
- 3. •Schultz & Schultz 10e •3
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
What Is Performance Appraisal?
• Performance Appraisal (PA) is the periodic,
formal evaluation of employee performance
for the purpose of making career decisions
- 4. •Schultz & Schultz 10e •4
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Fair Employment Practices
• EEOC guidelines apply to any selection procedure
used for making employment decisions
• Hiring
• Promotion
• Demotion
• Transfer
• Layoff
• Discharge
• Early retirement
• Performance appraisal procedures must be
validated
- 5. •Schultz & Schultz 10e •5
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Protecting Against Bias Claims
• Personnel decisions should be based on a
well-designed performance review program
that includes formal appraisal interviews
• Examples
• Racial bias
• Age bias
- 6. •Schultz & Schultz 10e •6
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Criteria For Compliance
• Performance appraisals should be based on job
analyses to document specific critical incidents
and behaviors related to job performance
• Appraisers should focus on actual job behaviors
rather than personality characteristics
• Supervisors should be well trained
• Notes, records, and documentation should be
retained
- 7. •Schultz & Schultz 10e •7
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Why Conduct PA?
• Validation of selection techniques and
criteria
• Make decisions about that person’s future
with the organization
• Identify training requirements
• Employee improvement
• Pay, promotion, and other personnel
decisions
- 8. •Schultz & Schultz 10e •8
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Critics Of Performance Appraisal
• Labor unions
• Represent approximately 11% of workforce
• Prefer seniority rather than assessment
• Employees
• Prefer not to be told of deficiencies
• Managers
• Dislike playing the role of judge
• Professors
• See “Newsbreak” on p. 108
- 9. •Schultz & Schultz 10e •9
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Performance Appraisal Techniques
• Objective Methods
• Output measures
• Computerized performance monitoring
• Job-related personal data
• Subjective (Judgmental) Methods
• Written narratives
• Merit rating techniques
- 10. •Schultz & Schultz 10e •10
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Output Measures
• Quantity, quality, job experience, and other
environmental factors must be considered
• Job-related personal data
• Computerized performance monitoring
• Computers can be programmed to monitor employee’s
on the job activities
• Attitudes toward computer monitoring depend on how
the data are used
• Favorable if used for development
• Found to be stressful
- 11. •Schultz & Schultz 10e •11
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Computerized Monitoring
• Advantages
• Immediate and objective feedback
• Reduces rater bias
• Helps identify training needs
• Facilitates goal setting
• May contribute to increases in productivity
• Disadvantages
• May be considered an invasion of privacy
• May increase stress
• May reduce job satisfaction
• May lead to focus on quantity at the expense of quality
- 12. •Schultz & Schultz 10e •12
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Written Narratives
• Subjective (judgmental) PA technique
• Brief essays describing employee
performance
• More prone to personal bias than merit rating
techniques
• Can be ambiguous and misleading
• Sometimes this is intentional to avoid giving
negative appraisal
- 13. •Schultz & Schultz 10e •13
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Merit Rating Techniques
• Performance rating scales
• Ranking
• Paired-comparison
• Forced distribution
• Forced choice
• Behaviorally anchored rating scales (BARS)
• Behavioral observation scales (BOS)
• Management by objectives (MBO)
- 14. •Schultz & Schultz 10e •14
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Performance Rating Scales
• Most frequently used technique
• Supervisors indicate how or to what degree a
worker possesses a relevant job characteristic
1 2 3 4 5
Poor Average Excellent
X
- 15. •Schultz & Schultz 10e •15
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Ranking Technique
• Supervisors list the workers in order from
highest to lowest
• Simple to do
• Difficult when there are many employees to
evaluate
• Provides less evaluative data than rating
• Doesn’t allow for listing of similarities
• Doesn’t indicate the extent of difference
between best and worst ratees
- 16. •Schultz & Schultz 10e •16
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Paired-Comparison Technique
• Compares the performance of each worker with that
of every other person in the group
• Number of comparisons
• (N * (N - 1)) / 2
• Advantage
• Accurate and judgmental process is simple
• Disadvantage
• Many comparisons when dealing with a large number of
employees
- 17. •Schultz & Schultz 10e •17
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Forced-Distribution Technique
• Supervisors rate employees according to a
prescribed distribution of ratings, similar to grading
on a curve
• Superior 10%
• Better than average 20%
• Average 40%
• Below average 20%
• Poor 10%
• Predetermined categories may not be fair if there is
small range of scores
• All ratees in group may be above average for their job
• Hard to compare across groups
- 18. •Schultz & Schultz 10e •18
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Forced-Choice Technique
• Raters are presented with groups of descriptive
statements and are asked to select the phrase in
each group that is most descriptive of the worker
being evaluated.
• Example: Choose one of the following:
• Is reliable
• Is agreeable
• One statement is indicative of good performance
but both are equal in social desirability
• More costly to develop than other merit rating
methods because each item must be validated
- 19. •Schultz & Schultz 10e •19
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Behaviorally Anchored Rating Scales
(BARS)
• Evaluate performance on basis of behaviors
important to success or failure on job
• Appraisers rate critical employee behavior
• Critical-incident behaviors are established
• These behaviors are used as standards for appraising
effectiveness
• The BARS items can be scored objectively by indicating
whether the employee displays that behavior
• Meet federal fair employment guidelines
- 20. •Schultz & Schultz 10e •20
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
BARS for a CEO
- 21. •Schultz & Schultz 10e •21
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Behavioral Observation Scale (BOS)
• Appraisers rate the frequency of critical
employee behaviors
• The ratings are assigned on a five point scale
• The evaluation yields a total score
• As with BARS, BOS meets federal fair
employment standards because it is based
on actual behaviors required for
performance
• Research has not found consistent support
for the superiority of either BARS or BOS
- 22. •Schultz & Schultz 10e •22
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Management By Objective (MBO)
• Involves mutual agreement between employee and
manager on goals to be achieved in a given period
• Two phases
• Goal setting
• Performance review
• Employees may feel pressured to set higher goals
• MBO technique satisfies fair employment
guidelines
• Has been found to increase motivation and
productivity
- 23. •Schultz & Schultz 10e •23
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Evaluating Managers
• Assessment centers
• Evaluation by superiors
• Evaluation by colleagues
• Peer ratings tend to be more favorable for career
development than for promotion decisions
• Self-evaluation
• Self-ratings suffer from leniency
• Subordinate evaluation
• Effective in developing leadership & leads to improved
performance
• 360 degree feedback (multisource)
- 24. •Schultz & Schultz 10e •24
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Common Sources of Rating Error
• Halo effect
• Constant or systematic bias
• Most-recent-performance error
• Inadequate information error
• Average rating or leniency error
• Rater’s cognitive processes
• Rater personality
• Role conflict
• Impression Management
- 25. •Schultz & Schultz 10e •25
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Halo Effect
• The tendency to judge all aspects of a person’s
behavior or character on the basis of a single
attribute
• Positive
• Negative
• Solution: Use multiple raters
• Research indicates halo may not be as pervasive
as originally thought
• Does not appear to reduce overall rating
• Often undetectable
• May be illusory
- 26. •Schultz & Schultz 10e •26
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Constant or Systematic Bias
• Based on the different standards used by
raters
• Hard rater
• Easy rater
• Solution: Require distribution of ratings
according to the normal curve
Constant or systematic
style of rating
- 27. •Schultz & Schultz 10e •27
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Most-Recent-Performance Error
• A rater evaluates a worker’s most recent job
behavior rather than behavior throughout the
period since last appraisal
• False high rating
• False low rating
• Solution: Require more frequent
performance appraisals
- 28. •Schultz & Schultz 10e •28
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Inadequate Information Error
• Supervisors rate subordinates even though
they don’t know enough about them to rate
them fairly or accurately
• Solution: Train raters and allow them to
decline to rate those they don’t know well
- 29. •Schultz & Schultz 10e •29
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Average Rating or Leniency Error
• Average rating error
• The rater is unwilling to assign a very high or very low
score
• Leniency error
• Rater is unwilling to assign other than a favorable
score
• Problem:
• Does not reflect the range of differences that exist
among workers and provides no useful data
• Solution:
• Maintain a record of supervisor rating tendencies
- 30. •Schultz & Schultz 10e •30
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Rater’s Cognitive Processes
Four cognitive variables can influence performance
evaluations:
1. Category structures
• How workers are categorized - e.g., team player; similar to
halo effect
2. Beliefs about human nature
3. Interpersonal affect
• One’s feelings toward the other person
• Susceptible to impression management techniques
4. Attribution
• Raters attribute positive or negative explanations of
employee behavior
- 31. •Schultz & Schultz 10e •31
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Rater Personality
• High self-monitors present themselves in whatever
ways they believe best fits the social situation
around them
• High self-monitors gave more lenient and less
accurate ratings than did low self-monitors
(Jawahar, 2001)
• When both members of a peer rating team scored
high on conscientiousness, they gave each other
significantly higher ratings than those pairs who
shared low conscientiousness scores (Antonioni &
Park, 2001)
- 32. •Schultz & Schultz 10e •32
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Role Conflict
• Disparity between job demands and the
employee’s personal standards for right and wrong
• Those high in role conflict tend to rate employees
higher than justified in evaluations to
• Establish control over work situation
• Avoid confrontation with subordinates
• Obtain subordinate gratitude and goodwill
- 33. •Schultz & Schultz 10e •33
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Impression Management
• Involves behaving in ways designed to present
ourselves to others in a positive way
• Ingratiation (ch. 3)
• Self-promotion (ch. 3)
• Political Skill - The ability to understand others and
to use that understanding to influence them in ways
designed to support the attainment of our goals
• Harris, Kacmar, Zivnuska, & Shaw (2007) found that
those high in political skill were much more likely to be
perceived by their supervisors as not using ingratiation
behaviors to curry favor for personal gain
- 34. •Schultz & Schultz 10e •34
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Improving Performance Appraisals
• Training
• Create awareness of normal distribution of abilities
and skills
• Develop ability to define objective criteria for work
behaviors
• Providing feedback to raters
• 90% of managers said feedback influenced second
set of ratings (Davis & Mount, 1984)
• Subordinate participation
• Led to increased employee trust and perceptions of
accuracy of evaluation system (Mayer & Davis, 1999)
- 35. •Schultz & Schultz 10e •35
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Postappraisal Interviews
• Offers feedback related to appraisal to help
employee improve performance
• Meta-analysis by DeNisi & Kluger (2000) found
that employees preferred computer- vs.
supervisor-provided postappraisal information
• Provides employee opportunity to react to
criticism
• Negative feedback can make employees angry
• Workers react to criticism differently
- 36. •Schultz & Schultz 10e •36
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Improving Postappraisal Interviews
• Allow employees to participate actively in the
appraisal process
• Interviewer should adopt a supportive attitude
• Focus on specific job problems, not personal
characteristics
• Establish specific goals jointly
• Allow the employee to rebut
• Discussions of changes in salary and rank should
be linked directly to performance criteria
- 37. •Schultz & Schultz 10e •37
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Poor Ratings for PA Programs
• Managers
• Lack the time to make other than hasty appraisals
• 90% of HR managers dissatisfied with their
organization’s PA system
• Employees
• Don’t like appraisals
• Uninformed about the criteria (criteria appear
biased)
• Correlations between ratings and results-
oriented criteria are low due to poor
implementation
- 38. •Schultz & Schultz 10e •38
•Copyright © 2010 Pearson Education, Inc.,
Upper Saddle River, NJ 07458. All rights reserved
Key Terms
• Attribution
• Average rating (leniency)
error
• Behavioral observation
scales (BOS)
• Behaviorally anchored
rating scales (BARS)
• Inadequate information
error
• Interpersonal effect
• Management-by-objectives
(MBO)
• Merit rating
• Most-recent-performance
error
• Paired-comparison
technique
• Constant (systematic) bias
• Forced-choice technique
• Forced-distribution
technique
• Halo effect
• Peer rating
• Performance appraisal
• Ranking technique
• Rating scales
• Role conflict
• Self-ratings