Performance Appraisal Defined
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- Allyson Horn
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1 Performance Appraisal Defined A formal system of review and evaluation of individual and/or team work performance Conducted periodically Provides feedback to workers regarding their perceived effectiveness and value to the organization Provides documented evidence of work performance A necessary but disliked activity that seems to elude mastery
2 Appraisal Data Can Be Used To... Assess Employee Work Performance How well are performance standards being met? Determine Training Needs Does the employee need to learn something in order to improve current work performance? Defend Compensation Adjustments It provides a basis to justify decisions regarding pay raises and bonuses. Justify Promotion, Transfer, and Layoff Decisions Used to defend decisions regarding promotions, transfers, layoffs, and terminations. Establish Career Planning and Development Goals Evaluate the employee s strengths and weaknesses to determine his/her advancement prospects. Develop A Plan for Managerial Replacement Build replacement charts or management succession plans for the organization. Legally Defend the Selection Criteria Validates the decision criteria used in the selection process.
3 Performance Appraisal Process External Environment Internal Environment Identify Specific Performance Appraisal Objectives Establish Performance Criteria (Standards) and Communicate Them To Employees Examine Work Performed Appraise the Results Discuss Appraisal with Employee
4 PERFORMANCE APPRAISAL REPONSIBILITY HUMAN RESOURCE DEPARTMENT Designs the performance appraisal system Establishes and monitors a reporting system Trains managers in how to conduct appraisals Safeguards performance appraisal records MANAGERS & SUPERVISORS Evaluates employee performance Completes the appraisal documents and forms Reviews appraisals with employees
5 SHARON WANTS A RAISE Hired 14 months ago as an administrative assistant/secretary Very organized and professional Appraisal results indicate only strengths... no weaknesses! Received the maximum pay increase allowed Noticed that lower-performing secretaries also got similar annual raises Now feels maybe she deserves more pay
6 CHARLES IS COASTING NOW Was an excellent accounting student in college Had a good internship experience Very motivated to make a difference Worked very hard his first year very efficient Given additional duties to keep him busy Annual appraisal noted he was above average Works more slowly now No longer volunteers to do extra things Now just gets his own work done
7 JANE FEELS UNFAIRLY TREATED Hired as a receptionist three months ago. Thinks her job is to be prompt and courteous in dealing with visitors, phone calls, and incoming messages. Has received no feedback of any kind until now this is her initial appraisal. Her supervisor is not happy with her performance and says she failed to show initiative and keep busy during slack times. He felt her knitting at work behavior was highly unprofessional and told her she would be dismissed at the end of the month. Jane doesn t think she s behaved inappropriately and feels unfairly treated because her supervisor didn t provide any warnings or specific guidance about what to do at work when things are slow.
8 JUST PUT ME DOWN AS AVERAGE It s performance appraisal time in the Podunk Conference. The President has told the staff that he believes most workers should be rated as average on the appraisal scale. The Treasurer agrees, and stressed that each worker had to earn an average appraisal rating in order to receive the cost-of-living increase of 1% that was voted for next year. There isn t any budget to pay for above-average ratings, and workers who earn below-average ratings will be issued a letter of warning and will not receive the anticipated cost-of-living increase. The appraisals were completed in record time, and the entire office staff earned average appraisal ratings, with the exception of one above-average secretary.
9 1. Should Sharon receive an additional pay raise? Everyone agrees that she s twice as productive as anyone else. Should a strengths and weaknesses appraisal like Sharon s be linked to pay increases at all? Are there other ways to recognize her superior work ethic? 2. Why has Charles lost his zeal at work? Was he unhappy with his appraisal, or was he just disappointed that his work efforts were not recognized? What will it take to motivate Charles again? 3. Should Jane be dismissed because she lacks initiative and failed to keep busy? Was her appraisal fair? Was it used to improve Jane s work skills or to defend an administrative decision to terminate her? 4. Does the conference conduct appraisals just to justify granting the 1% COLA? Is the office really filled with just average workers? What does an appraisal process like this encourage the workers to do be highly productive or just be average? IN EACH CASE, IS THE APPRAISAL SYSTEM WORKING PROPERLY? ARE SUPERIOR PERFORMERS RECOGNIZED FOR THEIR EFFORTS?
10 Some Important Questions about Performance Appraisals 1. Why conduct appraisals what s your objective? 2. If you do appraisals, how should they be conducted? 3. Which appraisal techniques seem to work best? 4. How do workers respond to the appraisal interview? 5. Is there appropriate recognition for good work?
11 WHAT IS THE PURPOSE OF THE APPRAISAL? JUDGMENTAL To defend administrative decisions (To justify decisions about pay adjustments, promotions, transfers, and terminations) DEVELOPMENTAL To enhance and expand worker performance (To provide feedback for individual growth, learning, and work improvement) You cannot accomplish both purposes equally well with a single appraisal system. Some appraisal tools are better at generating good feedback than providing a consistent rationale for a judgment. Similarly, negative feedback generated by judgmental appraisals is unlikely to motivate the employee to work harder to improve performance. If both appraisal objectives are important, separate assessment review systems should be created.
12 HOW OFTEN SHOULD YOU DO APPRAISALS? IT ALL DEPENDS Is the appraisal primarily for JUDGMENTAL or DEVELOPMENTAL purposes? JUDGMENTAL APPRAISAL A formal process Annually (once a year) Semi-annually (every six months) DEVELOPMENTAL APPRAISAL Less formal, more of a mentoring process Continuous (immediate) Weekly (touch base) Monthly (regular discussion)
13 WHO SHOULD CONDUCT THE APPRAISAL? IT ALL DEPENDS WHO IS IN THE BEST POSITION TO EVALUATE THE WORKER S JOB PERFORMANCE? THE APPRAISER NEEDS TO be aware of the objectives and requirements of the job have the opportunity to frequently observe the employee and his/her work be capable of evaluating and recording observed work behavior and performance avoid or minimize potential appraisal errors and bias
14 WHO SHOULD CONDUCT THE APPRAISAL? IMMEDIATE SUPERVISOR OTHER MANAGERS (above) SUBORDINATES (below) COWORKERS (peers) OUTSIDERS Customers, Constituents, Consultants SELF-APPRAISAL (by the worker) A FORMAL GROUP or DESIGNATED TEAM A complex job may require several appraisers, each viewing the worker from a different perspective. 360 degree appraisal = assessment from above and below - by both insiders and outsiders Once again, is the primary purpose for Judgment or for Development? Will your answer make a difference in who should conduct the appraisal?
15 TRY TO AVOID THESE COMMON APPRAISAL ERRORS & PROBLEMS CONTRAST EFFECT PROJECTION ERROR STATUS EFFECT HALO & HORN EFFECTS RECENCY EFFECT EVALUATOR BIAS (PREJUDICE) DISTRIBUTION (RANGE) ERRORS Leniency Strictness Central Tendency FUNDAMENTAL ATTRIBUTION ERROR EFFECTS OF APPRAISER DISCOMFORT AND EMPLOYEE ANXIETY DELIBERATE MANIPULATION OF THE APPRAISAL USE OF INAPPROPRIATE APPRAISAL MEASURES Remind the appraiser (before they begin the appraisal process) about the tendency to commit these errors hopefully sensitization will greatly reduce these errors.
16 The Halo/Horn Error Halo error - Occurs when a manager generalizes one positive performance feature or incident to all aspects of the employee s performance resulting in a higher-than-deserved rating. Horn error - Evaluation error occurs when manager generalizes one negative performance feature or incident across all aspects of the employee s performance resulting in a lower-than-deserved rating.
17 Recent Behavior Bias Employee s behavior often improves and productivity tends to rise several days or weeks before scheduled evaluation It s only natural for a rater to remember recent behavior more clearly than actions from the more distant past. (recency bias) We tend to forget what happened a while ago, unless we keep records of performance.
18 Personal Bias (Prejudice) Managers allow individual differences such as gender, race or age to affect ratings they give Effects of cultural bias, or stereotyping, can influence appraisals Other factors Example mild-mannered employees may be appraised more harshly simply because they do not seriously object to criticism and negative feedback.
19 Leniency/Strictness Leniency - Giving undeserved high ratings to everyone. Strictness - Being unduly critical of each employee s work performance. Worst situation is when the firm has both lenient and strict managers and does nothing to level these inequities.
20 Central Tendency Error occurs when all employees are incorrectly rated near average or at the middle of the scale. May be encouraged by some rating scale systems that require the evaluator to justify in writing extremely high or extremely low ratings.
21 THE FUNDAMENTAL ATTRIBUTION ERROR ( THE BLAME GAME ) POOR WORK PERFORMANCE BY OTHERS THEIR POOR WORK PERFORMANCE IS CAUSED BY PERSONAL FACTORS (No effort, laziness, they didn t try hard enough) THE PERSON IS THE REASON THE JOB WASN T DONE PROPERLY MY POOR WORK PERFORMANCE MY POOR WORK PERFORMANCE IS DUE TO SITUATIONAL FACTORS BEYOND MY CONTROL (Poor support, uncooperative coworkers, unforeseen events) THE ENVIRONMENT IS THE REASON THE JOB WASN T DONE Note the self-serving bias when others experience failure, it s their own fault, but when we experience failure it s NOT our fault, it s beyond our control!
22 ATTRIBUTION THEORY KELLEY 73 IS THE CAUSE OF THE FAILURE TO ACHIEVE SEEN AS INTERNAL (PERSONAL) OR EXTERNAL (SITUATIONAL)? WE LOOK FOR THREE INDICATORS TO DECIDE. DISTINCTIVE IS THIS PERSON S PERFORMANCE DIFFERENT ON OTHER TASKS AND IN OTHER SITUATIONS? (YES = EXTERNAL, NO = INTERNAL) CONSISTENT OVER TIME, IS THERE A CHANGE IN BEHAVIOR OR RESULTS ON THIS TASK BY THIS PERSON? (YES = EXTERNAL, NO = INTERNAL) CONSENSUS DO OTHERS PERFORM OR BEHAVE SIMILARLY WHEN ASSIGNED A SIMILAR POSITION OR TASK? (YES = EXTERNAL, NO = INTERNAL) Consistent Yes answers lead us to external attributions Environmentally caused No answers lead us to internal attributions -- The person is responsible
23 ATTRIBUTIONS OF FAILURE ALTERNATIVE STRATEGIES INTERNAL ATTRIBUTION The person was responsible for the failure LACK OF ABILITY LACK OF EFFORT EXTERNAL ATTRIBUTION The situation/environment was responsible DIFFICULT TASK BAD LUCK FAILURE ATTRIBUTION LACKS ABILITY? LACKS EFFORT? TASK IS TOO DIFFICULT? BAD LUCK? ENLIGHTENED SUPERVISOR ACTION Further Training or Transfer Reprimand or Motivational Strategy Redesign the Job Offer Sympathy and Support
24 More Problems with Appraisals Appraiser discomfort Employee anxiety Deliberate manipulation of the appraisal Use of inappropriate appraisal measures
25 Appraiser Discomfort Appraisal process cuts into manager s time for other duties Experience can be unpleasant when the employee has not performed very well. Supervisor wants to soft pedal the appraisal result because s/he still has to work with this person every day, and s/he wants to maintain a friendly cooperative relationship with him/hert.
26 Employee Anxiety The evaluation process often creates high anxiety/stress for the appraised employee. Opportunities for promotion, better work assignments, and increased compensation hinge on the appraisal results. Employees expect to hear everything is great anything less is disappointing. Employees become very defensive and do not hear suggestions on how to improve performance all they know is that you don t like their work.
27 Deliberate Manipulation of the Evaluation Sometimes, managers control virtually every aspect of the appraisal process and are in a position to manipulate system If a supervisor wants a certain employee to get a pay raise, the supervisor must make sure that the appraisal score is very high maybe much higher than deserved!
28 Reasons for Intentionally Inflating Performance Ratings You believe accurate ratings would damage your subordinate s motivation and performance. You want to improve your employee s eligibility for merit raises. You want to avoid creating a negative permanent record that might haunt the employee in the future. You want to protect good workers whose performance has suffered recently because of personal problems. You want to reward employees who put forth great effort, even though their results were relatively low. You want to avoid confrontation with hard-to-manage workers. You want to promote a poor or disliked employee up and out of your department.
29 Reasons for Intentionally Lowering Performance Ratings You want to scare better performance out of the employee. You want to punish a difficult or rebellious employee. You want to encourage a problem employee to quit. You want to create a strong record to justify a planned firing. You want to minimize the amount of merit increase a subordinate receives. You want to comply with an organizational edict that discourages managers from giving high ratings.
30 ON WHICH CRITERIA OR STANDARDS SHOULD THE APPRAISAL BE FOCUSED? Personal Characteristics and Traits Job Activities, Duties and Behaviors Work Results and Objectives
31 FOCUS OF APPRAISAL MEASURES 1. ON PERSONAL TRAITS AND CHARACTERISTICS + uses a common set of criteria (standards) for all workers + inexpensive to develop and use only one form is needed for everyone - doesn t assess specific job duties or accomplishments; no tie to job descriptions - has a high potential for rating errors and bias (subjectivity) - not very useful for feedback/development because traits are not easily changed - not easily justifiable for reward and promotion decisions
32 Evaluating Worker Traits Commonly used generic rating factors, such as attitude, appearance, initiative, and leadership are difficult to measure. These factors may have little relationship to the job, job performance, or expected work results. Employee appraisal based primarily on vaguelydefined personal characteristics often places the company in indefensible positions. Some traits may relate to job performance and if a job connection can be clearly established, they may be used as part of the appraisal process.
33 A Legal Caution on the use of Traits Wade v. Mississippi Cooperative Extension Service 1976 In a performance appraisal system, general characteristics such as leadership, public acceptance, attitude toward people, cooperation, appearance, personal conduct, outlook on life, judgment, resourcefulness, capacity for growth, mental alertness, loyalty to organization, etc. are susceptible to partiality and to the personal taste, whim, or fancy of the evaluator as well as patently subjective in form and obviously susceptible to completely subjective treatment by those conducting the appraisals.
34 FOCUS OF APPRAISAL MEASURES - Contd 2. ON JOB ACTIVITIES, DUTIES AND BEHAVIORS + can focus on specific duties and activities listed in the job description + intuitively acceptable to employees and supervisors + provides good feedback it s obviously tied directly to the job description + seems fair for reward and promotion decisions - can be costly to develop because each appraisal must be tailored to the position - has some potential for rating errors and bias, depending on the scales used
35 FOCUS OF APPRAISAL MEASURES - Contd 3. ON WORK RESULTS AND OUTCOMES + less subjectivity was the objective accomplished yes or no? + can link the individual s performance to organizational objectives + acceptable to employees and supervisors + seems fair for reward and promotion decisions - objectives and targets are time consuming to develop - some work outcomes are hard to quantify and measure - measures and objectives may focus on inappropriate or deficient criteria - can outcome measures be developed for all essential duties of the job? - may encourage a short-term perspective focus is on the immediate
36 AS WE LOOK AT SPECIFIC APPRAISAL MEASURES AND TOOLS Two important questions Does this appraisal tool gather GENERIC or JOB-SPECIFIC information? Is this methodology designed to support a JUDGMENTAL or a DEVELOPMENTAL appraisal system?
37 FIVE APPRAISAL METHODS NARRATIVES ESSAYS (Write a paragraph or two enumerating worker strengths and weaknesses) CRITICAL INCIDENTS (Keep a record of good and not so good work incidents as they happen) RANKING COMPARISONS ALTERNATION (Who is your best worker? your least-effective worker?) PAIRED COMPARISONS (Compare Bill against Sue, which is the better overall worker?) CHECKLISTS SIMPLE (Does the worker do this? if so, check if not, leave blank) WEIGHTED RATING SCALES TRAIT-RATING SCALES (TRS) BEHAVIORALLY ANCHORED RATING SCALES (BARS) BEHAVIORAL OBSERVATION SCALES (BOS) MEASURABLE RESULTS NATURAL COUNTS AND OUTCOMES (Quantity produced, unit and $$$ sales achieved, etc) GOALS/OBJECTIVES ACHIEVED (Program successfully launched, report done on time, etc)
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47 USING OBJECTIVES AND MEASURABLE RESULTS ADVANTAGES People who set goals accomplish more than those who don t set goals Goalsetting improves communication and feedback with the supervisor It encourages participation and collaboration in setting the objectives It facilitates role clarification by revealing the assessment criteria POSSIBLE PROBLEMS Are the really important (key) areas of the job included in the goals? Is the process participative or are objectives set for the worker? Can the worker truly control the outcomes s/he achieves? Overemphasizes quantitative, short-term, individual objectives These issues are much less of a problem when the appraisal is primarily for developmental purposes.
48 MORE GOALSETTING ISSUES These goalsetting issues are much more serious when the appraisal is used for judgmental or administrative purposes. EASY vs. CHALLENGING OBJECTIVES How difficult should the work objectives be? I want an easy goal, but the firm wants me to stretch and try something challenging and risky. ACCEPTANCE OF THE GOAL Will workers feel committed to work toward objectives that have been assigned, rather than those set jointly through participation? MEASURABLE OBJECTIVES Precise quantitative indicators may not exist for critical elements of the job. General, open-ended goals are not easily assessed. MOTIVATION TO MEET THE OBJECTIVE Objectives should be challenging, yet reachable. They also need to be linked to desirable rewards to successfully motivate workers.
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58 Summary of Appraisal Methods BEST MEASURES FOR Judgment/Administration Comparison Rankings Behavioral Rating Scales Objectives and Results Generic Information Comparison Rankings Trait Rating Scales Some Checklists Development/Feedback Narratives Checklists Rating Scales Job-Specific Information Narratives Checklists Behavioral Rating Scales Objectives & Results
59 Conducting the Appraisal Interview Is the appraisal interview for developmental or judgmental purposes? There is strong evidence that it is wise to separate the appraisal interview for discussing performance rewards from the appraisal discussion for employee development. Research has shown that when promotions, bonuses, or wage adjustments are tied to the appraisal interview, the employee does not hear the suggestions for improvement and s/he becomes defensive if the maximum rewards are not forthcoming. Developmental feedback is best received when it is shared at a different time, and by a different person than the one conducting the judgmental or administrative appraisal interview.
60 The Traditional Appraisal Interview The appraisal interview allows the worker and supervisor to examine and discuss the results of the appraisal, and to detect any errors or omissions before the formal report is filed. All appraisals should be reviewed by another manager within the organization, so that no manager has complete control over a subordinate s appraisal outcomes. If the employee disagrees with the appraisal evaluation and wants to challenge it, there should be an appeal procedure in place to promptly handle any grievances. This special appeal process is an absolute necessity for resolving disputes over judgmental/administrative appraisal decisions. The appraisal interview is often both a threatening, as well as a passive experience for the worker, as s/he is told what the supervisor has decided the appraisal results will be. Even in developmental/feedback interviews, the supervisor is dominant and in control. Thus, it s not surprising that most employees prefer to complete their appraisal meetings as quickly as possible. You ve been judged, and now I m going to tell you what I think!
61 A Collaborative Approach for Development A MORE ENLIGHTENED APPROACH FOR THE APPRAISAL INTERVIEW Have the worker do a self-appraisal, then you can compare your scores to theirs. Discuss with the worker what s/he has accomplished this year. What does the worker believe are his/her greatest strengths? Which areas need to be worked on to further improve work performance? If you were me, how would you evaluate your appraisal results? What ratings would you assign? Evaluate my performance as your supervisor. Where have I done well, and where have I let you down? What are some new objectives we can agree to pursue for the coming year? What can I do as your supervisor, to help you achieve them? After jointly discussing all the performance results, prepare the final appraisal report, and share it with the worker for review before forwarding it on to the proper authorities. Set up a regular time (at least monthly) to discuss developmental progress. Give immediate feedback to the worker when something good (and/or bad) occurs don t hoard feedback information until a formal meeting is held.
62 SUMMARY GUIDELINES FOR APPRAISALS 1. Appraisal standards are job related -- based on job analysis 2. Standards are clearly communicated to employees in advance 3. Standards are responsive to actual worker behavior or effort 4. Activities performed and results achieved are both appraised 5. Acceptable vs. unacceptable results can clearly be discerned 6. Appraisal criteria are consistently applied 7. Raters are able to consistently observe work performance 8. Raters are trained in appraisal and how to feedback results 9. Developmental feedback is separated from judgmental appraisal 10. An appeal process exists to resolve (judgmental) rating disputes
63 WHAT DO WE KNOW ABOUT JUDGMENTAL APPRAISALS, REWARDS, AND MOTIVATION? Judgmental appraisals are always linked to some kind or reward or recognition. - pay raises, bonuses, promotions, etc. High levels of performance will not be sustained without adequate recognition. - failure to adequately recognize good work will result in mediocrity. The reward/recognition must be significant and highly-valued to motivate. - do workers want the reward? are they honored to receive this recognition? Monetary rewards must be significant to maintain worker motivation. - bonuses must be at least 15% or more of annual pay to really motivate. Non-monetary rewards must be highly-valued, divisible, and affordable. - discretionary time off, recognition dinners, certificates, plaques, etc.
64 Making the Judgmental/Administrative Appraisal System Work How can our church-based organizations link merit rewards or incentives to appraisal results? Most of our organizations do not have the budgets to pay for good appraisals. Often the only financial reward we link to a good appraisal result is the annual cost of living adjustment (COLA). Unfortunately, the COLA amount is usually very small (1-2%) and its motivational power is low. Thus, any attempt to further subdivide it to coincide with varying appraisal results is not recommended. When the COLA is tied to the appraisal result, performance expectations are modest ( average is sufficient) and the system fails to either reward or motivate workers to high performance levels. Some organizations now offer extra vacation days as the primary incentive for a strong appraisal. Extra days off are highly valued, can be divided incrementally according to performance (2 days off, 3 days off, or 4 days off, etc), and are affordable, because they don t increase budgeted labor costs. Finally, because the people who earn these awards are usually very responsible, their work does not suffer when they are gone and they easily get caught up when they return. Linking highly-sought rewards to the appraisal motivates high worker performance
65 SOME IMPORTANT QUESTIONS ABOUT PERFORMANCE APPRAISALS A Final Review Why are you conducting performance appraisals? - for judgmental/administrative purposes or for developmental/feedback? How should the appraisal process be conducted? - how frequently will appraisal be done? - who will be involved in the appraisal process? - will your appraisal focus on traits, job duties, or measurable results? Which appraisal techniques work best? - is the appraisal for judgment or development? - does this method gather job-specific or generic information? How will your workers respond to the appraisal interview? - do the workers feel threatened, disappointed, or encouraged by the process? - are your developmental appraisals collaborative and non-threatening? Is there appropriate recognition for good work? - does the appraisal process reward excellent work or mediocre/average work? - which highly-valued (and affordable) rewards can you offer?
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