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HFT 2220

HFT 2220. Chapter 8 Performance Appraisals and Retention. What is a Performance Appraisal?. A meeting held between a manager and employee for the purpose of evaluating the performance, behaviors, knowledge and skills of the employee. Purposes for Performance Appraisals.

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HFT 2220

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  1. HFT 2220 Chapter 8 Performance Appraisals and Retention

  2. What is a Performance Appraisal? • A meeting held between a manager and employee for the purpose of evaluating the performance, behaviors, knowledge and skills of the employee

  3. Purposes for Performance Appraisals • Assess quality of job performance • Provide feedback regarding job performance • Plan future performance goals and objectives • Improve job performance through recognition and coaching • Establish a better knowledge of the employee to understand what motivates them • Document unsatisfactory performance • Serve as the basis for compensation changes

  4. Relationship to Performance • Performance defined in company standards • Defines accountability • Evaluate effectiveness of training programs

  5. Relationship to Communication • Feedback: information provided by the manager to the employee during a performance appraisal. • Helps to prevent misunderstandings when performance standards are communicated to employees who are held accountable

  6. Relationship to Development • Identify employees who need additional training or are ready to move up • Provide effective employee guidance and career counseling • Helps measure predictive validity – the extent to which management predicts future behavior

  7. Relationship to Training • Helps management evaluate training programs • Allows managers to discuss good and/or bad points of training programs with employees

  8. Relationship to Compensation • Long used as basis for increases in compensation. • Make sure criteria are based on measurable outcomes based on the current job

  9. Judge versus Coach • Development appraisal • Coaching. Manager and employee agree on training and development agenda • Performance appraisal (evaluation) • Judge. Manager provides employee with information on their success or failures in the organization

  10. Performance Appraisals • Should be based on previously established goals which should always be • Logical • Specific • Realistic • Measurable • Time Sensitive • Results Oriented • Mutually Acceptable

  11. Appraisal Document • Basic information • Name • Date • Job position • Date of the interview • Who is conducting the interview

  12. Subjectivity/Objectivity • Subjective rating systems not illegal but must be applied equally • Cannot misuse objective information • Retroactive documentation illegal • Criticism cannot be • Extreme and outrageous • Intentionally reckless • Intended to cause emotional distress • Any distress to the criticized employee is not severe

  13. Criteria for Performance Appraisals • Construct validity • Must measure what they claim to measure • Content validity • Must measure the entire issue • Inter-rater validity • More than one appraiser • Consistency • All instances, not just one or two points in time

  14. Methods of Appraising Performance • Critical incident • Capture and record incidents • Behaviorally Anchored Ratings Scales (BARS) • Rating system based on specific behaviors • Competency approach • Focuses on knowledge and sets of skills • 360 Degree appraisals • Provide feedback from multiple sources

  15. Mistakes to Avoid in Performance Appraisals • Halo Errors • Positive • Negative – Horn error • Bias • Recency Bias • Past anchoring errors Courts have held the appraisals are free from bias if they meet the requirements of Title VII

  16. Other Mistakes to Avoid • Attractiveness • Personalities • Employee backgrounds • Lacking clear standards of evaluation • Managers can’t or don’t observe employee adequately • Comparing one employee to another • Bureaucratic – more interested in regulations and legal protection than being honest

  17. Appraisals and the Law • Appraisals must not be discriminatory • Key issues must be • Job relatedness • Objectivity • Should be based on content and due process issues

  18. Content (Job Related) Issues • Performance standards must be based on analysis of job requirements • Based on specific dimensions of the job • Standards should be objective and observable • Ratings should be documented • Validity of appraisers ratings should be assessed

  19. Due Process Issues • Standards must be communicated and understood by the employee • Specific appraisal instructions should be put in writing • Use more than one appraiser if possible • Review results • Establish legitimate, formal appeal procedures

  20. Retention Programs • Aimed at decreasing turnover • The rate at which employees leave a company • Turnover costs – Tangible and intangible • Tangible – Out of pocket expenses. • Separation costs • Replacement costs • Training costs • Intangible – Do not relate to out of pocket expenses • Managerial time • Lost productivity • Morale

  21. Decreasing Turnover • Hire the right people • Make sure the job fits the employee • Meaningful new hire orientation • Effective training • Set clear expectations • Dignity and respect • Review compensation and benefit packages • Improve quality of work life • Sense of community

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