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Performance Appraisal. The identification, measurement, and management of human performance in organizations. 8-5. Performance Evaluation and Management. Performance Management: efforts to align employee performance with the firm’s goals

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performance appraisal
Performance Appraisal

The identification, measurement, and management of human performance in organizations.

slide2

8-5

Performance Evaluation and Management

  • Performance Management: efforts to align employee performance with the firm’s goals
  • Performance Evaluation:efforts to determine the extent to which an employee performs work effectively. Also known as:
    • Performance review
    • Personnel rating
    • Merit rating
  • Performance appraisal
  • Employee appraisal
  • Employee evaluation
potential purposes of evaluation

9-3

Potential Purposes of Evaluation

Development

HR and

Employment

Planning

Motivation

Legal

Compliance

HRM

Research

Communications

a model of performance appraisal
A Model of Performance Appraisal

Identification

Measurement

Management

performance evaluation criteria of evaluation

9-5

Performance Evaluation:Criteria of Evaluation
  • Reliability
  • Relevance
  • Sensitivity
  • Practicality

Combination of criteria using activities

and results is desirable

who should evaluate the employee

9-6

Who Should Evaluate the Employee?

MANY POSSIBILITIES

  • Immediate supervisor only (typical)
  • Committee of several supervisors
  • Employees’ peers (coworkers)
  • Employees’ subordinates
  • Someone outside the immediate work situation
  • Self-evaluation
slide7
Some Potential Benefits

Encourages employee participation

Enables subordinates to exercise self-control and manage own performance

Useful for training and career development purposes

May be used as an impetus for changing organization-wide systems

Some Potential Pitfalls

Managers may not be adequately prepared for MBO

Demands active employee and manager involvement

Too much emphasis on the short run and results

Failure to tie results to rewards

Too much time and paperwork

Too many and conflicting objectives set

9-11

Management By Objectives(MBO)

potential evaluation problems
Problems with standards of evaluation

Halo effects

Leniency or harshness

9-12

Potential Evaluation Problems
  • Opposition to evaluation
  • System design and operating problems
  • Rater problems include:
  • Central tendency errors
  • “Recency of events” errors
  • Contrast effects
  • Personal bias/stereotyping

Major problems exist more with

the rater than the technique used.

solutions to evaluation problem
ELIMINATING

RATER ERRORS

Train raters on how to evaluate others well

Grant ample opportunities to observe behavior

Motivate raters to use the system effectively

AVOIDING PROBLEMS

WITH EMPLOYEES

Train employees in performance evaluation methods

Simplify reporting forms

Communicate how evaluation information is be used

Allow employees to participate

in system development

Build equity into the system

9-13

Solutions to Evaluation Problem
the benefits of performance appraisal
The Benefits of Performance Appraisal

Employer Perspective:

  • Despite imperfect measurement techniques, individual differences in performance can make a difference to company performance.
  • Documentation of performance appraisal and feedback may be needed for legal defense.
  • Appraisal provides a rational basis for constructing a bonus or merit system.
  • Appraisal dimensions and standards can help to implement strategic goals and clarify performance expectations.
  • Providing individual feedback is part of the performance management process.
  • Despite the traditional focus on the individual, appraisal criteria can include teamwork and the teams can be the focus of the appraisal.
trait appraisal behavioral appraisal and outcome appraisal instruments
Trait Appraisal, Behavioral Appraisal, and Outcome Appraisal Instruments

Trait Appraisal

An appraisal tool that asks a supervisor to make judgments about worker characteristics that tend to be consistent and enduring.

Behavioral Appraisal

An appraisal tool that asks managers to assess a worker’s behaviors.

Outcome Appraisal

An appraisal tool that asks managers to assess the results achieved by workers.

sample trait scales
Sample Trait Scales

Rate each worker using the scales below.

Decisiveness:

1 2 3 4 5 6 7

Very low Moderate Very high

Reliability:

1 2 3 4 5 6 7

Very low Moderate Very high

Energy:

1 2 3 4 5 6 7

Very low Moderate Very high

Loyalty:

1 2 3 4 5 6 7

Very low Moderate Very high

evaluation of major appraisal formats
Evaluation of Major Appraisal Formats

Legal Defensibility

Developmental Use

Administrative Use

Appraisal Format

+

-

-

+

0

0

++

+

0

0

0

-

--

++

+

Absolute

Relative

Trait

Behavior

Outcome

++ Very good

+ Good

-- Very Poor

- Poor

0 Unclear or mixed

who should evaluate the employee14

9-7

Who Should Evaluate the Employee?

360-DEGREE FEEDBACK

  • Alternative to traditional supervisor-only approaches
  • Uses multiple

appraisers

  • Not a panacea

Supervisors

Self-

appraisal

Peers

Subordinates

challenges to effective performance measurement
Challenges to Effective Performance Measurement
  • Rater errors and bias
  • The influence of liking
  • Organizational politics
  • Whether to focus on the individual or the group
  • Legal issues
legal issues
Legal Issues
  • Arecent analysis of 295 court cases involving performance appraisal found judges’ decisions to be favorably influenced by the following additional factors:
    • Use of job analysis
    • Providing written instructions
    • Allowing employees to review appraisal results
    • Agreement among multiple raters (if more than one was used)
    • The presence of rater training
communication skills for the appraisal interview
Communication Skills for the Appraisal Interview

Skills

Benefit

Description

Example

Rater sits with a slight forward, comfortable lean of the upper body, maintains eye contact, and speaks in a steady and soothing voice.

—Open questions encourage information sharing and are most appropriate early in an interview or in complex, ambiguous situations.

—Closed question evoke short responses and are useful for focusing and clarifying.

Suggests interest and active listening.

Appropriate use of open and closed questions can ensure an effective flow of communication during an interview.

While the ratee is speaking, the rater looks at the person and gently nods head to signal interest.

— Open questions start with words like “Could,” “Would,” “How,” “What,” or “Why”.

— Closed questions start with words like “Did,” “Is,” or “Are.”

Nonverbal Attending

Open and Closed Questions

communication skills for the appraisal interview cont
Communication Skills for the Appraisal Interview (Cont.)

Skills

Benefit

Description

Example

Pay attention to cultural differences that may influence how another person communicates and how you might communicate with others.

Communication is more effective when you are sensitive to the possible influence of cultural differences.

When dealing with employees from a culture that is highly formal, avoid addressing them in the workplace by their first names. Doing so may signal disrespect.

Cultural Sensitivity

key steps in implementing 360 appraisal
Key Steps in Implementing 360° Appraisal
  • Top management communicates the goals of and need for 360° appraisal.
  • Employees and managers are involved in the development of the appraisal criteria and appraisal process.
  • Employees are trained in how to give and receive feedback.
  • Employees are informed of the nature of the 360° appraisal instrument and process.
  • The 360° system undergoes pilot testing in one part of the organization.
  • Management continuously reinforces the goals of the 360° appraisal and is ready to change the process when necessary.