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Employee Performance Appraisal
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  1. Employee Performance Appraisal Topics 1.What is Performance Appraisal? 2. Purposes of Performance Appraisal. 3. The Appraisal Process (Model). 4. Challenges to Performance Appraisal. 5. Appraisal Methods. 6. Feedback in Appraisals.

  2. 1.What is Performance Appraisal? Performance Appraisal can be defined as • evaluating an employee’s current and/or past performance relative to his or her performance standards. • The identification, measurement, and management of human performance in organizations • The process of assessing and recording staff performance for the purpose of making judgments about staff that lead to decisions.

  3. 2. Purposes of Performance Appraisal • Need documentation for legal defense related to HR decisions. • Provides a rational basis for pay and promotion decisions. • Help clarify strategic goals and performance expectations. • Provides individual feedback to aid performance improvement. • Appraisal of teams can strengthen team performance. • Identification of individuals needs.

  4. 3. Appraisal Process (Fig. 7.1) I. IDENTIFICATION II. MEASUREMENT III. MANAGEMENT

  5. I. IDENTIFICATION • Identifying the important aspects of job duties that should be evaluated based on Job Analysis. • That is, toconduct a job analysis ( e.g., specify tasks and KSAs). • Then, develop performance standards (e.g., define what is superior, acceptable, and poor job performance) Identification of performance factors to be assessed

  6. Example Performance Domains for job of “Firefighter” developed by Center for Governmental Services, Auburn University • Training/Technical Knowledge • Pre-fire Planning • Hydrant Testing • Fire Prevention/Public Relations • Fire Suppression • Emergency Response • Equipment and Station Maintenance • Coordination with Other Departments • Reports and Forms

  7. II. MEASUREMENT Developing reliable and valid appraisal methods. Two types of measures: a. Results – “What” b. Process – “How” Development of measurement methods to be used.

  8. III. MANAGEMENT Providing feedback to employees about their appraisals and following-up to insure improvement and to offer support. Management of the feedback process.

  9. 1. Errors/Bias Liking 3. Politics 4. Challenges to Appraisal a. Errors and Bias c. Politics b. Liking d. Legality

  10. Challenges: Errors and Biases 1. Halo 2. Recency 3. Primacy 4. Rating Tendencies 5. Escalation of Commitment 6. Anchoring and Adjustment

  11. 1. Halo Error Allowing a few behaviors of employees to influence the perception and rating of other behaviors. Observation of specific behavior (s) (e.g., volunteers to work overtime) High ratings on other performance dimensions

  12. 2. Recency Effect Allowing the most recent behavior of an employee to overly influence the overall appraisal.

  13. 3. Primacy Effect Allowing first impressions of employees to overly influence subsequent perceptions of performance.

  14. 4. Rating Tendencies • Leniency -rating everyone high. _____ _____ _____ _____ __ X ___ Very Average Excellent Poor • Strictness - rating everyone low. ___ X__ _____ _____ _____ _____ Very Average Excellent Poor • Centraltendency - rating everyone at the middle. _____ _____ ___ X __ _____ _____ Very Average Excellent Poor

  15. 5. Escalation of Commitment When supervisors use appraisals to support their views of and intentions toward employees – e.g. to promote, dismiss, or punish.

  16. 6. Anchoring and Adjustment Bias When past ratings of employees overly influence their current appraisal.

  17. Challenges: Liking (individual favoritism) Often, interpersonal attraction affects appraiser perceptions of employees. Events and actions are seen through “rose colored lenses”. Also referred to as “favoritism”.

  18. Challenges: Politics Often, supervisors allow “politics” to affect their appraisals. For example, a lower than justified rating may be used to “punish” an employee, or supervisors may avoid a pattern of low ratings to hide poor supervisory practices.

  19. Challenges: Legality How to insure legal compliance in performance appraisal? See text (P.239): Supreme Court in Brito v. Zia (1973) ruled that same standards used for testing apply to appraisals. Recent study of 295 federal court cases identified factors related to legality of appraisals: • Base appraisal system on job analysis. • Provide written instructions to raters. • Allow employees to review and discuss their appraisals. • Get agreement among multiple raters. • Implement rater training.

  20. 5. Appraisal Methods • Rating Process (See Course Packet) • Relative vs. Absolute • Results vs. Process • Process Methods – Traits vs. Behaviors

  21. Relative Results N/A Process Ranking of Employees Absolute Sales/Production Rating of Employees Methodology Issues

  22. Methodology Issues in Appraisal “Relative” versus “Absolute” Judgments Comparing one employee to another. Advantages • Aids promotion decisions. • Aids in making assignments. Disadvantages • Employee resentment & divisiveness. • Low reliability. • Difficult to give feedback. • Difficult to use with a large number of subordinates Relative

  23. Methodology Issues in Appraisal “Relative” versus “Absolute” Judgments Absolute Evaluating employees on an agreed upon set of standards. _____ _____ _____ _____ _____ Very Average Excellent Poor Advantages • More reliable and valid. • Perceived as fair. • Provides concrete feedback. Disadvantages • Takes more time. • Must identify factors.

  24. Methodology Issues in Appraisal “Results” versus “Process” Measures of outcomes such as sales, units produced, costs, etc. Advantages • Reliable and valid. • Objective/legally defensible.. Disadvantages • Difficult to identify individual contributions. • Difficult to provide feedback. Results

  25. Methodology Issues in Appraisal “Results” versus “Process” Assessment of job behaviors – i.e., “how” the job is performed. Advantages • Reliability/validity depend on method. • Perceived as fair by employees. • Provides specific feedback for improvement. Disadvantages • Takes more time for appraiser. • More costly to develop. Process

  26. Traits Assess personal characteristics of employees, which are “global” in nature. PROS Lower cost to develop. Less time and effort. CONS Low reliability/validity. Difficult to give feedback. Causes defensiveness (resentment) Legally indefensible. Behaviors Assess actual behaviors, which are “specific” to each job. PROS More reliable and valid than trait ratings. Allows specific and job-relevant feedback. Perceived as fair. Legally defensible. CONS Higher development costs. Takes more rater time. Methodology Issues in Appraisal“Traits” versus “Behaviors” Traits Behaviors

  27. 6. Managing Appraisals Issues: 1. Understanding potential causes of performance deficits. (Figure 7.10) 2. Providing effective feedback (Notes) 3. Appraisal interview skills (Figure 7.9) 4. 360-Degree appraisals (pp. 244-245)

  28. Contributing Factors to Performance DeficitsFigure 7.10 Factors Contributing to Performance Deficits Figure 7.10 • Poor coordination among units. • Inadequate information or instructions. • Inadequate procedures and methods. • Low quality materials or equipment • Lack of materials or equipment. • Inadequate financial resources. • Poor training. • Poor interpersonal relations or morale. • Poor work environment. • Insufficient time. • Low individual motivation.

  29. Recommendations for Effective Feedback Recommendations for Effective Feedback • Frequent observation of performance and feedback (both positive and negative) • Recordkeeping (ongoing if possible) • Encourage self-assessment of employees • Focus on behaviors (not traits) • Use specific behavioral criteria and standards • Set goals for employees (specific and challenging ones) • Develop an action plan (to be followed-up). • Focus on how to observe job behaviors and provide incentives to do so

  30. 360 Degree Appraisals Supervisors Peers Outsiders Subordinates

  31. 360 Degree Appraisals • 360-degree feedback, also known as 'multi-rater feedback', 'multisource feedback', or 'multisource assessment‘. • is employee development feedback that comes from all around the employee. "360" refers to the 360 degrees in a circle. The feedback would come from subordinates, peers, and managers in the organizational hierarchy, as well as self-assessment, and in some cases external sources such as customers and suppliers or other interested stakeholders. • It may be contrasted with upward feedback , where managers are given feedback by their direct reports, or a traditional performance appraisal, where the employees are most often reviewed only by their manager.