Performance Evaluation & Appraisal: Milford B

1. Performance Evaluation & Appraisal: Milford B

2. Today’s Topics • Milford B • Who is the most pressing problem? The least pressing? • Appraisal for each rep • Action plan for each rep • Common evaluation mistakes • Evaluation Survey Results- what’s being done in the real world.

3. Who are the most & least pressing problems?

4. Goals of Evaluation • Allocate raises & promotions • Allocate territories • Decide whom to hire or fire • Help the employee improve • Fill human need for feedback • Protect against lawsuits • Most managers find it difficult to do and there’s great variation in how it’s done.

5. Theoretical aspects of performance appraisal: • Distributive Justice • the outcomes do matter- reps will care about the perceived justice of the actual rewards • Procedural Justice • the procedures do matter- reps will care about the perceived justice of the process used to determine the rewards

6. Avoiding Barriers to Evaluation Effectiveness • Don’t • concentrate unduly on the squeaky wheels • neglect star performers • fail to recognize achievement & improvement • fail to clearly communicate goals & standards • fail to have a systematic plan for developing sales reps • try to impose unsuitable selling techniques & styles- different things work for different people

7. Performance Appraisal Checklist • The evaluation system is presented as a means to help salespeople become more effective • Good evaluations lead to some kind of reward (timing is important) • The formal evaluation process takes place at least once a year-more often is better • Appraisal forms are simple and easy to use and focus on specific outputs and behaviors • The appraisal form requires and explanation for the evaluation given • Appraisal criteria are applied uniformly to all salespeople in a given group • The salesperson’s perception of the quality and quantity of work done is part of the interview • All objectives that have not been met are accounted for and explained • Appraiser & salesperson develop an action plan jointly for the next period

8. Evaluating and Giving Feedback • Be careful that feedback isn’t demoralizing or demotivating • Describe the situation as you see it; invite the rep to tell his/her perception • Describe how you feel about the situation • Describe the change you want • Describe the reward for making the change and the sanctions for not making it • Agree on an action plan for improvement & a timeline for the change

9. Other Feedback Guidelines • Very little learning occurs without feedback- the more complex the task, the more true this is • Immediate feedback fosters learning better than delayed feedback • Focus feedback on specific behaviors • Relate feedback to underlying principles- mission, company objectives- the “why” • Listen to explanations • Probe with “why” questions to shape attributions for behaviors and results and to develop problem-solving & self-diagnosing skills

10. Problems in Assessing performance • Output:- deciding what to measure and how to measure it • Input: record keeping burden; may be biased since the rep’s the recorder • Problems in using someone as a rater: • biases • subjectivity • Solutions to rater problems • rater training • fixed distribution of scale points • ideal point=100 • more than one rater

11. Biases in Evaluation • Study of US managers: • They are too forgiving of high-volume salespeople • don’t expect enough; even forgive unethical behavior more • They don’t count territory features enough: • don’t expect enough of good territories • don’t lower expectations enough for poor territories • even though up to 40% of variation in performance is due to territory • They overweight sheer effort • too hard on those who get results without appearing to try hard • too soft on those who try hard but get nowhere • They overweight attitude & underweight numbers

12. Biases in Evaluation • Attribution errors: • subject over-attributes good events to personal, internal factors • subject over-attributes bad events to external, environmental factors • external evaluator makes the opposite attributions

13. Biases in Evaluation • Conservatism: • We sometimes overvalue prior information in the face of new information • We tend to anchor on our prior beliefs and do not adjust enough for new information • Example: performance evaluation of good work from a bad employee or bad work from a good employee • Evaluation must be on-going & task related, with specific guidelines for good/bad performance

14. Biases in Evaluation • Availability: • Our perception of how likely an event is to occur again is influenced by how easily we remember similar past events. • Examples: • R words- first vs. third letter • Frequency of deaths- asthma vs earthquakes • Extremely good or extremely bad performance events

15. Biases in Evaluation • Regression to the mean: • People fail to adequately consider regression to the mean (if one draw from a probabilistic process is extremely high or extremely low, the next draw I likely to be less extreme) • Examples: • Children of very tall parents • a salesperson’s performance from period to period

16. Biases in Evaluation • Confirmation Bias: • People overlook disconfirming evidence for their opinions. They overweight confirming evidence for their opinions. They read ambiguous information as confirming their opinions. • Examples: • hiring decisions: we never see the success of the people we do not hire • are those signs of improvement in a troubled rep’s performance significant or not? • Is average (ambiguous) performance at a task good or bad? It may depend on our opinion of that person’s overall performance

17. What To Do About These Biases • Know your goals; evaluate based on those goals • Communicate expectations early and often • Record performance regularly • not just when you think about it, since that is usually a high or low point for the individual • set aside one day a month and record the most recent incident • Be fair in appraisal and feedback