BAC 203 – TTH (1:30-3:00PM) Performance Criteria

CHAPTER 6: PERFORMANCE REVIEW AND APPRAISAL 1. RELEVANCE

- relevant performance dimensions are determined
Performance Review by the duties and responsibilities contained in the
 Is the ongoing process of evaluating and improving job description.
employees’ performance. 2. RELIABILITY
 It is a process by which an individual’s work - produced consistent and repeatable evaluation.
performance is assessed and evaluated. 3. FREEDOM
 It also entails determining and communicating to an - from contamination should measure each
employee how he/she is performing on the job and employee’s performance without being
ideally, establishing a plan of improvement. contaminated by factors that an employee cannot
control such as economic conditions, material
Why Measure Performance? shortage, or poor equipment.
 It allow management to specify what must be done
and to combine feedback with setting. Indicators or Matrix that can help Measure
 On the part of the employee, he/she cannot Employee Performance according to Hakala (2008)
improve on what he/she is supposed to do without
the necessary data before and after to see if 1. QUANTITY
performance actually improving. - the number of units produced, processed, or sold
is good objective indicator of performance.
Early Approaches to Performance Appraisal 2. QUALITY
1. Focusing on the employees’ past performance – - the percentage of work output that must be
this is more on management results. redone or is rejected one indicator of quality.
2. Focusing on the employees’ development – in 3. TIMELINESS
here, results become the bring force for - how fast work is performed, it might be the
management development. number of units produced per hour.
4. COST-EFFECTIVENESS
OBJECTIVES OF PERFORMANCE APPRAISAL - the cost of work performed should be used as a
1. It provides information upon which promotion measure of performance only if the employee has
transfer, demotion, layoff, discharge, and salary some degree of control over cost.
decisions can be made. 5. ABSENTEEISM/TARDINESS
2. It provides an opportunity for the supervisor and - an employee is obviously not performing which
his/her subordinates to review and identify their he or she is not at work.
strengths and weaknesses or work-related behavior. 6. CREATIVITY
3. It forms the basis in identifying the training needs - supervisors and employees should keep track of
of employees as well as evaluating the success of creative with examples and attempt to quantify
training, thus, development initiatives are not them.
based an opinions but rather results. 7. ADHERENCE TO POLICY
4. It helps in the firm’s career planning process - this may seem to be the opposite of creativity, but
because it provides a good opportunity to review it is merely a boundary on creativity.
the person’s career plans in light of his/her 8. GOSSIPING AND OTHER PERSONAL HABITS
exhibited strengths and weaknesses. - the specific behaviors should be defined, and
5. It allows easy monitoring and supervision. goals should be reducing their frequency.
6. It helps evaluate the individual’s share relative to 9. PERSONAL APPEARANCE/GROOMING
the team’s contribution in achieving the - most people know how to dress for work, but in
organization’s goal. many organizations, there is at least one employee
7. It provides information to evaluate effectiveness who need to be told.
and placement decisions.
WHO SHOULD EVALUATE PERFROMANCE? 3. Forced Distribution
1. Manager/Supervisor Appraisal - forced ranking is a method of performance appraisal
- hierarchical arrangement of from authority in most that ranks employees through forced distribution.
organizations gives the supervisor or the manager
legitimate authority to evaluate subordinates. INDIVIDUAL EVALUATION METHOD
2. Self-Appraisal 1. Critical Incident Method – the critical incident for
- the employee appraises his or her own performance performance appraisal is a method in which
many cases comparing the self-appraisal to manager writes down positive and negative
management’s review. performance behavior of employees throughout
3. Subordinates Appraisal the performance period.
- provides unique information because subordinates 2. Checklist and Weighted Checklist Method –
know better than anyone else whether leadership is checklist is a set of objectives or descriptive
good or bad. statements.
4. Peer Appraisal 3. Graphic Rating Scales – this is the oldest and most
- peer appraisals are often effective at focusing an widely used method for performance appraisal.
employee’s attention on undesirable behaviors and 4. Behaviorally Anchored Rating Scales (BARS) – this
motivating change. method is used to described a performance rating
5. Customer/Supplier that is focused on specific behaviors or sets as
- customers, vendors, or suppliers can be potential indicator of effective or ineffective performance.
evaluators. 5. Management by Objective (MBO) – MBO focuses
6. Team Appraisal attention on what must be accomplished (goals)
- similar to peer appraisal in that members of a team, rather than how it is accomplished (methods).
who may hold different positions, are asked to appraise 6. Multi-rater Assessment or the 360-Degree
each other’s work and work styles. Performance Feedback – the 360-degree feedback
7. Assessment Appraisal is a system or process in which employees receive
- the employee is appraised by professional assessore confidential, anonymous feedback from people who
who may evaluate simulated or actual work activities. work around them, their immediate superior, peers,
8. 360-Degree or “Full-Circle” Appraisal customers, or suppliers.
- the employee’s performance is appraised by everyone
with whom he or she interacts, including managers, 7 TIPS for creating World Class Appraisal System
peers, customers, and members of other departments. 1. DESIGN THE FORM FIRST
2. BUILD YOUR COMPANY’S VALUES INTO YOUR FORM
Sources of Data in Appraisal 3. ASSURE ONGOING COMMUNICATION DURING
1. PRODUCTION DATA DEVELOPMENT
- evaluate the degree of dependable task 4. PERFORMANCE APPRAISAL
accomplishment measuring quantity and quality of 5. ORIENT ALL APPRAISES
performance. 6. USE THE RESULTS
2. PERSONNEL DATA 7. MONITOR AND REVISE THE PROGRAM
- type of information found in an individual’s personnel.
3. JUDGEMENT OF OTHERS Performance Appraisal Problems and Solutions
-spontaneous and innovative behavior that are 1. Halo Effect
important to organizational effectiveness can only be The Problem:
assessed by the judgements. A manager or supervisor allows a general favorite
impression of an employee to influence his or her
Performance Appraisal Methods judgement on each part factor in the performance
1. Ranking Method appraisal process.
- ranking the employee from the most efficient to the The Solution:
least capable on each trait. The rater should consider each factor independently of
2. Paired Comparison Method other factors, rather than rating the employee at the
- consists of asking an evaluator to consider only two same level on all or factors in an appraisal.
individuals at one time and to decide who in better.
2. Recency Effect The Solution:
The Problem: When rating employees, the manager must consider
Recent events tend to have an unusually strong the same relevant behaviors for all employees
influence performance evaluation. supervised. Individual differences and other
The Solution: nonperformance factors should not affect performance
An alert manager compensates for lack of perspective appraisal ratings.
be careful documentation and to make refinements in
the design of the appraisal method, as well an Feedback or Appraisal Interview
improving the skills of the refers. This is an interview in which the supervisor and
3. Previous Performance Bins subordinates review the appraisal and make plans to
The Problem: remedy deficiencies and reinforce strengths.
The employee who has performed well in the distant Annual discussions of Performance should include:
past that assumed to be acceptable in the recent past 1. Review of overall progress
also. 2. Discussions of problems that were encountered.
The Solution: 3. Discussion of sources of ineffective performance.
Once again, observation and documentation of the 4. Agreement about how performance can be
employee’s performance will give an accurate account improved.
of the performance period under scrutiny. 5. Discussions on how current performance fits with
4. Leniency/Harshness/Strictness Error long-range career goals, and
The Problem: 6. Specific action plans for the coming year and how
Some managers tend to give mostly favorable ratings to reach short and long term objectives.
while others tend to evaluate the same performance
levels unfavorably.
The Solution:
Understanding the constructive purposes of
performance appraisal and acquiring effective skills in
giving negative feedback should reduce the tendency to
commit this error.
5. Central Tendency
The Problem:
Central tendency occurs when manager rates all
employees as average by choosing the middle rating.
The Solution:
Ranking employees can avoid this error because all
employees must be ranked and thus, cannot all be rated
average.
6. Carelessness
The Problem:
Managers make quick guesses based on first
impressions of an employee’s performance.
The Solution:
Managers commit significant time observing staff
members and forming judgements based on their
observations.
7. Bias
The Problem:
Individual differences among rates in terms of
characteristics like age, race, sex, and religious and
political affiliations.