Performance Appraisal

Steps in a Performance Review Do Background work for the Performance Review

Clarify job description and responsiblities
Clarify employee development interests and needs
list specific development areas for concentration
Review performance objectives and performance standards
Review progress toward objectives through ongoing feedback and periodic discussions
Decide on Purpose(s) Typically the purposes include
Giving employees answers to:
- what am I expected to do
- how well am I doing
- what are my strengths and weaknesses
- how can I do a better job how can I contribute more

Other purposes include providing information about work performance judgmental-provide basis for reward allocation, promotions, transfers, layoffs; identify high potential employees developmental-foster work improvement, identify training and development opportunities, develop ways to overcome obstacles, barriers; establish supervisor employee agreement on expectations sometimes these two don't mix well translating organizational goals into individual job objectives communicating expectations regarding emp. performance providing feedback; coach on how to achieve objectives diagnosing strengths and weaknesses of employees determining a development plan for improving job perf. Define the behavioral aspects of performance and analyze performance; Identify specific problem to be solved identify specific levels of performance communicate all data to individuals about performance Gather Performance Data Develop specific, measurable, reasonable goals for each worker-make sure the worker accepts the goal Choose Performance Review Approach (eg. Tell and sell, Tell and listen, Problem-solving) Evaluate (Interpret) Performance Data Prepare for Interview Set Interview Make specific appointment (at least an hour) Private (hold telephone calls, etc.); arrange effective seating arrangement Use Characteristics of Constructive Feedback (see handout on effective feedback) Follow-up Action Plan for Future

OVERVIEW OF PERFORMANCE APPRAISAL

General

ideally PA allows mgt to specify what employee must do; combines feedback and goal setting
everyone involved needs to recognize that performance appraisal involves human judgment and information processing; can never be totally objective or infallible
system should aim to be easy to operate, easy to explain, easy to maintain, easy to administer
system should be job related, relevant, sensitive, reliable, acceptable, practical, open, fair, useful
ratee should participate in the development
need to take legal issues into account

Why PA often fails

managers often resist (passively or actively)
may have limited contact with subordinate; may be poor at giving feedback
subordinates poor at receiving feedback
managers often view it as wasted paperwork, especially if nothing comes of their efforts
interfere with their "coaching" function they prefer
managers fear the emotions that can be unleashed; may fear not being able to defend ratings

To be very legally defensible a system would have these components:

employee participation in establishing perf. standards
standards based on critical elements of job; clearly recorded in writing
employee advised of critical requirements before the appraisal
system should not be based on interpersonal comparisons (eg. curve)
PA done in writing at least annually
results tied to personnel decisions
employees allowed to respond to charge orally and in writing
appraisers must be provided training
PA system evaluated and refined as necessary

Questions most asked by system designers and system users

is the system valid are the ratings reliable
are performance measures job related how are numbers going to be used
is there any pattern of dissemination how will numbers be explained to employees
does the system distinguish high from low performers
are scales well anchored what type of job analysis was conducted

The actual experience with PA is not encouraging

employees are often less certain about where they stand after the interview
employees evaluated supervisors less favorably after the interview than before it
few constructive actions or significant improvmeents result from interviews
typical managers have limited contact with subordinates
managers often resist conducting PA program
- -don't like giving negative feedback; fear reaction
- -fear not being able to defend ratings
- -often don't believe in it themselves so don't like defending it
- -feel system interferes with role as coach
system often regarded as needless paperwork

KEYS TO AN EFFECTIVE PERFORMANCE APPRAISAL PROGRAM Design Factors

provide for rater and ratee participation in the design process
aim for simplicity, fairness, objectivity, openness, usefulness
aim to be inclusive of all behaviors and results that should be performed
questions to be addressed in designing a system:
- -what is purpose -what are supervisors' attitudes toward PA
- -what are appropriate job criteria -who should conduct the appraisals; when should they occur;
- how often
-what format instruments are appropriate -what type of performance records should be kept

Company Reward System

accurately and thorougly assessing subordinate performance
for completing the forms conscientiously
for communicating their judgments to subordinates

Evaluator's Skills

with subordinates set specific goals; identify paths to reach goals, analyze job, problems
continuously monitor and improve subordinate performance
be trained in conducting effective PA; trained in setting objectives, giving feedback, conducting problem solving interviews
be aware of potential for bias and counteract tendencies-stereotype, halo, central tendency, etc.
need to have extensive information about ratee
need to effectively observe, recall, assimilate, weigh

The Forms need to be

job related, as simple as possible, easy to administer, valid, reliable
individuals need to be able to influence measures

Eliminating the sources of bias Organizational Support must support and reinforce time spent on these activities; organization from top to bottom must show PA is taken seriously must tie results of appraisals to decisions such as promotion, salary Designing Effective Performance Appraisal Systems Objectives of Performance Appraisal:

evaluation goals --
Provide feedback to subordinates on where they stand.
Develop valid data for pay and promotion decisions and provide a means for communicating these decisions.
Assist the manager in making discharge and retention decisions and provide a means of warning subordinates about unsatisfactory performance.
coaching and development goals --
Counsel and coach subordinates so they will improve their performance and develop future potential.
Develop commitment through discussion with subordinates of career opportunities and career planning.
Motivate subordinates through recognition and support.
Strengthen supervisor-subordinate relations.
Diagnose individual and organizational problems.

Commonly Used Techniques of Performance Appraisal:

Graphic Rating Scales, in which employees are rated on a scale, usually from 1 to 10, on traits and/or behavior such as intelligence, neatness, and quantity of work accomplished.
Management by objectives, wherein objectives are set, plans determined, performance reviewed, and rewards given.
Forced choice-requires the evaluator to choose among descriptions of employee behavior-scored according to a key.
Simple ranking, wherein raters simply rank the their subordinates from best to worst on their perceived performances.
Critical incidents, in which raters identify critical positive and negative employee performance (NOTE: Behaviorally anchored rating scales can be derived from these.)
Essay, in which performances are described in essays.

Note: Because each technique may be better for certain situations than others, students might be asked to assess the appropriateness of each for different levels of managers.

Some Commonly Encountered Conflicts in Performance Appraisal:

Conflicting Intra-Individual Goals: desire for honest feedback vs desire for self-concept affirming feedback.
Conflicting Individual and Organizational Goals: person's desire for rewards vs organization's desire for openness to feedback and helpfulness in supplying necessary information.

Improving the Design of the Appraisal System:

Uncouple Evaluation and Development: Many appraisal systems inadvertently force the mixing of the roles of judge and helper. The open problem-solving dialogue required for building a relationship and developing subordinates should be scheduled at a different time than the meeting in which the supervisor informs the subordinate about his/her overall evaluation and its implications for important rewards.
Choose Appropriate Performance Data: The behavior rating scale, the critical-incident methods, and various MBO techniques usefully guide the appraisal discussion toward reviewing specific task behaviors or accomplishments -- feedback which is both less threatening and more helpful to the person who wants to improve performance. A comprehensive performance management system might include MBO and behavioral ratings--which are, respectively, a means of managing the what and how of employee task-related behaviors.
Separate Evaluations of Performance and Potential: Current performance, as measured by the attainment of results, is not necessarily correlated with potential for promotion. Separation of assessments of performance and potential mitigates against the superior's averaging his/her unconscious assessment of these qualities and increases the likelihood of a constructive, non-defensive dialogue.
Recognize Individual Differences in System Design: Persons differ in their needs for performance evaluation and development, e.g., persons high in "nAch" may require more frequent performance feedback. Within permissible bounds, appraisal policies should permit managers to use different methods depending on the particular employee being appraised.
Upward Appraisal: One way to mitigate the inhibitions of the superior-subordinate power imbalance is to ask subordinates to appraise their supervisor; this allows influencing their environment, and may increases motivation to enter the appraisal process openly; provides the supervisor an opportunity to "model" the nondefensive behavior essential to a real dialogue.
Self-Appraisal: Experiences with self-appraisal suggests that it often results in lower ratings than the supervisor would have given. hence, the inclusion of self-appraisal before their the coaching or evaluation interview is likely to result in a more realistic rating and a greater acceptance of the final rating by both ratee and rater.