Chapter 7 Appraising Employee Job Performance

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Chapter 7Appraising Employee Job Performance
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Opening caseGaining competitive advantage at
Corning

• The problem an inadequate performance appraisal
  system
• The solution Develop an effective performance
  appraisal system
• A rating form containing behavioral standards
• A rating form containing performance objectives
• A form in which supervisors made salary and
  promotion recommendations

3
Chapter outline

• 8.1 Linking performance appraisal to competitive
  advantage
• 8,2 standards for effective performance
  appraisal systems
• 8,3 types of rating instruments
• 8.4 designing an appraisal system

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8.1Linking Performance Appraisal Practices to
Competitive Advantage
Strategic Plan
Direct Behavior Correct Behavior Monitor Behavior
Improved Job Performance
Effective Performance Appraisal System
Input Into Employment Decisions
Improved Employment Decisions
Competitive Advantage
Perceived Fair And Accurate Process
Minimized Litigation And Job Dissatisfaction
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8.2Standards for Effective Performance Appraisal
Systems

• Quality of the rating form
• Accuracy of the ratings
• Legality of process and decisions

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Quality of the Rating Form

• Relevance
• Clear performance standards

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Performance Appraisal Relevance
Criterion deficiency
Criterion contamination
Relevance
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Accuracy of the Ratings

• Leniency and severity errors
• Central tendency error
• Halo effect
• Raters use of implicit personality theory
• Recency error

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Causes of Leniency and Severity Errors

• Political
• Lack of conscientiousness
• Vague performance standards

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Causes of Central Tendency Error

• Administrative procedures
• Poorly defined scales

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Causes of Halo Effect

• Lack of conscientiousness
• Vague performance standards

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Causes of Raters Use of Implicit Personality
Theory

• Cannot observe all aspects of employees job
  performance
• Categorizing employees by type of person

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Causes of Recency Error

• Memory decay
• Failure to document job performance throughout
  appraisal period

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legal standards

• Fairness of the rating
• Accuracy of the rating

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8.3 Types of Rating Systems

• Employee comparison systems
• Graphic rating scales
• Behaviorally anchored rating scales
• Behavior observation scales
• Management-by-objectives

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Employee Comparison Systems
Paired Comparison
Simple Ranking
Mike Robert Sally
Fred Mike Robert Ö
Ö Sally Ö Ö Fred Ö
Ö
1. Mike Winkle 2. Robert King 3. Sally Morris 4.
Fred Taft
Forced Distribution
EX --Exceptional WD --With distinction HS-- High
standard RI --Room for improvement NA
--unacceptable
EX WD HS RI NA 5 15 70
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Ranking Methods

• Strengths
• Low cost
• Practical
• Time efficient
• Eliminates some rating errors
• Aids decision making

• Weaknesses
• Accuracy and fairness questionable
• Fail to direct or monitor behavior
• Cross-departmental comparisons difficult

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Graphic Rating Scale
Unsatisfactory Satisfactory
Outstanding Quantity of work Ö Quality
of work Ö Dependability Ö
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Graphic Rating Scales

• Strengths
• Low cost
• Practical
• Single form applicable to all or most jobs in
  organization

• Weaknesses
• Accuracy questionable
• Fail to direct behavior
• Nonspecific job performance feedback

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Behaviorally anchored rating scales(BARS)
Dimension Quality of Group Member Input
5
Group member has read all agreed-upon material
Effective
4
Group member participates in discussions, though
not always prepared
3
2
Group member does little work and offers no
valuable ideas or feedback
Ineffective
1
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Behaviorally Anchored Rating Scales

• Strengths
• Useful for directing and monitoring behavior

• Weaknesses
• Research has not substantiated its superiority
  over other methods
• Choosing one indicative behavior
• Time consuming to develop

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Behavioral Observation Scale
1 2 3 4 5
almost never almost always
___1. Sets clear priorities for multiple
goals. ___2. Coaches subordinates
effectively. ___3. Breaks projects into doable
components. ___4. Develops subordinates
knowledge and skills. ___5. Listens to
employees concerns. ___6. Seeks decision input
from subordinates.
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Behavioral Observation Scales

• Strengths
• Useful for directing and monitoring behavior
• Useful for providing specific feedback

• Weaknesses
• Time-consuming to develop

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Management-By-Objectives
Goal Setting
Planning
Evaluation
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Characteristics of Effective Goals

• Consistent with organizational objectives
• Specific and challenging
• Realistic and achievable
• Measurable

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Management-By-Objectives

• Strengths
• Directing and monitoring behavior
• Performance standards are objective
• Practical and inexpensive
• Employee participation

• Weaknesses
• Does not specify behaviors
• Focus on short-term
• Factors outside workers control
• Standards vary
• User acceptance

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8.4 Designing an Appraisal System

• Gain support for the system
• Choose the appropriate rating instrument
• Choose the raters
• Determine the appropriate timing of appraisals
• Ensure appraisal fairness

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Step 1 Gain Support for the System

• Gain support of upper-level managers
• Seek employee input

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Step 2 Choose the Appropriate Rating Instrument

• Practicality
• Cost
• construction
• implementation
• utilization
• Nature of job
• observations
• behavioral measures
• output measures

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Step 3 Choose the Raters
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360 Degree Feedback
superiors
outside observers
self-rating
customers
peers
employee
360 Degree Feedback systems are used most often
as feedback devices. Companies considering the
use of 360-degree ratings for evaluative purposes
should proceed cautiously.
subordinates
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Step 4 Determine the Appropriate Timing of
Appraisals
semi- annually
quarterly
annually
monthly
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Step 5 Ensuring Appraisal Fairness

• Upper-level management review
• Appeals system

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The Line Manager and Performance Appraisal

• Complete the ratings.
• Provide performance feedback.
• (conducting periodic performance review sessions)
• (Conducting the annual performance review
  conference)
• Set performance goals.

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The HRM Department and Performance Appraisal

• Develop the appraisal system.
• Provide rater training.
• Monitor and evaluate the appraisal system.

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Individual Assignments

• P235
• Review Questions 4. 7. 10

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