Introduction to Human Resource Management

1
Introduction to Human Resource Management

• Chapter 9
• Performance Appraisals

2
Highlights

• Selection of a performance appraisal (PA) system
• use of appraisals
• look at appraisal methods
• how do PA methods affect HRM

3
Performance Appraisals

• Process where an organization evaluates an
  employees job performance
• PA as used for many reasons
• improve employee performance
• compensation decisions
• placement decisions

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Performance Appraisals

• Also helps to ensure uniformity in methods and
  type of information
• PA normally performed by immediate supervisor

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Elements of An PA System

• Goal to develop an accurate picture of an
  employees behavior on the job
• must be job related, practical, have realistic
  standards, and dependable measures

• should evaluate critical job behaviors
• Need to be practical so that the methods
  system can be understood by both supervisor
  employee

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Performance Standards Measures

• Benchmark to measure performance against
• s/b related to desired job outcomes
• should relate back to the job description details
  

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Performance Standards Measures

• Performance measures s/b by direct or indirect
  observation
• direct observation rates sees actual
  performance
• indirect rater only sees substitutes for actual
  performance (i.e.. cannot observe sales calls but
  see sales figures
• objective performance measures are verifiable vs
  subjective ones which rely more on opinions

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Raters Bias

• Be aware of this especially if using subjective
  ratings
• Halo Effect personal opinion sways rating of
  performance
• Central Tendency - avoidance of extremes on a
  scale (i.e. poor or excellent) instead use
  central part of the scale for all

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Raters Bias

• Leniency or Strictness
• too hard to easy on evaluating performance
• often happens when standards are unclear or
  poorly defined
• Personal Prejudice
• raters likes or dislikes for a group may distort
  rating
• Recency Effect
• raters are effected strongly by employees most
  recent actions instead of performance over the
  whole year

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Characteristics of Effective PA Systems

• Employees should have input into the system
• increases commitment to the program
• need to discuss performance standards to come up
  with acceptable stds to both employee employer

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Characteristics of Effective PA Systems

• Feed back should be frequent
• all should be trained on how the process works
• different sources of raters should be used
• PA should have consequences to be effective (ie
  used for promo pay raises)

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Characteristics of Effective PA Systems

• Need to have a nurturing environment
• social climate has large impact
• s/b trusting relationship between managers and
  employees
• as well as dialog

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Legal Aspects

• PA is a legal document, may be used in court case
  
• need to ensure complete accurate
• focus on criteria used vs job
• HR manager may have to prove relevance of
  criteria used to the job
• if contested performance need to have allowed a
  reasonable timeframe for improvement to happen
• good documentation crticle

14
Past Orientated Approach to PA

• Most methods review past performance
• Rating Scale
• raters are asked to grade employee on a scale
  to reflect performance (low to high)
• can be subjective since criteria may be general

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Past Orientated Approach to PA

• Often a list of factors for rating in included in
  PA
• most widely used method
• Checklist
• must select among a group of statements
• find the best one that applies to the worker

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Past Orientated Approach to PA

• Some weighting may be used to highlight important
  factors
• statements are used to describe employees
  performance and characteristics

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Past Orientated Approach to PA

• Forced Choice Method
• required to select between 1 or 2 pairs of stmts
  to find ones that best describe employee
• want to select the one that comes the closest
• i.e.. learns quickly..works hard vs absent
  oftenusually tardy

• Critical Incident Method
• record good bad incidents since last appraisal
• helps to reduce recently effect if followed
• can help to ID patterns give job related
  feedback

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Past Orientated Approach to PA

• Behavior Anchored Ratings
• ID behaviors found on the job - specific examples
  are placed on a scale (p368)
• these behaviors are checked by the raters to
  complete the evaluation
• provides behavior bench marks
• can be time consuming expensive

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Past Orientated Approach to PA

• Field Review Method
• someone from HR compiles evaluation after
  disucssions with supervisor
• many reviews written by the same person
• prevents a level of bias, may be more accurate
• costly time consuming

• Once evaluation is complete sent to supervisor
  for review
• Performance Test Observations
• some jobs can be evaluated by direct observation
  or testing
• s/ realistic, reliable, valid job related

20
Past Orientated Approach to PA

• Comparative Evaluation Method
• use of group ratings
• members of the group are allocated points
  compared to all other employees
• comparative results not shared with employees to
  keep co-operation

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Future Orientated PA Methods

• Used to predict employees future performance
  (potential goals)
• Self Appraisals
• encourage employees to look _at_ their performance
• fill out on their own, reduces emotions,
  defensiveness compared to when completed by
  others
• employee can then ID what changes if any are
  required
• Management by Objective (MBO)
• employee supervisor develop performance
  objectives for the futures (ie. 6 months to a yr)
• evaluation compares actual performance to goals
• objectives s/b specific, measurable,. Realistic
  time framed

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Future Orientated PA Methods

• Assessment Centers
• std form of employee appraisal relies upon
  multiple evaluators situations to determine LT
  potential of employees
• normally used on middle management

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Future Orientated PA Methods

• location away from job site to allow max
  concentration
• staff may include a trained psychologist line
  managers
• 2-3 day evaluation
• then detail analysis provided of each employees
  potential

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Recent Developments in PA

• 360 Appraisal - combo of self, peer, supervisor
  and subordinate assessment
• can include customers and clients
• many perspectives feedback
• performance appraisal software can enhance HR
  function access to info

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Implications of PA

• Goal may be to allocate rewards, offer
  counseling, development programs, ID promotion
  targets
• HR department is responsible for design and
  monitor of PA systems

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Training Raters

• Training can encourage rates to be ware of errors
  
• focus on making valid judgements how to do this
• guidelines, handbooks about the PA process may be
  provided to increase consistency
• train rates on the whole process, explain the
  purpose, procedures answer questions

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Training Raters

• 3 Helpful Concepts
• 1) attention - the more deviant the observed
  behavior from the norm the more the observer
  remembers notices
• 2) categorization - classification of data causes
  observ to make quick judgements (i.e.
  stereotypes)
• 3) recall - hard to remember whole yrs data -
  good idea to record through yr.

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Evaluation Interviews

• Performance review sessions that give employee
  feedback
• 2 types
• 1) tell sell - allows employee to discuss their
  feelings about their performance

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Evaluation Interviews

• Counsel employees provide suggestions on hoe to
  do better
• 2)problem solving - employer ID causes of
  problems seek to overcome through training,
  counseling and coaching
• want to reinforce positives as well

• Want to make employee feel valuable
• for area of improvement focus on behavior not the
  individual be specific
• note should not be any large surprises if
  supervisor effective

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HRM Feedback

• Evaluations opportunity to ID weaknesses in HR
  activities
• if a whole group performs poorly should review
  situation to ID problem
• could be hiring process, lack of training etc.

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HRM Feedback

• Important part of strategic planning to assess HR
  dept
• SWOT analysis - look at strengths, weaknesses,
  opportunities threats
• through PA info can assess skills, experience,
  and performance of every employee
• quality of PA system impacts resource planning
  which in turn affects Co. strategic planning