chapter 8 performance appraisal 1438

8/3/2019 Chapter 8 Performance Appraisal 1438

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Performance Appraisal


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Performance Appraisals

Improve job performance

By directing employee behavior towardorganizational goals

By monitoring that behavior to ensure thatgoals are met

Make the correct employment decisions

Ensure legal compliance

Minimize job dissatisfaction and turnover


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Standards for Effective

Performance Appraisal Systems

The quality of the rating form

Accuracy of the ratings Legal standards


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Quality of Rating Form

Relevance The degree to which the rating form includes

necessary information

To be relevant, the form must: Include all the pertinent criteria for evaluating

performance

Exclude criteria that are irrelevant to jobperformance

Criterion deficiency: Omission of pertinentperformance criteria

Criterion contamination: Occurs whenirrelevant criteria are included on the ratingform


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Accuracy of the Ratings

Leniency and severity errors

Leniency error

Occurs when raters provide ratings that are

unduly high Severity error

Occurs when ratings are unduly low

Causes of leniency and severity errors: Political reasons

Raters lack of conscientiousness

Personal bias


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Accuracy of Ratings (cont.)

Central tendency error

Occurs when appraisers purposely avoid

giving extreme ratings even when suchratings are warranted

Causes of central tendency error:

Result of administrative procedures

When the end points of the rating scale areunrealistically defined


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Halo effect

Occurs when an appraisers overall

impression of an employee is based on aparticular characteristic

Causes of the halo effect:

Vague rating standards

Failure to conscientiously complete the ratingform


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Implicit personality theory

When the raters estimation is based on apersonal theory of how different types of

people behave in certain situations

Rater cannot observe all aspects of a workersperformance.

Rater classifies employee by type of person.

Using this theory, organizations are unable toidentify employees specific strengths andweaknesses.


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Legal Standards

Appraisal systems must meet all thecriteria imposed by EEO laws.

Specifically a court would examine: The nature of the appraisal instrument

The fairness and accuracy of the ratings


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Types of Rating Instruments

Employee comparison systems

Management-by-objectives (MBO)


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Employee Comparison Systems

Employee performance is evaluated relativeto other employees performances.

Ranking formats:Simple rankings

Require raters to rank-order their employees from best toworst, according to their job performance

Paired comparison A rater compares each possible pair of employees.

Forced distribution Requires a rater to assign a certain percentage of

employees to each category of excellence, such asbest, average, or worst.


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Management-by-Objectives (MBO)

A management system designed to

achieve organizational effectiveness by

steering each employees behavior toward

organizations mission.

MBO process includes:

Goal setting

Planning

Evaluation


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MBOGoal Setting

Goal setting: Starts at the top of the

organization with the establishment of the

organizations mission statement and

strategic goals It then cascades down through the

organizational hierarchy to the level of theindividual employee.


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MBOPlanning and Evaluation

Planning: Employees and supervisors work

together to identify potential obstacles to

reaching goals and devise strategies to

overcome these obstacles.

Evaluation: In the final phase, the

employees success at meeting goals is

evaluated against the agreed-on

performance standards.


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Step 2: Choosing AppropriateRating Instrument

Practicality

Cost

Development costs

Constructing an appraisal system

Implementation costs

Training appraisers

Developing written guidelines

Utilization costs Appraisers time observing, rating, and giving

performance feedback

Nature of job


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Step 3: Choose Raters

Supervisory ratings

Appraisals are typically responsibility of theimmediate supervisor.

Peer ratings

Supplement supervisory ratings

May also help eliminate biases

Competitive nature of the organizations rewardsystem and friendships are potential problems ifused in lieu of supervisory ratings.


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Step 3: Choose Raters (cont.)

Self-ratings

May not be effective as an evaluative tool

May be used for employee development

Using multiple raters: 360-degree

Evaluating managers performance usingseveral raters

Ratings are made by a circle of people whofrequently interact with the manager

Primarily used as feedback devices


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Step 4: Determining Timing

Mostly conducted annually

Difficulty remembering events

Appraisers should maintain records of

employee performance to minimize thisproblem.

Record keeping also serves as documentationfor EEO suits.

Companies avoid more frequentappraisals because they are considered

too time-consuming.


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Step 5: Ensuring Fairness

Upper-level management review

May serve to keep appraisers honest

Appeals system Means for employees to obtain a fair hearing

if dissatisfied with their appraisals

Considered beneficial because it:

Allows employees to voice their concerns

Fosters more accurate ratings

Prevents the involvement of outside third parties

chapter 8 performance appraisal 1438

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