performance appraisal basics mana 4328 dr. jeanne michalski michalski@uta.edu

Performance Appraisal Basics

MANA 4328

Dr. Jeanne Michalski

michalski@uta.edu

Why Conduct Performance Appraisals?

Performance Appraisal Programs

Performance Appraisal A process, typically performed annually by a

supervisor for a subordinate, designed to help employees understand their roles, objectives, expectations, and performance success.

Performance Management The process of creating a work environment in which

people can perform to the best of their abilities.

Performance Ethic

High-performing companies place a premium on setting demanding standards and measuring performance against those tough-minded goals. Specifically, they: Have a mission Have challenging goals and clear accountability Are excellent at performance feedback Apply consequences, both positive and negative, to individual

performance

(McKinsey & Company, 1999)

Setting Objectives

Coaching Performance

Developing Capability

Assessing Performance

Providing Feedback

Performance Management Cycle

Planning Performance for the Upcoming Period Defining key results/expectations for each position (usually 5-

8) that support the organization’s business strategy Establishing performance standards against which key result

areas will be measured May assign a weight to each key result since all key results

are NOT equal – adds complexity Coaching Performance and Giving Feedback Throughout

the Period Structured feedback like mid-period, quarterly, or monthly

progress reviews Informal feedback throughout the process

Performance Management Cycle continued

Rating Performance for the Just Completed Period One of the most challenging aspects is the approach for

rating employee performance

Developing an Appraisal System

GOAL SETTING

TYPE OF APPRAISAL

ADMINISTRATION

PERFORMANCE AND PAY

Legal Issues

Appraisal systems are more defensible if they:

Challenges for Performance Measurement

Rater errors and bias Halo Contrast effects Range restriction / Central tendency The influence of liking/similar to me

Rater errors can be addressed by training

Appraisal Forms

“Least important elements of the appraisal process” Appraisal forms most often contain various styles

Approaches to Appraisal Forms Trait Behavior Results / Outcomes Global / Essay

Trait-Based Appraisals

Characteristics that are enduring and general e.g. “Leadership” “Communication” “Decisiveness”

Competency models vs. Trait-based appraisal Are the characteristics really related to

performance?

Potential Problems Focus on person rather than performance May be ambiguous or arbitrary Poor feedback and goal setting Poor reliability and validity

“An employer has no business with a man’s personality. Employment is a specific contract calling for specific performance and nothing else. Any attempt of an employer to go beyond this is usurpation. It is an abuse of power. An employee owes no “loyalty,” he owes no “love,” and no “attitudes” – he owes performance and nothing else.”

Peter DruckerManagement Tasks, Responsibilities, Practices (1974)

Behavior-Based Appraisal

Focus on specific behaviors with examples1. Behavioral Frequency / Observation Scale (BOS) 2. Behaviorally Anchored Rating Scales (BARS)

Positives More valid and reliable Acceptable to employees Better for development and improvement

Developing Behavioral Scales

1. Identify critical incidents and behaviors

2. Sort similar behaviors into dimensions

3. Validate sorting

4. Collect data on relationship between behavior and performance

5. Assign a rating scale

6. Validate the scale

Behavior-Based Appraisal

Potential Problems Difficult and expensive to develop Needs to match jobs closely to be effective Behaviors may be hard to develop and interpret Emphasizes behaviors (at the expense of others?) Focuses on behavior rather than results May be no more reliable and valid than simple scale

Process of developing the rating system is more important than the system itself.

Results-Based Appraisal

Uses future results as performance targets

Challenge is setting goals and measures Can the goals be quantified? Unique goals for every individual

Appraisal forms tend to be very simple

Still need a rating scale

Results-Based Appraisal

Focus on results compared to specific goals Should be clear and unambiguous Requires alignment of expectations May promote gaming of the system Beware of results at any cost and excessive results

orientation Time consuming and needs constant updating

How to Judge Appraisal Types

Leads to desired behaviors Minimizes negative behaviors Reliability and validity Perceived fairness (rater and employee) Performance improvement and employee development Flexibility and administrative cost

Comparison of Appraisal Forms

Ease of UseEmployee

DevelopmentLegal

Defensibility

Traits High Low Low

Behaviors Medium High High

Outcomes Low Medium Medium

Comparison of Appraisal Forms

Ease of UseEmployee

DevelopmentLegal

Defensibility

Traits High Low Low

Behaviors Medium High High

Outcomes Low Medium Medium

Key Questions to Consider When Receiving Feedback Do I understand it? Is it accurate/valid? Is it important? Do I want to change?

At its heart feedback is only information. How you choose to think and feel about the feedback will determine the value you gain from it.

Possible Reactions To Feedback

DENIAL

ANGER / FLIGHT

WITHDRAWAL

ACCEPTANCE

ANALYSIS

ACTION PLANNING

360 Degree Feedback

Evaluation method that incorporates feedback from the: worker, his/her peers, supervisors, direct reports, and customers.

Results of these confidential surveys are tabulated and shared with the worker.

Interpretation of the results, trends and themes are discussed as part of the feedback.

360 Degree Feedback

360 Successful in Organizations When: Organizational climate fosters individual growth Proper framing of feedback method by management Assurance that feedback will be kept confidential Development of feedback tool based on organizational goals and

values Feedback tool includes area for comments Brief workers, evaluators and supervisors about purpose, uses of

data and methods of survey prior to distribution of tool Train workers in appropriate methods to give and receive feedback Support feedback with back-up services or customized coaching

360 Degree Feedback Errors

Feedback tied to merit pay or promotions Comments traced to individuals causing resentment

between workers Feedback not linked to organizational goals or values Use of the feedback tool as a stand alone without

follow-up Poor implementation of 360-degree tool negatively

affects motivation Excessive number of surveys are required of each

worker with few tangible results provided to individuals

Recommended 360 Degree Process

Leaders invite direct reports to evaluate them (if less than 5 direct reports, include second level direct reports)

Direct reports rate the leader through a survey tool (often web-based)

Outside consultant analyzes data and generates reports

Leaders and human resources consultant receive feedback report & have opportunity discuss results

Leaders give feedback to their direct reports through a facilitated high performing team session

Leaders create preliminary development plan and discuss with their supervisor