Training Supervisors To Avoid Performance Appraisal Pitfalls

Edward TaylorAl RennerLois RobinsonTraining Supervisors To Avoid Performance Appraisal Pitfalls1AgendaComponents of Performance Appraisal SystemImportance of Training for ManagersTraining Focus/TopicsCommon Rater ErrorsCloser look at Feedback SystemReactions to Appraisal ProcessEffective Performance Appraisal Process

2Components of a Performance Appraisal SystemEvaluation systemFeedback systemTaken from http://www.performance-appraisal.com/basic.htmAn effective performance appraisal systems contains two parts: an evaluation systemand afeedback system.

The main aim of the evaluation system is to identify theperformance gap(if any). This gap is the shortfall that occurs when performance does not meet the standard set by the organization as acceptable.

The main aim of the feedback system is to inform the employee about the quality of his or her performance. (However, the information flow is not exclusively one way. The appraisers also receives feedback from the employee about job problems, etc.)

One of the best ways to appreciate the purposes of performance appraisal is to look at it from the different viewpoints of the main stakeholders: the employee and the organization.

Employee ViewpointFrom the employee viewpoint, the purpose of performance appraisal is four-fold:(1) Tell me what you want me to do(2) Tell me how well I have done it(3) Help me improve my performance(4) Reward me for doing well.(fromCash, 1993) Organizational Viewpoint

From the organization's viewpoint, one of the most important reasons for having a system of performance appraisal is to establish and uphold theprinciple of accountability.

For decades it has been known to researchers that one of the chief causes of organizational failure is "non-alignment of responsibility and accountability." Non-alignment occurs where employees are given responsibilities and duties, but are not held accountable for the way in which those responsibilities and duties are performed. What typically happens is that several individuals or work units appear to have overlapping roles.

The overlap allows - indeed actively encourages - each individual or business unit to "pass the buck" to the others. Ultimately, in the severely non-aligned system, no one is accountable for anything. In this event, the principle of accountability breaks down completely. Organizational failure is the only possible outcome.

In cases where the non-alignment is not so severe, the organization may continue to function, albeit inefficiently. Like a poorly made or badly tuned engine, the non-aligned organization may run, but it will be sluggish, costly and unreliable. One of the principal aims of performance appraisal is to make people accountable. The objective is to align responsibility and accountability at every organizational level.

3Why Training is ImportantCourt casesStudy on EffectivenessHP allegedly discriminated against an African American computer engineer. He started a diversity group then he was encouraged to leave company. The court ruled that there appeared to be enough irregularities in the performance appraisal documentation to raise questions about the fairness of the appraisal system. It was viewed as being overly subjective.

Ford, Goodyear Tire & Rubber, and Capital One have been sued and/or have settled lawsuits related to forced distribution ranking in performance appraisals (managers are forced to rate a certain percentage of employees as outstanding, and percentage as satisfactory, and still another percentage as needing improvement.

Ford paid $10.5 m to settle a lawsuit based on an employees claim that the Ford appraisal system disproportionally and negatively affected the pay raises of older workers.

According to a study conducted by Tziner, Murphy, and Cleveland, how managers complete performance appraisals on employees is affected by how the raters view the appraisal process.

Results of the study found that raters who viewed the appraisal system more favorably tended to make greater distinctions when rating employees. Those raters also reported being more comfortable making performance rating distinctions among subordinates in comparison with managers with a more negative view of appraisal systems.4Training Focus and TopicsEmployee training focusManager/Supervisor training focusFrequently covered topicsEmployees training should focus on the purposes of appraisal, the appraisal process and timing, and how performance criteria and standards are linked to job duties and responsibilities. It can also teach them how to rate their own performance and use that information in discussions with their supervisors and managers.

Most appraisal systems can be improved by training supervisors. The training will help minimize rate errors.

Topics such as:Appraisal process and timingPerformance criteria and job standards that should be consideredHow to communicate positive and negative feedbackWhen and how to discuss training and development goalsConducting and discussing the compensation reviewHow to avoid common rating errors5Common Errors by RatersVarying StandardsRecency & Primacy EffectsCentral Tendency, Leniency, StrictnessRater BiasVARYING STANDARDS DO NOT APPLY DIFFERENT STANDARDS/EXPECTATIONS TO EMPLOYEES PERFORMING SIMILAR JOBS. AMBIGUOUS CRITERIA AND SUBJECTIVE WEIGHTINGS MAY CAUSE THIS.

RECENCY MORE WEIGHT GIVEN TO RECENT EVENTS/INFO IE COURSE GRADE BASED ON LAST WEEK OF CLASSPRIMACY OPPOSITE OF RECENCY MORE WEIGHT GIVEN TO FIRST EVENTS/INFO

CENTRAL TENDENCY ALL ARE RATING PATTERNS. RATE ALL IN NARROW MIDDLE RANGE (AVG)LENIENCY - RATE ALL IN HIGH RANGE - DONE TO AVOID CONFLICT, LIKELY IF NO HR REP REVIEWS.STRICTNESS - RATE ALL IN LOW RANGE

RATER BIAS RATERS VALUES OR PREJUDICES DISTORT RATING. BASED ON AGE, RELIGION, SENIORITY, SEX APPEARANCE. MAY BE UNINTENTIONAL. LIKELY IF NO HR REP REVIEWS.

6Common Errors by Raters (contd)Halo & Horns EffectsContrast ErrorSimilar to Me/Different From MeSampling ErrorHALO SCORES EMPLOYEE HIGH ON ALL CRITERIA BASED ON PERFORMANCE IN ONE AREA. I.E.. FEW ABSENCES = HIGH RATING FOR QUALITY & QTY WORK.

HORNS OPPOSITE EFFECT. SCORES EMPLOYEE LOW ON ALL CRITERIA BASED ON PERFORMANCE IN ONE AREA.

CONTRAST RATING PEOPLE RELATIVE TO OTHERS RATHER THAN AGAINST ESTABLISHED PERFORMANCE STANDARDS. IE MOST IN GROUP ARE AVERAGE, ABOVE AVG PERFORMED RATED AS EXCELLENT. IN GROUP OF HIGH PERFORMERS SAME PERSON MAY BE RATED LOWER.

SIMILAR/DIFFERENT TO ME RATER INFLUENCED BY PEOPLE W/ CHARACTERISTICS SAME AS OR DIFFERENT FROM OWN. I.E. MGR HAS MBA, GIVES MBAS HIGHER RATING THAN BACHELORS DEGREE. RATING PEOPLE RELATIVE TO OTHERS RATHER THAN AGAINST ESTABLISHED PERFORMANCE STANDARDS.

SAMPLING ERROR OCCURS WHEN RATER HAS ONLY SEEN SMALL SAMPLE FO PERSONS WORK. IE. 95% OF REPORTS ARE SATISFACTORY, BUT MGR ONLY SEES THE 5% WITH ERRORS. WORK RATED SHOULD BE BROAD & REPRESENTATIVE SAMPLE OF ALL WORK.7Communicating FeedbackDO NOT

DOPrepare in advanceFocus on performance & development ID specific re reasons for ratingsID specific improvement planConsider your role in performanceReinforce desired behaviorFocus on future performanceDo all the talkingLectureDiscuss salary or promotionFocus only on the negativeBe overly criticalFeel you both must agreeCompare employee to others

SLIDE SUMMARIZED TIPS FOR MGRS TO CONDUCT EFFECTIVE APPRAISAL INTERVIEWS

CONDUCTING THE INTERVIEW MGRS NEED TO COMMO RESULTS OF APPRAISAL TO ENSURE EMPLOYEE UNDERSTANDS HOW THEY STAND IN EYES OF SUPERVISOR. OPPORTUNITY TO CLEAR UP MISUNDERSTANDINGS ON EITHER SIDE. BUT, IS BOTH OPPORTUNITY & DANGER; SINCE MGR MUST COMMO BOTH PRAISE AND CRITICISM.

MGRS CONCERNS HOW TO EMPHASIZE POSITIVE BUT, STILL DISCUSS NEEDS IMPROVEMENT. EMPLOYEE MAY FEEL RESENTMENT.

EMPLOYEE CONCERNS FEEL APPRAISAL IS PERSONAL & IMPORTANT TO CONTINUED SUCCESS. ALSO WANT TO KNOW HOW MGR VIEWS THEIR PERFORMANCE.

8Three Common Components of Feedback as a SystemData Data is a small part of the overall story.Evaluation of data the way the feedback system reacts to the facts.Action based on evaluation the action plan.

Three Common Components of Feedback as a system.(a)Data Data is a small part of the overall story in an employees performance. When data is noted good or bad the manager has to confirm how the employee got there.. (b) Evaluation of data the way the feedback system reacts to the facts. Example: Mary achieved her sales goals for 2009 (Mary handled her call volume efficiently capturing those customers that needed the checking/savings/installment/business loan. Or, Mary failed to achieve her sales goals if Mary was given additional assignments throughout 2009 that would have kept her from reaching her sales goal some of her failure to achieve may be justified in her annual performance appraisal(c) Action based on evaluation The manager provides specific suggestions as feedback to the employee as to how the employee can maintain or increase performance in a particular area. Example: Sales if an employee is more comfortable selling checking/savings accounts to meet sales goals, it would be suggested that the employee sell products that would generate more sales dollars to the employees portfolio home equity loans, car & boat loans, etc.

9Manager/Employee Reactions to Appraisal ProcessManagement thought process hesitancy vs. development plans.Employee thought process fear vs. the self improvement process.

Reactions of managers Managers are hesitant at times to provide feedback when it is or may be perceived as negative. A manager never wants to document something that may hinder an employees career goals. Managers are caught between being manager and counselor at times it is tempting to avoid the truth. However, down-playing poor performance does not help the employee. It only prolongs the truth eventually and prolongs how far the employee can go in their career. Suggestion: Make sure there are no surprises continual and ongoing feedback to employees weekly &monthly eliminate any surprises in the annual review. Let the employee know they actually write their own reviews by how they perform. If you meet with them weekly/monthly they know what the performance appraisal should look like. 2. Reactions of employees Employees may see the appraisal process as a threat at times they try to track peers that perform low in hopes that their ratings are higher than their peers. They feel that the only way to receive a higher rating is for someone else to receive a lower rating. The focus here is to help the employee think in terms of self-improvement and personal development. These two components can be documented in the performance appraisal so as to show the employee they can perform at an achieves level and higher continuously if they keep a plan mindset at all times. That will ensure their success.

10What an Effective Performance Appraisal Process Should Look LikeConsistentBeneficialUsefulLegalJob RelatedFairEffective

Effective performance appraisal process should be:1. Consistent with strategic mission of the organization the performance appraisal helps the employee understand how his/her role plays in the organization.2. Beneficial as development too the appraisal is not used to punish employees, it is used to develop and show employees how to reach their individual/departmental/organizational goals as well.3. Useful as admin tool We can show the employee their strengths & weaknesses and develop their plan from there.4. Legal and job related the appraisal only focuses on the employee, the job and how effective the employee was at getting the job done. A manager cannot legally usurp any power over an employee during the appraisal process because of any personal feelings/like/dislikes they may have. It must all be legal and professional. Anything outside of that is a HR issue and could be considered illegal.5. Viewed as fair The metrics should be clear. The expectations must be set and the employee must understand what is being expected of them ongoing review of how the employee is doing must be done to ensure their success. If, for some reason the employee is not successful it should be clear to them before you confirm it that they simply did not perform based on any challenges they had outside of your development plans you helped them with. 6. Effective in documenting employee performance Effective documentation is crucial first to set clear guidelines for employee goals. Second, if you do have a HR issue legally it is crucial to be specific in documentation 1) What the goal is 2) Was it met? 3) If not, why? 4) Was it the employee or something else that caused the employee to fail? 5) Describe details that were in place to help the employee succeed. If an employee must be placed on formal warning or terminated, it should be very clear why you need to do so and it all must be performance related.

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