Chapter 5: Performance Appraisal
- 1. HRM 751 PERFORMANCE AND COMPENSATION MANAGEMENT (PERFORMANCE APPRAISAL) Nur Izyan binti Supandi 2012293352 BM7703CF
- 2. Outline Introduction of Performance Appraisal Performance Interview and Feedback Appraisal Form Traditional Methods vs Modern Methods Type of appraisal Methods Type of Appraiser Definition Importance Performance Interview Performance Appraisal Methods Definition and Purpose When? Performance appraisal steps/process Supervisors, Peers, Subordinates, Self, Customers, Clients and Group Appraiser Error Judgmental Errors Rater Training Program Poor Appraisal Forms Ineffective Organizational Policies and Practices
- 3. INTRODUCTION
- 5. Other Terms Performance appraisal has been synonymous with performance review, performance evaluation, performance assessment, performance measurement, employee evaluation, personnel review, staff assessment, and service rating (Aggarwal & Thakur, 2013)
- 6. Definition of Performance Appraisal The observation and assessment of the employee performance against job-related standards determined by the organization over a certain period (Eichel & Bender, 1984). The process of evaluating on employee’s job performance that helpful to, and often even essential to, accomplishing important goals of all organization (Kondrasuk, 2012) Performance appraisals involves the similar idea of developing social and performance norms, monitoring the actions of employees in relation to the norms, assigning responsibility for the actions, and then ultimately providing rewards or punishment based on performance towards those norms (Milliman, Nason, Zhu, & Cieri, 2002)
- 7. Definition of Performance Appraisal Performance appraisal provides an annual review and evaluation of an individual's job performance (Eastern Illinois University, 2009) Performance appraisal is the process of determining how well employees do their jobs compared with a set of standards and communicating that information to those employees (Chukwuba, 2011) Performance appraisal is the evaluation of employee’s performance based on the standard and give feedback about the assessment .
- 8. Purpose of Performance Appraisal Walsh and Fisher (2005); Faseeh (2013): (1) To provide feedback about strengths and weaknesses; (2)To distinguish between individuals to allocate rewards; (3)To evaluate and maintain the human resource systems of the organization; and (4)To create a paper trail of documentation (Murphy & Cleveland, 1995) Chattopadhayay and Ghosh (2012), •It provides a justification for human resource decision such as rewards, career planning, transfers, training, counseling, mentoring , termination, etc.
- 9. Milliman, Nason, Zhu, and Cieri (2002)
- 10. When Performance Appraisal? Annually • Many organization usually make an evaluation of the employees’ performance in the end of the year. • annual employee performance reviews appear to be the standard in most American organizations. Semiannually • A semi-annual one for the employee to discuss with his manager any needed remedial steps for his performance on an unofficial basis. While the second one, would be an official one held at the end of the year for the employee to receive his appraisal results and know about the salary increase or promotion. E.g: Japan Others • According to the Chartered Institute of Personnel and Development (CIPD), UK, 87% of employers use some form of individual annual appraisals, 27% do them twice a year and 10% more often than that. Some use them when projects come to an end.
- 12. Example Performance Appraisal Step 1. Establish performance standards for each position and criteria for evaluation. 2. Establish performance evaluation policies on when to rate, how often to rate, and who should rate. 3. Have raters gather data on employees’ performance. 6. Make decisions and file evaluation. 5. Discuss the evaluation with the employees. 4. Have raters (and employees in some systems) evaluate employees’ performance. (Kumari, 2012)
- 13. Example Performance Appraisal Step Step l: The Initial (Performance) Planning Session • Meeting individually to described expectation Step II: The MidPoint Review Step III: The Final Review Session • provide feedback to the employee during the primary performance period • to review and rate the performance of each employee during the entire performance rating period. (West Virginia Division of Personnel Handbook, 2005)
- 15. Definition of Performance Interviewinterviews between a Recurrent strategic superior in an organization and an employee that focus on employee performance and development (Asmuß, 2008) The interview constitutes a discussion session between an employee and his or her supervisor with respect to the employee’s results during the period of evaluation, focusing especially on employee progress, aims, and needs at work (Anne Linnaa, Elovainio, Bos, Kivimäki, & Penttia, 2012) The performance appraisal interview is defined as the formal process of evaluating employee performance (Keeping and Levy 2000) A potentially important part of any organization’s performance appraisal system that function in several ways such as providing feedback (Cederblom, 1982) A formal meetings for the specific purpose of discussing the various aspect of performance and the performance management system (Aguinis, 2009)
- 16. Function of Performance Interview Two main purpose: Counseling and development Evaluation and discussion About employees’ performance Allow employees to improve their performance by identifying performance problem and solution for overcoming them. Helps to build good relationship (Cederblom, 1982) (Aguinis, 2009)
- 17. Importance of Performance Interview Instant feedback (Asmuß, 2008) Human resource plan Feedbacks in Pepsi- Cola International Development feedback (Cederblom, 1982) Coaching (Cederblom , 1982) Accountability based performance appraisals
- 18. Explanation of Feedback Staff members should not receive any surprise feedback because informal, continuous discussion and feedback between staff and manager throughout the year prevents surprises (Boice & Kleiner, 1997).
- 20. Traditional vs New Approach Traditional Approach New Approach Traditional Approach This method is based on studying the personal qualities of the employees. It may include knowledge, initiative, loyalt y, leadership and judgment (Aggarwal & Thakur, 2013). New Approach Performance appraisal is used for developmental and motivational purposes in the organizations (Gürbüz & Dikmenli, 2007).
- 21. (Nili, Ardakani & Shekarchizadeh, 2012)
- 22. Methods and Form SHRM Curriculum Guidebook (2010)
- 23. Critical Incident Method Keeping a record of uncommonly good or undesirable examples of an employee's work related behavior and reviewing it with the employee at predetermined times.
- 24. Management by Objectives (MBO) Employees are evaluated how well they accomplished a specific set of objectives that have been determined to critical in the successful completion of the job.
- 25. Narrative Essay Evaluator writes an explanation about employee’s strength and weakness points, previous performance, positional and suggestion for his (her) improvement at the end of evaluation time.
- 26. Rating Scale Behaviorally Anchored Rating Scale (BARS) Graphic Rating Scale • BARS combines elements from critical incident and graphic rating scale approaches. The supervisor rates employees’ according to items on a numerical scale. • A scale that lists a number of traits and a range of performance for each, the employee is then rated by identifying the score that best describes his or her performance for each trait.
- 28. Comparative Methods Comparative methods of performance appraisal seek to identify one worker’s standing to others. Ranking, paired comparison, and forced distribution
- 29. Comparative Methods Ranking Method Forced Distribution Ranking Paired - This method Comparison - employees from forces a set best to worst on a - Each person is percentage of all particular directly compared person being trait, choosing with every other evaluated into highest, then person being pre-determined lowest, until all rated. performance ranked (Aggarwal categories. & Thakur, 2013)
- 30. Appraisal Form Information on performance is collected by using forms, which can be filled out in paper or electronically (Aguinis, 2009) Example appraisal form
- 31. Components in Appraisal Form Basic employee information Accountabilities, objectives and standard Competencies and indicators Major achievements and contributions Developmental achievements Developmental needs, plans, and goals Stakeholder input Employees comments Signature (Aguinis, 2009)
- 32. 360 Degree is known by a variety of names, including multisource assessment, 360-degree feedback, multirater assessment, and threedimensional or full-circle appraisal. It relies on the input of an employee's superior, colleagues, subordinates, sometimes customers, suppliers and/or spouses. The information collected and feedback is provided in full circular fashion top down and back to top.
- 34. Supervisors Peers Subordinates • Supervisor: • Best position to evaluate performance in relation to strategic organization goals • Peer: • Must know the level of performance of the employee being evaluated. • May be useful when the task of the work unit require frequent working contact among peers • For developmental aspects of performance evaluation • Subordinates are a valuable source of information regarding particular aspects of a supervisor or leader’s performance such as communication, team building or delegation. • For example Exxon and universities
- 35. Self Customers • Self appraisal • To be used for developmental aspects. • Self evaluation have often been met with skepticism by organizations because the self interest of the employee. • Customers • Useful for jobs that require a high degree of interaction with public or with particular jobrelated individuals. • Clients may also offer a different perspective on a employee’s performance, particularly for jobs that require a high degree of interaction with people. For example, client appraisals can be a valuable source of feedback regarding the quality of service provision (e.g. the quality of interaction, degree of professionalism). • Group
- 36. APPRAISER ERROR
- 37. Appraiser Error Appraisal error affect the objectivity of the appraisal negatively (Boachie-Mensah & Seidu, 2012). The problems that affect the validity and dependability of the Performance appraisal systems (Kumari, 2012)
- 38. Component of Appraisal Error (Kumari, 2012) Judgment Error • People commit mistake due to biasness and inadequate training while evaluating people and their performance. • These errors are also called as Rater Errors. Poor Appraisal Forms • The rating scale may be quite vague and unclear. • Problems with evaluation standards • The rating form may ignore important aspects of job performance. • The forms may be too long and complex. Ineffective Organizational Policies and Practices • Very often the sincere appraisal report put in by a rater is not suitably rewarded
- 39. Ratings Error Unintentionally Similar to me Contrast Halo Primacy Recency Negatively First impression Spillover Stereotype Attribution Intentional Leniency Severity Central tendency (Aguinis, 2009)
- 40. Rater Training Programs The overall objective of providing raters with tools that will allow them to implement the performance management system effectively and effectively (Aguinis, 2009). To improve managers’ ability to conduct effective performance appraisals with dealing errors to eliminate it from ratings (Inancevich & Konopaske, 2013). The example of training such as Rater Error Training, Frame of Reference Training (FOR), Behavioral Observation Training, and SelfLeadership Training.
- 41. A Study in polytechnic in Takoradi, Ghana (Boachie-Mensah & Seidu, 2012) Effect from Appraisal Error The most common errors: similarity and the halo effect biases Irregular and inadequate feedback A negative perception that the employees Recommendation Precise definitions of the job-related behaviours being rated are required. The superior to routinely document employee accomplishments and failures throughout the whole appraisal period. Performance standards must be clearly defined Formal training programmes
- 42. Support from Previous Study In a study of Telecom Industry in Navi Mumbai Region the most common appraisal errors in the system are the similarity (similar-to-me) effect and the halo effect.
- 43. Deming (1982/2000) Deming was a recognized guru in the quality movement and famous for his critique of performance ratings, identifying them as one of management’s deadly diseases in the PA: It nourishes short-term performance, annihilates longterm planning, builds fear, demolishes team-work, nourishes rivalry and politics. It leaves people bitter, crushed, bruised, battered, desolate, despondent, dejected, feeling inferior, some even depressed, unfit for work for weeks after receipt of rating, unable to comprehend why they
- 44. Conclusion Organizations can benefit a lot from performance appraisal by seeing it as crucial part of management responsibility. Employee will be motivated and inspired with positive and constructive feedback from performance appraisal. Effective performance appraisal should eliminate appraisal error.
- 45. THANK YOU..