Performance Appraisal Essay Methods

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					        Performance Appraisal
•   Overview
•   The Criterion Problem
•   Sources of Performance Data
•   Specific Performance Appraisal Methods
•   The Performance Appraisal Interview
       Performance Appraisal
• Performance appraisal is…
   – the formalized means of assessing worker
     performance in comparison to certain
     established organizational standards.
   – the process used by an organization to
     evaluate the extent to which its workers
     are doing their jobs satisfactorily.
        Development and Use of
        Performance Appraisal
                               Uses of Performance Data
                                         Training
        Job Analysis
                                        Compensation
                                        Administration
                                         Placement
    Criterion Development
                                         Promotions
                                        Discharge
Performance Appraisal System            Personnel
                                        Research
     Uses of Performance Appraisal
• Between-person uses - salary administration,
  promotion, retention/termination, recognition of
  individual performance, layoff, and identification
  of poor performers.
• Within-person uses - identification of individual
  training needs, performance feedback, determining
  transfers and assignments, and identifying
  individual strengths and weakness.
• System maintenance uses - workforce planning,
  determining organization training needs, evaluating
  goal achievement, evaluating personnel practices.
         Performance Criteria
• Performance criteria are measures used to
  determine successful and unsuccessful job
  performance.
• The Criterion Problem - How should we judge
  worker performance?
• Objective performance measures - quantitative
  indicators of work outcomes.
• Judgmental (subjective) performance -
  ratings/rankings made by some knowledgeable
  individual.
         Performance Criteria
• Three different levels of criteria
  – The ultimate criterion - an abstract, idealized
    concept of the criterion.
  – The conceptual criterion - the various concepts
    that together make up the ultimate criterion.
  – The operational criterion - the manner in which
    the operational criteria are measured.
• The match between the operational criterion
  to the conceptual criterion determines the
  relevance of the criteria
             Performance Criteria

                 Conceptual
Criterion
                  Criterion
Deficiency

                                Criterion
                                Relevance
 Criterion       Operational
 Contamination    Criterion
     Sources of Performance Data
• Personnel Data - work-related information that is
  regularly recorded
  – e.g., absenteeism, tardiness, # of accidents, letters of
    commendation or reprimand
• Advantages
  – Relatively easy to obtain
  – Do not require subjective interpretation
• Disadvantages
  – Assess mostly negative behaviors
  – Many aspects of job performance are not measured
  – Contextual factors may influence personnel records
   Sources of Performance Data
• Results-oriented (“hard”) criteria - direct
  measures of job performance, productivity
  – e.g., dollar volume of sales, number of words
    typed, units produced
• Advantages
  – Face Validity
• Disadvantages
  – Aspects of job performance may not be measured
  – Contextual factors may influence “hard” criteria
   Sources of Performance Data
• Judgmental (“Soft”) criteria - ratings or
  rankings of job performance
• Advantages
  – Ratings scales are flexible and can used to
    measure many different aspects of job
    performance.
• Disadvantages
  – Rating errors and biases can result in criterion
    contamination.
    Who Rates Job Performance?
•   Supervisors
•   Self-appraisals
•   Peer appraisals
•   Subordinate appraisals
•   Customer appraisals
•   360-degree feedback is a method of gathering
    performance ratings from supervisors,
    subordinates, peers, and customers.
               Rating Errors
• Rating errors are unintentional rating
  inaccuracies.
• Leniency - the tendency to give ratings that
  are overly high
• Severity - the tendency to give ratings that are
  overly low
• Central Tendency - the tendency to use the
  midpoint of the scale too often
                Rating Errors
• Halo - the tendency to use an overall impression of
  someone when making ratings on specific
  performance dimensions.
• Attributional errors - the tendency to underestimate
  situational factors that may constrain the ratees
  performance.
• Personal biases - unintentional discrimination based
  on age, sex, race, etc.
• Recency effect - the tendency to give greater weight
  to recent performance and lesser weight to earlier
  performance.
      Reducing Rating Errors
• Train performance raters
  – Rater error training (RET) - making raters
    aware of unintentional rating errors
  – Rater accuracy training (RAT) - train the rater
    in what constitutes good or poor performance
    and practice rating (videotaped) work samples
    and get feedback on accuracy.
• Use more than one performance rater
• Improve the rating process
  – e.g., structuring observations, changing rating
    scale format
                Rating Biases
• Rating biases are intentional rating inaccuracies.
• Longenecker et al. (1987), The politics of
  performance appraisal.
  – Interviewed executives familiar with rating
    performance to investigate the thought processes they
    used when rating performance
  – Revealed that distortion of ratings was an acceptable
    means of accomplishes various ulterior goals.
     • “Accurately rating performance is not as important
       as keeping things cooking.”
                Rating Biases
• Seven common reasons for inflating ratings:
  –   Pain-in-the-neck factor
  –   To get more bonuses/raises for the unit
  –   To promote someone out of the unit
  –   Boost morale
  –   Underdog factor
  –   Dirty laundry factor
  –   Recognition of recent improvements
               Rating Biases
• Four common reasons for deflating ratings:
  – Give a „kick in the pants‟ to someone who is
    coasting
  – Pay is linking to performance and the budget is
    tight
  – Show them who‟s the boss
  – In an effort to provide justification for future
    firing
      Reducing Rating Biases
• Reward supervisors who rate accurately
• Limit access to performance appraisal
  information
• Make managers aware of the benefits of
  accurate performance ratings and the
  detrimental affects of inaccurate
  performance ratings
• Redesign organizational systems that
  promote intentional distortion
Specific Performance Appraisal Methods

  • Narrative Evaluations
    – An essay describing the employees
      performance over some time period.
    – Used as either the only performance appraisal
      method or to supplement a more structured
      approach (i.e., ratings/ranking).
    – Used in self-, peer, subordinate, customer, and
      supervisor performance appraisals.
Specific Performance Appraisal Methods

  • Narrative Evaluations
    – Advantages
       • May provide specific behavioral examples of
         job performance
       • Fill in gaps
       • Few development demands (i.e., up-front
         time)
Specific Performance Appraisal Methods
• Narrative Evaluations
  – Disadvantages
     • Time consuming
     • Requires good communication and writing skills
       on the part of the assessor
     • May not address all of the aspects of job
       performance (especially if it is the only method
       used)
     • Affected by error and bias
     • No quantitative information and therefore difficult
       to compare across employees
Specific Performance Appraisal Methods
• Graphic Rating Scales
  – Performance appraisal methods using a
    predetermined scale to rate the worker on
    important job dimensions.
  – It usually consists of:
     • a list and description of job related performance
       dimensions/traits
     • numerical anchoring system (typically 5-9 points)
       or
     • verbal anchoring system (e.g., good/poor,
Specific Performance Appraisal Methods
• Graphic Rating Scales
  – Advantages
     • Quantifies job performance
     • Relatively easy to develop
  – Disadvantages
     • Affected by error and bias
     • Often ambiguous and therefore different raters
       infer different meanings
     • Often generic and may not represent job very
       well
Specific Performance Appraisal Methods
• Behaviorally Anchored Rating Scales (BARS)
  – Using ratings scales with labels or anchors reflecting
    examples of poor, average, and good behavioral
    incidents
  – Four step development process
     • Critical incidents are generated
     • One group of SMEs clustered the critical
       incidents into performance dimensions
     • Another group of SMEs confirms the
       performance and
     • Rates each critical incident (effective/ineffective)
Specific Performance Appraisal Methods
• Behaviorally Anchored Rating Scales (BARS)
  – Advantages
     • Performance dimensions are clearly defined
     • Based on job analysis and therefore job relevant
       and legally defensible
     • Useful for feedback purposes
     • High content and face validity (if it is well
       developed)
     • The development process may promote buy-in a
       frame-of-reference for evaluating performance
Specific Performance Appraisal Methods

• Behaviorally Anchored Rating Scales (BARS)
  – Disadvantages
     • Development is time-consuming and expensive
     • Affected by error and bias
     • If anchors are too representative of a particular
       employee‟s performance this may result in rating
       errors
Specific Performance Appraisal Methods
• Behavioral Observation Scales (BOS)
  – Requires appraisers to rate how often a worker has
    been observed performing key work behaviors
    (critical incidents)
  – Values on the rating scale can reflect specific
    percentages of time
     • 5 = 95-100%
     • 4= 87-94%
     • 3 = 75-84%
     • 2 = 65-74%
     • 1 = 0-64%
Specific Performance Appraisal Methods
• Behavioral Observation Scales (BOS)
  – Advantages
    • It is (supposedly) measuring observations of
      behavior and therefore lessening subjective
      judgement
    • Based on job analysis and therefore job relevant and
      legally defensible
    • Very useful for feedback purposes
    • High content and face validity (if well developed)
    • The development process may promote buy-in a
      frame-of-reference for evaluating performance
Specific Performance Appraisal Methods

• Behavioral Observation Scales (BOS)
  – Disadvantages
     • A supervisor cannot always be observing the
       workers he or she is rating
     • Appraisers cannot remember how often very
       specific periods of time over any extensive time
       period (certainly not 6 to 12 months)
     • Affected by error and bias
Specific Performance Appraisal Methods
• Comparative Approaches
  – Rankings - involve a simple rank ordering workers
    from best to worse
  – Paired Comparison - comparing each worker with
    each other worker in the group
  – Forced Distribution - assigning workers to
    established categories of poor to good performance
    with fixed limitations on how many employees can
    be assigned to each category
  – Relative Percentile Method - indicating the
    percentage of other employees performing at or
    below level demonstrated by a worker
Specific Performance Appraisal Methods

• Comparative Approaches
  – Advantages
     • Relatively simple to develop (however, certain
       methods may involve critical incidents)
     • Easy for raters and ratees to understand
     • Forces raters to make distinction among ratees
Specific Performance Appraisal Methods

  – Disadvantages
    • Most methods make it difficult to compare across
      work groups
    • Provides no information about an absolute level
      of performance -- a problem with work groups of
      exceptionally good or poor performers
    • Usually not very descriptive of performance
      behaviors
    • Using for performance feedback may be difficult
  The Performance Appraisal Interview
• At some point there is typically (and preferably) a
  face-to-face interview between the rater and the
  ratee at which the results of the performance
  appraisal are discussed.
• There shouldn‟t be surprises in the interview.The
  ratee should understand the appraisal process and
  should be receiving feedback frequently.
• There should be a review of job responsibilities
  and goals how well they‟ve been met
• Goals for future performance should be identified
 The Performance Appraisal Interview
• Performance feedback should:
  – focus on activities under the worker‟s control
  – should be timely
  – describe the situation and behavior in specific terms
  – should allow for two-way communication
  – typically should balance the recognition of good
    performance with the identification of areas for
    improvement
  – should be constructive, not manipulative
  – should be used to motivate the worker
 The Performance Appraisal Interview
• Characteristics promoting perceptions that the
  performance appraisal system is fair (Greenburg,
  1986)
  – Soliciting the ratee‟s input prior to the performance
    appraisal and using it
  – Two-way communication
  – Opportunity to challenge/rebut the evaluation
  – The rater‟s degree of familiarity with the ratee‟s work
  – Consistent application of performance standards
Content Recommendations for Legally
   Sound Performance Appraisals
• Appraisal criteria should be:
  – should be job-related and based on job analysis
  – should be based on behaviors rather than traits
  – should be within the control of the ratee
  – should relate to specific functions, not global
    assessments
  – should be communicated to ratees in advance
 Content Recommendations for Legally
    Sound Performance Appraisals
• Appraisal procedures should:
  – be standardized and uniform for all employees in a
    work group
  – be formally communicated to employees
  – allow employees to review appraisal results
  – provide formal appeal mechanisms
  – use multiple, diverse, and unbiased raters
  – provide written instructions for training raters
  – require thorough and consistent documentation
  – establish a system for detecting error and bias

				
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