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Strategic human resource management ch09

Performance Management and Appraisal


Basic Concepts in Performance
Management and Appraisal
Comparing
Performance Appraisal
and
Performance Management

Performance Appraisal:
Setting work standards, assessing
performance, and providing
feedback to employees to motivate,
correct, and continue their
performance.

© 2008 Prentice Hall, Inc. All rights reserved.

Performance Management:
An integrated approach to

ensuring that an employee’s
performance supports and
contributes to the organization’s
strategic aims.

9–2


Why Performance Management?

Total Quality

The
Performance
Management
Approach

Appraisal Issues

Strategic Focus

© 2008 Prentice Hall, Inc. All rights reserved.

9–3


Why Performance Management?
• Increasing use of performance management by
employers reflects:
 The popularity of the total quality management
(TQM) concepts.
 The belief that traditional performance appraisals are
often not just useless but counterproductive.
 The necessity in today’s globally competitive
industrial environment for every employee’s efforts to
focus on helping the company to achieve its strategic
goals.

© 2005 Prentice Hall Inc. All rights reserved.

9–4


FIGURE

The Building Blocks of an Effective Performance Management Process

Direction sharing

Role clarification

Goal alignment

Goal setting and planning

Developmental goal setting

Ongoing performance monitoring

Ongoing feedback

Coaching and support

Performance assessment (appraisal)
Rewards, recognition, and compensation
Workflow, process control, and return on investment management

© 2008 Prentice Hall, Inc. All rights reserved.

9–5


Defining the Employee’s Goals
and Work Standards
Guidelines for
Effective Goal Setting

Assign
Specific
Goals

Assign
Measurable
Goals

© 2008 Prentice Hall, Inc. All rights reserved.

Assign
Challenging
but Doable
Goals

Encourage
Participation

9–6


Setting Goals
• SMART Goals:
 Specific, and clearly state the desired results.
 Measurable in answering “how much.”
 Attainable, and not too tough or too easy.
 Relevant to what’s to be achieved.
 Timely in reflecting deadlines and milestones.

© 2008 Prentice Hall, Inc. All rights reserved.

9–7


Performance Appraisal Roles
• Supervisors
 Usually do the actual

appraising.
 Must be familiar with

basic appraisal
techniques.
 Must understand and

avoid problems that can
cripple appraisals.
 Must know how to

conduct appraisals fairly.
© 2008 Prentice Hall, Inc. All rights reserved.

9–8


Performance Appraisal Roles (cont’d)
• The HR Department
 Serves a policy-making and advisory role.
 Provides advice and assistance regarding the

appraisal tool to use.
 Trains supervisors to improve their appraisal skills.
 Monitors the appraisal system effectiveness and

compliance with EEO laws.

© 2008 Prentice Hall, Inc. All rights reserved.

9–9


An Introduction to Appraising Performance
Why Appraise Performance?
1

Is basis for pay and promotion decisions.

2

Plays an integral role in performance management.

3

Helps in correcting deficiencies and reinforcing good
performance.

4

Is useful in career planning.

© 2008 Prentice Hall, Inc. All rights reserved.

9–10


An Introduction to Appraising Performance
Steps in Appraising Performance
1

Defining the job

2

Appraising performance

3

Providing feedback

© 2008 Prentice Hall, Inc. All rights reserved.

9–11


Performance Appraisal Methods
Appraisal Methodologies
1

Graphic Rating Scale Method

6

Narrative Forms

2

Alternation Ranking Method

7

Behaviorally Anchored Rating
Scales (BARS)

3

Paired Comparison Method

8

Management by Objectives
(MBO)

4

Forced Distribution Method

9

5

Critical Incident Method

© 2008 Prentice Hall, Inc. All rights reserved.

Merged Methods

9–12


Performance Appraisal Methods
• Graphic rating scale
 A scale that lists a number of traits and a range of
performance for each that is used to identify the
score that best describes an employee’s level of
performance for each trait.

© 2005 Prentice Hall Inc. All rights reserved.

9–13


Graphic
Rating Scale
with Space
for
Comments

Figure 9–3
© 2005 Prentice Hall Inc. All rights reserved.

9–14


Portion of an Administrative Secretary’s Sample
Performance Appraisal Form

Source: James Buford Jr., Bettye Burkhalter, and Grover Jacobs, “Link Job Description
to Performance Appraisals,” Personnel Journal, June 1988, pp. 135–136.
© 2005 Prentice Hall Inc. All rights reserved.

Figure 9–4
9–15


Performance
Performance
Management
ManagementOutline
Outline

Source: www.cwru.edu.
© 2005 Prentice Hall Inc. All rights reserved.

Figure 9–5a
9–16


Performance
Performance
Management
Management
Outline
Outline
(cont’d)
(cont’d)

Source: www.cwru.edu.
© 2005 Prentice Hall Inc. All rights reserved.

Figure 9–5b
9–17


Performance
Performance
Management
Management
Outline
Outline(cont’d)
(cont’d)

Source: www.cwru.edu.
© 2005 Prentice Hall Inc. All rights reserved.

Figure 9–5c
9–18


Performance Appraisal Methods (cont’d)
• Alternation ranking method
 Ranking employees from best to worst on a
particular trait, choosing highest, then lowest, until all
are ranked.
• Paired comparison method
 Ranking employees by making a chart of all possible
pairs of the employees for each trait and indicating
which is the better employee of the pair.

© 2005 Prentice Hall Inc. All rights reserved.

9–19


Alternation Ranking Scale

Figure 9–6
© 2005 Prentice Hall Inc. All rights reserved.

9–20


Ranking Employees by the
Paired Comparison Method

Note: + means “better than.” − means “worse than.” For each chart, add up the
number of 1’s in each column to get the highest-ranked employee.
Figure 9–7
© 2005 Prentice Hall Inc. All rights reserved.

9–21


Performance Appraisal Methods (cont’d)
• Forced distribution method
 Similar to grading on a curve; predetermined
percentages of ratees are placed in various
performance categories.
 Example:
15% high performers
 20% high-average performers
 30% average performers
 20% low-average performers
 15% low performers


• Narrative Forms

© 2005 Prentice Hall Inc. All rights reserved.

9–22


TABLE

Examples of Critical Incidents for a Plant Manager

Continuing
Duties

Targets

Critical Incidents

Schedule
production for
plant

90% utilization of
personnel and
machinery in plant;
orders delivered on
time

Instituted new production
scheduling system; decreased
late orders by 10% last month;
increased machine utilization in
plant by 20% last month

Supervise
procurement of
raw materials and
inventory control

Minimize inventory
costs while keeping
adequate supplies
on hand

Let inventory storage costs rise
15% last month; overordered
parts “A” and “B” by 20%;
underordered part “C” by 30%

Supervise
machinery
maintenance

No shutdowns due
to faulty machinery

Instituted new preventative
maintenance system for plant;
prevented a machine breakdown
by discovering faulty part

© 2008 Prentice Hall, Inc. All rights reserved.

9–23


Behaviorally Anchored Rating Scale (BARS)
Developing a BARS
1. Generate critical

incidents
2. Develop performance

dimensions
3. Reallocate incidents
4. Scale the incidents
5. Develop a final

Advantages of BARS
 A more accurate

gauge
 Clearer standards
 Feedback
 Independent

dimensions
 Consistency

instrument

© 2008 Prentice Hall, Inc. All rights reserved.

9–24


Example of a
Behaviorally
Anchored Rating
Scale for the
Dimension
Salesmanship Skill

Source:Walter C. Borman, “Behavior
Based Rating,” in Ronald A. Berk (ed.),
Performance Assessment: Methods and
Applications (Baltimore, MD: Johns
Hopkins University Press, 1986), p. 103.

Figure 9–9
© 2005 Prentice Hall Inc. All rights reserved.

9–25


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