Performance appraisals and management: Performance Management: A process that insures that all employees know what is expected from them, receives frequent feedback reviews, on how to improve their performance and are recognized for their good results. Process= going on activity (not event) Expected = 1- planning : setting performance expectations and goals for individuals and groups (elements and standards) Employee involvement for better commitment Plans should be flexible Frequent feedback and reviews = 2- monitoring It is the consistent measuring of performance and providing ongoing feedback to employees towards reaching their goals Done against standards and elements stated Identify unacceptable performance and the need to change unrealistic standards. Improve = 3- development: Increased capacity to perform through training, introducing new skills, higher level of responsibility, improving work process etc P.M. helps to identify the development needs Further improving may be needed even in cases of good performance 4- Rating: Summary of employee performance done from time to time Identify best performers Based on work performed during appraisal period Recognized= 5- rewarding : Recognizing employees individually or in groups to acknowledge their performance and contributions. Recognition should be ongoing and part of day to day experience. Formal (e.g. financial) or informal (e.g. thank you) Inputs Performance Management output Planning monitoring Inputs: Information History : Org Life Cycle Organization culture Strategic business plan Managers = agreement with employee Employee = agreement with manager Output: Improved performance on the level on individual and org Motivation Recognition Rewarding PM Development Rating 1|Page Strategy is controlled by corporate values: Vision mission goals how to achieve it? (strategy) tasks Why performance management: 1- Total quality: by integrating goals appraisal and development. 2- Appraisal issues: focusing of appraisal only may be tense, useless and even counterproductive. 3- Strategic focus: continuous improvement will lead to meeting goals of cost, quality, and delivery. Building blocks of an effective performance management process: 1- Direction sharing. 2- Role clarification. 3- Goal setting and planning. 4- Goal alignment: with departmental and organization goals. 5- Developmental goal setting. 6- Ongoing performance monitoring. 7- Coaching and support. 8- Performance appraisal (rating). 9- Reward, compensation and recognition. 10- Workflow, process control, and ROI management. Defining employee goals: should be SMART + encourage participation in setting goals Definition of performance appraisal: Procedure of setting work standards, assessing the employee actual performance relative to those standards, and provide feedback to the employee with the goal: To motivate him to eliminate performance deficiencies or to continue to perform above average Result is improving employees and company’s performance. Why: 1- Base pay and promotional decisions on performance appraisals 2- Performance management process: employer converts strategic goals to specific employee goals and reviews them periodically 3- Appraisal let the boss and subordinate create a plan to correct deficiencies and reinforce the things that the subordinate have done right. 4- Should serve a useful career planning purpose, providing opportunity to define strengths and weaknesses Realistic appraisals: Jack Welch of GE “there is nothing worst that telling someone whose job is mediocre that he is doing well. The supervisor’s role: The supervisor not the HR usually does the actual appraising. HR role is and advisory role about the tools of appraisal, monitoring effectiveness of appraisal, and its compliance with labor laws. Steps of performance appraisal: 3 steps 1- Clearly define the job – both the supervisor and the employee must agree on the job duties and job standards. (job description) 2- Actual performance appraisal (form) what to measure and how to measure. Example: Quality, qty, timeliness of work. 3- Providing feedback to the employee. Appraisal methods: tools that defines: what to measure and how to measure it. Actual performance appraisal methods: 2|Page a. b. c. d. e. f. Graphic rating scales: simplest and most popular method, list traits as quality, reliability, and rate performance from unsatisfactory to outstanding. Each subordinate is evaluated and then totals the assigned values. Measures: generic dimensions (communication, quality, qty) and/or job actual duties (maintaining records, using spreadsheets) and /or competency The alternation ranking method: ranking of employees from best to worst on each trait, by choosing best then worst, till all are ranked. Paired comparison method: ranking employees for each trait, by pairing and comparing every subordinate with every other subordinate (in pairs). It’s more accurate. Forced Distribution method: Place predetermined percentages of rates into several performance categories. Example 20% top- middle 70% and bottom 10%. Each employee is placed in the matching category for the measured trait (creativity, quality of work and so on). This method first popularized by GE. Bottom 10% are given 90 days to improve, if not, they can resign and get severance pay. Or stay but if it didn’t work out, fired without severance. Some reported inequality between teams, 10% of best teams leave, while 90% of low performance teams stay! Critical incident Method: supervisor keep log with positive and negative examples (critical incidents) of subordinate behavior using incidents as examples. Behaviorally anchored rating scales (BARS): narrative form with combined anchors a numerical rating scales. Better tool. 5 steps: 1- generate critical incidents: asking people who know the job to describe specific illustrations –incidents- of effective and ineffective performance, 2- develop performance dimensions: cluster incidents in groups or clusters of 5-10 incidents performance dimensions and define each dimension. 3- another group reallocate the incidents and reassigned to matching clusters (usually assigned to same clusters in 50-80% of cases) 4- scale the incidents (7 to 9 points scale are common) 5- develop the final instruments. Choose 6 or 7 of the incidents as the dimensions behavioral anchors. Advantages: 1- More accurate gauge 2- Clearer standards 3- Better feedback 4- Dimensions are rated independently 5- More consistent and reliable g- Management by objectives MBO: Manager needs to set specific measurable goals for each employee. It is a comprehensive and formal organization wide goal setting and appraisal program: 1. Setting organizations goals 2. Setting departmental goals 3. Discussing departmental goals 4. Defining expected results 5. Conducting performance reviews 6. Providing feedbacks There are 3 problems in MBO: Setting unclear objectives. Time consuming. Objectives setting may create some conflicts between supervisors and subordinate. Objectives should be SMART. h- Computerized web based performance appraisal: example electronic performance monitoring when supervisors electronically monitor the amount of computerized data an employee processing per day. i- Merging the methods: best forms of appraisal may result from merging many approaches. 3|Page General appraisal Steps: defining the job and agree of job standards, compare the performance to the set standards, schedule feedback sessions Problems associated with performance appraisal: 1. Unclear standards: makes appraisal too open for interpretation. 2. Halo effect: when performance in one trait biases the appraisal of other traits. 3. Strictness: tendency to rate all the subordinates either high or low. 4. Bias: tendency to allow individual differences as age, sex, race to affect the appraisal ratings. 5. Central tendencies: tendency to rate all employees in a similar war, example rating all as average. How to avoid these problems: 1- Know the problem 2- Use the right tool 3- Train supervisors 4- Control outside influences. 5- Keep a diary of employee appraisal. Who should do the appraising? 1- Immediate supervisor 2- Peers 3- Rating committee 4- Subordinates 5- Self-rating 6- 360 degree feedback: all surrounding individual including internal and external customers. Appraisal interviews: an interview in which the supervisor and the subordinates review the appraisal and make plans to reinforce strengths and remedy the deficiencies. Types: Satisfactory promotable interview Satisfactory not promotable Unsatisfactory correctable Unsatisfactory uncorrectable How to conduct appraisal interview: 1- Talk in terms of objective work data 2- Don’t get personal 3- Encourage dialogue 4- Write clear action plan with dates 4|Page