Performance Appraisal: An Overview

Performance Appraisal Basics

• Performance appraisal is a systematic and periodic process for measuring individual work performance against established job requirements.
• It includes a subjective evaluation of an employee's strengths and weaknesses, their value to the organization, and their potential for future development.
• Other names for performance appraisals include performance evaluations, performance reviews, development discussions, and employee appraisals.

Reasons for Performance Appraisal

• Performance appraisals are used in making decisions about pay, promotion, and employee retention.
• Appraisals link individual performance management to the achievement of company goals.
• Managers use appraisals to correct employee deficiencies and reinforce strengths.
• Employees can review career plans using appraisals.
• Training needs can be identified.

Advantages of Performance Appraisals

• They provide a documented record of employee performance over a specific time.
• Appraisals offer a structure for managers to discuss performance with employees and provide feedback on goal accomplishment.
• A structured process for employees clarifies expectations and discuss issues with their manager.
• Appraisals allow thinking through and planning of employee personal goals.
• Employees feel motivated if appraisals are supported by fair merit increases and compensation.

Disadvantages of Performance Appraisals

• If not executed properly, appraisals can create negative experiences.
• They can be very time-consuming and overwhelming for managers with many employees.
• Subject to rater errors and biases due to being based on human assessment.
• If not done appropriately, appraisals can be a waste of time.
• Appraisals can lead to a stressful environment for everyone involved.

Types of Performance Appraisals

• In a 360-degree appraisal, the manager gathers employee performance information from supervisors, co-workers, group members, and self-assessment, usually via questionnaire.

Who Appraises Performance

• Supervisors, peers, the individual themselves, subordinates, suppliers, and customers or clients may all appraise performance.

Appraisal Interview Steps

• Prepare by informing the employee what to expect
• Plan and explain the interview's purpose.
• Measure success through performance ratings.
• Coach the employee and collaborate on solutions.
• Agree a completion date for the next performance period.

How to Criticize in Appraisal Interviews

• Be positive.
• Give actionable advice related to behavior.
• The appraissal should be a collaborative experience for both people.
• Focus on the situation rather than the person.
• Be specific with examples and incidents.
• Keep the conversation private.
• Consider the timing of the interview.
• Follow up afterwards.

Advantages and Disadvantages of Performance Appraisal Methods

• Written essays: Simple to use but primarily measures evaluator's writing skill rather than employee's performance.
• Critical incidents: Behavioral based with rich examples, but time-consuming and lacks quantification.
• Graphic rating scales: Offers quantitative data and is less time-consuming, but lacks depth in job behavior assessment.
• BARS (Behaviorally Anchored Rating Scales): Focuses on specific and measurable job behaviors, but is time-consuming and difficult to develop.
• Multiperson comparisons: Compare employees with one another, but can be unwieldy with large numbers of employees and may have legal concerns.
• MBO (Management by Objectives): Focuses on end goals and results, but is time-consuming.
• 360-degree appraisals: Thorough, but time-consuming.

Job Analysis

• Jobs have outcomes, responsibilities, tasks, and functions.
• All jobs should contribute to achieving corporate or strategic objectives.
• Job analysis is the accurate analysis, design, and implementation of jobs.
• Job analysis is an ongoing process of determining the competencies required to ensure jobs remain relevant.
• Job analysis systematically gathers and evaluates job-related data to produce a Job Description and Job Specifications (TDR + KSA).

Methods of Collecting Job Analysis Information

• Interviews and questionnaires.
• Observational studies.
• Participants' diary/logs.
• Electronic analyses methods.

Job Analysis Interviews

• Interviews provide a quick, direct way to find overlooked information.
• However, they can lack standardization in the collection process and have limited scope for covering large numbers of respondents.
• Interviews require documentation for each individual and can be time-consuming and costly.
• Variations in interviewer skills and distortions from interviewees can occur.

Human Resources Planning

• HR must ensure an organization has the right number and kinds of people, with the necessary skills, at the right place and time.
• They must be capable of effectively and efficiently completing tasks to achieve overall strategic objectives (KSAO).

Employment or Personnel Planning

• It involves deciding what positions the firm needs to fill and how to fill them.
• The plan can be based on strategic goals and HR demands.
• A systematic process of matching the internal and external supply of candidates with anticipated job openings over some time.
• Openings filled using current employees recruiting from outside the organization.
• It may involve succession planning and replacement charts for filling key executive jobs.
• Involves forecasting three essential factor: HR needs, as well as both internal and external candidates

Forecasting Personnel Needs

• Trend Analysis is the method for studying a firm's past employment and the department headcount to predict future needs.
• Ratio Analysis is a technique for determining future staffing needs by using ratios between some causal factor and the number of employees needed, e.g. revenue per salesperson.
• Scatter Plot is a graphic method, using regression and correlation, to identify the relationship between two variables.

Staff Turnover

• Yearly turnover is calculated: Number of employees leaving during the year / Average numbers employed during the year x100
• Turnover is split between voluntary and involuntary reasons.
• Retention Rate = Number of employees retained during the year / Average numbers employed during the year x100
• Retention Rate? = 1- Turnover Rate?

Strategic Recruitment

• The direction of a business, its organizational culture, and the competencies required influences the kind of attraction process and selection tools utilized.

Internal vs External Sources of Recruitment

• Internal examples are Promotion-from-within, Hiring-from-Within Tasks, and Filling vacancies with current employees.
• External examples are recruiting new candidates, and looking from outside the organization.
• Internal methods are Posting open job positions, Succession planning (HRIS), and Rehiring former employees.

Attracting Internal Talent

• Electronic record systems like computerized Human Resource Information Management System help.
• Intranets and job postings are useful, particularly when career development programs adequacy of training.

Recruiting Methods

• Digital and social media.
• Online job boards.
• Advertisements and recruitment agencies.
• Educational institutions and employee referrals.
• Executive leasing and contracting.
• Social networking sites.
• Employment agencies (public, nonprofit, private)

Advantages/Disadvantages of Internal Recruitment

• Potential Advantages: Boosts employee morale, provides easier assessment of candidates, rewards good performance, provides ready succession, avoids 'leak plugging", and is less costly.
• Potential Disadvantages: Risks inbreeding, discontented unpromoted employees, political infighting, needing a strong appraisal program, criticism from the unpromoted, maintained old culture, and risks cloning by the selectors.

Advantages/Disadvantages of External Recruitment

• Potential Advantages: Brings new ideas, avoids favoritism claims, forces insiders to compete, and provides a diverse workforce
• Potential Disadvantages: Risk of poor cultural fit, declining morale in passed over employees, needing more training & development.

Basics of Employee Selection

• Selection is a continuous process that contains a varying number of steps in varying sequences
• The number of steps in the selection process depends on the organisation and the type and level of jobs

Validity

• It is a measure of the effectiveness of a new approach
• A selection process is valid when it increases the chance of hiring the right person for the job
• It is possible to evaluate hiring decisions in terms of high output, low absenteeism and good safety records

Reliability

• A selection process cannot be valid if increases the chance of hiring the right person for the job
• Reliability is a critical component of validity because a hiring assessment can produce information reliably and consistently

Definitions of Employee Selection

• Reliability refers to whether a selection method is consistent.
• Validity refers to whether a selection method tells something about the job

Employment Interview's Aim

• The interview serves to make an accurate prediction of a candidate's future performance.
• Aim: to find the right candidate

Aims of Employment Interviews

• To find the RIGHT person for the Vvacancy.
• Interviews determine if the individual can perform the job with the right comptencies (KSAOs + behaviour vs Job);
• Check whether the individual wants to do the job (Individual personality, attitude vs Job).
• Check if the will properly fit into the organisation.
  • Indidivuals belifs values compared with Personlity and Organisaitonal Culture

Types of Interviews

• Directive or Structured: Ensures consistency and is reliable, but can lack flexibility.
• Non-directive or non-structured: Easy to explore leads, but hard to control and assess.
• Panel: Impartial and allows close observation but can be intimidating for applicants.

Selection Tool Types and Validation

• Interviews are a conversation between interviewer and candidate with purposes

How to Conduct an Effective Interview.

• Know the job.
• Structure the interview.
• Get organized.
• Establish rapport.
• Ask job related questions.
• Take notes.
• Close the interview.
• Post interview evaluation.

Selection Process

• Pool of candidates
• They screening
• The interviews
• Reviews
• Back ground checks and referencing to select someone