Performance Management PDF

Performance Management Motivational system of individual performance improvement ○ Objective goal setting ○ Continuous coaching & feedback ○ Performance appraisal Done annually but performance management is done...

Performance Management Motivational system of individual performance improvement ○ Objective goal setting ○ Continuous coaching & feedback ○ Performance appraisal Done annually but performance management is done continuously Systematic review and evaluation of job performance; provision of performance feedback Personnel decisions (I.e. who will get promoted or get a raise) Developmental purposes (I.e. help employees develop professionally) Documentation of organizational decisions Typically done in a top-down manner (I.e. supervisor evaluates subordinates) Upward Appraisal Ratings Ratings provided by lower-ranked individuals 360-degree Feedback Multiple raters at various organizational levels evaluate and provide feedback to an employee 360-degree Feedback Assumptions Muliple ratings overcome idiosyncrasies or biases of any single rater Multiple raters bring mulitple perspectives for a broader/more accurate view of performance Participants are happier being involved in the process If there is around 80% agreement then we will be quite confiedent these ratings are good ○ Development planning Rating Formats: Overview Graphic rating scales ○ Consist of several traits or behaviors E.g. dependability, follows procedures ○ Raters assess employees' behavior/traits with respect to organizational expectations on a 7-point scale ○ Advantages: easy to develop and easy to use ○ Disadvantage: lack of precision in dimensions and lack of precision in anchors Behaviorally anchored rating scales (BARS) ○ Very similar to graphic rating scales but more complicated  ○ Has a rating scale but instead of anchors it gives specific examples that are for a certain job ○ Process for developing BAARS Identify and define important dimensions for the job Generate a series of behavioral examples (critical incidents) Retranslation stage: sort critical incidents into appropriate dimensions Rate behavioral examples on effectiveness Select items to reflect performance levels ○ Advantages: Precise and well-defined scales; well received by raters and ratees ○ Disdavantages: time and money intensive; not more accurate than other formats Checklists ○ Weighter checklist Items previously weighted on importance or effectiveness Desirable and undesirable ○ Force-choice checklist Raters choose two items from a group of four that best describe the employee Reduce rater bias/distortion ○ Advantages: Easy to develop, easy to use ○ Disadvantages: Rater errors (halo, leniency, severity) are frequent Employee comparison ○ Evaluate ratees in comparison to other employess Rank-ordering Paired comparisons becomes more complex as number of ratess increases Forced distribution Ex. Grading on a normal curve ○ Advantages: precise ranking are possible; Useful for making personnel decisions ○ Disadvantages: time intensive, not well received by raters and ratees (lower control) Rating Errors Evaluating performance accurately and fairly is difficult ○ Errors are common ○ Understanding of these errors is important Research in cognitive psychology provides I/O [psychologists with valuable information applied to the performance appaisal process Cognitive-Processing Model of PA 1. Observe behavior  ○ The rater may miss important behaviors or see what he or she wants to see 2. Encode information about behavior ○ Not label information well enough for storage and label information incorrectly 3. Store information ○ Not store some relevant information at all or store the wrong information 4. Retrieve information ○ Not be able to retrieve relevant information or retrieve irrelevant information 5. Integrate information ○ Make a poor decision based on the only available information or come to a biased conclusion because he or she likes the ratee Halo Error Tendency to use global evaluation of a ratee in making dimension-specific ratings ○ Ex. If you see that an employee is doing really well generally they will be given a high rating for every individual rating section Why does this occur? ○ Laziness; lack of information ○ Unwilling/unable to discriminate between independent dimensions of performance True halo: accurate intercorrelations among performance dimensions Leniency When rater: ○ Use only the high end of the rating scale ○ Give consistently higher ratings than other raters do Why does this occur? ○ Looks good to superiors ○ Be liked by subordinates ○ Keep peace among employees Severity When raters: ○ Use only the low end of the rating scale ○ Give concicstently lower ratings to their employees than other raters do Why does this occur? ○ Being the "tough" boss ○ Don’t want employees to get "cocky" ○ Motivate employees to improve Central Tendency When raters only use the midpoint of the scale  Why does this occur? ○ Laziness ○ Lack of knowledge of individual employees ○ Poor rating scale Normal distribution: 2/3 of people are in the "middle of the pack" Other Common Rating Errors Regency Error ○ Raters heavily weight their most recent interactions/observations of the ratee Primacy error ○ Raters pay too much attention to initial experiences with ratee (first impressions) Similar-to-me error ○ Raters tend to give more favorable ratings to ratees who are like themselves Rater Considerations: Training Rater Error Training (RET) ○ Describe errors, show raters how to avoid them ○ Reduces errors; doesn't necessarily improve accuracy Fram-of-Reference (FOR) Training ○ Enhance raters' observational and categorization skills ○ Reduces errors; improves accuracy Social-Psychological Context Early research focused on rating-scale formats; accuracy Reaction Criteria Consideration of rater and ratee reactions in the PA process Ratees reported less anger and higher perceptions of justice when rater justified ratings PAs viewed as unfair are related to ratees' emotional exhaustion Emotional reactions to feedback play a significant role in determining future goals Dunning-Kruger Effect ○ Cognitive bias ○ Some people overestimate their abilities and lack the meta-cognitive skills to realize it ○ People who are unskilled & unaware are also uninterested in learning/improving Supervisor-Subordinate Relationship Relationship between employee and supervisor plays a role in the PA process Leader-member Exhange (LMX) theory:  ○ Supervisors have different relationship with different subordinates Communication, trust, empowerment Affects PA satisfaction through its effect on procedural justice Organizational Politics Executives may intentionally manipulate performance appraisal for political reasons ○ E.g. make department look good, send message to subordinates ○ Can create stress and anxiety that impact work attitudes and result in decreased performance Subordinates may use impression management to influence appraisal Trust & Justice Extent to which raters believe that fair and accurate appraisal has been/will be made in their organization ○ Trust in the Appraisal Process Survey (TAPS) If raters or ratees see the appraisal process as unfair/biased, its psychometric quality will be irrelevant Employee Participation Self-assessment; expressing ideas during the appraisal process Strong positive relationship between employee participation in the PA process and employee reactions to the appraisal ○ Satisfaction with the PA process/system ○ Motivation to improve based on feedback ○ Belief in fairness of the appraisal Proving Performance Feedback Employee development is largely a function of their receptivity to feedback and the organization's approach to feedback What makes good feedback? ○ Feedback intervention theory (FIT): Feedback is most effective when targeted at task rather than at self ○ Feedback Environment (FE): Organization's climate and attitude toward feedback; includes: Source credibility Feedback quality Feedback delivery ○ Feedback Orientation (FO): Individual's overall attitude toward feedback or receptivity to feedback; includes: Perceptions of feedback utility Accountability to use feedback Social awareness through feedback  Self-efficacy in dealing with feedback Employees high on FO tend to seek feedback more often than those low on FO Employees low on FO are no motivated by a high FE environment Performance Appraisal: Legal Considerations Illegal to discriminate in performance appraisal based on factors unrelated to performance ○ I.e. age, gender, race, ethnicity, religion, disability PA provides the "legal justification" for personnel decisions How to Not get Suad: 1. Start with job analysis to develop criteria 2. Communicate standards in writing 3. Recognize separate dimensions of performance 4. Use both subjective and objective criteria 5. Give employees access to appeal 6. Use multiple raters rather than one rater 7. Document everything pertinent to HR decisions 8. Train the raters; provide written instructions for conducting the performance appraisal