Managing And Evaluating Performance

8/10/2019 Managing And Evaluating Performance

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MANAGING ANDEVALUATINGPERFORMANCE

Week 3 (cont.) ________________________

Dr. Teal McAteer-Early


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Performance Management

HR system that includes processes usedto identify, encourage, measure, evaluate,improve, and reward employeeperformance

Related to terms such as per formanceappraisal , perform anc e evaluat ion , etc. Although Perform anc e Managem ent is often

considered to be a broader term


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Common Purposes ofPerformance Appraisal

1. Administrative to make employmentdecisions

Promotion, termination

Training who to train; training needs in general Compensation merit increases Legal justification for these decisions

2. Feedback and Development Point out strengths and weaknesses Identify corrective action to address weaknesses Motivation


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The Criterion Problem

Difficulties involved in determining whatperformance is and how to measure it

Ultimate Criterion Includes everything that ultimately defines

success on the job Is a construct conceptual in nature

Operational Criterion The aspects of performance that are actually

measured


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The Criterion Problem

Criterion Deficiency When performance standards fail to capture

the full range of employees responsibilities E.g., focus on sale revenue but ignore customer

service

Criterion Contamination When factors outside of employees control

influence his/her performance E.g., machine breakdowns; differences in sales

regions


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Potential Performance Criteria Output

Units produced, items sold, $ sales, commissionearnings, etc.

Quality measures # of errors, # of errors detected, #

complaints/grievances, # commendations, rates ofscrap/breakage

Lost time Absences (unexcused), Lateness/tardiness,

Turnover (withdrawal) from training or job,transfers due to inadequate performance


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Potential Performance Criteria

Ratings Performance appraisals by trainers,

supervisors, peers, self Performance in work samples, simulations,

etc.

Others Counterproductive behaviours Safety records, accidents

Citizenship (voluntary) behaviours


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The Appraisal Process


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Legal Considerations in PA

Performance standards should be job-related Based on job analysis (content validity)

Employees must be aware of performancestandards

Managers must be able to observe the

behaviour they are rating Raters should be trained Ratings should be valid / bias-free

Reasonable time frame for performanceim rovement


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Factors Affecting LegalDecisions

McShane (1989) In cases involving dismissal due to poorperformance, Canadian courts may considerthe following:

1. Cause of poor performance Within or outside of employee control

2. Effect of poor performance on employer Organizations may be required to show adverse

effect of poor performance If found, opportunity must be provided to improve

performance


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Factors Affecting LegalDecisions

McShane (1989)5. Credibility of appraisal source Source of appraisal must be considered

balanced and detached i.e., fair and

unbiased

6. Contrived appraisals

Courts tend to rule against appraisals thatare done just to document poor performance E.g., court ruled in favour of fired TD Bank

employee because a management memo

requested that the next appraisal containnegative comments


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Importance Elements of PA

In general, Performance Appraisalsystems like selection systems shouldbe:

Valid Reliable

Free from bias Practical

Fairness is also critical


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3 Dimensions of Fairness /Justice

1. Distributive justice Perceived fairness of the distribution of the

rewards

2. Procedural justice Perceived fairness of the procedure/system

used Voice

3. Interactional justice

Perceived fairness of the relationship withthe rater(s); sincerity, etc.


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Now some considerations aboutchoosing the right instrument to

increase the likelihood of the PAbeing valid, reliable, and free frombias


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Considerations re: PA Methods

What do we want to measure: traits,outcomes, or behaviours??

Traits (personality) E.g., loyalty, dependability, initiative Problems

too ambiguous

susceptible to bias not legally defensible focuses on person rather than performance


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Considerations re: PA Methods

Outcomes objective criteria E.g., sales revenue, # of calls taken, # of

complaints Problems influenced by factors beyond

employee control

Behaviours

E.g., works well with others Focuses on what employees do whatthey should start, stop, and continue doing

2 common instrument types: BARS, BOS

A S


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BARS:Behaviourally Anchored Rating

Scales Format was developed to due lack ofstandardization (and reliability) acrossraters

Goal was to help the rater rate Performance standards are concrete

Each standard consists of a number ofspecific, behavioural anchors on the ratingform itself

The behavioural anchors cover the range of

performance from excellent to poor


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BOS: Behavioural ObservationScales

Focus on behaviour Based on job analysis often critical

incident technique

Performance ratings are based on thefrequency of use criterion

How often employee engages in behaviour Using a 5-point frequency scale


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Example of a BOS Criterion

I. Overcoming Resistance to Change1. Provides employees with information about

organizational change Almost never 1 2 3 4 5 Almost

always

2. Addresses/responds to employee concerns and

input regarding change Almost never 1 2 3 4 5 Almostalways


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DevelopingBehavioural Observation Scales (BOS)1. Collect critical incidents

2. Group similar incidents into a behavioura li tem

E.g., 2 critical incidents(1) Describes details of organizational change to subordinates(2) Explains why the change is necessary Could be grouped into a behavioural item Provides

emplo yees wi th info rm at ion abo ut organizat ionalchange

2 more critical incidents(1) Listens to employee concerns

(2) Asks employee for help in making the change work Could be grouped into a behavioural item Addresses


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DevelopingBehavioural Observation Scales (BOS)3. Similar behavioural items are grouped

into a meaningful behaviou ral c r i ter ion 2 behavioural items

1. Pr o v i d es em p l o y ees w i t h i n f o rm a t io n a b o u torg anizat ion al ch ange

2. A d d r es s es /r es p o n d s t o e m p l o y ee c o n c er n sand inpu t regard ing ch ang e

Combine to form the beh aviou ral (B OS)cr i ter ion OVERCOMING RESISTANCE TOCHANGE

The PA instrument is created by attaching a 5-oint ratin scale to each behaviou ral i tem


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Example of a BOS Criterion

I. Overcoming Resistance to Change1. Provides employees with information about

organizational change Almost never 1 2 3 4 5 Almost always

2. Addresses/responds to employee concerns and

input regarding change Almost never 1 2 3 4 5 Almost always


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360-degree PA

Subordinateratings

Selfassessment

Customerratings

Peerratings

Supervisorratings

TargetEmployee


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360-degree PA

Benefits More complete picture of job

performance Different stakeholders may observedifferent behaviours

Target may behave differently with differentstakeholders

Reduced bias because feedback comesfrom more than 1 person

Feedback from peers and subordinates


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360-degree PA

Limitations Complex and time consuming Potential for conflicting opinions

Same behaviours may be seen as positive by onegroup and negative by another group E.g., manager who encourages participative

decision-making

Peer, subordinate, and self evaluations notuseful for administrative decisions (e.g.,raises)

Peer and subordinate evaluations may

jeopardize coworker relations


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Questions / Comments ??


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Factors Distorting PA Ratings

Halo effect / error Leniency / Strictness error

Central tendency Similarity error Recency effect

Contrast effect Matthew effect


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Halo effect Tendency to provide similar ratings across different

PA dimensions

Leniency / Strictness error Leniency when ratings are restricted to high part of

scale

Strictness when ratings are restricted to low part ofscale

Central tendency

When raters avoid extreme ratings and restrict ratings


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Similarity (similar -to- me) error Tendency of rater to inflate ratings when they have

something in common with the target

Recency effect Ratings are based largely on employees most recent

behaviour

Contrast effect When an employees evaluation is biased upward or

downward because of a comparison with another

employee who was recently evaluated


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Matthew effect Tendency of raters to use previous

evaluations as an anchor for subsequentevaluations

i.e., Employees receive the same appraisalresults, year in and year out

Like a self-fulfilling prophecy -- if they havedone well, they will continue to do well; if they

have done poorly, they will continue to dopoorly

"For everyone who has will be given more,

and he will have an abundance. Whoeverdoes not have even what he has will be


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Reasons PA can fail

1. Rater lacks information re: an employeesactual performance

2. Performance standards are unclear

3. Employee does not receive on-going feedback4. Rater does not take PA seriously; not prepared

for PA review; lacks PA skills

5. Review meeting is ineffective feedback poorlydelivered and/or received6. Insufficient resources to reward performance7. Lack of attention to employee development


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Summary of Recommendations

1. Based on job analysis2. Focus on behaviour (use BOS)

3. Top management must prioritize PA4. Use multiple raters5. Provide raters with extensive training

6. Ensure system is fair7. Make sure performance management is

on-going


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Managing And Evaluating Performance