chapter 13 performance appraisal and managing the results: coaching, promoting, and compensating...

Chapter 13Performance Appraisal and Managing the Results: Coaching, Promoting, and

Compensating Employees

Chapter 13Performance Appraisal and Managing the Results: Coaching, Promoting, and

Compensating Employees

Chapter 13/Performance Appraisal and Managing the Results: Coaching, Promoting, and CompensatingHilgert & Leonard © 2001

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1.1. Define performance appraisal and clarify the Define performance appraisal and clarify the supervisor’s role in the process.supervisor’s role in the process.

2. 2. Explain how often performance feedback Explain how often performance feedback should be provided.should be provided.

3.3. Discuss the advantages of a formal Discuss the advantages of a formal performance appraisal system.performance appraisal system.

4.4. Explain the concepts and techniques in using Explain the concepts and techniques in using a written employee appraisal form.a written employee appraisal form.

1.1. Define performance appraisal and clarify the Define performance appraisal and clarify the supervisor’s role in the process.supervisor’s role in the process.

2. 2. Explain how often performance feedback Explain how often performance feedback should be provided.should be provided.

3.3. Discuss the advantages of a formal Discuss the advantages of a formal performance appraisal system.performance appraisal system.

4.4. Explain the concepts and techniques in using Explain the concepts and techniques in using a written employee appraisal form.a written employee appraisal form.

After studying this chapter, you will be able to:After studying this chapter, you will be able to:


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5.5. Discuss the process of conducting a sound Discuss the process of conducting a sound appraisal meeting.appraisal meeting.

6.6. Discuss coaching as a follow-up to Discuss coaching as a follow-up to performance appraisal.performance appraisal.

7.7. Identify the benefits derived from applying a Identify the benefits derived from applying a policy of promotion from within.policy of promotion from within.

8.8. Discuss the supervisor’s role in employee Discuss the supervisor’s role in employee compensation and outline the goals of an compensation and outline the goals of an effective compensation program.effective compensation program.

5.5. Discuss the process of conducting a sound Discuss the process of conducting a sound appraisal meeting.appraisal meeting.

6.6. Discuss coaching as a follow-up to Discuss coaching as a follow-up to performance appraisal.performance appraisal.

7.7. Identify the benefits derived from applying a Identify the benefits derived from applying a policy of promotion from within.policy of promotion from within.

8.8. Discuss the supervisor’s role in employee Discuss the supervisor’s role in employee compensation and outline the goals of an compensation and outline the goals of an effective compensation program.effective compensation program.

After studying this chapter, you will be able to:After studying this chapter, you will be able to:


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SUPERVISOR’S ROLE IN SUPERVISOR’S ROLE IN PERFORMANCE APPRAISALPERFORMANCE APPRAISAL


Performance appraisal—a systematic assessment of Performance appraisal—a systematic assessment of how well employees are performing their jobs, and how well employees are performing their jobs, and the communication of that assessment to them.the communication of that assessment to them.

• Supervisors establish performance standards Supervisors establish performance standards or targets that subordinates are expected to or targets that subordinates are expected to achieve.achieve.

• Effective supervisors provide subordinates Effective supervisors provide subordinates with regular feedback on their performance.with regular feedback on their performance.

Performance appraisal—a systematic assessment of Performance appraisal—a systematic assessment of how well employees are performing their jobs, and how well employees are performing their jobs, and the communication of that assessment to them.the communication of that assessment to them.

• Supervisors establish performance standards Supervisors establish performance standards or targets that subordinates are expected to or targets that subordinates are expected to achieve.achieve.

• Effective supervisors provide subordinates Effective supervisors provide subordinates with regular feedback on their performance.with regular feedback on their performance.

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• Supervisors usually evaluate employees’ performance Supervisors usually evaluate employees’ performance formally; supervisors should view this process as an formally; supervisors should view this process as an extension of the planning, leading, and organizing extension of the planning, leading, and organizing functions.functions.

• Supervisors must keep accurate records of employee Supervisors must keep accurate records of employee performance to document fulfillment of equal performance to document fulfillment of equal employment opportunity regulations.employment opportunity regulations.

• Long-term success depends on the performance of a Long-term success depends on the performance of a organization’s workforce. Employees must know what organization’s workforce. Employees must know what is expected of them, and receive regular feedback.is expected of them, and receive regular feedback.

• Supervisors usually evaluate employees’ performance Supervisors usually evaluate employees’ performance formally; supervisors should view this process as an formally; supervisors should view this process as an extension of the planning, leading, and organizing extension of the planning, leading, and organizing functions.functions.

• Supervisors must keep accurate records of employee Supervisors must keep accurate records of employee performance to document fulfillment of equal performance to document fulfillment of equal employment opportunity regulations.employment opportunity regulations.

• Long-term success depends on the performance of a Long-term success depends on the performance of a organization’s workforce. Employees must know what organization’s workforce. Employees must know what is expected of them, and receive regular feedback.is expected of them, and receive regular feedback.

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An appraisal should be done by an employee’s immediate An appraisal should be done by an employee’s immediate supervisor. Supervisors should be trained in the use of supervisor. Supervisors should be trained in the use of the appraisal instrument.the appraisal instrument.

• Peer evaluationPeer evaluation——Evaluation of employee’s performance Evaluation of employee’s performance by other employees of relatively equal levels. by other employees of relatively equal levels.

• 360-degree evaluation360-degree evaluation—Evaluation based on feedback —Evaluation based on feedback from people all around the employee—customers, from people all around the employee—customers, vendors, supervisors, peers, and subordinates.vendors, supervisors, peers, and subordinates.

• Self-evaluationSelf-evaluation—Allows supervisors to supplement their —Allows supervisors to supplement their judgments with self-ratings from employees. judgments with self-ratings from employees. A self-evaluation and supervisor’s evaluation should A self-evaluation and supervisor’s evaluation should match closely.match closely.

An appraisal should be done by an employee’s immediate An appraisal should be done by an employee’s immediate supervisor. Supervisors should be trained in the use of supervisor. Supervisors should be trained in the use of the appraisal instrument.the appraisal instrument.

• Peer evaluationPeer evaluation——Evaluation of employee’s performance Evaluation of employee’s performance by other employees of relatively equal levels. by other employees of relatively equal levels.

• 360-degree evaluation360-degree evaluation—Evaluation based on feedback —Evaluation based on feedback from people all around the employee—customers, from people all around the employee—customers, vendors, supervisors, peers, and subordinates.vendors, supervisors, peers, and subordinates.

• Self-evaluationSelf-evaluation—Allows supervisors to supplement their —Allows supervisors to supplement their judgments with self-ratings from employees. judgments with self-ratings from employees. A self-evaluation and supervisor’s evaluation should A self-evaluation and supervisor’s evaluation should match closely.match closely.

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PERFORMANCE FEEDBACKPERFORMANCE FEEDBACKPERFORMANCE FEEDBACKPERFORMANCE FEEDBACK

In most organizations, upper-level management In most organizations, upper-level management decides who should appraise and how often it should decides who should appraise and how often it should be done. be done.

New employees are usually evaluated at the end of New employees are usually evaluated at the end of their probationary periods, then on a regular basis their probationary periods, then on a regular basis after that.after that.

Ongoing feedback, both positive and negative, Ongoing feedback, both positive and negative, rewards good performance and guides improvement. rewards good performance and guides improvement. An employee given ongoing feedback should receive An employee given ongoing feedback should receive no surprises at appraisal time.no surprises at appraisal time.

In most organizations, upper-level management In most organizations, upper-level management decides who should appraise and how often it should decides who should appraise and how often it should be done. be done.

New employees are usually evaluated at the end of New employees are usually evaluated at the end of their probationary periods, then on a regular basis their probationary periods, then on a regular basis after that.after that.

Ongoing feedback, both positive and negative, Ongoing feedback, both positive and negative, rewards good performance and guides improvement. rewards good performance and guides improvement. An employee given ongoing feedback should receive An employee given ongoing feedback should receive no surprises at appraisal time.no surprises at appraisal time.

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A FORMAL PERFORMANCE APPRAISAL SYSTEMA FORMAL PERFORMANCE APPRAISAL SYSTEMA FORMAL PERFORMANCE APPRAISAL SYSTEMA FORMAL PERFORMANCE APPRAISAL SYSTEM

Most large firms in the U.S. use some type of formal Most large firms in the U.S. use some type of formal appraisal system. Some reasons for this are:appraisal system. Some reasons for this are:

Most large firms in the U.S. use some type of formal Most large firms in the U.S. use some type of formal appraisal system. Some reasons for this are:appraisal system. Some reasons for this are:

1. Provides systematic judgments to support salary Provides systematic judgments to support salary increases, promotions, transfers, layoffs, increases, promotions, transfers, layoffs, demotions, and terminations.demotions, and terminations.

2.2. Means of telling subordinates how they are doing Means of telling subordinates how they are doing and suggesting needed changes in behavior, and suggesting needed changes in behavior, attitudes, skills, or job knowledge.attitudes, skills, or job knowledge.

3.3. Used as a basis for coaching and counseling of Used as a basis for coaching and counseling of employees by supervisors.employees by supervisors.

1. Provides systematic judgments to support salary Provides systematic judgments to support salary increases, promotions, transfers, layoffs, increases, promotions, transfers, layoffs, demotions, and terminations.demotions, and terminations.

2.2. Means of telling subordinates how they are doing Means of telling subordinates how they are doing and suggesting needed changes in behavior, and suggesting needed changes in behavior, attitudes, skills, or job knowledge.attitudes, skills, or job knowledge.

3.3. Used as a basis for coaching and counseling of Used as a basis for coaching and counseling of employees by supervisors.employees by supervisors.

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Formal appraisals usually become part of Formal appraisals usually become part of an employee’s record, and are used an employee’s record, and are used to answer such questions as:to answer such questions as:

Formal appraisals usually become part of Formal appraisals usually become part of an employee’s record, and are used an employee’s record, and are used to answer such questions as:to answer such questions as:

• Who should be promoted?

• Who should get merit raises?

• What should be the raise differential?

• Who needs training?

• An employee is appealing termination. Do we have adequate documentation?

• Who should be promoted?

• Who should get merit raises?

• What should be the raise differential?

• Who needs training?

• An employee is appealing termination. Do we have adequate documentation?

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Another purpose of the formal appraisal system Another purpose of the formal appraisal system

is to provide clues to the supervisor’s is to provide clues to the supervisor’s

performance. Poor employee performance performance. Poor employee performance

may point to inadequate supervision, and may may point to inadequate supervision, and may

suggest where the supervisor needs to suggest where the supervisor needs to

improve.improve.

Another purpose of the formal appraisal system Another purpose of the formal appraisal system

is to provide clues to the supervisor’s is to provide clues to the supervisor’s

performance. Poor employee performance performance. Poor employee performance

may point to inadequate supervision, and may may point to inadequate supervision, and may

suggest where the supervisor needs to suggest where the supervisor needs to

improve.improve.

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USING A WRITTEN APPRAISAL FORMUSING A WRITTEN APPRAISAL FORMUSING A WRITTEN APPRAISAL FORMUSING A WRITTEN APPRAISAL FORM

A typical formal employee performance A typical formal employee performance

appraisal by a supervisor involves appraisal by a supervisor involves

(a)(a) completing a written form completing a written form

(b)(b) conducting an interview conducting an interview

A typical formal employee performance A typical formal employee performance

appraisal by a supervisor involves appraisal by a supervisor involves

(a)(a) completing a written form completing a written form

(b)(b) conducting an interview conducting an interview

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Most forms include factors that serve as criteria Most forms include factors that serve as criteria for measuring job performance. Including for measuring job performance. Including some of the following:some of the following:

Most forms include factors that serve as criteria Most forms include factors that serve as criteria for measuring job performance. Including for measuring job performance. Including some of the following:some of the following:

• job knowledgejob knowledge

• quality of workquality of work

• conductconduct

• ability to learnability to learn

• job knowledgejob knowledge

• quality of workquality of work

• conductconduct

• ability to learnability to learn

• quantity of workquantity of work

• timeliness of output of output

• suggestions and ideassuggestions and ideas

• dependabilitydependability

• quantity of workquantity of work

• timeliness of output of output

• suggestions and ideassuggestions and ideas

• dependabilitydependability

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USING A WRITTEN USING A WRITTEN APPRAISAL FORMAPPRAISAL FORMUSING A WRITTEN USING A WRITTEN APPRAISAL FORMAPPRAISAL FORM

Computerized performance appraisal Computerized performance appraisal software packagessoftware packages

Recently, vendors have developed software packages Recently, vendors have developed software packages that allow supervisors to “point-and-click” easily that allow supervisors to “point-and-click” easily through the appraisal process.through the appraisal process.

Supervisors have to remember that they are still Supervisors have to remember that they are still responsible for keeping ongoing records, either on responsible for keeping ongoing records, either on paper or electronically, on employee performance paper or electronically, on employee performance throughout the year. throughout the year.

Computerized performance appraisal Computerized performance appraisal software packagessoftware packages

Recently, vendors have developed software packages Recently, vendors have developed software packages that allow supervisors to “point-and-click” easily that allow supervisors to “point-and-click” easily through the appraisal process.through the appraisal process.

Supervisors have to remember that they are still Supervisors have to remember that they are still responsible for keeping ongoing records, either on responsible for keeping ongoing records, either on paper or electronically, on employee performance paper or electronically, on employee performance throughout the year. throughout the year.

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Problems with Appraisal Forms Problems with Appraisal Forms

Terms are subjective.Terms are subjective. What does What does exceptional exceptional oror fair fair mean? mean?

Some supervisors Some supervisors rate employees consistently lowrate employees consistently low because they feel no one is sufficiently capable or because they feel no one is sufficiently capable or they fear that they will lose them to promotion. they fear that they will lose them to promotion.

Others Others rate employees consistently highrate employees consistently high because they because they feel it boosts morale or they fear antagonizing the feel it boosts morale or they fear antagonizing the employee. A employee. A leniency errorleniency error occurs when supervisors occurs when supervisors give employees higher ratings than they deserve.give employees higher ratings than they deserve.

Supervisors should avoid the “halo or horns” effect.Supervisors should avoid the “halo or horns” effect.

Problems with Appraisal Forms Problems with Appraisal Forms

Terms are subjective.Terms are subjective. What does What does exceptional exceptional oror fair fair mean? mean?

Some supervisors Some supervisors rate employees consistently lowrate employees consistently low because they feel no one is sufficiently capable or because they feel no one is sufficiently capable or they fear that they will lose them to promotion. they fear that they will lose them to promotion.

Others Others rate employees consistently highrate employees consistently high because they because they feel it boosts morale or they fear antagonizing the feel it boosts morale or they fear antagonizing the employee. A employee. A leniency errorleniency error occurs when supervisors occurs when supervisors give employees higher ratings than they deserve.give employees higher ratings than they deserve.

Supervisors should avoid the “halo or horns” effect.Supervisors should avoid the “halo or horns” effect.

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USING A WRITTEN USING A WRITTEN APPRAISAL FORMAPPRAISAL FORMUSING A WRITTEN USING A WRITTEN APPRAISAL FORMAPPRAISAL FORM

Appraisals Should Be Job Based Appraisals Should Be Job Based

The appraisal rating should be:The appraisal rating should be:

• made within the context of each employee’s made within the context of each employee’s particular job.particular job.

• based on the total performance of the employee.based on the total performance of the employee.

• based on an employee’s total record for the based on an employee’s total record for the appraisal period.appraisal period.

• free of the supervisor’s personal biases.free of the supervisor’s personal biases.

Appraisals Should Be Job Based Appraisals Should Be Job Based

The appraisal rating should be:The appraisal rating should be:

• made within the context of each employee’s made within the context of each employee’s particular job.particular job.

• based on the total performance of the employee.based on the total performance of the employee.

• based on an employee’s total record for the based on an employee’s total record for the appraisal period.appraisal period.

• free of the supervisor’s personal biases.free of the supervisor’s personal biases.

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CONDUCTING A SOUND CONDUCTING A SOUND APPRAISAL MEETINGAPPRAISAL MEETING


After the appraisal form has been completed, After the appraisal form has been completed, the supervisor must arrange a time to meet the supervisor must arrange a time to meet with the employee.with the employee.

Appraisal meetings must be handled well, Appraisal meetings must be handled well, because misunderstanding, because misunderstanding, conflict, and resentment may conflict, and resentment may result.result.

After the appraisal form has been completed, After the appraisal form has been completed, the supervisor must arrange a time to meet the supervisor must arrange a time to meet with the employee.with the employee.

Appraisal meetings must be handled well, Appraisal meetings must be handled well, because misunderstanding, because misunderstanding, conflict, and resentment may conflict, and resentment may result.result.

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The Right PurposeThe Right Purpose

The primary purpose of the appraisal meeting is to let The primary purpose of the appraisal meeting is to let the employee know how he or she is doing. the employee know how he or she is doing.

• The meeting is the place to explain past behavior that The meeting is the place to explain past behavior that needs correction and improvement.needs correction and improvement.

• Use the meeting to help the employee develop plans Use the meeting to help the employee develop plans for improved future performance.for improved future performance.

The Right PurposeThe Right Purpose

The primary purpose of the appraisal meeting is to let The primary purpose of the appraisal meeting is to let the employee know how he or she is doing. the employee know how he or she is doing.

• The meeting is the place to explain past behavior that The meeting is the place to explain past behavior that needs correction and improvement.needs correction and improvement.

• Use the meeting to help the employee develop plans Use the meeting to help the employee develop plans for improved future performance.for improved future performance.

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The Right Time and PlaceThe Right Time and Place

An appraisal meeting should be held shortly An appraisal meeting should be held shortly after the performance rating form has been after the performance rating form has been completed, preferably in a private setting.completed, preferably in a private setting.

The Right Time and PlaceThe Right Time and Place

An appraisal meeting should be held shortly An appraisal meeting should be held shortly after the performance rating form has been after the performance rating form has been completed, preferably in a private setting.completed, preferably in a private setting.

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Conducting the Appraisal MeetingConducting the Appraisal Meeting

Be sure the employee understands the Be sure the employee understands the standards of performance upon which the appraisal standards of performance upon which the appraisal is based, and how the appraisal system meets legal is based, and how the appraisal system meets legal requirements for nondiscrimination.requirements for nondiscrimination.

Review and compliment achievements, identify Review and compliment achievements, identify strengths, and proceed to any areas needing strengths, and proceed to any areas needing improvementimprovement

The employee and supervisor need to agree on what The employee and supervisor need to agree on what needs improvement, and the problem solving needs improvement, and the problem solving method to achieve that improvement.method to achieve that improvement.


Be sure the employee understands the Be sure the employee understands the standards of performance upon which the appraisal standards of performance upon which the appraisal is based, and how the appraisal system meets legal is based, and how the appraisal system meets legal requirements for nondiscrimination.requirements for nondiscrimination.

Review and compliment achievements, identify Review and compliment achievements, identify strengths, and proceed to any areas needing strengths, and proceed to any areas needing improvementimprovement

The employee and supervisor need to agree on what The employee and supervisor need to agree on what needs improvement, and the problem solving needs improvement, and the problem solving method to achieve that improvement.method to achieve that improvement.

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Emphasize that everybody in the same Emphasize that everybody in the same job is evaluated using the same standards.job is evaluated using the same standards.

Back-and-forth discussion may be involved.Back-and-forth discussion may be involved.

Discuss opportunities. Do not to make promises for Discuss opportunities. Do not to make promises for training or promotion that may not materialize in training or promotion that may not materialize in the foreseeable future.the foreseeable future.

Include the opportunity for the employee to ask Include the opportunity for the employee to ask questions, which should be answered as fully as questions, which should be answered as fully as possible.possible.


Emphasize that everybody in the same Emphasize that everybody in the same job is evaluated using the same standards.job is evaluated using the same standards.

Back-and-forth discussion may be involved.Back-and-forth discussion may be involved.

Discuss opportunities. Do not to make promises for Discuss opportunities. Do not to make promises for training or promotion that may not materialize in training or promotion that may not materialize in the foreseeable future.the foreseeable future.

Include the opportunity for the employee to ask Include the opportunity for the employee to ask questions, which should be answered as fully as questions, which should be answered as fully as possible.possible.

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CONDUCTING A SOUND APPRAISAL MEETINGCONDUCTING A SOUND APPRAISAL MEETINGCONDUCTING A SOUND APPRAISAL MEETINGCONDUCTING A SOUND APPRAISAL MEETING

Difficult Responses in the Appraisal MeetingDifficult Responses in the Appraisal Meeting

Supervisors may encounter difficult responses to their Supervisors may encounter difficult responses to their appraisals; they should not ignore or short-circuit the appraisals; they should not ignore or short-circuit the appraisal process. Some difficult responses include:appraisal process. Some difficult responses include:

Difficult Responses in the Appraisal MeetingDifficult Responses in the Appraisal Meeting

Supervisors may encounter difficult responses to their Supervisors may encounter difficult responses to their appraisals; they should not ignore or short-circuit the appraisals; they should not ignore or short-circuit the appraisal process. Some difficult responses include:appraisal process. Some difficult responses include:

1.1. “You hired me; therefore, how can I be so “You hired me; therefore, how can I be so bad?”bad?”

2.2. “You’re just out to get me!”“You’re just out to get me!”

3.3. “You don’t like my lifestyle. This has “You don’t like my lifestyle. This has nothing to do with my on-the-job nothing to do with my on-the-job performance.”performance.”

4.4. “This evaluation is not fair!”“This evaluation is not fair!”

5.5. “I didn’t know that was important. “I didn’t know that was important. You never told me that.”You never told me that.”

1.1. “You hired me; therefore, how can I be so “You hired me; therefore, how can I be so bad?”bad?”

2.2. “You’re just out to get me!”“You’re just out to get me!”

3.3. “You don’t like my lifestyle. This has “You don’t like my lifestyle. This has nothing to do with my on-the-job nothing to do with my on-the-job performance.”performance.”

4.4. “This evaluation is not fair!”“This evaluation is not fair!”

5.5. “I didn’t know that was important. “I didn’t know that was important. You never told me that.”You never told me that.”

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Closing the MeetingClosing the Meeting

Be certain that the employee has a clear Be certain that the employee has a clear understanding of the performance rating.understanding of the performance rating.

Some organizations require employees sign Some organizations require employees sign acknowledgement that the meeting has taken place; acknowledgement that the meeting has taken place; this does not constitute agreement of the appraisal. this does not constitute agreement of the appraisal.

Some organizations require supervisors discuss Some organizations require supervisors discuss appraisals with a manager or human resources appraisals with a manager or human resources department; some decisions may be challenged department; some decisions may be challenged and all may be evaluated by the employer.and all may be evaluated by the employer.

Closing the MeetingClosing the Meeting

Be certain that the employee has a clear Be certain that the employee has a clear understanding of the performance rating.understanding of the performance rating.

Some organizations require employees sign Some organizations require employees sign acknowledgement that the meeting has taken place; acknowledgement that the meeting has taken place; this does not constitute agreement of the appraisal. this does not constitute agreement of the appraisal.

Some organizations require supervisors discuss Some organizations require supervisors discuss appraisals with a manager or human resources appraisals with a manager or human resources department; some decisions may be challenged department; some decisions may be challenged and all may be evaluated by the employer.and all may be evaluated by the employer.

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COACHING AS A FOLLOW-UPCOACHING AS A FOLLOW-UPCOACHING AS A FOLLOW-UPCOACHING AS A FOLLOW-UP

Coaching:Coaching: The supervisor’s role in providing The supervisor’s role in providing

information, instructions, and suggestions relating to information, instructions, and suggestions relating to employee’s job assignments and performance.employee’s job assignments and performance.

The amount and type of coaching varies with the The amount and type of coaching varies with the appraisal assessment.appraisal assessment.

Employee performance usually improves when Employee performance usually improves when specific improvement goals are established during specific improvement goals are established during the performance appraisal.the performance appraisal.

Good coaching can avoid termination in many cases.Good coaching can avoid termination in many cases.

Coaching:Coaching: The supervisor’s role in providing The supervisor’s role in providing information, instructions, and suggestions relating to information, instructions, and suggestions relating to employee’s job assignments and performance.employee’s job assignments and performance.

The amount and type of coaching varies with the The amount and type of coaching varies with the appraisal assessment.appraisal assessment.

Employee performance usually improves when Employee performance usually improves when specific improvement goals are established during specific improvement goals are established during the performance appraisal.the performance appraisal.

Good coaching can avoid termination in many cases.Good coaching can avoid termination in many cases.

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GUIDELINES FOR COACHING GUIDELINES FOR COACHING GUIDELINES FOR COACHING GUIDELINES FOR COACHING

Some guidelines to help the employee Some guidelines to help the employee improve performance:improve performance:

Some guidelines to help the employee Some guidelines to help the employee improve performance:improve performance:

1.1. Have you identified specific areas of Have you identified specific areas of performance performance that need improvement?that need improvement?

2.2. Is it worth your time and effort to help the Is it worth your time and effort to help the employee improve?employee improve?

3.3. Does the employee understand that his or her Does the employee understand that his or her performance needs improvement?performance needs improvement?

4.4. Does he or she know what is expected Does he or she know what is expected (standards (standards of performance)?of performance)?

5.5. Are there barriers beyond the employee’s control Are there barriers beyond the employee’s control

that influence the current performance?that influence the current performance?

1.1. Have you identified specific areas of Have you identified specific areas of performance performance that need improvement?that need improvement?

2.2. Is it worth your time and effort to help the Is it worth your time and effort to help the employee improve?employee improve?

3.3. Does the employee understand that his or her Does the employee understand that his or her performance needs improvement?performance needs improvement?

4.4. Does he or she know what is expected Does he or she know what is expected (standards (standards of performance)?of performance)?

5.5. Are there barriers beyond the employee’s control Are there barriers beyond the employee’s control

that influence the current performance?that influence the current performance?

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PROMOTION FROM WITHINPROMOTION FROM WITHINPROMOTION FROM WITHINPROMOTION FROM WITHIN

Promotion from within provides a steady source of Promotion from within provides a steady source of

trained personnel and incentive to employees who trained personnel and incentive to employees who see a link between performance and promotion.see a link between performance and promotion.

Supervisors should encourage and counsel Supervisors should encourage and counsel employees they feel are worthy of promotion.employees they feel are worthy of promotion.

Situations occur where it is difficult or detrimental Situations occur where it is difficult or detrimental to promote from within. These include:to promote from within. These include:

•• need for skills current employees don’t need for skills current employees don’t possesspossess•• no qualified internal candidatesno qualified internal candidates

Promotion from within provides a steady source of Promotion from within provides a steady source of trained personnel and incentive to employees who trained personnel and incentive to employees who see a link between performance and promotion.see a link between performance and promotion.

Supervisors should encourage and counsel Supervisors should encourage and counsel employees they feel are worthy of promotion.employees they feel are worthy of promotion.

Situations occur where it is difficult or detrimental Situations occur where it is difficult or detrimental to promote from within. These include:to promote from within. These include:

•• need for skills current employees don’t need for skills current employees don’t possesspossess•• no qualified internal candidatesno qualified internal candidates

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Criteria for Promotion from WithinCriteria for Promotion from Within

SENIORITYSENIORITY

Seniority is an easily measured and objective Seniority is an easily measured and objective criterion applied to reduce favoritism and criterion applied to reduce favoritism and discrimination.discrimination.

Advantages:Advantages: loyalty, abilities, and knowledge loyalty, abilities, and knowledge improve.improve.

Disadvantages:Disadvantages: the best employees are not always the best employees are not always the most senior; younger employees may have little the most senior; younger employees may have little motivation to perform well.motivation to perform well.


SENIORITYSENIORITY

Seniority is an easily measured and objective Seniority is an easily measured and objective criterion applied to reduce favoritism and criterion applied to reduce favoritism and discrimination.discrimination.

Advantages:Advantages: loyalty, abilities, and knowledge loyalty, abilities, and knowledge improve.improve.

Disadvantages:Disadvantages: the best employees are not always the best employees are not always the most senior; younger employees may have little the most senior; younger employees may have little motivation to perform well.motivation to perform well.

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Merit and ability: Merit and ability: Merit refers to the quality of an Merit refers to the quality of an employee’s job performance. Ability means an employee’s job performance. Ability means an employee’s capability or potential to perform, or be employee’s capability or potential to perform, or be trained to perform, a higher-level job.trained to perform, a higher-level job.

Good supervisory practice attempts to attain a Good supervisory practice attempts to attain a workable balance between the concepts of merit and workable balance between the concepts of merit and ability on the one hand, and seniority on the other.ability on the one hand, and seniority on the other.


Merit and ability: Merit and ability: Merit refers to the quality of an Merit refers to the quality of an employee’s job performance. Ability means an employee’s job performance. Ability means an employee’s capability or potential to perform, or be employee’s capability or potential to perform, or be trained to perform, a higher-level job.trained to perform, a higher-level job.

Good supervisory practice attempts to attain a Good supervisory practice attempts to attain a workable balance between the concepts of merit and workable balance between the concepts of merit and ability on the one hand, and seniority on the other.ability on the one hand, and seniority on the other.

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EFFECTIVE COMPENSATIONEFFECTIVE COMPENSATIONEFFECTIVE COMPENSATIONEFFECTIVE COMPENSATION

Wage rates and salary schedules are Wage rates and salary schedules are

formulated by higher-level management, formulated by higher-level management, human resources departments, union human resources departments, union contracts, or government legislation contracts, or government legislation and regulation.and regulation.

Supervisors have major input Supervisors have major input in determining appropriate in determining appropriate compensation for employees.compensation for employees.

Wage rates and salary schedules are Wage rates and salary schedules are formulated by higher-level management, formulated by higher-level management, human resources departments, union human resources departments, union contracts, or government legislation contracts, or government legislation and regulation.and regulation.

Supervisors have major input Supervisors have major input in determining appropriate in determining appropriate compensation for employees.compensation for employees.

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• Eliminate pay inequities to minimize dissatisfaction and Eliminate pay inequities to minimize dissatisfaction and complaintscomplaints

• Establish and/or maintain attractive pay rates to attract Establish and/or maintain attractive pay rates to attract and retain qualified employeesand retain qualified employees

• Conduct periodic employee merit ratings to provide the Conduct periodic employee merit ratings to provide the basis for comparative performance rewardsbasis for comparative performance rewards

• Eliminate pay inequities to minimize dissatisfaction and Eliminate pay inequities to minimize dissatisfaction and complaintscomplaints

• Establish and/or maintain attractive pay rates to attract Establish and/or maintain attractive pay rates to attract and retain qualified employeesand retain qualified employees

• Conduct periodic employee merit ratings to provide the Conduct periodic employee merit ratings to provide the basis for comparative performance rewardsbasis for comparative performance rewards

Objectives of a compensationprogram include:

Objectives of a compensationprogram include:

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The Supervisor’s Role in Compensation DecisionsThe Supervisor’s Role in Compensation Decisions

Every supervisor should make an effort to make higher-Every supervisor should make an effort to make higher-level managers aware of serious compensation level managers aware of serious compensation inequities. inequities.

How much should an employee’s raise be?How much should an employee’s raise be?

• Satisfactory performance = recommend normal increase

• Unsatisfactory performance = suspend increase and discuss this with employee

• Outstanding performance = recommend higher than average increase if this can be done within the wage structure

The Supervisor’s Role in Compensation DecisionsThe Supervisor’s Role in Compensation Decisions

Every supervisor should make an effort to make higher-Every supervisor should make an effort to make higher-level managers aware of serious compensation level managers aware of serious compensation inequities. inequities.

How much should an employee’s raise be?How much should an employee’s raise be?

• Satisfactory performance = recommend normal increase

• Unsatisfactory performance = suspend increase and discuss this with employee

• Outstanding performance = recommend higher than average increase if this can be done within the wage structure

EFFECTIVE COMPENSATIONEFFECTIVE COMPENSATION


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Incentive programs include:Incentive programs include:

• PieceworkPiecework

• Pay for PerformancePay for Performance

• Gain sharing PlanGain sharing Plan

• Skill-based PaySkill-based Pay

• Suggestion PlansSuggestion Plans

Incentive programs include:Incentive programs include:

• PieceworkPiecework

• Pay for PerformancePay for Performance

• Gain sharing PlanGain sharing Plan

• Skill-based PaySkill-based Pay

• Suggestion PlansSuggestion Plans

Employee IncentivesEmployee Incentives

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The company must clearly define what it The company must clearly define what it wants to reward.wants to reward.

Regardless of the incentive plan used, the Regardless of the incentive plan used, the supervisor must fully comprehend the supervisor must fully comprehend the plan and be able to answer employee plan and be able to answer employee questions.questions.

The company must clearly define what it The company must clearly define what it wants to reward.wants to reward.

Regardless of the incentive plan used, the Regardless of the incentive plan used, the supervisor must fully comprehend the supervisor must fully comprehend the plan and be able to answer employee plan and be able to answer employee questions.questions.

Employee IncentivesEmployee Incentives

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Most organizations provide supplementary Most organizations provide supplementary benefits for employees in addition to benefits for employees in addition to monetary compensationmonetary compensation

vacationsvacations

holidaysholidays

health planshealth plans

Most organizations provide supplementary Most organizations provide supplementary benefits for employees in addition to benefits for employees in addition to monetary compensationmonetary compensation

vacationsvacations

holidaysholidays

health planshealth plans

Employee BenefitsEmployee BenefitsEmployee BenefitsEmployee Benefits

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Supervisors must stay informed about the Supervisors must stay informed about the compensation system in their companies compensation system in their companies and consult human resources or and consult human resources or other sources when questions arise.other sources when questions arise.

Concerns can arise if Concerns can arise if feelings of inequity feelings of inequity arise in regard to arise in regard to benefits. benefits.

Be honest and open in Be honest and open in communication.communication.

Supervisors must stay informed about the Supervisors must stay informed about the compensation system in their companies compensation system in their companies and consult human resources or and consult human resources or other sources when questions arise.other sources when questions arise.

Concerns can arise if Concerns can arise if feelings of inequity feelings of inequity arise in regard to arise in regard to benefits. benefits.

Be honest and open in Be honest and open in communication.communication.

Employee BenefitsEmployee Benefits

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END

chapter 13 performance appraisal and managing the results: coaching, promoting, and compensating...

Documents

performance feedback

employees performance

performance standards

supervisors role

effective supervisors

sound appraisal meeting

regular feedback

compensating employees