Performance Appraisals State of the Art Performance & P.A Job performance represents the contribution

that individuals make to the organization that employs them.

The process of measuring what each employee contributes, called performance appraisal.

“OBSERVE and EVALUATE an employee’s work in relation to PRE-SET performance standards.”

Definitions (contd…) Performance appraisal is the assessment of an

individual’s performance in a systematic way( against well defined benchmarks). Assessment should not be confined to the past alone, potentials of the employee for future performance must also be assessed.

Performance Management Performance Management System (PMS) is a process

of establishing performance standards and evaluating performance in order to arrive at objective HR decisions and to provide documentation to support personnel actions.

Performance Appraisal state of the art This evaluation is communicated to the employee,

and she then has the opportunity to contribute her own assessment of her work performance. The results of the performance appraisal and discussion are recorded in the employee's personnel file.

Performance Management CycleSource of figure: Adapted from Fisher, Schoenfeldt, & Shaw (2006), Figure 10.1, p. 421

What is the purpose of performance appraisal? Providing feedback to employees about their

performance Determining who gets promoted Facilitating layoff or downsizing decisions Encouraging performance improvement Motivating superior performance Setting and measuring goals Counseling poor performers Determining compensation changes Encouraging coaching and mentoring

Supporting manpower planning or succession planning

Determining individual training and development needs

Determining organizational training and development needs

Confirming that good hiring decisions are being made Providing legal defensibility for personnel decisions Improving overall organizational performance Goals of Performance Appraisals System• Many organizations consider performance appraisal as a

tool that can “provide systematic judgments to back up salary increases, promotions, transfers, and sometimes demotions or Terminations.

• They are a means of telling a subordinate how he is doing and suggest needed change in his behaviour ,attitude and skills

• Used for coaching and counseling of the individual by the supervisor.

What GE discovered

Key companies such as AT&T, the Bank of America, Caterpillar, GTE and General Electric have been pioneers with this latter approach. Given these tendencies, Coens and Jenkins (2000) estimate that appraisal interviews are used in about 80% of organisations - although they go on to estimate that about 90% of appraisers and appraisees are dissatisfied with them.

Finding in various studies Despite the assumption that P.A is valuable not a lot

of time is devoted to it. Regardless of Position ,both managers and staff see a

lot of room for improvement . Respondents give the lowest grades to feedback and

coaching. Respondents describe P.A as fragmented system that

lacks continuity Beliefs about the nature and function of formal

performance appraisal systems in American organizations:

• The process is essential to good management.• The process is natural or normal.• The process is the only reasonable method available for

assuring at least minimal performance.• The process is the only valid basis for granting or

withdrawing employee economic benefits.• The process is the primary means of maintaining control of

staff productivity..

Beliefs about the nature and function of formal performance appraisal systems in American organizations:

• The process is essential for the growth and well-being of the individual employee.

• The process is an important element in an effective system of motivation.

• The process is essential in work orientation programs.

• The process is or can be an objective assessment of an individual's strengths and weaknesses

Beliefs about the nature and function of formal performance appraisal systems in American organizations:

• The process is primarily directed toward the subordinate.

• The process is continuous and reflects a careful analysis of the individual's daily performance.

• The process is equally effective whether carried out by a supervisor or the employee's peers.

Beliefs about the nature and function of formal performance appraisal systems in American organizations:

• The process is concerned with all aspects of an individual's work, not just the performance of the assigned duties.

• The process is useful in assessing an employee's future and potential progress in the organization.

• The process is essential in planning organizational personnel needs for the present and the immediate future.

Beliefs about the nature and function of formal performance appraisal systems in American organizations:

• The process is important in counseling and suggesting areas of improvement that the individual should achieve if the individual hopes to gain more responsible positions either in the organization or outside it

Performance appraisal the state of the art.(DDI and SHRM suggestions

Organisation Readiness. System Integration. Training . Evaluation

Factors causing antipathy towards P.A Page 9• Neither managers nor subordinates rarely has any

sense of ownership. They are not involved in the design or the administration of the system; they frequently are not trained to use the system, and their reactions to the system are seldom solicited and acted upon

• Managers do not like to deliver negative messages to people with whom they must work, and whom they often like on a personal basis; and employees do not like to receive them. Negative messages tend to generate defensive reactions and promote hostility rather than serve as performance feedback.

• Both managers and employees recognize that delivering a negative message will adversely affect a person's career. Managers may be aware of the permanence of the "paper trail" that follows formal appraisal and are often hesitant to commit negative feedback to writing even when they do not like the individual.

• There are few formal rewards for taking the appraisal process seriously and probably no informal rewards. There are many informal rewards for not delivering unpopular messages.

• Managers hesitate to give unfavorable appraisals for fear that the appearance of unsatisfactory work by subordinates reflects badly on the manager's ability to select and develop employees. Lack of candor in employee evaluation is one way of "hiding

dirty laundry." Important Uses for Performance Appraisal in 100

companies(rank order)1. Improving work performance2. Administering merit pay3. Advising employees of work expectations4. Counseling employees5. Making promotion decisions6. Motivating employees7. Assessing employee potential8. Identifying training needs9. Better working relationships10. Helping employees set career goals11. Assigning work more efficiently12. Making transfer decisions13. Making decisions about layoffs and terminations14. Assisting in long-range planning15. Validating hiring procedures16. Justifying other managerial actions

Performance distribution in fortune 100 companies Level 1 Level 2 Level 3 Level 4 Level 5 Executives 23 46 31 2 0 Managers 14 43 33 6 2 Professionals 13 43 34 8 1 Non-Exempts 14 44 34 6 1

Recommendation Summary: Key Points Page 11 Get employees more involved in the design, development,

and administration of the performance appraisal system. Participation creates ego involvement and a sense of commitment to the process.

Invest more heavily in training raters to use the system. Train managers not only to observe and document performance but also to communicate information effectively and deliver performance feedback.

3. Create an environment in which performance information is viewed as a resource that managers can use to develop subordinates. Top managers must create a climate in which accurate and timely performance appraisal is expected of all managers, is taken seriously, and is rewarded.

4. Make performance appraisal the responsibility of the ratee, not the rater. This is a fundamental philosophical shift that takes the burden to "be nice" from managers and frees them to honestly "call it as they see it." As part of this philosophy, employees must be trained to use the feedback from the appraisal process to manage their own careers.

5. Use multiple perspectives (multiple raters) including peer evaluation to reduce the reliance on a single source. This reduces sampling error by increasing the number of observations and reduces the effect of possible idiosyncratic biases. Raters are more comfortable, since they are no longer solely responsible for what happens to the person as a result of the rating

Performance Management Cycle