Pitfalls to Avoid in Performance Appraisals

Pitfalls to Avoid in Performance AppraisalsPerformance Evaluation Period 2014What is Performance Appraisal?Performance Appraisal Evaluating an employees current and/or past performance relative to his or her performance standards.The identification, measurement, and management of human performance in organizations.Performance ManagementThe process organizations use to make sure employees are working toward and accomplishing organizational goals.

Appraisal ProcessEstablish and communicate expectations for performance.Observe and measure individual performance against standards.Reinforce performance to provide remediesEstablish and Communicate ExpectationsDuring the planning process and related action plans, the manager spells out what to do in order to accomplish the department objectives.

This information will indicate what each employee must do in order to help the department or work group meet its objectives.

It is important that each employee knows and understands what is expected.The manager/supervisor must communicate the objectives effectively.Employees are most likely to understand and be committed to objectives when they have a say in developing them.Observe and Measure Individual PerformanceThrough the control process, the manager should continuously gather information about each employees performance.

This is an ongoing process, not something the manager/supervisor saves to do when filling out appraisal forms.Performance appraisals should focus on behavior and results.

Focusing on behavior means the appraisal should describe specific actions or patterns of behaving.

Focusing on results means describing the extent to which the employee has satisfied the objective for which he or she is responsible.Observe and Measure Individual PerformanceSometimes a manager needs to appraise personal characteristics, for example, an employees dependability or attitude.

While such ratings are necessarily subjective, the manager/supervisor can try to base them on observations about behavior and results.Reinforce PerformanceTo keep employees motivated and informed, the manager needs to tell them when they are doing something right, not just when they are making a mistake.

Reinforce good performance by pointing out to employees the areas in which their performance is good.In areas where the employee falls short of the standards, he or she needs to know how to improve.

To move beyond discussing symptoms to uncover the underlying problems, the manager/supervisor can ask which of the following kinds of causes led to the poor performance:(1) Inadequate skills. The supervisor should see that the employee gets the necessary training.(2) Lack of effort. The supervisor may need to apply the principles of motivation. (3) External Additions. If the problem is something beyond the control of the supervisor and employee, such as a poor economy or lack of cooperation from another department, the appraisal standards and ratings should be adjusted so that they are fair to the employee.(4) Personal problems. The supervisor should handle the situation to ensure they dont affect performanceRating BiasesRating biases are intentional rating inaccuracies.Longenecker et al. (1987), The politics of performance appraisal.Interviewed executives familiar with rating performance to investigate the thought processes they used when rating performanceRevealed that distortion of ratings was an acceptable means of accomplishing various ulterior goals.Accurately rating performance is not as important as keeping things cooking.Rating BiasesSeven common reasons for inflating ratings:

Pain-in-the-neck factorTo get more bonuses/raises for the unitTo promote someone out of the unitBoost moraleUnderdog factorDirty laundry factorRecognition of recent improvementsRating BiasesFour common reasons for deflating ratings:

Give a kick in the pants to someone who is coastingShow them whos the boss In an effort to provide justification for future firing

Challenges to Effective Performance Measurement

Rater ErrorsAn error in performance appraisals that reflects consistent biases on the part of the rater

Problems in Performance AppraisalAppraiser discomfortLack of objectivityHalo/horn error Leniency/strictnessCentral tendencyRecent behavior biasPersonal bias Manipulating the evaluationEmployee anxiety

16Appraiser DiscomfortPerformance appraisal process cuts into managers timeExperience can be unpleasant when employee has not performed well

17Lack of Objectivity In rating scales method, commonly used factors such as attitude, appearance, and personality are difficult to measure 18CompetenciesWhat is your measure of performance?Customer Service Time to resolve complaintsME within 48 hoursEE within 36 hoursE within 24 hoursRating ErrorsLeniency - the tendency to give ratings that are overly highSeverity - the tendency to give ratings that are overly lowCentral Tendency - the tendency to use the midpoint of the scale too oftenHalo/Horn Error Halo error - Occurs when manager generalizes one positive performance feature or incident to all aspects of employee performance resulting in higher rating Horn error - Evaluation error occurs when manager generalizes one negative performance feature or incident to all aspects of employee performance resulting in lower rating

21Rating ErrorsPersonal biases - unintentional discrimination based on age, sex, race, etc.Recency effect - the tendency to give greater weight to recent performance and lesser weight to earlier performance.Recent Behavior Bias Employees behavior often improves and productivity tends to rise several days or weeks before scheduled evaluationOnly natural for rater to remember recent behavior more clearly than actions from more distant pastMaintain records of performance 23Personal Bias (Stereotyping) Managers allow individual differences such to affect ratings they give Effects of stereotyping can influence appraisals Other factors Example: mild-mannered employees may be appraised more harshly simply because they do not seriously object to results 24Manipulating the Evaluation Example: Want to give pay raise to certain employee. Superior may give employee an undeserved high performance evaluation 25Employee Anxiety Evaluation process may create anxiety for appraised employee Opportunities for promotion, better work assignments, and increased compensation may hinge on results

26Reasons for Intentionally Inflating RatingsBelieve accurate ratings would damage subordinates motivation and performance.Improve employees eligibility for merit raises.Avoid airing departments dirty laundry.Avoid creating negative permanent record that might haunt employee in future.Protect good workers whose performance suffered because of personal problems.27Reasons for Intentionally Inflating RatingsReward employees displaying great effort even when results were relatively low.Avoid confrontation with hard-to-manage employees.Promote a poor or disliked employee up and out of department.28Reasons for Intentionally Lowering RatingsScare better performance out of employee.Punish difficult or rebellious employee.Encourage problem employee to quit.Create strong record to justify planned firing.Minimize amount of merit increase a subordinate receives.

29Emerging Trends: Measuring the Performance of TeamsReview existing measures to make sure the team is aware of the measures and has commitment and responsibilities to achieve them.Identify interim checkpoints at which team progress or achievements can be assessed.Identify what the team and team members must do to achieve the desired team-level results.Prioritize team goals according to relative importance.

Tips for Better Performance Reviews

Start with the raw dataMake sure you are evaluating performance on appropriate dimensionsBeware of rating biasesSupport ratings with written commentsEvaluate several or all of your people at one time, if possibleStick with performance and stay away from inferences about causeBe consistent across workers