APPRAISING & IMPROVING PERFORMANCE

Transcription

1 Graduate Diploma In Management Managing People Jeeshan Mirza APPRAISING & IMPROVING PERFORMANCE

2 Overview Performance Appraisal The Appraisal Process The Appraisal Interview Appraisal Problems

3 Overview Performance Appraisal The Appraisal Process The Appraisal Interview Appraisal Problems

4 Performance Appraisal The Purpose Of Performance Appraisal

5 Journal Entries Account Receivables Invoice Jane joins as Junior Accountant Account Payable Reconciliation She completes one year of employment. Now she is puzzled, whats next? How is she performing? Is she eligible for pay rise? Promotion? Does she have a long term future at the company? Where can she improve?

6 Performance Appraisal Evaluating an employee s current and/or past performance Relative to his or her performance standards Formalized process to provide employee feedback, and allocation of rewards Operated since 1950 s, in many organizations more formality than to improve performance

7 Performance Appraisal Usually conducted annually, bi-annually in some companies Effective appraisal requires supervisor to set performance standards Employees must receives training, feedback, incentives To eliminate performance deficiencies

8 Performance Appraisal Purpose 5 reasons to appraise subordinates performance 1. Most employers base pay, promotion, and retention decisions on employee s appraisal 2. Central role in employer s performance management in achieving company s goals 3. Lets manager and subordinate develop plan to correct deficiencies, reinforce right things

9 Performance Appraisal Purpose 4. Career planning purpose-opportunity to review employee s career plans In light of strengths and weaknesses 5. Identify employees training and development needs Performance gaps, formulate remedial steps

10 Performance Appraisal Purpose Source: Mathis

11 Performance Appraisal Criticisms In most organizations, treated as administrative exercise Typically performance reviews are done once a year, forms are filed Issue of performance then neglected until next review, likely to be next year Sometimes ineffective, does little to improve the future performance of employees

12 Overview Performance Appraisal The Appraisal Process The Appraisal Interview Appraisal Problems

13 The Appraisal Process How Its Done

14 The Appraisal Process Defining Goals & Performance Standards Employees need and expect to know ahead of time On what basis their managers will appraise them Managers use one or more of three bases goals, standards, and competencies Each employee s goals should derive from the company s overall aims

15 The Appraisal Process Defining Goals & Performance Standards Mastery of the competencies or skills(or behavioral standards ) the job requires Goals set must be SMART Specific-Clearly state desired results Measurable- How much? Attainable- Practical, realistic Relevant- Clearly derived from company needs Timely- With deadlines and milestones

16 The Appraisal Process Who Does The Appraisal Appraisals by immediate supervisor (Line Manager)-heart of most appraisals Supervisor-best position to observe and evaluate subordinate s performance Supervisor also responsible for that person s performance HRD can provide appraisal support on company regulation specific issues

17 The Appraisal Process Who Does The Appraisal BUT Relying only on supervisors appraisal might not be wise Employee s supervisor may apprise based on only what they know May not know how customers, colleagues rates the employees performance

18 The Appraisal Process Who Does The Appraisal Always some danger of bias for or against the employee Hence wise to have multiple options in appraisal process

19 The Appraisal Process Who Does The Appraisal Peer Appraisal Appraisal by fellow employee or group of employees Can improve communication, cohesion Employees motivated to meet colleague s expectation

20 The Appraisal Process Who Does The Appraisal Subordinate Appraisal Subordinates rate their managers Usually for developmental rather than for pay purposes Self Ratings Employees rate themselves in conjunction with supervisor, may over rate themselves

21 The Appraisal Process Who Does The Appraisal 360 Degree Feedback Employer collects performance information all around an employee From supervisors, subordinates, peers, and internal or external customers Generally for developmental than pay purposes

22 The Appraisal Process Who Does The Appraisal 360 Degree Feedback Example:

23 The Appraisal Process Who Does The Appraisal Responsibility in Performance Appraisal Source: Mathis

24 The Appraisal Process Appraisal Methods Graphic Rating Method Rater mark employee s performance indicating low to high levels of a particular characteristic Straightforward process Commonly used in performance evaluation See Example

25 The Appraisal Process Appraisal Methods Alternation Ranking Method Ranking employees from best to worst on a trait or traits Easier to distinguish between the worst and best employees than to rank them See Example

26 The Appraisal Process Appraisal Methods Paired Comparison Method Every subordinate to be rated is paired with and compared To every other subordinate on each trait See Example

27 The Appraisal Process Appraisal Methods Forced Distribution Method Ratings or scores of employees performance levels are distributed along a bell-shaped curve. Manager places predetermined percentages of subordinates in performance categories See Example

28 The Appraisal Process Appraisal Methods Forced Distribution Method Source: Mathis

29 The Appraisal Process Appraisal Methods Differentiation at GE Under Jack Welch

30 The Appraisal Process Appraisal Methods Stack Microsoft

31 Forced Distribution Does It Work?

32 Overview Performance Appraisal The Appraisal Process The Appraisal Interview Appraisal Problems

33 The Appraisal Interview Conducting Interview During Performance Appraisal

34 The Appraisal Interview As important as the selection interview! Manager and subordinate discuss appraisal Formulate plans to remedy deficiencies and reinforce strengths Few people like to receive or give negative feedback

35 The Appraisal Interview Preparing For Appraisal Interview Give subordinate at least a weeks notice to review work, compile questions to ask Compare employees performance to standards Review previous appraisals Identify private area for discussion, minutes depending on seniority

36 The Appraisal Interview Conducting The Interview Main aim is to reinforce satisfactory performance Diagnose improve unsatisfactory performance Be direct, specific, objective Get agreement before the subordinate leaves on how things will improve and by when Develop action plan, formal warning letter if needed

37 The Appraisal Interview Conducting The Interview Ensure that the review process is fair Let employee participate, express opinion, concerns, explanations for performance Same process for all staff Be prepared to deal with defensiveness Denial, when accused of poor performance or negative aspects, focus on performance than person

38 The Appraisal Interview Appraisal Interview Hints Source: Mathis

39 Overview Performance Appraisal The Appraisal Process The Appraisal Interview Appraisal Problems

40 Appraisal Problems Dealing With Challenges Faced During Appraisal Interview

41 Appraisal Problems Performance Appraisals can be an unpleasant experience- for employee, manager Employees may view appraisals as unfair, unhelpful, and counterproductive Supervisors are often uncomfortable in dispensing the ratings and reviews Important to know where the pitfalls lie and how to avoid them

42 Appraisal Problems Dealing With Appraisal Problems Ensure fairness and effective supervision Some managers ignore accuracy and honesty in performance appraisals Use process for political purposes, eg. encouraging employees with whom they don t get along to quit Employees standards should be clear Employees should understand on what basis they will be appraised; should be objective

43 Appraisal Problems Dealing With Appraisal Problems Clarify Standards Appraisal scale is too open to interpretation Different supervisors would probably define good performance differently Best way to rectify this problem- develop and include descriptive phrases that define each trait and degree of merit Consistency in system, process

44 Appraisal Problems Dealing With Appraisal Problems Avoid Halo Effect Ratings Occurs when rater scores an employee high on all job criteria because of performance in one area If worker has few absences, supervisor might give high rating in all other areas of work, including quantity and quality of output Horns effect-when a low rating on one characteristic leads to an overall low rating

45 Appraisal Problems Dealing With Appraisal Problems Recency & Primacy Effects Rater gives greater weight to recent events Giving student grade based only on the student s performance in the last week of class Primacy- When rater gives greater weight to information received first when appraising an individual s performance

46 Appraisal Problems Dealing With Appraisal Problems Similar To Me, Different From Me Errors Raters influenced whether people show characteristics that are the same as or different from their own Manager with MBA might give subordinates with MBAs higher appraisals than those with only bachelor s degrees

47 Appraisal Problems Dealing With Appraisal Problems The Middle Rating, Being Too Lenient, Too Strict Central tendency problem refers to a tendency to rate all employees as being about average, or in the middle Leniency- Ratings of all employees fall at the high end of the scale Strictness- Ratings of all employees fall at the low end of the scale

48 Appraisal Problems Dealing With Appraisal Problems Bias Rating based on personal characteristics-age, gender, race Occurs when rater s values or prejudices distort the rating Research has indicated supervisors rate women low, when they excel at male typical tasks Contrast Error Tendency to rate people relative to others rather than against performance standards

49 Appraisal Problems Performance Management For some appraisal aims, annual or bi-annual performance appraisal may suffice Eg. Promotions and raises tend to be periodic decisions To correct performance, acknowledging exceptional performance, a more continuous process is required Performance Management

50 Appraisal Problems Performance Management Continuous process Performance management is often confused with performance appraisal Performance appraisal is a component of performance management Appraisal-Past; Management- Present & Future

51 Components Of Performance Management Source: Mathis

52 Jane joins as Junior Accountant Manager meets her at end of the year, does an evaluation of her performance, how she has performed her tasks, achieved her goals, adhered to company s regulations and standards. Based on successful appraisal, gives her a 10% raise Performance Appraisal

53 Jane joins as Junior Accountant Her manager sets her goals, targets, and expectations he has. Two weeks later he sits with her, gives feedback on her performance, answers her queries, coaches her, sets a new goal for her to achieve. Two weeks later again meets, to discuss if she is meeting goals, and how to improve Performance Management

54 Performance Management In Practice Most companies carry out only performance appraisal That too mainly for salary review, rather than performance optimization Particularly SME s, Sri Lankan context Performance appraisal is a formality, administrative purpose

55 Performance Management In Practice Performance management is more complex to carry out Needs strong integration with strategy, clear-cut strategic goals Adequate reporting and evaluation system, capable HR Division May only be feasible for large companies

56 Performance Management In Practice Requires supervisors/managers to be forthright, candid, direct Many Asian cultures are face saving, supervisor uncomfortable, employee defensive situations Salary appreciation, bonuses, and other benefits provided without appraisal-based on other factors Politics, biases frequently used

57 Thanks! Any questions? You can find me