Performance Management 1
MANA 3320
Dr. Jeanne Michalski
michalski@uta.edu
Performance Ethic
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High-performing companies place a premium on setting
demanding standards and measuring performance against
those tough-minded goals. Specifically, they:
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Have a mission
Have challenging goals and clear accountability
Are excellent at performance feedback
Apply consequences, both positive and negative, to individual
performance
(McKinsey & Company, 1999)
Possible Positive Outcomes
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Motivation
Performance
Job definition
Communication
Development
Acceptance of organizational goals
Possible Negative Outcomes
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Turnover
False data
Degraded supervisor / subordinate relationship
Damaged self-esteem
Low motivation and performance
Legal action
Wasted time
Performance Appraisal
Appraisal Programs
Administrative
Developmental
Compensation
Ind. Evaluation
Job Evaluation
Training
EEO/AA Support
Career Planning
Purposes for Performance
Appraisal
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Developmental
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Provide performance feedback
Identify individual strengths/weaknesses
Recognize individual performance
Assist in goal identification
Evaluate goal achievement
Identify individual training needs
Determine organizational training needs
Allow employees to discuss concerns
Improve communication
Provide a forum for leaders to coach
Purposes for Performance
Appraisal
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Administrative
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Document personnel decisions
Determine promotion candidates
Determine transfers and assignments
Identify poor performance
Decide retention or termination
Decide on layoffs
Validate selection criteria
Meet legal requirements
Make reward/compensation decisions
Developing an Effective Appraisal
Program
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Performance Standards
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Must be based on job-related requirements derived from job
analysis and reflected in job description and job
specifications.
Help translate an organization’s goals and objectives into job
requirements that define acceptable and unacceptable
performance levels.
Performance Standards
Characteristics
Strategic
Relevance
Individual standards directly
relate to strategic goals.
Criterion
Deficiency
Standards capture all of an
individual’s contributions.
Criterion
Performance capability is not
Contamination reduced by external factors.
Reliability
(Consistency)
Standards are quantifiable,
measurable, and stable.
Are You Complying with the Law?
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Brito v Zia
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The Supreme Court ruled that performance appraisals were
subject to the same validity criteria as selection procedures.
Albemarle Paper Company v Moody
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The U.S. Supreme Court found that employees had been
ranked against a vague standard, open to each supervisor’s
own interpretation.
Legal Issues
Appraisal systems are more defensible if they:
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Are based on job analysis (Validity)
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Are consistent among multiple raters (Reliability)
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Provide written instructions
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Allow employees to review appraisal results
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Train appraisers in the use of the system
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Ensure managers who conduct the appraisal are
able to observe the behavior they are rating.
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Establish an appeals procedure to enable employees
to express disagreement with the appraisal.
Sources of Performance Appraisal
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Manager and/or Supervisor
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Self-Appraisal
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Appraisal done by an employee’s manager and reviewed by
a manager one level higher.
Appraisal done by the employee being evaluated, generally
on an appraisal form completed by the employee prior to the
performance interview.
Subordinate Appraisal
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Appraisal of a superior by an employee, which is more
appropriate for developmental than for administrative
purposes.
Sources of Performance Appraisal
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Team Appraisal
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Based on TQM concepts; recognizes team accomplishment
rather than individual performance
Customer Appraisal
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A performance appraisal that, like team appraisal, is based
on TQM concepts and seeks evaluation from both external
and internal customers
360 Degree Feedback
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Evaluation method that incorporates feedback from
the:
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worker,
his/her peers,
supervisors,
direct reports, and
customers.
Results of these confidential surveys are tabulated
and shared with the worker.
Interpretation of the results, trends and themes are
discussed as part of the feedback.
360 Degree Feedback
Peers
Customers
Worker
Supervisor
Direct
Reports
Multi-rater Assessment
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Advantages
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Fair – less rating inflation, less adverse impact on diversity,
and technology safeguards
Accurate – less bias and more balance
Credible: more believable because of respect for the
opinions of multiple work associates
Valuable: more specific feedback and greater distinctions
among performance criteria
Disadvantages
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Requires more administration
Vulnerable to bias – highs and lows
Dependent on the amount of trust employees have that
feedback will remain confidential
Key Questions to Consider When
Receiving Feedback
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Do I understand it?
Is it accurate/valid?
Is it important?
Do I want to change?
At its heart feedback is only information. How you
choose to think and feel about the feedback will
determine the value you gain from it.
Possible Reactions To Feedback
DENIAL
ANGER / FLIGHT
WITHDRAWAL
ACCEPTANCE
ANALYSIS
ACTION PLANNING
Training Appraisers
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Establishing an Appraisal Plan
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Provide an explanation of the performance appraisal
system’s objectives so that raters will understand the
compensation and development purposes for which the
appraisal is to be used.
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Explain the mechanics of the rating system
 How frequently the appraisals are to be
conducted
 Who will conduct them
 What are the standards of performance.
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Alert raters to the weaknesses and problems of appraisal
systems so that they can be avoided.
Rater Errors
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Error of Central Tendency
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Leniency or Strictness Error
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A rating error in which all employees are rated about
average.
A rating error in which the appraiser tends to give all
employees either unusually high or unusually low ratings.
Recency Error
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A rating error in which appraisal is based largely on an
employee’s most recent behavior rather than on behavior
throughout the appraisal period.
Rater Errors
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Contrast Error
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A rating error in which an employee’s evaluation is biased
either upward or downward because of comparison with
another employee just previously evaluated.
Similar-to-Me Error
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An error in which an appraiser inflates the evaluation of an
employee because of a mutual personal connection.
Rater Errors: Training and
Feedback
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Rating Error Training
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Observe other managers making errors
Actively participate in discovering their own errors
Practice job-related tasks to reduce the errors they tend to
make
Feedback Skills Training
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Communicating effectively
Diagnosing the root causes of performance problems
Setting goals and objectives
Leadership courage is required to
assess performance and provide
candid, constructive and positive
feedback and get the truth into
performance appraisal.
How Not to Provide Feedback
"I would not allow this employee to breed."
"He would be out of his depth in a parking lot puddle."
"This young lady has delusions of adequacy."
"He sets low personal standards and then consistently fails to achieve them."
"This employee should go far -- and the sooner he starts, the better."
"Got a full six-pack, but lacks the plastic thing to hold it all together."
"A gross ignoramus -- 144 times worse than an ordinary ignoramus."
"I would like to go hunting with him sometime."
"He's been working with glue too much."
"He brings a lot of joy whenever he leaves the room."
"When his IQ reaches 50, he should sell."
"If he were any more stupid, he'd have to be watered twice a week."