HUMAN RESOURCE MANAGEMENT
Global Edition 12e
Chapter 9,10,11&12
Performance Appraisal,
Career and
Rewarding Employees
Part 3 Training and Development
Copyright © 2011 Pearson Education
GARY DESSLER
PowerPoint Presentation by Charlie Cook
The University of West Alabama
WHERE WE ARE NOW…
Copyright © 2011 Pearson Education
9–2
Basic Concepts in Performance
Management and Appraisal
Performance Appraisal
Performance
Management
Setting work
standards, assessing
performance, and
providing feedback to
employees to
motivate, correct, and
continue their
performance.
An integrated
approach to ensuring
that an employee’s
performance supports
and contributes to the
organization’s
strategic aims.
Copyright © 2011 Pearson Education
9–3
An Introduction to Appraising Performance
Why Appraise Performance?
1
Is basis for pay and promotion decisions.
2
Plays an integral role in performance management.
3
Helps in correcting deficiencies and reinforcing good
performance.
4
Is useful in career planning.
Copyright © 2011 Pearson Education
9–4
(Un)Realistic Appraisals
• Motivations for Soft Appraisals
Soft Appraisal : semua dikasih nilai
bagus
 The fear of having to hire and train someone new.
 The unpleasant reaction of the appraisee.
 An appraisal process that’s not conducive to candor.
• Hazards of Soft Appraisals
 Employee loses the chance to improve before being discharged
or forced to change jobs.
 Lawsuits arising from dismissals involving inaccurate
performance appraisals.
Copyright © 2011 Pearson Education
9–5
Performance Appraisal Roles
• The Supervisor’s Role
 Usually do the actual appraising
 Must be familiar with basic
appraisal techniques
 Must understand and avoid
problems that can cripple
appraisals
 Must know how to conduct
appraisals fairly
Copyright © 2011 Pearson Education
9–6
Performance Appraisal Roles (cont’d)
• The HR Department’s Role
 Serves a policy-making and advisory role.
 Provides advice and assistance regarding the appraisal
tool to use.
 Trains supervisors to improve their appraisal skills.
 Monitors the appraisal system effectiveness and
compliance with EEO laws.
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9–7
Effectively Appraising Performance
Steps in Appraising Performance
1
Defining the job and performance criteria
2
Appraising performance
3
Providing feedback session
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9–8
Performance Appraisal Methods
Appraisal Methodologies
1
Graphic rating scale
6
Narrative forms
Ex: Telespazio
2
Alternation ranking
7
Behaviorally anchored rating
scales (BARS)
3
Paired comparison
8
Management by objectives (MBO)
4
Forced distribution
9
Computerized and Web-based
performance appraisal
10
Merged methods
Dipaksakan mis. Harus 15%
outstanding, 15% poor
5
Critical incident
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9–9
FIGURE 9–2
Sample Graphic
Rating Performance
Rating Form
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9–10
FIGURE 9–5
Scale for Alternate Ranking of Appraisee
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9–11
FIGURE 9–6
Ranking Employees by the Paired Comparison Method
Note: + means “better than.” - means “worse than.” For each chart, add up
the number of +’s in each column to get the highest ranked employee.
Copyright © 2011 Pearson Education
9–12
TABLE 9–1
Examples of Critical Incidents for Assistant Plant Manager
Continuing Duties
Targets
Critical Incidents
Schedule production
for plant
90% utilization of
personnel and machinery
in plant; orders delivered
on time
Instituted new production
scheduling system; decreased
late orders by 10% last month;
increased machine utilization in
plant by 20% last month
Supervise procurement Minimize inventory costs
of raw materials and
while keeping adequate
on inventory control
supplies on hand
Let inventory storage costs rise
15% last month; over-ordered
parts “A” and “B” by 20%; underordered part “C” by 30%
Supervise machinery
maintenance
Instituted new preventative
maintenance system for plant;
prevented a machine breakdown
by discovering faulty part
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No shutdowns due
to faulty machinery
9–13
Behaviorally Anchored Rating Scale (BARS)
Developing a BARS
Advantages of BARS
1. Write critical incidents
 A more accurate gauge
2. Develop performance
 Clearer standards
dimensions
 Feedback
3. Reallocate incidents
 Independent dimensions
4. Scale the incidents
 Consistency
5. Develop a final
instrument
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9–14
FIGURE 9–8
Example of a
Behaviorally
Anchored Rating
Scale for the
Dimension
Salesmanship Skills
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9–15
Management by Objectives (MBO)
• A comprehensive and formal organizationwide
goal-setting and appraisal program requiring:
1. Setting of organization’s goals
2. Setting of departmental goals
3. Discussion of departmental goals
4. Defining expected results (setting individual goals)
5. Conducting periodic performance reviews
6. Providing performance feedback
Copyright © 2011 Pearson Education
9–16
Dealing with Performance
Appraisal Problems
Potential Rating Scale
Appraisal Problems
Unclear
standards
Halo
effect
Central
tendency
Leniency or
strictness
Bias
Terutama jika
skala Likert nya
ganjil
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9–17
TABLE 9–2
A Graphic Rating Scale with Unclear Standards
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9–18
Guidelines for Effective Appraisals
How to Avoid
Appraisal Problems
Know the
problems
Use the
right tool
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Keep a
diary
Get
agreement on
a plan
Be
fair
9–19
Choosing the Right Appraisal Tool
Criteria for Choosing an
Appraisal Tool
Accessibility
Copyright © 2011 Pearson Education
Ease-of-use
Employee
acceptance
Accuracy
9–20
Who Should Do the Appraising?
Immediate
supervisor
Peers
Rating
committee
Self-rating
Potential
Appraisers
Subordinates
360-degree
feedback
360 degree :
Atasan
Rekan kerja, vendor, client
Bawahan
Diri sendiri
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9–21
The Appraisal Interview
Satisfactory—Promotable
Types of Appraisal
Interviews
Satisfactory—Not Promotable
Unsatisfactory—Correctable
Unsatisfactory—Uncorrectable
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9–22
Appraisal Interview Guidelines
Guidelines for Conducting
an Interview
Talk in terms of
objective work
data
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Don’t get
personal
Encourage the
person to talk
Get
agreement
9–23
How to Deliver Criticism
How to Criticize a Subordinate
1
Do it in a manner that lets the person maintain
his or her dignity and sense of worth.
2
Criticize in private, and do it constructively.
3
Give daily feedback so that the review has no
surprises.
4
Never say the person is “always” wrong.
5
Criticism should be objective and free of biases.
Copyright © 2011 Pearson Education
9–24
Formal Written Warnings
• Purposes of a Written Warning
 To shake your employee out of bad habits.
 To help you defend your rating, both to your own boss and (if
needed) to the courts.
• A Written Warning Should:
 Identify standards by which employee is judged.
 Make clear that employee was aware of the standard.
 Specify deficiencies relative to the standard.
 Indicate employee’s prior opportunity for correction.
Copyright © 2011 Pearson Education
9–25
Careers Today and
Employee Commitment
Old Contract
(Employer-focused)
New Contract
(Employee-focused)
“Do your best and be
loyal to us, and we’ll take
care of your career.”
“I’ll do my best for you,
but I expect you to
provide the development
and learning that will
prepare me for the day
I must move on, and for
having the work-life
balance that I desire.”
Copyright © 2011 Pearson Education
10–26
TABLE 10–1
Traditional Versus Career Development Focus
HR Activity
Traditional Focus
Career Development Focus
Human resource
planning
Analyzes jobs, skills, tasks—
present and future. Projects
needs. Uses statistical data.
Adds information about individual interests,
preferences, and the like to replacement
plans.
Recruiting and
placement
Matching organization’s needs
with qualified individuals.
Matches individuals and jobs based on
variables including employees’ career
interests and aptitudes.
Training and
development
Provides opportunities for
learning skills, information,
and attitudes related to job.
Provides career path information.
Adds individual development plans.
Performance
appraisal
Rating and/or rewards.
Adds development plans and individual
goal setting.
Compensation
and benefits
Rewards for time, productivity,
talent, and so on.
Adds tuition reimbursement plans,
compensation for non–job-related activities
such as United Way.
Copyright © 2011 Pearson Education
10–27
Why Offer Career Development?
Better equips employees
to serve the firm
Career
Development
Benefits
Boosts employee
commitment to the firm
Supports recruitment and
retention of efforts
Copyright © 2011 Pearson Education
10–28
TABLE 10–2
Roles in Career Development
Individual
Manager
•
•
•
•
•
•
•
• Provide timely and accurate performance
feedback.
• Provide developmental assignments and
support.
• Participate in career development
discussions with subordinates.
• Support employee development plans.
Accept responsibility for your own career.
Assess your interests, skills, and values.
Seek out career information and resources.
Establish goals and career plans.
Utilize development opportunities.
Talk with your manager about your career.
Follow through on realistic career plans.
Employer
•
•
•
•
•
•
•
•
Communicate mission, policies, and procedures.
Provide training and development opportunities, including workshops.
Provide career information and career programs.
Offer a variety of career paths.
Provide career-oriented performance feedback.
Provide mentoring opportunities to support growth and self-direction.
Provide employees with individual development plans.
Provide academic learning assistance programs.
Copyright © 2011 Pearson Education
10–29
Characteristics of Effective Mentors
• Are professionally competent
• Are trustworthy
• Are consistent
• Have the ability to communicate
• Are willing to share control
• Set high standards
• Are willing to invest time and effort
• Actively steer protégés into important work
Copyright © 2011 Pearson Education
10–30
Enhancing Diversity Through
Career Management
• Sources of Bias and Discrimination
 A lack of diversity in the hiring department
 The “old-boy network” of informal friendships
 A lack of women mentors
 A lack of high-visibility assignments and developmental
experiences (glass ceiling = batasan yg tdk terlihat)
 A lack of company role models for members of the same
racial or ethnic group
 Inflexible organizations and career tracks
*Dual career planning :
- Secara struktural (sesuai struktur organisasi), mis kaprodi, dekan
- Secara fungsional, mis semua dosen bisa jadi guru besar
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10–31
Taking Steps to Enhance Diversity:
Women’s and Minorities’ Prospects
Eliminate institutional barriers
Improve networking and mentoring
Supporting
Diversity
Abolish the glass ceiling
Adopt flexible career tracks
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10–32
Attracting and Retaining Older Workers
Create a culture that honors experience
Mis. Jd konsultan
Modify selection procedures
HR Policies for
Older Workers
Mis. Jd part timer?
Offer flexible or part-time work
Implement phased retirement programs
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10–33
FIGURE 10–6 The Talent Management Process
Recruitment = utk semua posisi
Succession = utk posisi2 tertentu
yg penting dlm suatu organisasi
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10–34
WHERE WE ARE NOW…
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11–35
Basic Factors in Determining
Pay Rates
Employee Compensation
Components
Direct financial
payments
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Indirect financial
payments
11–36
Compensation Policy Issues
• Pay for performance
• Pay for seniority
• The pay cycle
• Salary increases and promotions
• Overtime and shift pay
• Probationary pay
• Paid and unpaid leaves
• Paid holidays
• Salary compression
• Geographic costs of living differences
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11–37
Equity and Its Impact on Pay Rates
Forms of Compensation
Equity
External
equity
Internal
equity
Individual
equity
Procedural
equity
• External equity refers to how a job’s pay rate in one company compares to the job’s pay rate in other companies.
• Internal equity refers to how fair the job’s pay rate is when compared to other jobs within the same company (for
instance, is the sales manager’s pay fair, when compared to what the production manager is earning?).
• Individual equity refers to the fairness of an individual’s pay as compared with what his or her coworkers are
earning for the same or very similar jobs within the company, based on each individual’s performance.
• Procedural equity refers to the “perceived fairness of the processes and procedures used to make decisions
regarding the allocation of pay.”
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11–38
Addressing Equity Issues
Area wage and salary surveys
Methods to
Address Equity
Issues
Job analysis and job evaluation
Performance appraisal and incentive pay
Communications, grievance mechanisms,
and employees’ participation
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11–39
Step1: The Salary Survey
Uses for Salary Surveys
To price
benchmark jobs
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To market-price
wages for jobs
To make
decisions about
benefits
11–40
Sources for Salary Surveys
Sources of Wage and
Salary Information
SelfConducted
Surveys
Consulting
Firms
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Professional
Associations
Government
Agencies
The
Internet
11–41
Step 2: Job Evaluation
Identifying Compensable Factors
Skills
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Effort
Responsibility
Working
conditions
11–42
How to Evaluate Jobs
Methods for Evaluating Jobs
Ranking
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Job
classification
Point method
Factor
comparison
11–43
FIGURE 11–6
Wage Structure
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11–44
HR in Practice:
Developing a Workable Pay Plan
• Simplified Approach:
 Conduct a wage survey
 Conduct a job evaluation
 Conduct once-a-year job appraisals
 Compile the compensation budget
for upcoming year
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11–45
Competency-Based Pay: Pros and Cons
• Pros
 Higher quality
 Lower absenteeism
 Fewer accidents
• Cons
 Pay program implementation problems
 Costs of paying for unused knowledge, skills, and behaviors
 Complexity of program
 Uncertainty that the program improves productivity
Copyright © 2011 Pearson Education
11–46
Special Topics in Compensation
• Broadbanding
 Consolidating salary grades and ranges into a few wide levels
or “bands,” each of which contains a relatively wide range of
jobs and salary levels.
 Pros and Cons

More flexibility in assigning workers to different job grades

Provides support for flatter hierarchies and teams

Promotes skills learning and mobility

Lack of permanence in job responsibilities can be unsettling
to new employees.
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11–47
FIGURE 11–8
Broadbanded Structure and How It Relates
to Traditional Pay Grades and Ranges
Tujuan :
Mempermudah penugasan
karyawan ke level2 yang
lebih bervariasi
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11–48
Comparable Worth
• Concept:
 Employers should be required to pay men and women
equal wages for dissimilar jobs that are of comparable
(rather than strictly equal) value to the employer.
• Basis:
 Seeks to address the issue that women have jobs that
are dissimilar to those of men and those jobs are often
consistently valued less than men’s jobs.
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11–49
The Pay Gap
• Factors Lowering the Earnings of Women:
1. Women’s starting salaries are traditionally lower.
2. Salary increases for women in professional jobs do not
reflect their above-average performance.
3. In white-collar jobs, men change jobs more frequently,
enabling them to be promoted to higher-level jobs over
women with more seniority.
4. In blue-collar jobs, women tend to be placed in
departments with lower-paying jobs.
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11–50
Incentive Pay Terminology
• Pay-for-Performance Plan
 Ties employee’s pay to the employee’s performance
• Variable Pay Plan
 Is an incentive plan that ties a group or team’s pay to some
measure of the firm’s (or the facility’s) overall profitability
 Example: profit-sharing plans
 May include incentive plans for individual employees
Incentive :: Membayar karyawan berdasarkan kinerjanya
Bedanya dg benefit, benefit diberikan kepada semua karyawan
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12–51
Types of Employee Incentive Plans
Individual Employee Incentive
and Recognition Programs
Sales Compensation
Programs
Pay-for-Performance
Plans
Team/Group-based
Variable Pay Programs
Organizationwide Incentive
Programs
Executive Incentive
Compensation Programs
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12–52
Pros and Cons of Piecework
• Easily understandable, equitable,
and powerful incentives
• Employee resistance to changes
in standards or work processes
affecting output
• Quality problems caused by
an overriding output focus
• Possibility of violating minimum
wage standards
• Employee dissatisfaction when
incentives either cannot be earned
or are withdrawn
Copyright © 2011 Pearson Education
12–53
Individual Incentive Plans (cont’d)
• Merit Pay
 Is a permanent cumulative salary increase the firm awards
to an individual employee based on his or her individual
performance
 Can detract from performance if awarded across the board
 Becomes permanent ongoing reward for past performance
• Merit Pay Options
 Give annual lump-sum merit raises that do not make the
raise part of an employee’s base salary.
 Tie merit awards to both individual and organizational
performance.
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12–54
Incentives for Professional Employees
• Professional Employees
 Are those whose work involves the application
of learned knowledge to the solution of the
employer’s problems.

Lawyers, doctors, economists, and engineers
• Possible Incentives
 Bonuses, stock options and grants, profit sharing
 Better vacations, more flexible work hours
 Improved pension plans
 Equipment for home offices
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12–55
Nonfinancial and Recognition Awards
• Effects of Recognition-Based Awards
 Recognition has a positive impact on performance,
either alone or in conjunction with financial rewards.
 Day-to-day recognition from supervisors, peers, and
team members is important.
• Ways to Use Recognition
 Social recognition
 Performance-based recognition
 Performance feedback
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12–56
FIGURE 12–1
Social Recognition and Related Positive
Reinforcement Managers Can Use
• Challenging work assignments
• Freedom to choose own work
activity
• Being provided with ample
encouragement
• Being allowed to set own goals
• Having fun built into work
• Compliments
• More of preferred task
• Expression of appreciation in
front of others
• Role as boss’s stand-in when he
or she is away
• Note of thanks
• Role in presentations to top
management
• Employee-of-the-month award
• Job rotation
• Bigger desk
• Encouragement of learning and
continuous improvement
• Bigger office or cubicle
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• Special commendation
12–57
Incentives for Salespeople
• Salary Plan
 Straight salaries

Best for: prospecting (finding new clients),
account servicing, training customer’s sales force,
or participating in national and local trade shows
• Commission Plan
 Pay is a percentage of sales results.
Bs timbul kencenderungan hanya menjual
barang2 yg laku

Keeps sales costs proportionate to sales revenues

May cause a neglect of nonselling duties

Can create wide variation in salesperson’s income

Likelihood of sales success may be linked to external
factors rather than to salesperson’s performance

Can increase turnover of salespeople
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12–58
Incentives for Salespeople (cont’d)
• Combination Plan
 Pay is a combination of salary and
commissions, usually with a sizable
salary component.
 Plan gives salespeople a floor
(safety net) to their earnings.
 Salary component covers company-
specified service activities.
 Plans tend to become complicated,
and misunderstandings can result.
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12–59
Short- and Long-Term Incentives
• Short-Term Incentives: The Annual Bonus
 Plans intended to motivate short-term performance
of managers and tied to company profitability.
 Issues in awarding bonuses
 Eligibility basis
 Fund size basis
 Individual performance award
 Long-term incentives
 Stock options
 Performance shares
 Indexed options
 Premium price options
 Stock appreciation rights
 Perks
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12–60
Team/Group Incentive Plans
• Team (or Group) Incentive Plans
 Incentives are based on team’s performance.
• How to Design Team Incentives
 Set individual work standards.
 Set work standards for each team member
and then calculate each member’s output.
 Members are paid based on one of three formulas:

All receive the same pay earned by the highest producer.

All receive the same pay earned by the lowest producer.

All receive the same pay equal to the average pay
earned by the group.
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12–61
Pros and Cons of Team Incentives
• Pros
 Reinforces team planning and problem solving
 Helps ensure collaboration
 Encourages a sense of cooperation
 Encourages rapid training of new members
• Cons
 Pay is not proportionate to an individual’s effort
 Rewards “free riders”
Copyright © 2011 Pearson Education
12–62
Organizationwide Incentive Plans
• Profit-Sharing Plans
 Current profit-sharing (cash) plans

Employees receive cash shares of the firm’s profits
at regular intervals.
 Deferred profit-sharing plans

A predetermined portion of profits based on the
employee’s contribution to the firm’s profits is
placed in each employee’s retirement account
under a trustee’s supervision.

Employees’ income taxes on the distributions are
deferred, often until the employee retires.
Profit sharing vs gain sharing
Profit = hanya diperoleh jika perusahaan untung
Gain = bisa tetap diperoleh walaupun perusahaan tdk untung, jika perusahaan/organisasi bs melakukan
efisiensi
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12–63
At-Risk Variable Pay Plans
• Put some portion of the employee’s
weekly pay at risk.
 If employees meet or exceed
their goals, they earn incentives.
 If they fail to meet their goals, they
forego some of the pay they would
normally have earned.
Copyright © 2011 Pearson Education
12–64
Organizationwide Incentive Plans (cont’d)
• Employee Stock Ownership Plan (ESOP)
 A firm annually contributes its own stock—or cash
(with a limit of 15% of compensation) to be used to
purchase the stock—to a trust established for the
employees.
 The trust holds the stock in individual employee
accounts and distributes it to employees upon
separation from the firm if the employee has worked
long enough to earn ownership of the stock.
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12–65
Why Incentive Plans Fail
• Performance pay can’t replace good management.
• You get what you pay for.
• “Pay is not a motivator.”
• Rewards punish.
• Rewards rupture relationships.
• Rewards can have unintended consequences.
• Rewards may undermine responsiveness.
• Rewards undermine intrinsic motivation.
Copyright © 2011 Pearson Education
12–66
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Printed in the United States of America.
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7–67