PART THREE TRAINING AND DEVELOPMENT CHAPTER T Nine Performance Management and Appraisal 9 Lecture Outline Strategic Overview Basic Concepts in Performance Management and Appraisal The Performance Appraisal Cycle Why Appraise Performance? The Importance of Continuous Feedback Performance Management Defining the Employee's Goals & Performance Standards Who Should Do the Appraising? Techniques for Appraising Performance Graphic Rating Scale Method Alternation Ranking Method Paired Comparison Method Forced Distribution Method Critical Incident Method Narrative Forms Behaviorally Anchored Rating Scales Mixed Standard Scales Management by Objectives (MBO) Computerized and Web-Based Performance Appraisal Electronic Performance Monitoring Appraisal in Practice Dealing with Appraisal Problems and Interviews Potential Appraisal Problems Guidelines for Effective Appraisals Appraisal and the Law Managing the Appraisal Interview Performance Management Performance Management vs. Appraisal Using Information Technology Talent Management Practices and Employee Appraisal Appraising and Actively Managing Employees Segmenting and Actively Managing Employees In Brief: This chapter gives an overview of the performance appraisal process and the different tools and methods available. The main topics covered include the performance management process, appraisal methods, appraisal performance problems and solutions, and the appraisal interview. Interesting Issues: Despite lots of attention, money, and effort, performance appraisals remain an area with which few managers or employees are satisfied. The following questions may be worth discussing. Is it just that we don't have a good enough system yet, is there an intrinsic problem with performance appraisals, or is it just human nature to dislike them? LEARNING OUTCOMES 1. Define performance management and discuss how it differs from performance appraisal. 2. Describe the appraisal process. 3. Set effective performance appraisal standards. 4. Develop, evaluate, and administer at least four performance appraisal tools. 5. Explain and illustrate the problems to avoid in appraising performance. 6. Discuss the pros and cons of using different raters to appraise a person’s performance. 7. Perform an effective appraisal interview. ANNOTATED OUTLINE Basic Concepts in Performance Management and Appraisal The Performance Appraisal Process - Stripped to its essentials, performance appraisal always involves the 3-step performance appraisal process: (1) setting work standards, (2) assessing the employee’s actual performance relative to those standards, which usually involves some rating form; and (3) providing feedback to the employee with the aim of helping him or her to eliminate performance deficiencies or to continue to perform above par. Why Appraise Performance? For several reasons: 1) many employers still base pay, etc. on employee appraisals; 2) appraisals play an integral role in the employer's performance management process; 3) the appraisal lets the boss and subordinate develop a plan for correcting any deficiencies, and reinforce those things the employee does correctly; 4) they serve a useful career planning purpose; and 4) appraisals play a role in identifying training and development needs. The Importance of Continuous Feedback - Aligning the employee’s efforts with the job’s standards should be a continuous process. When you see a performance problem, the time to take action is immediately—there is no substitute for nudging your employee’s performance back into line continuously and incrementally. Similarly, when someone does something well, the best reinforcement comes immediately, not six months later. Performance Management – Includes continuously adjusting how an organization and its team members do things. Team members who need coaching and training receive it, and procedures that need changing are changed. Defining the Employee's Goals and Work Standards – At the heart of performance management is the idea that employees’ effort should be goal directed, which involves clarifying expectations and quantifying them by setting measurable standards for each objective. Some guidelines for effective goal setting are: 1. assign specific goals; 2. assign measurable goals; 3. assign challenging but doable goals; and 4. make sure the goals are relevant and 5. timely. Who Should Do the Appraising? 1. The Immediate Supervisor – Usually in the best position to observe and evaluate the subordinate’s performance and typically responsible for that person’s performance. 2. Peer Appraisals – Becoming more popular with firms using self-managing teams. 3. Rating Committees – Consist of multiple raters, typically the employee’s immediate supervisor and three or four other supervisors. 4. Self-Ratings – Tend to be higher than supervisor or peer ratings. 5. Appraisal by Subordinates – Also known as upward feedback. It is where subordinates anonymously rate their supervisor’s performance. 6. 360-Degree Feedback – Ratings are collected from the employee’s supervisors, subordinates, peers, and internal or external customers. This method is the subject of considerable debate. One study found significant correlation between 360-degree ratings and conventional ratings. Firms should carefully assess potential costs, carefully train those giving feedback, and not rely solely on 360-degree feedback. Ø NOTES Educational Materials to Use Techniques for Appraising Performance Graphic Rating Scale Method – It is the simplest and most popular performance appraisal technique. A scale is used to list a number of traits and a range of performance for each, then the employee is rated by identifying the score that best describes his/her performance level for each trait. (See example, Figure 9-3) Managers must decide which job performance aspects to measure. Some options include generic dimensions, actual job duties, or behaviorally recognizable competencies. Alternation Ranking Method – Employees are ranked from best to worst on a particular trait, choosing highest, then lowest, until all are ranked. Figure 9-6 shows an example of this method. Paired Comparison Method –It involves ranking employees by making a chart of all possible pairs of employees for each trait and indicating which one is the better employee of the pair. Figure 9-7 shows an example of the paired comparison method. Forced Distribution Method – Predetermined percentages of rates are placed in various performance categories, which is similar to grading on a curve. Teaching Tip: Discuss what the ramifications of using the forced distribution method for class grades would be. Students will have strong opinions. Critical Incident Method – A supervisor keeps a record of uncommonly good and/or undesirable examples of an employee’s work-related behavior, and reviews the record with the employee at predetermined times. Narrative Forms – The method involves rating the employee’s performance for each performance factor, writing down examples and an improvement plan, aiding the employee in understanding where his/her performance was good or bad, and summarizing with a focus on problem solving. Behaviorally Anchored Rating Scales (BARS) – A method that combines the benefits of narratives, critical incidents, and quantified scales by anchoring a scale with specific behavioral examples of good or poor performance. The five steps in developing a BARS are: 1) generate critical incidents; 2) develop performance dimensions; 3) reallocate incidents; 4) scale the incidents; and 5) develop a final instrument. The advantages of BARS include a more accurate gauge, clearer standards, feedback, independent dimensions, and consistency. Mixed Standard Scales – These are similar to BARS but generally list just 3 behavioral examples or standards for each, of 3, performance dimensions. Management by Objectives (MBO) – The manager sets specific measurable goals with each employee and then periodically discusses the employee’s progress toward these goals. The process consists of six steps: 1) set the organization's goals; 2) set departmental goals; 3) discuss departmental goals; 4) define expected results; 5) conduct performance reviews; and 6) provide feedback. Computerized and Web-Based Performance Appraisal – This method generally enables managers to keep notes on subordinates during the year, to rate employees on a series of performance traits, and then generate written text to support each part of the appraisal. About 1/3 of employers use online performance management tools for at least some employees. Electronic Performance Monitoring – These systems use computer network technology to allow managers access to their employees’ computers and telephones. Appraisal in Practice – The most effective appraisal forms often merge several approaches. Ø NOTES Educational Materials to Use Dealing with Appraisal Problems and Interviews It can be difficult to rate performance for several reasons. Much depends on a good rating, including career progress, or being able to obtain a raise. There are also technical problems that can affect the fairness of the process. A. Potential Appraisal Problems – unclear standards; halo effect; central tendency; leniency or strictness; and bias. 1. Unclear Standards – Ambiguous traits and degrees of merit can result in an unfair appraisal. 2. Halo Effect – The influence of a rater’s general impression on ratings of specific qualities can be a problem. 3. Central Tendency – This occurs when supervisors stick to the middle of the rating scales, thus rating everyone average. 4. Leniency or Strictness – Supervisors have the tendency to rate everyone either high or low. 5. Recency Effects – This involves letting what the employee has done recently blind the manager to the employee’s performance over the rest of the year. 6. Bias – The tendency to allow individual differences such as age, race, and sex affect employee appraisal ratings is a problem. B. Guidelines for Effective Appraisals – Appraisal problems can be more effective by following these five things: a) know the problem; b) use the right appraisal tool; c) keep a diary; d) get agreement on a plan; e) be fair. C. Appraisals and the Law – It has been found that inadequate appraisal systems tend to be at the root of illegal discriminatory actions. In addition to being done legally, appraisals should be handled ethically and honestly. Figure 9-12 provides guidelines for developing a legally defensible appraisal process. Ø NOTES Educational Materials to Use D. Managing the Appraisal Interview – The supervisor and subordinate review the appraisal and make plans to remedy deficiencies and reinforce strengths. Types of Appraisal Interviews – 1) Satisfactory – Promotable This is the easiest interview, with the objective to make development plans; 2) Satisfactory – Not Promotable This type of interview has the objective of maintaining performance when promotion is not possible; and 3) Unsatisfactory – Correctable with the objective to plan correction via the development of an action plan. How to Conduct the Interview – Prepare for the interview by assembling the data, preparing the employee, and choosing the time and place. Be direct and specific, using objective examples; don’t get personal; encourage the person to talk; and reach agreement. How to Handle a Defensive Subordinate – Recognize that defensive behavior is normal; never attack a person’s defenses; postpone action; and recognize your own limitations. How to Criticize a Subordinate – When required, criticize in a private and constructive manner that lets the person maintain his/her dignity and sense of worth. How to Handle a Formal Written Warning – Written warnings should identify the standards by which the employee is judged, make it clear that the employee was aware of the standard, specify any violation of the standard, and show that the employee had an opportunity to correct the behavior. Realistic Appraisals – It is important that a manager be candid when a subordinate is underperforming. IV. Performance Management A. Performance Management vs. Performance Appraisal – Three concepts distinguish performance management from performance appraisal: performance management is continuous, not just once a year, it is goal-directed, and it is continuously re-evaluating and modifying the way people accomplish their work. Using Information Technology to Support Performance Management – IT allows management to monitor and correct deficiencies in real time. It involves assigning financial and nonfinancial goals, informing employees of their goals, using an IT system to monitor and assess performance, and taking corrective action. V. Talent Management Practices and Employee Appraisal Appraising and Actively Managing Employees – Talent management requires actively managing decisions like these. The point is that the traditional practice of allocating pay raises, development opportunities, and other scarce resources across the board or based just on performance makes less sense then it used to. Today, employers also need to focus their attention and resources on their company’s mission-critical employees, who are essential to the firm’s strategic needs. Segmenting and Actively Managing Employees in Practice – Examples are discussed of organizations who actively manage their employees. Ø NOTES Educational Materials to Use DISCUSSION QUESTIONS 1. What is the purpose of a performance appraisal? Answer: The purpose of a performance appraisal is to provide employees with feedback on how they are doing, as well as give them an opportunity to give feedback. 2. Discuss the pros and cons of at least four performance appraisal tools. Answer: The text lists eight different performance appraisal tools. Students might discuss the pros and cons of any four of these eight. An example of some of the pros and cons is: Graphic Rating Scale method is easy to use, simple, and does not take much time to administer. However, different supervisors may interpret a numerical rating differently and the traits rated may or may not relate to performance. 3. Explain how you would use the alternation ranking method, the paired comparison method, and the forced distribution method. Answer: The alternation ranking method would be used by listing all employees to be rated, deciding who is the best in a trait to be rated, and which employee is the worst. Then decide who is the second best, and the second worst ... the third best and the third worst ... and so on until all the employees have been ranked for that trait. Then do the same with the next trait to be rated. With the paired comparison, for each trait to be rated, the supervisor would have a sheet with employee names in pairs. For each pair, the supervisor would circle the one of the two employees that is better in that trait. Forced Distribution gives the supervisor a set rating scale (such as 1 through 5). The supervisor is limited to giving a pre-determined percentage of his or her employees' rating. For example: 15% can get a 1; 20% can get a 2; 30 % can get a 3… and so forth. 4. Explain in your own words how you would go about developing a behaviorally anchored rating scale. . Answer: Each student should express the five steps in his or her own words. Those five steps are: 1) generate critical incidents; 2) develop performance dimensions; 3) reallocate incidents; 4) scale the incidents; and 5) develop a final instrument. Developing a behaviorally anchored rating scale (BARS) involves several key steps: 1. Identify the Job and Key Performance Dimensions: Start by clearly defining the job or role you're assessing. Break down the job into key performance dimensions or criteria that are crucial for success in that role. For example, if you’re evaluating customer service representatives, dimensions might include communication skills, problem-solving ability, and customer satisfaction. 2. Collect and Analyze Job Data: Gather data through observations, interviews, or surveys from those who are familiar with the job (e.g., employees, supervisors). This helps you understand what behaviors are indicative of good or poor performance for each dimension. 3. Develop Behavior Anchors: For each performance dimension, identify specific behaviors that reflect different levels of performance. These behaviors should be concrete examples of what effective and ineffective performance looks like. For instance, for communication skills, effective behavior might be "actively listens to customer concerns and provides clear solutions," while ineffective behavior could be "fails to address customer issues and provides vague responses." 4. Create the Rating Scale: Develop a scale that quantifies these behaviors. Typically, the scale might range from 1 to 5 or 1 to 7, with each number corresponding to a different level of performance. For example, a 5-point scale might include: • 1: Poor performance • 2: Below average performance • 3: Average performance • 4: Above average performance • 5: Excellent performance Each point on the scale is associated with specific behavior examples for clarity. 5. Validate the Scale: Test the scale with a sample of employees to ensure it accurately measures performance and is consistent. This can involve pilot testing and gathering feedback to make any necessary adjustments. 6. Implement and Train: Introduce the BARS to those who will be using it (e.g., supervisors) and provide training on how to apply the scale effectively. This helps ensure consistency and fairness in evaluations. 7. Review and Revise: Regularly review the BARS to ensure it remains relevant and accurate. As job roles and performance expectations evolve, update the scale accordingly. By following these steps, you create a structured and objective way to evaluate employee performance based on specific, observable behaviors. 5. Explain the problems to be avoided in appraising performance. Answer: The five main rating scale problems listed in the text are: 1) unclear standards; 2) halo effect; 3) central tendency; 4) leniency or strictness; and 5) bias. 6. Discuss the pros and cons of using different potential raters to appraise a person's performance. Answer: The advantage of using several raters (either a rating committee, or a combination of peer, supervisor, and subordinate ratings) is that the ratings tend to be more valid than those of one individual rater. The negatives might include the time and cost involved as well as problems with the amount of daily contact that some raters may not have with the employee being rated. 7. Compare and contrast performance management and performance appraisal. Answer: Performance appraisal means evaluating an employee's current and/or past performance relative to his or her performance standards. Performance management is the process that consolidates goal setting, performance appraisal, and development into a single, common system, the aim of which is to ensure that the employee's performance is supporting the company's strategic aims. Performance management includes practices through which the manager defines the employee's capabilities, and evaluates and rewards the person's effort. 8. Answer the question: How would you get the interviewee to talk during an appraisal interview? Answer: There are several techniques that will help: 1) stop and listen to what the person is saying ... don't be afraid of a little silence; 2) ask open-ended questions; 3) use prompting statements like "go on," or "tell me more;" 4) restate the person's last statement as a question. INDIVIDUAL AND GROUP ACTIVITIES 1. Working individually or in groups, develop a graphic rating scale for the following jobs: secretary, professor, directory assistance operator. Answer: Job characteristics may include, but not be limited to: Secretary--quantity of work, frequency of errors, attendance, and initiative; Engineer--initiative, significance of contribution to the organization, problem-solving skills, frequency of errors, and communication skills; Directory Assistance Operator--speed, attendance, accuracy, and friendliness. In each case, the students should come up with a defining statement that clarifies what the job characteristic means. 2. Working individually or in groups, describe the advantages and disadvantages of using the forced distribution appraisal method for college professors.. Answer: Students should review the section on the forced distribution method and describe how the use of this method would impact the rating of their college professors. Advantages of Using the Forced Distribution Appraisal Method for College Professors 1. Encourages Differentiation: The forced distribution method forces evaluators to place a certain percentage of professors into predefined performance categories (e.g., top 20%, middle 50%, bottom 20%). This helps distinguish high performers from average and low performers, which can highlight outstanding achievements and identify areas needing improvement. 2. Reduces Leniency Bias: By requiring that professors be distributed across performance categories, this method helps prevent evaluators from being overly lenient or giving everyone high ratings. It promotes a more balanced and objective assessment. 3. Facilitates Performance Comparisons: The method makes it easier to compare professors' performance relative to their peers. This can be useful for making decisions about promotions, raises, or development needs. 4. Provides Clear Criteria: It establishes clear expectations and standards for performance. Professors can understand that they will be evaluated in relation to their peers, which can clarify performance goals and expectations. 5. Supports Data-Driven Decisions: The method provides quantifiable data that can support administrative decisions, such as tenure reviews or resource allocation. Disadvantages of Using the Forced Distribution Appraisal Method for College Professors 1. Can Be Demotivating: Professors who are consistently placed in the lower percentiles may feel discouraged or unfairly treated, especially if they are performing well relative to their own past performance or personal goals. 2. May Not Reflect Actual Performance: The forced distribution method can create a situation where professors are ranked lower than their performance might warrant, simply because there is a requirement to fit them into a specific percentile distribution. 3. Can Create Unnecessary Competition: It might foster a competitive rather than a collaborative environment, as professors may feel pressured to outperform their peers rather than focus on personal growth or collaboration. 4. Ignores Contextual Differences: The method may not account for differences in departmental needs, teaching loads, or research output. For instance, a professor in a heavily research-focused department might be unfairly compared to a professor in a teaching-focused department. 5. May Overlook Individual Achievements: It can be challenging to acknowledge exceptional individual achievements if they fall into a category where everyone is expected to be average or below average. This can result in outstanding contributions being undervalued. 6. Requires Accurate Benchmarking: The effectiveness of the forced distribution method relies on accurate and fair benchmarking. If the distribution criteria are not well-defined or if the evaluation process is flawed, the method can lead to unfair assessments. In summary, while the forced distribution appraisal method can help differentiate and objectify performance evaluations, it also has potential drawbacks related to fairness and motivation. It’s important to consider these factors and potentially combine this method with other appraisal approaches to ensure a comprehensive evaluation process. 3. Working individually or in groups, develop, over the period of a week, a set of critical incidents covering the classroom performance of one of your instructors. Answer: If you had the class conduct a job analysis and create a job description for an instructor in Chapter 3, it would be helpful to refer to that to help identify what kinds of behavior and tasks the instructor should be doing. This will give a good basis for students to observe and watch for critical incidents. If they find critical incidents that are not based in these other documents, it will be a good opportunity to go back and review how all this ties together and that we haven't communicated to the instructor in the job description these behaviors or tasks that they are now wanting to rate them on. Developing a set of critical incidents for evaluating classroom performance involves identifying specific examples of both effective and ineffective behavior. Here's a structured approach to developing these incidents over a week: Day 1: Define Evaluation Criteria 1. Identify Key Performance Areas: Determine the critical aspects of classroom performance that you want to evaluate. These might include: • Teaching Effectiveness: Clarity of instruction, ability to engage students. • Classroom Management: Handling disruptions, maintaining discipline. • Student Interaction: Responsiveness to student questions, providing feedback. • Preparation and Organization: Structuring of lessons, use of materials. • Professionalism: Punctuality, adherence to academic standards. 2. Set Objectives: Define what you want to achieve with the critical incidents. For example, are you looking to improve teaching methods, address specific issues, or recognize outstanding performance? Day 2: Gather Data 1. Collect Observations: Spend time observing the instructor in the classroom. Take detailed notes on various aspects of their performance related to the criteria you identified. 2. Review Past Feedback: Look at previous evaluations, student feedback, or peer reviews to gather additional insights into the instructor’s performance. Day 3: Identify Critical Incidents 1. Effective Incidents: Note instances where the instructor’s performance was particularly effective. For example: • Effective Teaching: The instructor uses a creative method to explain a complex concept, leading to high student engagement and understanding. • Excellent Classroom Management: The instructor smoothly addresses a disruptive student, quickly restoring focus and maintaining a positive classroom environment. 2. Ineffective Incidents: Document situations where the instructor’s performance was less effective. For example: • Ineffective Teaching: The instructor delivers a lecture that is confusing and lacks clear objectives, resulting in student frustration and disengagement. • Poor Classroom Management: The instructor struggles to manage a group of students who are chatting during class, leading to a chaotic and unproductive session. Day 4: Detail Each Incident 1. Describe Context: For each incident, provide a detailed description of the context, including the date, time, and specific classroom setting. 2. Behavior Description: Clearly describe the instructor’s behavior in the incident. Focus on observable actions rather than subjective opinions. 3. Impact: Explain the impact of the behavior on the class, including student reactions, engagement levels, or learning outcomes. Day 5: Review and Refine 1. Review Incidents: Go through each incident to ensure accuracy and relevance. Make sure the descriptions are clear and objective. 2. Seek Feedback: If possible, get feedback from colleagues or students to verify the accuracy of the incidents and ensure that they represent a fair assessment of the instructor’s performance. Day 6: Compile and Organize 1. Organize Incidents: Arrange the incidents in a coherent format, categorizing them by performance area (e.g., teaching effectiveness, classroom management). 2. Prepare Summary: Create a summary that highlights key trends and patterns observed across the incidents. This helps in identifying areas of strength and areas needing improvement. Day 7: Finalize and Present 1. Prepare Report: Draft a final report that includes the critical incidents, their descriptions, and the overall summary. Ensure the report is professional and respectful. 2. Present Findings: If you’re working in a group, discuss the findings and prepare to present them constructively. Focus on providing actionable feedback and suggestions for improvement. By following these steps, you’ll develop a well-rounded set of critical incidents that accurately reflects the instructor’s classroom performance, providing valuable insights for evaluation and improvement. 4. The HRCI "Test Specifications" appendix at the end of this book lists the knowledge someone studying for the HRCI certification exam needs to know in each area of human resource management (such as in Strategic Management, Workforce Planning, and Human Resource Development). In groups of 4-5 students, do four things: (1) review that appendix now; (2) identify the material in this chapter that relates to the required knowledge the appendix lists; (3) write four multiple-choice exam questions on this material that you believe would be suitable for inclusion in the HRCI exam; and (4) if time permits, have someone from your team post your team's questions in front of the class, so the students in other teams can take each other's exam questions Answer: Here’s a structured approach to tackling this assignment: 1. Review the HRCI "Test Specifications" Appendix • Obtain the Appendix: Get access to the appendix from the HRCI certification book or materials. • Review Content: Familiarize yourself with the different areas listed, such as Strategic Management, Workforce Planning, and Human Resource Development. • Highlight Key Areas: Note down the specific knowledge and skills required for each area. 2. Identify Relevant Material • Examine the Chapter: Look through the chapter of your textbook or study material to find content related to the areas listed in the appendix. • Match Topics: Align the material with the knowledge requirements specified in the appendix. This might involve summarizing key points, concepts, or theories that are relevant to each area. 3. Write Multiple-Choice Exam Questions For each of the four areas, create one question that tests the key knowledge: Example Questions Area 1: Strategic Management 1. Question: Which of the following is a primary component of a strategic HR management plan? • A) Developing employee benefits packages • B) Aligning HR activities with organizational goals • C) Managing payroll processes • D) Conducting employee satisfaction surveys • Answer: B) Aligning HR activities with organizational goals Area 2: Workforce Planning 2. Question: What is the primary purpose of workforce planning in human resource management? • A) To increase the number of employees in the organization • B) To ensure the organization has the right number and type of employees at the right time • C) To provide training programs for all employees • D) To conduct performance evaluations for current employees • Answer: B) To ensure the organization has the right number and type of employees at the right time Area 3: Human Resource Development 3. Question: Which approach is most effective for identifying training needs within an organization? • A) Conducting a SWOT analysis • B) Performing a training needs assessment • C) Reviewing employee attendance records • D) Setting up a suggestion box for employee feedback • Answer: B) Performing a training needs assessment Area 4: Employment Law 4. Question: Under the Fair Labor Standards Act (FLSA), which of the following is a requirement for classifying an employee as exempt from overtime pay? • A) The employee must be paid on an hourly basis. • B) The employee must perform non-manual work related to the business operations. • C) The employee must work fewer than 40 hours per week. • D) The employee must be under 40 years of age. • Answer: B) The employee must perform non-manual work related to the business operations. 4. Post Questions for Class Review • Prepare a Presentation: Have a team member create a clear and concise presentation of the questions. • Class Interaction: Post the questions in front of the class or share them digitally if possible, and encourage other students to answer. • Facilitate Discussion: Engage the class in discussing the answers and the rationale behind them to deepen understanding. By following these steps, you'll be able to create relevant and effective exam questions based on the HRCI test specifications and help your classmates in their preparation. 5. Every week, like clockwork, during the 2009 TV season, Donald Trump told another "apprentice," "You're fired." Review recent (or archived) episodes of Donald Trump's Apprentice show, and answer this: What performance appraisal system did Mr. Trump use, and do you think it resulted in valid appraisals? What techniques discussed in this chapter did he seem to apply? How would you suggest he change his appraisal system to make it more effective? Answer: Most critics agree that Trump's method of providing performance feedback could be vastly improved. Lead a discussion by first asking students to identify the methods Trump used, a critique on how well he used any methods discussed in this chapter, and then suggest which methods outlined in this chapter would be more effective, and specifically how it would be applied in the scenario/episode they selected. In Donald Trump's "The Apprentice," the performance appraisal system used was largely based on direct, high-stakes feedback during the boardroom meetings. Here’s an analysis of the appraisal system employed and how it could be improved: Performance Appraisal System Used by Donald Trump 1. Direct Feedback and Elimination: • System Description: The primary performance appraisal technique used was immediate and direct feedback during boardroom sessions, where Trump would evaluate the candidates' performance in specific tasks or projects. Candidates were judged based on their performance in team tasks, leadership skills, and problem-solving abilities. The culmination of this process was the dramatic elimination of one or more contestants, famously encapsulated in the phrase, "You're fired." • Focus: The appraisal focused on the outcomes of team projects, individual contributions, and overall leadership effectiveness. It was a high-pressure, results-oriented system. Evaluation of Validity 1. Validity Concerns: • Lack of Comprehensive Feedback: The system often lacked detailed, comprehensive feedback on the performance aspects beyond the immediate task. This could lead to evaluations that don’t fully reflect the contestants' overall capabilities. • High-Stress Environment: The high-stress environment and the public nature of eliminations might influence performance and decision-making, potentially skewing the validity of the appraisals. • Limited Context: The system might not always account for the context in which tasks were performed, such as the challenges faced by the teams or individual contestants. Techniques Applied 1. Forced Ranking: • The boardroom sessions involved a form of forced ranking, where Trump would rank the performance of the contestants relative to each other and ultimately decide who would be eliminated. 2. Behavioral Observation: • Trump's evaluations were based on observing contestants' behaviors and decisions during tasks, as well as their ability to handle challenges and work with others. 3. Results-Oriented Appraisal: • The system was heavily results-oriented, focusing on the end outcomes of tasks rather than on the process or developmental aspects. Suggested Changes for a More Effective Appraisal System 1. Incorporate Multi-Source Feedback: • Suggestion: Implement 360-degree feedback, where performance is evaluated not only by Trump but also by peers, subordinates, and other stakeholders involved in the tasks. This would provide a more comprehensive view of the contestants' performance. 2. Provide Constructive Feedback: • Suggestion: Alongside the final decision, provide detailed feedback on strengths and areas for improvement. This would help contestants understand their performance better and learn from their experiences. 3. Use a Structured Evaluation Criteria: • Suggestion: Develop a clear, structured evaluation rubric that outlines specific criteria for assessment. This would make the appraisal process more transparent and fair. 4. Balance Results with Process Evaluation: • Suggestion: Evaluate not only the final outcomes but also the processes and strategies used by contestants. This would ensure that the appraisal reflects both the effectiveness of the results and the quality of the methods used. 5. Reduce High-Stress Impacts: • Suggestion: Consider reducing the high-stress environment or providing opportunities for contestants to demonstrate their skills in less pressured situations. This would help in assessing their capabilities more accurately. By implementing these changes, the appraisal system could become more holistic, fair, and effective, providing a better assessment of the contestants’ true capabilities and potential for success. EXPERIENTIAL EXERCISES & CASES Experiential Exercise: Grading the Professor 1. Students should develop their own tool for appraising the performance of an instructor. Look for them to apply concepts discussed in this chapter. Answer: To develop a performance appraisal tool for instructors, students should: 1. Identify Criteria: • Use concepts like teaching effectiveness, engagement, and student outcomes. 2. Design Evaluation Metrics: • Develop specific, measurable indicators for each criterion (e.g., clarity of instruction, responsiveness to student needs). 3. Create a Feedback Mechanism: • Include both quantitative (rating scales) and qualitative (comments) feedback options. 4. Ensure Relevance: • Align metrics with instructional goals and learning objectives discussed in the chapter. 5. Pilot and Revise: • Test the tool, gather feedback, and make necessary adjustments. 2. Students should present their tools to the class. How similar are the tools? Do they all measure about the same factors? Which factor appears most often? Which do you think is the most effective tool? Encourage students to reflect on the factors that they chose, or did not choose. Answer: When presenting their tools, students should consider: 1. Similarity of Tools: • Compare the criteria and metrics used. Most tools should measure teaching effectiveness, engagement, and student outcomes. 2. Common Factors: • Identify which factors appear most frequently (e.g., clarity, responsiveness). 3. Effectiveness: • Evaluate which tool provides the most comprehensive and actionable feedback based on chosen factors. 4. Reflection: • Encourage students to discuss why they selected certain factors and omitted others, considering their relevance and impact on instructional quality. The class should select the top 10 factors from all of the appraisal tools presented to create what the class perceives to be the most effective tool for appraising the performance of the instructor. Share your perspective on what makes a good teacher. Application Case: Appraising the Secretaries at Sweetwater U Do you think that the experts' recommendations will be sufficient to get most of the administrators to fill out the rating forms properly? Why? Why not? What additional actions (if any) do you think will be necessary? Answer: While controversial, the recommendations would, in fact, encourage administrators to fill the forms out correctly. Using the more detailed form and not tying the performance ratings to salary increases would allow the managers to feel more free about rating the secretaries accurately. There would, however, need to be some strong training sessions (both for administrators and secretaries) to help them understand the new system. Since all secretaries have traditionally received the same salary increases and have been pleased with that, it would be advisable to consider lowering the maximum increase to an amount that could be given to all secretaries while staying within budget. Then all secretaries with a satisfactory rating or better would receive that increase. 2. Do you think that Vice President Winchester would be better off dropping graphic rating forms, substituting instead one of the other techniques we discussed in this chapter such as a ranking method? Why? Answer: Certainly other methods could be used. He has already had a taste of what would result if he went to a forced distribution or other ranking method. A BARS system might be best, but it could be costly to develop if the clerical staff has positions that are significantly different Yes, Vice President Winchester might benefit from dropping graphic rating forms in favor of a ranking method if clear differentiation between employee performances is needed. Ranking can highlight top and bottom performers more distinctly than graphic rating forms. However, it’s crucial to consider potential impacts on employee motivation and ensure that rankings are accompanied by constructive feedback to support development. 3. What performance appraisal system would you develop for the secretaries if you were Rob Winchester? Defend your answer. Answer: If the development costs are not too great, the BARS system would give the strongest solution to the current situation. The behavioral anchors would make it more difficult to just rate everyone at the top. It would also help to eliminate the different interpretations of what the rating scales mean. Continuing Case: Carter Cleaning Company: The Performance Appraisal 1. Is Jennifer right about the need to evaluate the workers formally? The managers? Why or why not? Answer: Based on the information presented in the chapter, the students need to determine if the workers and managers should be evaluated formally or informally, and they need to provide reasons for their decision. Yes, Jennifer is right about the need to evaluate both workers and managers formally. Formal evaluations provide structured feedback, help in identifying strengths and areas for improvement, and ensure that performance standards are consistently applied. For workers, formal evaluations can guide career development and align their goals with organizational objectives. For managers, evaluations can assess their leadership effectiveness and impact on team performance, which is crucial for overall organizational success. 2. Develop a performance appraisal method for the workers and managers in each store. Answer: The students need to be familiar with different appraisal methods discussed in the chapter. They should use the sample appraisal forms given in the chapter as guides Performance Appraisal Method for Workers 1. Criteria: Job Knowledge, Quality of Work, Productivity, Communication Skills, Attendance, Teamwork. 2. Method: • Rating Scale: 5-point scale (1 = Poor, 5 = Excellent). • Self-Assessment: Workers evaluate their own performance. • Manager Evaluation: Managers assess workers using the same criteria. • Peer Feedback: Collect input from colleagues. • Review Meeting: Discuss results and set goals. Performance Appraisal Method for Managers 1. Criteria: Leadership Skills, Decision-Making, Team Development, Goal Achievement, Communication, Operational Efficiency. 2. Method: • 360-Degree Feedback: Gather input from subordinates, peers, and upper management. • Rating Scale: 5-point scale (1 = Poor, 5 = Excellent). • Self-Assessment: Managers evaluate their own performance. • Manager Review: Upper management provides a formal review. • Review Meeting: Discuss feedback, strengths, and areas for improvement. Translating Strategy into HR Policies and Practices Case: The Hotel Paris The New Performance Appraisal System – In this case, HR manager Lisa Cruz must develop a performance appraisal system that supports company competitive strategies. 1. Choose one job, such as front desk clerk. Based on any information you have (including job descriptions you may have created in other chapters), write a list of duties, competencies, and performance standards for that chosen job. Answer: Answers should include competencies that will help Hotel Paris become more service oriented. Use examples from the case itself, such as “ability to check a guest in or out in five minutes or less,” to get the class started. Discuss what has made students happy or unhappy when checking into a hotel, or in seeking other services. Front Desk Clerk Duties: 1. Greet and check in guests. 2. Manage reservations and room assignments. 3. Handle guest inquiries and provide information. 4. Process check-outs and manage billing. 5. Resolve guest complaints and issues. 6. Maintain accurate records and files. Competencies: 1. Customer Service: Ability to provide excellent service and handle complaints professionally. 2. Communication Skills: Clear and effective verbal and written communication. 3. Organizational Skills: Efficiently manage reservations, paperwork, and guest requests. 4. Problem-Solving: Address and resolve issues promptly. 5. Computer Proficiency: Use of reservation and billing software. Performance Standards: 1. Guest Satisfaction: Maintain a guest satisfaction rating of 90% or higher. 2. Accuracy: Ensure billing and reservation details are 100% accurate. 3. Response Time: Address guest inquiries and issues within 5 minutes. 4. Professionalism: Exhibit professional demeanor and appearance at all times. 5. Efficiency: Complete check-in and check-out processes within 10 minutes. 2. Based on that, create a performance appraisal form for appraising that job. Answer: There are samples in the text. If possible, before class ask students to bring sample performance appraisal forms in to class, either from jobs they have held or samples from the Internet. Suggest combining graphic rating scales with the critical incident method to improve on-going coverage of employee performance. Also stress that a once-yearly formal appraisal will not be sufficient unless it is supplemented by regular verbal feedback. Front Desk Clerk Performance Appraisal Form Employee Name: ____________________ Job Title: Front Desk Clerk Review Period: ____________________ Reviewer Name: ____________________ Performance Criteria 1. Customer Service • Exceeds Expectations (5): Consistently provides outstanding service, anticipates guest needs, resolves issues effectively. • Meets Expectations (3): Provides good service, addresses guest needs and issues promptly. • Needs Improvement (1): Service is inconsistent, struggles to address guest needs or issues. Rating: _______ Comments: ___________________________________________ 2. Communication Skills • Exceeds Expectations (5): Communicates clearly and professionally, effectively handles all forms of communication. • Meets Expectations (3): Communicates clearly and professionally, minor issues in communication. • Needs Improvement (1): Communication is unclear or unprofessional, frequently causes misunderstandings. Rating: _______ Comments: ___________________________________________ 3. Organizational Skills • Exceeds Expectations (5): Manages reservations, paperwork, and guest requests with exceptional efficiency. • Meets Expectations (3): Manages tasks efficiently, minor issues with organization. • Needs Improvement (1): Struggles with task management, frequent errors or delays. Rating: _______ Comments: ___________________________________________ 4. Problem-Solving • Exceeds Expectations (5): Quickly and effectively resolves issues, proactive in finding solutions. • Meets Expectations (3): Resolves issues in a timely manner, generally effective problem-solving. • Needs Improvement (1): Struggles to resolve issues or delays in finding solutions. Rating: _______ Comments: ___________________________________________ 5. Computer Proficiency • Exceeds Expectations (5): Expertly uses reservation and billing software, minimal errors. • Meets Expectations (3): Proficient with software, occasional minor errors. • Needs Improvement (1): Frequently makes errors, struggles with software use. Rating: _______ Comments: ___________________________________________ Overall Performance Rating • Exceeds Expectations (5) • Meets Expectations (3) • Needs Improvement (1) Rating: _______ Comments: ___________________________________________ Goals and Development Plan 1. Goal: ____________________________________________ Target Date: ____________________ Action Plan: _________________________________ 2. Goal: ____________________________________________ Target Date: ____________________ Action Plan: _________________________________ Employee Comments: ___________________________________ Reviewer Signature: ____________________ Date: ____________________ Employee Signature: ____________________ Date: ____________________ This form provides a structured way to evaluate a front desk clerk’s performance based on key competencies and performance standards. KEY TERMS Solution Manual for Human Resource Management Gary Dessler 9780132668217, 9780134235455, 9780135172780
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