UAPP 2053 Organizational Psychology - Lecture 5 Job Performance Appraisal

Objectives

• What is performance appraisal?
• Aims of performance appraisal
• Importance of performance appraisal
• Overview of performance appraisal
• Performance criteria
• Methods for assessing job performance
• Legal issues in performance appraisal

What is Performance Appraisal?

• Performance appraisal, also known as employee appraisal, is a method by which the performance of an employee is evaluated (generally in terms of quality, quantity, cost and time).
• There is, says Dulewicz (1989), “… a basic human tendency to make judgments about those one is working with, as well as about oneself.”
• Appraisal, it seems, is both inevitable and universal. In the absence of a carefully structured system of appraisal, people will tend to judge the work performance of others, including subordinates, naturally, informally and arbitrarily.
• The human inclination to judge can create serious motivational, ethical and legal problems in the workplace. Without a structured appraisal system, there is little chance of ensuring that the judgments made will be lawful, fair, defensible and accurate.
• Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-annual).In which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development.

Aims of Performance Appraisal

Performance appraisals are regular review of employee performance within organizations. Generally, the aims of a scheme are:

• Give feedback on performance to employees.
• Identify employee training needs.
• Document criteria used to allocate organizational rewards.
• Form a basis for personnel decisions: salary increases, promotions, disciplinary actions, etc.
• Provide the opportunity for organizational diagnosis and development.
• Facilitate communication between employee and administrator.Validate selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements.

Importance of Performance Appraisal

• In many organizations – but not all – appraisal results are used, either directly or indirectly, to help determine reward outcomes.
• That is, the appraisal results are used to identify the better performing employees who should get the majority of available merit pay increases, bonuses, and promotions.
• By the same token, appraisal results are used to identify the poorer performers who may require some form of counseling, or in extreme cases, demotion, dismissal or decreases in pay.
• (Organizations need to be aware of laws in their country that might restrict their capacity to dismiss employees or decrease pay.)Whether this is an appropriate use of performance appraisal – the assignment and justification of rewards and penalties – is a very uncertain and contentious matter.

Overview of Performance Appraisal

• Ideally PA allows management to specify what employee must do; combines feedback and goal setting.
• Everyone involved needs to recognize that performance appraisal involves human judgment and information processing; can never be totally objective or infallible.
• System should aim to be easy to operate, easy to explain, easy to maintain, easy to administer.
• System should be job related, relevant, sensitive, reliable, acceptable, practical, open, fair, and useful.
• Ratee should participate in the development.Need to take legal issues into account.

Performance Criteria

• Actual vs theoretical criteria
  - Theoretical criterion
  Ø The theoretical construct
  Ø The idea of what good performance is.
  - Actual criterion
  Ø The way in which the theoretical criterion is assessed and operationalized.
  - Example:
  Ø Insurance salesperson
  Ø TC: sell
  Ø AC: count of the sales the person made.
• Criterion contamination
  - Refers to the part of the actual criterion that reflects something other than what it was designed to measure.
  - Contamination can arise from biases in the criterion and from unreliability.
• Criterion deficiency
  - The actual criterion does not adequately cover the entire theoretical criterion.
  - On the other words, the actual criterion is an incomplete representation of what we are trying to assess.
  - Example
• Criterion relevance
  - The extent to which the actual criterion assesses the theoretical criterion it is designed to measure, or its construct validity.
  - The closer actual and theoretical criterion, the greater relevance.
• Eight job performance criteria
  - Production
  - Sales
  - Tenure or turnover
  - Absenteeism
  - Theft
  - Counterproductive workplace behavior
  - Customer service behavior

Methods of Assessing Job Performance

• Objective measures of job performance
  - A set of factors used to assess job performances that are (relatively) objective or factual in character.
  - Such data are usually found in organization records, for example: accidents, incidents at work, lateness, productivity, etc.
• Subjective measures of job performance
  - A set of factors used to assess job performances that are the product of someone’s (e.g. supervisor, peer, customer, etc) subjective rating of these factors.
  - It is a judgmental evaluation of a person’s performance.
  - Most organizations require that supervisors complete annual performance appraisal rating forms on each of their subordinates.

Legal Issues of Performance Appraisal

1. Performance appraisal should not be used in a merely punitive or retaliatory fashion. It is grossly unprofessional for a manager or supervisor to use the appraisal process to ‘get even’ with an employee who has displeased or upset them in some way.
2. Appraisals should not be used to discriminate against employees on the basis of race, religion, age, gender, disability, marital status, pregnancy, or sexual preference.
3. Performance appraisal results should be fair, accurate and supported by evidence and example. For instance, if an employee has poor interpersonal skills and is harming morale and group performance, the supervisor might keep a log of incidents. Co-workers may be interviewed and their views and reactions recorded. The nature and effects of the employee’s behavior should be documented.
4. An employee should have the opportunity to comment on their appraisal result, to express their agreement or otherwise, and to appeal the result or at least request a review by up line supervisors.
5. Appraisals should be balanced, recording information on both the good and the bad aspects of an employee’s performance (as far as possible).
6. Appraisals results should not be used the sole basis for promotion, remuneration or termination decisions. A broad range of information should be considered, in which the employee’s appraisal results may be significant but not necessarily conclusive.
7. Employees who receive a poor performance appraisal result should be given a reasonable chance to improve. Generally speaking, it is a bad idea to dismiss, demote of otherwise penalize an employee because of a single adverse appraisal result (depending of course on the nature and seriousness of the conduct that underlies the poor result).
8. Provide timely feedback, especially to marginal or poor performers. It is not fair to offer zero feedback to a poor performer for twelve months and then present them with a bad appraisal. Be willing, especially with employees who are having trouble, to offer more frequent feedback and guidance. Tell them if something is wrong and give them a chance to correct the problem in a timely manner.
9. Retain records. If an employee believes they have been dealt with unfairly, they may have rights to instigate legal action years later. In the case of poor performers, or persons dismissed or demoted, or those who resign or leave in less than happy circumstances, we suggest that their appraisal records, together with critical incidents logs and other relevant documents, be archived indefinitely.
   - Check with local legal specialists as to required periods of record retention and time limits on the right of potential litigants, as these vary from one jurisdiction to the next.
10. If an appraisal results is poor (or in any way likely to be controversial or provocative), ask an objective third party for their views on whether the appraisal result seems fair and reasonable. Be prepared to modify your position if the second opinion is not supportive of the result.
11. Appraisals should avoid inflammatory and emotive language. As far as possible, aim for a detached and dispassionate style. Ensure that criticisms relate to actual job requirements and are not based on mere personal or other irrelevant issues that have little or no connection with actual job requirements.
12. Managers and supervisors required to conduct staff appraisals should be trained in appraisal principles and techniques. Conducting performance appraisals is one of the most demanding of all supervisory activities. It is a sensitive and sometimes controversial task which, if mishandled, can cause serious damage to employee relations and morale.
13. Appraisal results should be treated as private and confidential information. Record storage should be secure and controlled. Only people with an approved need to know should have access to an employee’s performance appraisal information.