Chapter 26

Review and Appraisal of Individual Performance

Performance management and assessment

Aim: to get better results for the organisation via the measurement and evaluation of individual performance.

Appraisal is a part of the system of PM, including goal setting, performance monitoring, feedback and improvement planning.

Definition: a means of getting better results by managing performance within an agreed framework of goals, standards and competence requirements. It is a process to establish shared understanding about what is to be achieved, and an approach to managing and developing people iot achieve it.

PM processStep 1 From the business plan , identify the requirements

& competencies required to carry it out.

Step 2 Draw up a performance agreement, defining the expectations of the individual or team, covering standards of performance, performance indicators, and the skills and competencies people need.

Step 3 Draw up a performance & development plan.

Step 4 Manage performance continually throughout the year

Step 5 Performance review

Staff Appraisal

Definition: The regular & systematic review of performance & the assessment of potential with the aim of producing action programmes to develop both work and individuals.

Performance appraisal (PA)

PA acts as an information processing system providing vital information for rational, objective & efficient decision-making

3 components of the PA process:1. Measure the extent to which an individual may be

awarded a salary increase

2. Identify T & D needs

3. Aid individuals career development needs

Objectives of appraisalFrom organisational point of view From individual point of view

• Establishes the results staff are expected to deliver•Identifies training and development needs•Encourages communication•Aids personnel planning•Creates a supportive organisational culture

•Determines future promotional activities•Gives recognition for work well done•Serves as a basis for increase in remuneration•Formal opportunity to ask for guidance•Chance to contribute to goal-setting process

The purpose of appraisal Personnel planning Identify training needs Plan personal & job objectives Assess the level of reward payable Encourages two-way communication Identifies problem areas so that immediate

corrective action can be taken Assess potential, thereby facilitating succession

planning.

Outcomes of the PA processThe outcome of the process provides a way

to: Review past performance Assess future potential Set performance objectives Help improve current performance Assess T & D needs Assist career planning decisions Assess increase or new levels of salary.

The appraisal criteria may include

Volume of work produced Knowledge of work Quality of work Supervisory or management skills Personal qualities.

1. Work quality Technical & task knowledge Accuracy & consistency Exercise of judgement & discretion Communication skills Cost consciousness

2. Work quantity, which includes:

Personal planning & time management Capacity to meet deadlines or work under pressure Capacity to cope with upward variations in work

volume.

3. Supervisory & managerial skills & competencies, which include:

Planning & organising Communication & interpersonal skills Directing guiding & motivating Leadership & delegation Co-ordination & control Developing & retaining staff Developing teamwork

Beer et al: Criteria for assessing performance

High commitmentHigh competenceCost effectivenessHigh congruence

HintsEmployees must be clear about the

objectives & results required.The objectives set & statement of results

required, must relate to: Job description Person specification Salary grading

Criteria for effectiveness:A job performance criterion should be:

Capable of being measured reliably, stable and consistent

Capable of being differentiated Capable of being influenced by the job-holder Acceptable to those individuals whose

performance is being assessed.

Performance Management as a Control System

Essential job functions &

Performance standards

Actual Performance

Comparison of performance &

Standard

Constructive performance

evaluation

CONTROL

FEEDBACK

The benefits of appraisal

Rewards good performance, thereby motivates employees to continuously perform well

Sets motivating challenges and encourages creative problem solving on the job.

Benefits for employee and employer

Barriers to effective staff appraisalCriticism has a negative effective on goal

achievementSubordinates react defensively to criticism Inferior performance result from defensive

reactionsRepeated criticism can damage employees

self-confidence, especially those who already have low SC

Barriers to effective staff appraisalAppraisal as confrontationAppraisal as judgementAppraisal as chatAppraisal as bureaucracyAppraisal as annual eventAppraisal as unfinished business

Overcoming barriers to effective appraisals

To avoid barriers to successful appraisal the process must be handled professionally. Any PA process is doomed for failure if: Appraisal procedures are not made clear to

everybody The program does not get full support at all

mgt levels

Overcoming barriers to effective appraisals cont…Potential appraisers have little or no

experience in interviewing. Managers lack the necessary training to carry out the appraisals

Interviews designed to improve performance are often trying to weigh up at the same time salary & promotion issues.

Fear, ignorance, lack of involvement & the suspicion of unfairness can create open hostility, a scheme should be seen as objective & fair.

The facts are not recorded Uncontrollable factors are introduced It is not felt to be taken seriously.

Various staff appraisal processes exist:

1. Review & comparison

2. MBO

3. The task centred method

4. 360° appraisal

Management skillsThe appraisal process The persons carrying out appraisals should be

skilled in: Clarifying a person’s job Assessing competence Interviewing the job-holder Identifying and agreeing future goals & targets Agreeing action points Giving regular feedback

Management skills used in the process Questioning and listening skills Good persuasion & negotiation skills are also

essential during the feedback stage. Communication strategies that managers used

can include: Tell and sell Tell and listen Problem-solving

The appraisal interview

The appraisal interview may rate: Performance Highlight strengths Set targets Discuss potential

Preparation for an appraisal interview

1. Problems Just playing the game Choosing how often & at what level to evaluate The ever present subject element Deciding who should attend & approve Deciding what should be discussed The danger to giving the interviewee delusions of

grandeur

2. Pre-interview documentation Prior to the interview the supervisor/manager

needs to be prepared. The following documents should be made available to them, and should be read by them: Job description Statement of performance such as the rating

sheet or appraisal form A diary or record book which highlights the good

& bad points of the employees’ performance over the review period

Pre-interview documentation cont…

Peer assessment Comments from clients, customers & other

outside agencies The employees’ self-assessment form The employees’ file with background notes

on attendance, time-keeping, personality, temperament & family

Part of the interview preparation

should consider:

1. The environment & atmosphere

2. Your approach and main points

Key communication skills:Conducting the interview

Ask open questions requiring more that simply ‘yes’ or ‘no’ responses

Ask closed questions only when clarification is needed Allow time for appraisee to ask questions Refrain from asking multiple, leading or confusing

questions Encourage conversation with body language &

appropriate cues Periodically summaries, reflect & check your

understanding Refrain from talking too much

Concluding the interview

There must be a clear and shared understanding of the outcome of the discussion with all parties knowing how, when and by whom action plans are to be progressed.

After the interview: The manager/supervisor should inform the

appraisee of the results of the appraisal and write up on the following:

Agreed action plans on training, promotions.. The shortcomings & weaknesses that were

discussed & the results of the discussion Any help or assistance that the employee needs

& what was promised by the interview.

After the interview cont…

The follow-up procedures will include: Providing feedback Organizing training Re-scheduling work Altering work methods Upgrading equipment

The importance of feedback

Feedback is a control process that gives people timely, relevant information on performance & progress. It is sought because, without feedback, learning is difficult or impossible

Feedback has a motivating effect People naturally want to know how they have

done on a particular task and need the reassurance that they are on the right track

Assessing the appraisal system

RelevanceFairnessSerious intentCo-operationEfficiency

Ensuring effective appraisalsFirmFactualFairFrequent

Staff turnoverStaff turnover as a measurement of

effectiveness refers to: Movement of employees in and out of an

organization over a period (normally one year)

The causes of ST include: Discharge Unavoidable Avoidable

Staff turnover cont…

Hidden costs of employee resignation: Morale of remaining w/force declines Org reputation can be damaged Wages cost of learning while the employee is

under training Cost of recovering lost production time Cost of extra scrap produced by learners Extra supervision required to cope with R & S, T

& D.

Turnover ratios

Total # of voluntary leavers in a period-------------------------------------------------------- *100

Average # of persons employed at the start of the period

Chapter Summary PM aims to get better results for the organisation and

evaluation of individual performance. Appraisal is part of the system of PM, including goal

setting, performance monitoring, feedback and improvement planning.

Appraisal can be used to reward but also try to identify potential. It can be used to identify areas of improvement and T & D needs.

Formal PAS support objective, positive, relevant, consistent feedback by managers.

3 basic requirements for PA: defining what is to be appraised; recording assessments; getting the appraiser and appraisee together for feedback and planning.

The effectiveness and cost-effectiveness of appraisal should be systematically evaluated.