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35 Cards in this Set
- Front
- Back
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Define Performance Appraisal |
The process of assessing the overall performance levels of individual employees |
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Two reasons why companies have a hard time establishing good appraisal systems |
Many companies can't seem to find a performance appraisal system they are happy with Despite their lack of success, they keep trying to make performance appraisals work |
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Four categories of performance appraisal reasons |
Administrative Developmental Supervisory Symbolic |
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Administrative reasons |
Identify under-performing employees Identify employees for promotion Monitor overall quality of performance of the firm |
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Developmental reasons |
Help employee's understand expectations Provides useful feedback |
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Supervisory reasons |
Improves supervisor's performance, encouraging them to think systematically |
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Symbolic reasons |
Creating the perception that management cares about good employee performance |
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Define Performance Appraisal Reliability |
Occurs when a performance appraisal system produces the same scores even when applied by different appraisers |
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Define Performance Appraisal Validity |
Occurs when employees who receive the highest scores in a performance appraisal system are in fact the highest performers |
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Pitfalls of Performance Appraisals |
Intentional inaccuracies in appraisals (supervisor bias, make decisions for own gain) Unintentional inaccuracies in appraisals (problems within the system itself) |
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System inaccuracies |
Central tendency error Halo error Recency effect Contrast effect Similarity effect Leniency effect Harshness effect Beauty effect |
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Define central tendency error |
Occurs when appraisers rate all employees as 'average' in everything |
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Define halo error |
Appraisers rate an individual either high or low on all characteristics because one characteristic is either high or low (generalizing) |
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Define Recency Effect |
Overweighting recent events |
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Define Contrast Effect |
Influencing set of appraisals by one low or high performer |
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Define Similarity Effect |
Seeing appraisees as similar to themselves |
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Define Leniency Effect |
Tend to provide unduly high appraisals |
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Define Harshness Effect |
Tend to provide unduly low appraisals |
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Define Beauty Effect |
Tendency for the physical attractiveness of a rate to affect their performance appraisal |
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Methods for Appraisals |
Ranking & Forced Distribution Graphic Rating Scale Behaviourally Anchored Rating Scales Behavioural Observation Scales Objectives and Results Based Systems Field Review Combination Approaches |
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Two types of Ranking & Forced Distribution |
Paired Comparison Method Forced Distribution Method |
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Define Paired Comparison Method |
Determines the rank order of all employees in a unit by comparing each employee with each of the other employees in the unit |
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Define Forced Distribution Method |
A performance appraisal method that stipulates the distribution of employees across the performance categories |
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Define Graphic Rating Scale |
An appraisal method in which appraisers use a numerical scale to rate employees on a series of characteristics (Likert) One of the most widely used Pro: Simple Con: Vaguely defined traits; traits can be hard to observe leaving to guessing; opinion-based; doesn't provide useful feedback |
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Define Behaviourally Anchored Rating Scales (BARS) |
Appraisal method that provides specific descriptors for each point on the rating scale Pro: Provides more guidance for appraiser; better reliability and validity results Con: Time consuming; different scales need to be produced for each job aspect; may be more than one choice in given options |
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Define Behavioural Observation Scale (BOS) |
Appraisal method under which appraisers rate the frequency of occurrence of different employee behaviours Pro: Less detailed definitions needed; frequency of behaviour ensures one answer; best for smaller firms Con: Frequency can be hard to judge |
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Define Management by Objectives (MBO) |
An approach to management that involves setting employee goals and providing feedback on goal accomplishment |
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Define Field Review |
Involves a short period of direct observation of the job performance of the individual being rated (ex. mystery shoppers) |
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Who conducts performance appraisals? |
Superiors Peers Subordinates Self Customers 360-Degree Feedback |
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Define 360-Degree Feedback |
An appraisal system that uses feedback from superiors, peers, subordinates, and possibly customers |
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Define Performance Management |
Method for improving employee performance based on goal-setting, feedback, encouragement and support, and rewards for success |
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Key elements of Performance Management |
1. Goals are tied to strategy 2. Measures are the primary indicators of success 3. Feedback is the data used to determine progress towards goals 4. Reinforcement is the active encouragement and support for action 5. Rewards are what the individual or team receives for achieving desired results |
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Three considerations when linking pay to appraisals |
1. Should the link be fixed or discretionary? 2. Should amount of merit money be fixed or discretionary? 3. How should total amount of money towards merit pay be determined? |
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Define Merit Pay Grid/Matrix |
A tool for allocating merit raises, based on the performance level of the employee and the pay range quartile in which they fall. Example: Excellent performance level: Fourth quartile employee: 5% Third quartile employee: 6% Second quartile employee: 7% First quartile employee: 8% |
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Issues with Designing an Effective Merit Pay System |
Define the purpose of merit pay and objectives Determine performance measurement system Determine frequency of appraisals Determine how pay is linked to appraisals Determine how feedback will be provided Determine mechanisms for procedural justice Determine procedures for rater training and eval. Develop procedures to evaluate merit system |
