Management Chapter 10 Performance Management And Appraisal Without Training Managers And Supervisors Often Appraise

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10-6a. Rater Errors

• Potential errors include varying standards; recency and primacy effects; central

tendency, leniency, and strictness errors; rater bias; halo and horns effects; contrast

errors; similar-to-me/different-from-me errors; and sampling errors.

• When appraising employees, a manager should avoid applying different standards and

expectations to employees performing the same or similar jobs.

• The recency effect occurs when a rater gives greater weight to recent events when

appraising an individual’s performance.

• The primacy effect occurs when a rater gives greater weight to information received

first when appraising an individual’s performance.

10-7. Appraisal Feedback

10-7a. The Appraisal Discussion

• The appraisal discussion can be an emotional experience for the manager and the

Chapter 10: Performance Management and Appraisal

employee because the manager frequently must communicate both praise and

Teaching Tip: Ask students for additional tips about appraisal interviews for managers.

10-7b. Reactions of Managers and Employees

• Managers may be tempted to avoid unpleasantness. Employees may see the appraisal

10-7c. Effective Performance Management

• To be effective, a performance management system should be beneficial as a

10-7d. Performance Management 2.0

• The “revolution” underway in performance management is an attempt to take a

necessary, but often ineffective, process and make it useful and helpful.

Critical Thinking Challenges

1. Describe how an organizational culture and the use of performance criteria and standards

affect the remaining components of a performance management system.

Corporate cultures vary regarding their emphasis on performance management. Some

Chapter 10: Performance Management and Appraisal

performance appraisal systems that link compensation and development. Students should

discuss how an organization’s culture can affect the remaining components of a

performance management system—identifying and measuring employee performance,

legal and effective performance appraisal processes, manager and employee training, and

appraisal feedback.

2. Suppose you are a supervisor. What errors might you make when preparing the

performance appraisal on a clerical employee? How might you avoid those errors?

It is incumbent on the supervisor to use extreme care in conducting each evaluation. In the

absence of such care, a variety of errors can influence the rating—positively or negatively.

Appraisal systems may include many rather nebulous personality traits that complicate the

supervisor’s job. While the rating is supposed to deal only with factors affecting job

performance, it may embody factors that may not deal exclusively with job requirements.

Among some of the more common errors are the following:

• Recency Effect—occurs when a rater gives greater weight to recent events when

appraising an individual’s performance.

3. Based on your experiences, as well as the chapter information, what are some good “rules

of thumb” for conducting successful performance appraisal interviews?

Chapter 10: Performance Management and Appraisal

• Prepare before interview

Do Not:

• Talk too much

4. Review the performance appraisal process and appraisal form used by a current or former

employer and compare it with those provided by other students. Also review other

appraisal issues by going to www.workforce.com and searching for articles on

performance appraisals. Develop a report suggesting changes to make the performance

appraisal form and process you reviewed more effective.

Some of the articles on performance appraisals on www.workforce.com include the

following:

5. As the new HR Director of a company in the fast food industry, you have the responsibility

to develop a performance management system. You need to present a business case to

senior executives that the performance management system does not stand alone and must

be integrated into the company’s strategic plan, business needs, and measurements.

Review various publications and websites in the HR field.

A. Given several key practices for a successful performance management system, which

Chapter 10: Performance Management and Appraisal

ones should be implemented first?

Students might recommend several of the elements of a legal performance appraisal

system identified in the HR Competencies & Applications feature: Elements of a

Legal Performance Appraisal System. It is generally agreed that a legally defensible

performance appraisal should include the following:

B. Identify key performance criteria for the jobs of food preparer, cashier/order taker,

and store/restaurant manager. Suggest some ways to measure these criteria that will

be meaningful for the employee and organization.

Students’ answers will vary, but they might suggest measurements of speed and

Case: Deloitte Revolutionizes Performance Management

Ratings are often affected by unconscious rater biases and perceptions rather than factual

performance outcomes—an issue that Deloitte has identified by transforming its performance

management system from a traditional system to a system in which individual employees take

ownership of their performance and receive ongoing feedback and input on their performance.

1. What is your overall opinion of Deloitte’s new approach to performance management?

What type of training would you recommend for managers, team leaders, and team

members before switching to a system like this?

2. What actions should be taken if an employee is ranked as a potential performance risk?

How would compensation decisions be made without a performance score for each

employee?

Answers will vary. Some students may say that if an employee is ranked as a potential

Supplemental Cases

Microsoft Jettisons Stack Rankings

This case describes how a leading technology company faced difficulties with its performance

management program. Adopting a stack ranking system created more problems than it solved, so

the company opted to eliminate the controversial process. (For the case, visit MindTap® at

1. What is your overall opinion of the stack ranking system? Do you think this approach

serves a purpose in modern organizations?

2. If you were to implement stack ranking in a company, how would you do it? What are the

potential challenges associated with implementing this system? Would you use it, or would

you elect to use an alternative approach?

Performance Management at Netflix

Chapter 10: Performance Management and Appraisal

This case provides an example of how a performance-oriented culture can be established to

facilitate the performance management process. (For the case, visit MindTap® at

1. Would you find working at Netflix exciting or frightening? Why?

2. Can everyone in a company be above average? If so, how can you tell if someone is truly

above average?

Students may say that everyone in a company can be above average. Companies wouldn’t

hire someone who is just average or below average.

Performance Management Improvements for Bristol-Myers Squibb

This case identifies how performance management systems might be redesigned. (For the case,

1. Discuss how this case illustrates the contrasts between the administrative use and

developmental use of appraisals.

The old system at Bristol-Myers Squibb (BMS) focused on the administrative use of

2. Identify some of the advantages and disadvantages of eliminating the use of appraisal

forms and ratings.

The advantages of eliminating the use of appraisal forms and ratings are that the

managers can focus more on the development of employees, goals, and expectations for the

future. Also, the process and the goals can be more individualized to the particular

Building Performance through Employee Participation

The case outlines what was done at Jewelers Mutual Insurance in allowing employees to have a

1. Discuss how this case illustrates how greater support for a performance management

Chapter 10: Performance Management and Appraisal

system can be developed through employee participation.

In this case, the company leaders decided to involve employees in the redesign efforts to

2. Identify some of the ways that performance management systems can be improved based

on the experiences at JMI.

Some of the ways that performance management systems can be improved based on the

experiences at JMI would include the following:

• Employee participation in design

Unequal/Equal Supervisors

This case identifies the consequences of giving appraisal ratings that may not be accurate. (For

1. How have the inaccurate performance ratings created more problems?

2. What HR and legal issues could be raised in this case?

Chapter 10: Performance Management and Appraisal

provide accurate performance information. The case clearly raises many issues. For

instance, in the past when two employees had the same ratings, the senior employee

received priority. If the more senior employee is demoted, it may be perceived by the rest

of the people in the department, as well as by the individual involved, as a company slap at

long-service, loyal employees. On the other hand, to demote an individual who was clearly

a superior performer emphasizes longevity at the expense of performance.

Comments

Hubert is facing a very common problem. Having to distinguish between dependable, loyal

service over a long period of time, and a higher quality of service from another individual over a

shorter period of time is difficult. He has further complicated the unpleasant task by failing to

Extra Teaching Video

On the Job Video: Metropolitan Bakery—Performance Review

This short video will help reinforce key points and may prompt additional discussion from the

class.