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BUS 381 (65)
Chapter 10

Chapter 10: Performance Appraisal

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Business Administration
BUS 381
Rick Iverson

Chapter 10 Performance AppraisalAcronymsGAP Free Children Now By MoneyCommon Rating MethodsLA CRUSHCommon Rater ErrorsThe Strategic Importance of Performance Management Performance managementprocess encompassing all activities related to improving employee performance productivity and effectivenessoIncludes goal setting pay for performance training and development career management and disciplinary actionoFoundation performance appraisal processThe Performance Appraisal ProcessThree steps1Defining expectationsSetting standards2Assessing performance relative to standards3Providing feedback to employeeWhy should performance be appraisedoLinks performance criteria to strategic objectives and implementation plansoResults provide information for promotionsalary decisionsoProvides opportunity to reinforce andor correct behavioroProvides opportunity to review career plansProblemsoLack of standardsemployees not told ahead of time what is expectedoPoor measures of performanceoRater errorsoPoor feedback to employeesoFailing to use results for decision makingStep 1 Defining Performance ExpectationsSetting Work StandardsMost employees require more clarification of performance expectations and how they contribute to organizations overall resultsjob description is not enoughShould develop measurable standards for each positionEmployees should always know ahead of time how and on what basis they will be appraisedStep 2 Appraising Performance Relative to Standards Common MethodsGAPFCNBM GAP Free Children Now By MoneyGraphic Rating Scale MethodScale lists number of traits and a range of performance for each Employee is rated by identifying scorelevel of performance for each traitSimplest and most popular methodAlternation Ranking MethodRanking employees from best to worst on a particular trait alternating from highest to lowest next highest next lowest etcPaired Comparison MethodRank employees by making a chart of all possible pairs of employees for each trait and indicating who the better one of the pair isNumber of times an employee is rated better is added upForced Distribution MethodPredetermined percentages of ratees placed in various performance categories like a bellcurveProblem Demotivating for those considered below averageCritical Incident MethodKeep record of uncommonly good or undesirable examples of workrelated behavior and reviewing the list with the employee at predetermined timesAdvantages specific hard facts appraisal occurs throughout the year concrete examples to improve on less subjectiveProblem Cant compare between jobsNarrative FormsPerformance problem and organizational impact are specified in detail presents an improvement plan with measurable goals and direction regarding training and encourages employee to add ideas outcomesconsequences are also statedBehaviourally Anchored Rating Scales BARSCombines benefits of narratives critical incidents and quantified ratings by anchoring a quantified scale with specific narrative examples of goodpoor performance similar to marking rubric eg BUS 360Five steps1Generate critical incidentsjobholderssupervisors describe specific illustrationscritical incidents of effective and ineffective performance2Develop performance dimensionsexperts cluster incidents into sets of performance dimensions3Reallocate incidentsanother group of people reallocate critical incidents to clusters it ends up where the majority of people place it4Scale the incidentsrate from effective to ineffective representation of performance5Develop final instrument use 67 incidents as anchors for each dimensionAdvantagesoMore accurate measure from people who know the job legally defensibleoClearer standardscritical incidents help clarifyoFeedbackprovides specific examplesoIndependent dimensionsratings are independent of each otheroConsistency consistent and reliableDisadvantage more timeconsuming to developManagement by Objectives MBOInvolves setting specific measurable goals with each employee and periodically reviewing progress madeSix steps1Set organizations goals2Set departmental goals3Discuss departmental goals and ask employees to develop own individual goals to contribute to departments goals
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