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HRM 2600 (78)
Chapter 8

Chapter 8

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Human Resources Management
HRM 2600
Shelley Millman

Chapter 8Appraising and Improving PerformancePerformance appraisal programs are the most helpful tools an organization can use to maintain and enhance productivity and facilitate progress toward strategic goalsThe successfailure of a performance appraisal program depends on the philosophy underlying it its connection with business goals and the attitudesskills of those responsible for its administrationPerformance Appraisal ProgramsPerformance appraisala process typically performed annually by a supervisor for a subordinate designed to help employees understand their roles objectives expectations and performance successPerformance managementthe process of creating a work environment in which people can perform to the best of their abilitiesPurpose of Performance AppraisalsMost of the most versatile tools available to managersAdministrative PurposesAppraisal programs provide input that can be used for the entire range of HRM activitiesPerformance appraisal data is used in HR planningdetermining the relative worth of jobs under a job evaluation program and as criteria for validating selection testsProvide a paper trail for documenting HRM actions that may result in legal actionAppraisal systems have the capability to influence employee behaviour leading directly to improved organizational performanceDevelopmental PurposesAppraisal provides the feedback essential for discussing strengths and weaknesses as well as improving performanceAppraisal process provides opportunity to identify issues for discussion eliminate any potential problems and set new goals for achieving high performanceReasons Appraisal Programs Sometimes FailCulprits lack of topmanagement information and support unclear performance standards rater bias too many forms to complete and use of the program for conflicting purposesManagers want to inflate their evaluations to increase salaries for employees or because higher subordinate ratings make them look good as managersManagers may Developing an Effective Appraisal ProgramWhat are the Performance StandardsBefore an appraisal is conducted the standards by which performance is to be evaluated should be clearly defined and communicated to the employeeSic considerations in establishing performance standards strategic relevance criterion deficiency criterion contamination and reliabilityStrategic RelevanceRefers to the extent to which standards relate to the strategic objectives of the organizationCriterion DeficiencyRefers to the extent to which the standards capture the entire range of an employees responsibilitiesCriterion ContaminationThere are factors outside an employees control that can influence hisher performanceReliabilityRefers to the stability or consistency of a standard or the extent to which individuals tend to maintain a certain level pf performance over timeWhen standards are expressed in specific measurable terms comparing the employees performance against the standard results in a more justifiable appraisalLegal IssuesPerformance appraisals must meet certain legal requirementsIf a manager indicates on an appraisal that the employee performs acceptablyaboveaverage but they are passed for promotion disciplined for poor performance or laidoffthese appraisals can undermine the legitimacy of the personnel decisionPerformance appraisals should meet the following guidelines1performance ratings must be jobrelated2employees must be given a written copy of their job standards in advance of appraisals3managers who conduct appraisal must be able to observe the behaviour they are rating4supervisors should be trained to use the appraisal form correctly5appraisals should be discussed openly with employees and counselingcorrective guidance help poor performers improve performance6an appeals procedure should be established to enable employees to express disagreement with their appraisalWho Should Appraise PerformanceManagerSupervisor AppraisalManager andor supervisor appraisala performance appraisal done by an employees manager and often reviewed by a manager one level higher
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