HRM’s role in the performance management process

Module 4 Overview

In the last module, you looked at training needs assessment and the processes organizations use to ensure their employees have the knowledge, skills, and abilities they will need. This module’s focus is a natural progression of these topics: performance management systems, or the methods employers use to evaluate employee performance. If you have worked full time, you have likely been through your company’s performance appraisal or performance evaluation process.

While evaluating employee performance seems to be a straightforward process, there are many tasks managers need to perform to ensure employees receive the feedback, support, and encouragement they need to succeed. Watch this video,  Performance Appraisals Gone Bad! , and make a list of the mistakes you see the manager make when conducting the appraisal meeting. Be sure to keep in mind the concepts you have covered in previous modules. 

 - The captioned version of this video may be accessed at the following link:   OL-211: Performance Appraisal Gone Bad!! (CC)

Setting Performance Objectives: Long before the performance evaluation form is completed, the manager and employee set performance objectives, which become the basis for the performance appraisal. How the objectives relate to the performance evaluation varies, depending on the type of evaluation used. The evaluation process may be directly based on the objectives, as it supposedly was in the video. While it was not stated, the company portrayed may have been using management by objectives (MBO), which is described in this module’s textbook reading. Other types of appraisals are based more on the employee’s behavior or traits, giving the performance objectives a more indirect influence. No matter what form the performance evaluation takes, the performance objectives need to be clearly stated at the start of the appraisal period. Did you notice in the video that the employee’s performance objectives did not follow the SMART approach, resulting in confusion and frustration for the employee?

During the Performance Period: The performance period, the time frame during which the employee’s performance is evaluated, is most often 12 months. Employees new in their roles may be evaluated after 30 or 90 days, and some organizations have semi-annual appraisals. As the term implies, performance management is an active, ongoing process. Managers need to give regular informal feedback, including both praise and correction, throughout the appraisal period. Done well, this helps the employee succeed and ensures that the content of the written performance appraisal never comes as a surprise to the employee. Do you recall in the video that the employee directly asked the manager why he did not give her feedback immediately after she fell short of her objectives? He also neglected to praise her after the director meeting, so she did not know to repeat her behavior.

Preparing the Performance Appraisal: As you will see in this module’s resources, there are many types of performance appraisals. When it is time to complete the performance evaluation, many people may be involved in giving feedback besides the employee’s manager. Others to give input may include the employee and people they interact with such as peers, customers, and subordinates, if the employee manages other people. These individuals need to be trained and given ample time to complete the appraisal form. The employee’s manager then reviews whatever feedback was solicited and completes the evaluation form. Did you catch in the video that the manager never located the self-appraisal the employee had sent weeks before their meeting? In addition, the meeting logistics were not handled properly. The time frame of the session was not clear, and the room had not been reserved. While the film presented these blunders lightheartedly, oversights such as these send a powerful message to employees that the manager does not value the appraisal process. It essential that managers see the benefit of effective performance evaluation and convey this understanding through all of their actions.

Conducting the Performance Appraisal Meeting: Many employees dread receiving their performance appraisal. Based on the video, it is easy to see why. With effective communication during the performance period and effective planning on the manager’s part, however, the performance evaluation session should be a positive experience for both parties most of the time. In the video, did you observe the manager’s lack of consideration toward the employee? It was clear that she did not feel valued as he took a personal phone call, looked at his watch while she was talking, dismissed her concerns repeatedly, ignored her questions and requests for clarification, talked over her, contradicted the established process, and then asked her to type up her finalized performance appraisal.

For some tips and a demonstration of how to conduct a successful performance appraisal meeting, view this video on  How to Do Effective Performance Appraisals . In this video, you are able to see some key points illustrated, such as how to open and close the session, how to ask for and respond to the employee’s input, ways to give praise, and how to give negative feedback. Notice that the focus of the negative situation is on how to correct it. There is no hint of corrective action. When an employee’s performance is not meeting standards, it needs to be addressed during the performance period. Module Six covers the employee relations aspect of HRM, including correcting employee performance problems.

 - The captioned version of this video may be accessed in the following link:  OL-211: How to do Effective Performance Appraisals (CC)

It takes training for managers to become skilled at performance appraisals. Untrained evaluators can fall prey to a host of rating errors, which can be avoided with awareness. Here is a summary of the most common rating errors, any of which can be detrimental to a performance management process:

Error	Description
Halo Effect	When the rater allows one positive aspect of an employee’s performance to positively influence the rating of all other aspects of their performance (Armstrong, 2012)
Horns Effect, also known as the Pitchfork Effect	The opposite of the halo effect; when one negative aspect of the appraisal negatively colors the entire evaluation (Armstrong, 2012)
Recency	When the rater uses only recent behavior as the basis for the entire appraisal, often because they did not document and do not remember earlier performance (Armstrong, 2012)
Central Tendency	The tendency for a rater to cluster everyone in the middle-performance categories, avoiding extreme ratings of either good or bad (Armstrong, 2012)
Bias	When the rater allows a personal bias about something (e.g., race, national origin, sex, religion, age, veterans’ status, disability, hair color, weight, height, intelligence) to influence the rating (Armstrong, 2012)
Favoritism	The tendency to rate a favorite person or a popular employee highly (Armstrong, 2012)
Sunflower Effect, also known as Leniency	When a rater evaluates everyone as high, either to look good or to be able to give higher raises (Armstrong, 2012)
Severity	The opposite of Leniency; when the rater evaluates everyone harshly, believing that no one should score the highest rating (College of William and Mary, n.d.)
Length of Service Bias	When the evaluator gives credit for longevity or penalizes an employee for being new (College of William and Mary, n.d.)
Holding a Grudge	The tendency to base an appraisal on an employee’s poor behavior not relevant to the appraisal or outside the appraisal period (Armstrong, 2012)
Guilt by Association	When the rater judges an employee by the company, they keep rather than their performance (Armstrong, 2012)

 References

Armstrong, S. (2012, April 11). 10 rating errors to avoid in performance reviews. Retrieved from http://hr.blr.com/HR-news/Performance-Termination/Performance-Employee-Appraisal/zn-10-Rating-Errors-Avoid-in-Performance-Reviews#

College of William and Mary. (n.d.). Common rating errors. Retrieved from http://www.wm.edu/offices/hr/documents/compensation-perf-management/commonratingerrors.pdf