Effective Human Resource Administration

Lesson 10 - Developing, Appraising, and

Rewarding Employees
Slide 1

Employee Development
The Seven Steps of Employee Development – From Hire to Retire

Rewarding
Appraising
Training
Orientation
Selecting
Screening
Recruiting

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Slide 2

Employee Development
Recruiting – the process of attracting qualified applicants to
apply for available positions

Sources of Applicants:

• Internal – current employees desiring a change or

promotion
• External – applicants outside of the organization recruited
by advertising, job fairs, employee referrals, recruiting
firms, etc.

LinkedIn is a common source of applicants in social media

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Slide 3

Employee Development
Screening – the process of eliminating applicants who are
unlikely to be successful on the job

Selecting – the process of determining which applicants will

be offered jobs

• The two are closely related – the applicants are screened to

narrow the number and then those applicants are screened
further to select the best fit for the job(s)

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Slide 4

Employee Development
Screening Techniques:

• A full background check on education, employment, credit history, driving

record, criminal record.

• Job Interview
o Structured – all applicants asked same questions
o Unstructured – focuses on objective with interviewer flexibility in what to
ask to determine individual abilities

• Attitude Testing – not focused on set of skills, looks at the qualities of the
applicant

BEWARE – to avoid discriminatory practices, only review areas that are job
related

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Slide 5

Employee Development
Orientation – the process of introducing new employees to
their work group, their superior, and their tasks

Common Agenda Items:

• Company history
• Company general policies
• Company products and/or services
• General regulations
• Formal introduction to the workgroup

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Slide 6

Employee Development

Training – the process of preparing the

employee to meet job expectations

Types of Training:
• Apprentice – given to people new to the job
• Vestibule – working in a simulated environment
• On-the-job – provided by supervisor and workgroup
• Virtual – classes presented via computer based
learning

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Slide 7

Employee Development
Training Platforms:

• Virtual Classroom
• Pathfinder Training Program
• The Saba System
• Communities of Practice
• Human Capital (Talent) Management Systems
• Moodle Learning Management System
• In-House Training Programs

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Slide 8

Performance Appraisal
Appraising – the process of determining the best, average and
poor performers

The Performance Appraisal Cycle – A Four Step Process:

1. Establish performance standard

2. Develop a method to determine individual performance
3. Compare individual performance against standards
4. Evaluate performance based on comparison

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Slide 9

Performance Appraisal
Performance Appraisal Tools:

• Graphic Rating Scales – easy to develop and apply

• The Paired Comparison Method – more discriminating than
GRS
• Management by Objectives – manager with employee set
goals
• 360-Degree Evaluations – manager and peers and other
evaluate

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Slide 10

Performance Appraisal
Graphic Rating Scale – a graph with the area to be evaluated
on the left and a rating scale from left to right across the top
which is scored
Sample Graphic Rating Scale

1 2 3 4 5
Unsatisfactory Fair Good Superior Exceptional
Quantity –
volume
produced
Quality -
accuracy
Attendance -
dependability

Score

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Slide 11

Performance Appraisal

Paired Comparison Method – a chart comparing each

employee to every other employee in each evaluated area
Sample Paired Comparison Method
Basis - Quantity Employees Being Rated

Compared To: Jones Smith Barber Corbett

Jones - + -

Smith + + -

Barber - + +

Corbett + + +

Score: 2 2 3 1

Highest for Quantity

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Slide 12

Performance Appraisal
Management By Objectives – the manager and employee define
common goals and areas of responsibility jointly

MBO Process – Six Steps:

1. Manager identifies unit goals
2. Identify duties and responsibilities of each person in unit
3. Manager and employee establish next period objectives
4. Annual goal-setting worksheet developed
5. Check employee’s goal progress throughout the year
6. Measure results against goals

Then the cycle repeats

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Slide 13

Performance Appraisal
Annual Goal Setting Worksheet Sample

Objectives Major Steps for Progress Evaluation

Achieving Objectives Method
Increase output to 300 Conduct study to Daily individual
units per day per determine work flow production reports
employee
Make changes to assure
parts for assembly
available
Reduce absenteeism by Determine any employee Gather recommendations
10% chronic absenteeism from employees to
improve environment,
make changes, view
absentee reports
Determine cause of
employee absenteeism
Improve working
environment for
employees

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Slide 14

Performance Appraisal
360-Degree Evaluation Process:

1. The employee and manager agree on the list of individuals who will be used to
evaluate the employee, and each of these individuals receives an evaluation form.
2. The evaluators complete the forms and return them to the managers.
3. The manager collects and summarizes the data.
4. The manager and the subordinate meet and discuss the results and agree on a
developmental plan of action that will help the employee address any problems as
well as expand his or her knowledge, experience, and other job-related skills and
abilities.
5. The 360-degree summary and action plan are used to evaluate the individual, and
these become part of the employee’s personnel file.
6. The action plan is used as a guide in providing the individual with overall leadership
direction and serves as a basis for the next 360-degree evaluation.

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Slide 15

Performance Appraisal
360-Degree Evaluation Process (Cont.)

• Determine how well employee has performed during the period and report
utilizing the following scale:
1 = excellent performance
2 = fully satisfactory performance
3 = significant improvement needed

• Evaluate the means used in accomplishing the goals utilizing the following
scale:
A = significant
B = some development needs exist
C = significant development is required

• Finally – create a development action plan

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Slide 16

Performance Appraisal
General Electric’s Nine-Block Matrix

Significant Some Significant Development

Strength Development Needed Needs
(A) (B) (C)
Excellent
(1)

Satisfactory
(2)

Improvement
Needed
(3)
Consistently models GE Demonstrates GE values Does not adequately
values and serves as a in a satisfactory way demonstrate GE values
standard of excellence

Source: Adapted from Richard M. Hodgetts, Measures of Quality and High Performance: Simple Tools and Lessons from America’s Most
Successful Companies (New York: American Management Association, 1998), chapter 6.

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Slide 17

Appraisal Problems
Four Major Problems with Performance Appraisal:

1. Clarity of the Appraisal Form – every appraiser must have

an identical interpretation of what the factors mean and
what the ratings mean
2. The Halo Effect – appraiser gives same rating on all
factors regardless of actual performance
3. Central Tendency – everyone is given an average rating
regardless of their actual performance
4. Leniency – everyone gets the highest possible rating
regardless of their actual performance

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Slide 18

Appraisal Problems
General Cause of Appraisal Problems – rating form or the
rater

• Validity – the form must measure what we intend it to

measure
• Reliability – the form measures the same factor repeatedly

• Reduce Appraisal Problems By:

o Require appraisers to explain their ratings
o Train the appraisers
o Use multiple appraisers
o Train employees on the form and encourage feedback

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Slide 19

Performance and Rewards

Extrinsic Rewards
Money, fringe benefits
External and Physical

Intrinsic Rewards
Feeling of accomplishment
Internal and Psychological

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Slide 20

Performance and Rewards

Expectancy Theory:

Motivation = Valence x Expectancy

• Valence – the individual’s preference for an outcome

• Expectancy – the perceived probability of obtaining

outcome

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Slide 21

Performance and Rewards

Studies have shown that people who expect rewards for
performance often perform no better than those who do not
expect a reward.

Four types of rewards:

1. Wages
2. Incentive Programs
3. Benefit Programs
4. Recognition Programs

Employees like to be recognized for their work.

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Slide 22

Performance and Rewards

Requirement to link rewards and performance:

1. Individual performance can be measured objectively

2. Can measure all important aspects of the job

3. Effort and performance are related over a relatively short

period

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Slide 23

Discipline
Types of Problem Employees

Type Primary Goal Secondary Goal

Type I does not intentionally violate
the rules but does so
unintentionally and infrequently
Type II will violate the rules when
they consider some treatment
unfair and does so only occasionally
Type III will violate the rules
whenever they can get away with it,
generally creates problems, and
often is disciplined
Type IV is not so much a problem
employee as an employee with a
problem
Source: John Seltzer, “Discipline with a Clear Sense of Purpose, ” Management Solutions, February 1987, p. 34.
To correct the behavior and to
inform and train
To correct the behavior and to avoid
discipline problems with others
To avoid discipline problems with
others
To get help for the individual and to
provide a reason to use that help
To maintain the individual’s
motivation
To identify and deal with why the
person feels unfairly treated, so that
future problems can be solved
To document the use of discipline
toward eventual termination
To document whether the individual
is unwilling to seek help or the
problems recurs

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Slide 24

Discipline

Progressive Discipline – begins with a warning and

ends with firing
1 – Oral Warning
2 – Written Warning
3 – Disciplinary Layoff
4 – Discharge

Discipline Must Be:

1 – Immediate
2 – Advance Warning
3 – Consistent
4 - Impersonal

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Review Questions:

1. The main objective(s) of performance appraisal is:

A. Provide feedback to employees
B. Provide a basis for rewards to employees
C. Provide feedback on the organization's training and development
programs
D. All of the above

2. True or False: Screening and selecting applicants are closely related.

A. True
B. False

3. True or False: Recruiting is attracting qualified applicants to apply for available

positions.
A. True
B. False

4. Employee development is conducted by:

A. Forget about training
B. Pay employees poorly
C. Shoot from the hip
D. Ignore problems

5. True or False: Interviews should only include job related areas.

A. True
B. False

6. Major problems with performance appraisals include:

A. Clarity of the appraisal form
B. The Halo Effect
C. Central Tendency
D. All of the above
Answer Key:
1. D
Performance appraisal is an evaluation tool that tells the employer and
employees how each is doing.

2. A
True. Screening narrows the pool so as to make selection easier.

3. A
True. It is used to find the best potential employees from the pool of available
workers.

4. D
Employee development is also conducted by recruiting, screening, training, and
appraising.

5. A
True. Otherwise you are opening yourself up to a lawsuit.

6. D
Another major problem is also leniency.