10Copyright © 2015 Pearson Education, Inc. Managing Employee.docx

10
Copyright © 2015 Pearson Education, Inc.
Managing Employee
Retention, Engagement,
and Careers
10-1
4-
IBM recently celebrated 100 years since its creation. Few
companies stay in business that long.
Most credit IBM’s longevity to its ability to adapt to changing
customer needs.
Today, for instance, technology is changing so fast that IBM
will soon need a workforce with dramatically
different skills than its current employees have.
In many companies, that would signal impending turnover and
huge turnover costs, as new employees
replace old. What should IBM do to build that new workforce,
and to retain the employees it needs to
move ahead? We’ll see what they did.
1

Learning Objectives
Describe a comprehensive approach to retaining employees.
Explain why employee engagement is important, and how to
foster such engagement.
Discuss what employers and supervisors can do to support
employees’ career development needs.
10-2
4-
After studying this chapter, you will be able to:
1. Describe a comprehensive approach to retaining employees.
2. Explain why employee engagement is important, and how to
3. Discuss what employers and supervisors can do to support
2
List and briefly explain the main decisions employers should
address in reaching promotion and other employee life-cycle
career decisions.
Explain each of the main grounds for dismissal.
Learning Objectives

10-3
4-
4. List and briefly explain the main decisions employers should
address in reaching promotion
and other employee life-cycle career decisions.
5. Explain each of the main grounds for dismissal.
3
Describe a comprehensive approach to retaining employees.
10-4
4-
Experts from a top consulting company suggest building
comprehensive retention programs around the steps below.
Using effective selection techniques
Offering professional growth opportunities
Providing career direction
Offering meaningful work and

Encouraging ownership of goals
Let’s discuss these in a bit more detail.
4
IMPROVING PERFORMANCE:
HR as a Profit Center
10-5
Studies show link when turnover rates rise financial
performance is at risk
HR practices can lower turnover
Opportunities
Training
Development
4-
Turnover and Performance
Combining voluntary and involuntary turnover produces some
astounding statistics. For example, the turnover
in many food service firms is around 100% per year. In other
words, many restaurants need to
replace just about all their employees every year!
The researchers say, “Organizations must recognize that when
turnover rates rise, their workforce and financial performances

are at risk.”
How to cut turnover? Another study focused on turnover
intentions among government technology workers. It
concluded that human resource managers could influence
turnover through practices such as promotion
opportunities, training and development, pay and reward
satisfaction, and family-friendly policies. The bottom
line is that HR practices can have a big influence on employee
turnover, and thereby on the company’s profitability.
Discussion Question 10-1: Discuss three steps you would take
to reduce the need to dismiss employees.
5
Managing Employee Turnover
Costs of turnover
Managing voluntary turnover
Reducing voluntary turnover
10-6
4-
Turnover is an expensive cost for organizations. Understanding
more about the costs and causes of turnover is important.
There are tangible and intangible costs associated with turnover.
Reducing turnover requires identifying and managing the

reasons for both voluntary and involuntary turnover.
Voluntary turnover occurs for many reasons. Top reasons
include job dissatisfaction, poor pay or health-care benefits, few
promotional opportunities, and inadequate work-life balance.
See FIGURE 10-1 Reasons Top-Performing Employees Leave
an Organization
6
Identify issues with surveys
Compensation
Selection
Professional growth
Meaningful work/ownership
Managing Employee Retention
10-7
4-
Experts from the consulting company Development Dimensions
International (DDI) and the employment
firm Robert Half International suggest building comprehensive
retention programs around the following steps.

Any retention strategy begins with identifying the specific
causes of turnover within a particular company.
Use exit interviews and surveys to identify issues.
Manage high performers and key employees with enhanced pay.
Remember, “retention starts up front, in the selection and hiring
of the right employees.” The process begins with
a thorough understanding of the jobs to be filled. It includes a
solid job analysis and an effective and efficient
hiring process.
Professional growth is a well-thought-out training and career
development program that can provide a strong
incentive for staying with the company.
Providing career direction means discussing employee’s career
preferences and prospects at your firm, and helping
them lay out potential career plans. Furthermore, “don’t wait
until performance reviews to remind top employees
how valuable they are to your company.”
An important part of retaining employees is making it clear
what your expectations are regarding their performance
and responsibilities. This helps employees “own” their
behaviors and results. A job is meaningful if the incumbent
understands its relationship to the company goals and sees his
or results as part of the bigger picture.
7
10-8

Work–life balance
High engagement
Data analytics
Counter offers
Workforce planning
4-
Robert Half and careerbuilder.com surveys found employees are
looking for flexible work
arrangements and telecommuting.
Employee empowerment, problem-solving groups, and self-
directed teams has a positive
effect and reduced turnover.
It takes sifting through data to provide Nationwide Mutual
Insurance Co. managers with
monthly “scorecards” of turnover data.
Employers who allow counter offers need a policy that specifies
what people and positions
are eligible for counteroffers.
Identifying and preparing for skills gaps can help reduce the
turnover that unexpected skills

gaps can trigger.
8
HR Practices Around the Globe
IBM technology training program is improving
Employee retention
Minimizing layoffs
Resignations and
Turnover costs
10-9
4-
IBM Dodges an Employee Turnover Problem
IBM put in place an “on-demand” staffing strategy. This aims to
ensure that its current employees get
the training and coaching they need to play roles in IBM’s
future.
To do this, IBM budgeted $700 million per year to identify
needed skills, spot gaps for skills that are in
short supply, and train and assess its executives, managers, and
rank-and-file employees. IBM’s on-demand
staffing effort is supporting IBM’s strategy, which depends on
offering the fast-evolving technological services
its customers need, at once, on demand.
9

10-10
Talent Management and Employee Retention
Job withdrawal
Dealing with job withdrawal
4-
Talent management best practice suggests focusing augmented
retention efforts on the company’s most important employees.
Job withdrawal is any action which places physical or
psychological distance between the employee and the
organization.
It’s a means of escape for someone who is dissatisfied or
fearful. Managing the almost limitless reasons an employee can
become
dissatisfied requires a complete and effective human resource
system.
People tend to move toward situations that make them feel
good, and away from those that make them feel bad. People
are repelled by situations that produce unpleasant,
uncomfortable emotions, and are attracted to those that produce
pleasant,
comfortable ones.
The manager can therefore think of withdrawal-reducing

strategies in terms of reducing the job’s negative effects, and/or
of raising
its positive effects.
Potential negatives include boring jobs, poor supervision, low
pay, bullying, lack of career prospects, and poor working
conditions.
Potential positives include job enrichment, supportive
supervision, equitable pay/ family-friendly benefits,
disciplinary/appeals
processes, career development opportunities, safe and healthy
working conditions, and having high-morale colleagues.
Interviews,
surveys, and observation can help identify issues to address.
10
10-11
Identify issues with surveys
Compensation
Selection
Professional growth
Meaningful work/ownership
Review
4-
As we discussed experts from the consulting company

Development Dimensions International (DDI) and the
employment firm Robert Half International suggest building
comprehensive retention programs around
the steps discussed here.
11
10-12
Review
Work–life balance
High engagement
Data analytics
Counter offers
Workforce planning/ Talent Management
Job withdrawal
4-
We continued our discussion of the researched based steps for
building comprehensive retention
programs.
Talent management best practice suggests focusing augmented
retention efforts on the company’s
most important employees.
Lastly, this objective stated voluntary turnover is one way that
employees withdraw. Withdrawal in

general means separating oneself from one’s current situation—
it’s a means of escape for someone
who is dissatisfied or fearful. At work, job withdrawal has been
defined as “actions intended to place
physical or psychological distance between employees and their
work environments.”
12
Explain why employee engagement is important, and how to
10-13
4-
Engagement refers to being psychologically involved in,
connected to, and committed to getting one’s job done.
Poor attendance, voluntary turnover, and psychological
withdrawal often reflect diminished employee engagement.
Let’s discuss.
13
Rio Tinto is a global mining corporation
Using metrics and measures, consulting firm Towers Watson
conducted an employee engagement survey so Rio Tinto could
take the steps to:

Employee engagement and
Performance
10-14
4-
Employee Engagement at Rio Tinto
The consulting firm Towers Watson conducted an employee
engagement survey and analyzed the results.
They began by collecting extensive employee engagement
survey data from Rio Tinto employees around
the world. The Towers Watson consultants then used a
statistical process they called linkage analysis to
analyze how employee engagement measures related to dozens
of performance and maintenance measures
in Rio Tinto’s plants and mines around the world.
The analysis compared Rio Tinto’s employee engagement scores
with benchmark scores from other
companies in Towers Watson’s database. The engagement
metrics focused on things like understanding
and support for the vision of the company, support for company
values, “willingness to go the extra mile
to ensure business success.” Rio Tinto was better able to
understand how taking specific steps to improve
employee engagement would translate into improved
organizational performance.
14

10-15
Managing Employee Engagement
Gallup survey
Business units that have employee engagement have 83%
chance of performing above the company median
Those with the lowest employee engagement have a 17%
chance
Watson Wyatt Worldwide survey
Highly engaged employees generate 26% higher revenue per
employee
4-
Employee engagement is important because both employee
behavior (including turnover) and
organizational performance reflect whether employees are
“engaged.”
One study by Towers Watson, conclude that only about 21% of
the global workforce is engaged,
while almost 40% is disengaged.42 In one large survey, 57% of
respondents were disengaged
within 2 years after hiring.
See FIGURE 10-2 Employee Actions That Make Employees
Feel More Engaged
15

10-16
Employee Actions That Foster Engagement
Understanding how their department contributes to company
success
Seeing how their efforts contribute to achieving company goals
Get a sense of accomplishment from work at the company
Managing Employee Engagement
4-
Employee participation also improves engagement. For
example, Milliken & Co. uses employee participation safety
teams at one plant. The safety process consists of 16 employees
on the plant’s safety steering committee, which in turn governs
8 employee safety subcommittees. The program appears to
produce high levels of safety engagement among employees,
and significant improvements in the plant accident rates.
Perhaps the best way to improve engagement is to remember
that engagement is a two-way street. Employees tend to be
committed to and engaged in companies that are committed to
them. Such companies demonstrate what psychologists call
“perceived organizational support,” wherein the employee
perceives that the employer values his or her contribution and
cares about his or her well being. Researchers measure such
organizational support with survey items such as, “The
organization values my contribution to its well-being”; “The

organization would understand a long absence due to my
illness”; and “The organization really cares about my well
being.”
16
10-17
Review
Employee Engagement and Performance
Employee Actions That Foster Engagement
4-
Withdrawal and turnover often reflect diminished employee
engagement. Engagement refers to being psychologically
involved in, connected to, and committed to getting one’s jobs
done. Engaged employees “experience a high level of
connectivity with their work tasks,” and therefore work hard to
accomplish their task-related goals.
As far as employee engagement is concerned, many employee
behaviors, including turnover, reflect the degree to which
employees are “engaged.”
We discussed the studies show engagement and performance are
related and three actions that foster employee
engagement.
17

10-18
Discuss what employers and supervisors can do to support
4-
While each individual employee may have different interests
and career aspirations, employers and managers should provide
career development support and training. Let’s discuss these
important concepts in more detail.
18
10-19
Career terminology
Careers today
Psychological contract
The employee’s role
Career Management
4-

We may define a career as the “occupational positions a person
has had over many years.”
Career management is a process for enabling employees to
better understand and develop their career skills and interests
and to use these skills and interests most effectively both within
the company and after they leave the firm.
Career development is the lifelong series of activities (such as
workshops) that contribute to a person’s career exploration,
establishment, success, and fulfillment.
Career planning is the deliberate process through which
someone becomes aware of personal skills, interests,
knowledge, motivations, and other characteristics; acquires
information about opportunities and choices; identifies career-
related goals; and establishes action plans to attain specific
goals.
What the employer and employee expect of each other is part of
what psychologists call a psychological contract. The
psychological contract identifies each party's mutual
expectations.
As in other parts of life, an individual must accept
responsibility for his/her own career. He or she should assess
his/her own interests, skill, and values. Finally, the employee
must take the steps required to ensure a happy and fulfilling
career. One of these steps is finding a mentor who can be a
sounding board. Mentoring programs can be informal or formal.

19
10-20
Career Management
The Employer’s Role
Depends on length of time employee is employed
Employer Career Management Options
Employee career planning form suggested
Managers Role
Actively train, mentor, review performance
4-
An experienced mentor who can help the person learn the ropes
is recommended for employee career development.
Some employers create Web-based or offline libraries of career
development materials, and offer career workshops and perhaps
individual career coaches for career guidance. First USA Bank
has its “Opportunity Knocks” program. In addition to career
development training and follow-up support, the program
includes career development centers at work sites that
employees use on company time. The latter contain materials
such as career assessment and planning tools. WorkforceVision
from Criterion, Inc., supplies online systems that help the
employer analyze an employee’s training
needs.

A career planning workshop is “a planned learning event in
which participants are expected to be actively involved,
completing career planning exercises and inventories and
participating in career skills practice sessions.” A typical
workshop includes self-assessment exercises (skills, interests,
values, and so on), an assessment of important occupational
trends, and goal-setting and action-planning segments.
Career coaches generally help employees create 1- to 5-year
plans showing where their careers with the firm may lead. Then,
the employer and employee base the latter’s development plans
on what he or she will need to move up.
The manager can support his or her subordinates’ career
development needs by ensuring they have the right skills and
scheduling a regular performance appraisal. Managers must also
make expectations clear. Finally, managers must focus on the
extent to which the employee’s current skills and performance
match career aspirations.
Schedule regular performance appraisals; at these reviews,
cover the extent to which the employee’s current skills and
performance are consistent with the person’s career aspirations.
Provide the employee with an informal development plan like
that in Figure 10-4. Keep subordinates informed about how they
can utilize the firm’s current career related benefits, and
encourage them to do so.
20
10-21
Career terminology
Careers today

Psychological contract
The employee’s role
Employer’s and Manager role
Employer Career Management Options
Review
4-
We can define a career as the “occupational positions a person
has had over many years.” Today, employees
often find themselves having to reinvent themselves.
A psychological contract is what the employer and employee
expect of each other.
As in other parts of life, an individual must accept
responsibility and take an active role in his/her own career.
Finally, we looked at career development and the role of the
employer and manager.
21
List and briefly explain the main decisions employers should
address in reaching promotion
and other employee life-cycle career decisions.

10-22
4-
Promotions usually provide opportunities to reward the
exceptional performance of tested and loyal employees.
However, unfairness, arbitrariness, or secrecy can diminish the
effectiveness of the promotion process for all concerned. Let’s
discuss.
22
10-23
Making Promotion Decisions
Is seniority or competence the rule?
How should we measure competence?
Is the process formal or informal?
Vertical, horizontal, or other?
4-
Employee Life-Cycle Career Management
An employee’s tenure with a firm tends to follow a life-cycle,

from employment interview to first job, promotion, transfer, and
perhaps retirement. We’ll look here at the latter three.
Four important rules impact the effectiveness of promotion
decisions.
Decision 1: Is Seniority or Competence the Rule? Today’s
focus on competitiveness favors competence. However, union
agreements and civil service regulations often emphasize
seniority.
Decision 2: How Should We Measure Competence? Start by
defining the job, setting standards, and using one or more
appraisal tools to record the employee’s performance. Then, use
a valid procedure for predicting a candidate’s potential for
future performance.
Decision 3: Is the Process Formal or Informal? Each firm will
determine whether the promotional process will be formal or
informal.
Decision 4: Vertical, Horizontal, or Other? Promotions can be
vertical (within the same functional area) or horizontal (in
different functional areas).
There are practical steps to take in formulating promotion
policies. Establish eligibility requirements, for instance, in
terms of minimum tenure and performance ratings. Require the
hiring manager to review the job description, and revise if
necessary. Vigorously review all candidates’ performance and
history. Preferably hire only those who meet the job’s
requirements.
23

10-24
The Gender Gap
Eliminate barriers
Improve networking, mentoring
Break the glass ceiling
Have flexible career tracks
4-
Today women constitute more than 40% of the workforce, but
hold less than 2% of top management positions.
Women report greater barriers (such as being excluded from
informal networks) than do men. They also have more difficulty
getting developmental assignments and geographic mobility
opportunities. Many call this combination of subtle and not-so-
subtle barriers to women’s progress the glass ceiling.
Organizations need to be aware of it and try to eliminate it.
In one example the flexible/reduced work schedule enabled
many working mothers who might otherwise have left to stay
with the firm and gave this group a flexible career path.
24
10-25
Look at Practical Considerations

Managing transfers
Managing retirements
4-
There are practical steps to take in formulating promotion
policies. Establish eligibility requirements, for instance, in
terms of minimum tenure and performance ratings. Require the
hiring manager to review the job description, and revise if
necessary. Vigorously review all candidates’ performance and
history. Preferably hire only those who meet the job’s
requirements.
Transfers are moves from one job to another, usually with no
change in salary or grade. Frequent relocation of transferred
employees has been assumed to have a damaging effect on
transferees’ family life. Transfers are also financially costly.
Some employers are instituting formal pre-retirement
counseling aimed at easing the passage of their employees into
retirement. As you might suspect, a large majority of employees
have said they expect to continue to work beyond the normal
retirement age. For some, part-time employment is an
alternative to outright retirement.
Finally, employers can benefit from retirement planning by
becoming able to anticipate or plan for future labor shortages.

25
10-26
Review
Look at Practical Considerations
Gender Gap
Managing transfers
Managing retirements
Promotion decisions
Measurement
Formal vs. informal
Vertical or horizontal
4-
The rules for promotion decisions include issues of seniority or
competence, how to measure, and whether the process is formal
or informal. In addition, consideration is given to whether the
promotion is vertical or horizontal and who is eligible. Practical
issues include bias such as the glass ceiling, legal compliance,
and managing transfers and formal pre-retirement counseling.
Women have to be more proactive than men to get stretch
assignments. Employers need to eliminate the barriers that

impede women’s career progress. Some specific steps were
discussed.
26
Explain each of the main grounds for dismissal.
10-27
4-
Not all employee separations are voluntary. Some career plans
and appraisals end not in promotion
or graceful retirement but in dismissal—involuntary termination
of an employee’s employment
with the firm.
Many dismissals are avoidable. For example, many dismissals
flow from bad hiring decisions. Using
assessment tests, background checks, drug testing, and clearly
defined jobs can reduce such dismissals.
27
10-28
Grounds for Dismissal
Avoiding Wrongful Discharge Suits
Supervisor Liability
Managing Dismissals

4-
There are four bases for dismissal: unsatisfactory performance,
misconduct, lack of qualifications
for the job, and changed requirements of (or elimination of) the
job.
Unsatisfactory performance refers to a persistent failure to
perform assigned duties or to
meet prescribed standards on the job.96 Specific reasons
include excessive absenteeism,
tardiness, a persistent failure to meet normal job requirements,
or an adverse attitude.
Misconduct is deliberate and willful violation of the employer’s
rules and may include stealing
and rowdy behavior.
Lack of qualifications for the job is an employee’s inability to
do the assigned work, although
he or she is diligent. Because this employee may be trying to do
the job, it is reasonable to
try to salvage him or her—perhaps by assigning the employee
to another job.
Changed requirements of the job is an employee’s incapability
of doing the job after the nature
of the job has changed. Similarly, you may have to dismiss an
employee when his or her job is
eliminated. Again, the employee may be industrious, so it is
reasonable to retrain or transfer

this person, if possible.
Insubordination, a form of misconduct, is sometimes the
grounds for dismissal. The two basic
categories of insubordination are unwillingness to carry out the
manager’s orders, and disrespectful
behavior toward the manager.
To avoid suits: First allow the employee to explain why he (or
she) did what he did.
Second, have a formal multistep procedure (including warning)
and an appeal process.
Third, the person who actually does the dismissing is important.
Fourth, dismissed employees
who feel they’ve been treated unfairly financially are more
likely to sue.
Wrongful discharge (or termination) occurs when an employee’s
dismissal does not comply with
the law or with the contractual arrangement stated or implied by
the employer.
To avoid liability: First, have employment policies including
grievance procedures that help show
you treat employees fairly. Second, review and refine all
employment-related policies, procedures,
and documents to limit challenges. Follow outlines procedural
steps and ask the questions in
Figure 10-6.
Have a security checklist to collect all keys, laptops and also
security measure need to include disabling
passwords.
To avoid having personal liability become an issue.
● Follow company policies and procedures. An employee may

initiate a claim against a
Supervisor who he or she alleges did not follow policies and
procedures.
● Administer the dismissal in a manner that does not add to the
employee’s emotional hardship
(as would having the employee publicly collect his or her
belongings and leave the office).
● Do not act in anger, since doing so undermines the appearance
of objectivity.
● Finally, utilize the HR department for advice regarding how
to handle difficult dismissal
situations.
28
10-29
The Exit Process and Termination Interview
Layoffs and the Plant Closing Law
Adjusting to Downsizings and Mergers
Managing Dismissals
4-
Follow company guidelines for the termination interviews. Have
exit interviews with employees leaving the firm.
These are interviews, usually conducted by a human resource
professional just prior to the employee leaving.

Senior management plans all aspects of a layoff. A layoff, in
which the employer sends workers home for a time for lack of
work, is usually not a permanent dismissal.
Downsizing means reducing, usually dramatically, the number
of people employed by a firm. The basic idea is to cut costs and
raise profitability.
1. First is making sure the right people are let go; this requires
having an effective …
BUS/475v10
Project Plan
BUS/475 v10
Page 2 of 2
Wk 4 – Apply: Project PlanProject Title: Apple Reality
ProjectProject Objectives:
· Identify the top 2 Apple products and/or services to first
integrate with AR and VR features.
· Determine and develop the top 5 AR and VR features and
make prototypes
· Estimate supply chain needs, cost and production timeframe
Operational Step
Responsible Person
Timeline
Review Apple’s product/service mix and determine which top 2
products to start with AR and VR
Charles (Product Research Manager)
2/1 (1 week)
Conduct consumer surveys and market research regarding
potential AR/VR features on Apple products/services
Darin (Market Research Manager)
2/8 (4 weeks)
Share survey results and feedback with management and the

research team
Charles and Darin
3/8 (2 weeks)
Determine and develop the top 5 AR and VR features and make
prototypes
Operational Step
Responsible Person
Timeline
Review sales data to determine peak sales opportunities by
location
Jim (Director of Sales)
9/30 (1 week)
Identify the top 5 locations in which to conduct the desert taco
pilot
Jim
10/7 (2 weeks)
Create marketing collateral and social media communications to
promote the desert taco pilot
Oliver (Media Relations Manager)
10/21 (4 weeks)
Provide expected volume and product information for the
inventory team
Jim
10/7 (2 weeks)
Estimate the required inventory and supply chain needs
necessary to support the desert taco pilot
Operational Step
Responsible Person
Timeline
Based on expected customer volume, locations, and times,
determine the product inventory required to support the pilot.

Louise (Controller)
10/14 (3 weeks)
Source supply companies and obtain product pricing quotes and
delivery timelines.
Louise
10/21 (4 weeks)
Determine shipment and storage needs to support the pilot.
Louise and Ben (Operations Manager)
10/21 (4 weeks)
Purchase product for the pilot and arrange transportation to
support the desert taco pilot at the various locations.
Louise
10/28 (5 weeks)
Copyright 2019 by University of Phoenix. All rights reserved.
BUS/475 v10
Wk 1: Advanced Organizer
BUS/475 v10
Page 2 of 3
Wk 1 Apply: Degree of AlignmentAdvanced Organizer
Review the companies listed in the case studies portion of the
textbook. Choose 1 of the companies to use for all weekly
assessments. Complete the chart below with information
provided in the textbook and other resources. Provide your
analysis below the chart.
Selected Organization:Describe the organization in the follow
chart:
Element
Description
Mission
Apple Inc. mission is “To bringing the best user experience to
its customers through its innovative hardware, software, and

services” ("Mission Statement Academy", 2019).
Vision
“We believe that we are on the face of the earth to make great
products and that’s not changing.” (Farfan, 2019).
Values
Apple’s values include “inclusion, diversity, education,
accessibility, environment, supplier responsibility and privacy.”
("Mission Statement Academy", 2019).
Structure
Apple Inc. has a hierarchical organizational structure with
divisional characteristics. This type of organizational structure
is common in traditional business organizations.
Culture
“The company’s cultural features focus on maintaining a high
level of innovation that involves creativity and a mindset that
challenges conventions and standards.” (Meyer, 2019).
Analysis
Based on your advanced organizer and further research, analyze
the degree of alignment between what the organization is
currently doing (actions) and their mission, vision, values,
structure, and culture.
Apple Inc has an impressive lineup of products that have
changed the lives of millions of consumers. Apple Inc embraces
technology and channels that focus towards the vision and the
mission statement of the organization. The values of this
organization provide management and employees with direction
as well as an overview of what is required from them (D
O'Rourke, 2018). Apple is a wildly successful technology
company and has a market capitalization of over $1 trillion. The
company has definitely lived up to their mission of innovating
and creating great products that bring the best user experience
for their customers. Although the company has enjoyed much
success, Apple Inc has faced criticism and is accused of
unethical business practices, sweatshop labor, and anti-

competitive behavior (Gruber et al., 2017). For Apple Inc to
continue being successful and staying aligned with their values,
the company needs to focus on improving partnerships as well
as supplier and production quality (Ng et al., 2018). I’ve met a
lot of Apple Inc employees through my job and they all have
great things to say about the company and the employee benefits
they receive. Although the employees have great benefits, they
all share the same frustration about the stress and pressure to
perform. Based on that feedback, Apple needs to come up with a
desirable solution where employees can still innovate and be
effective while providing employees work life balance.
Citations
D O'Rourke, A. (2018). The world apple market. Routledge.
Gruber, T. R., Sabatelli, A., Aybes, A., Pitschel, D. W., Voas,
E. D., Anzures, F. A., & Marcos, P. D. (2017). U.S. Patent
Application No. 15/193,971.
Ng, E. H., Nepal, B., Schott, E., & Keathley, H. (2018). TOTAL
QUALITY MANAGEMENT & APPLE SUCCESS.
Mission Statement Academy(2019). Retrieved from
https://mission-statement.com/apple/
Farfan, B. (2019). What is Apple's Mission
Statement. Retrieved from
https://www.thebalancesmb.com/apple-mission-statement-
4068547

Apple Inc Metrics
Explain why this opportunity/threat was selected and how it is
anticipated to benefit the organization
Apple Inc. is a technology behemoth that started in 1977. The
company headquarters is in Cupertino, California and is one of
the most valuable brands in the world. Apple products include
software applications, computers and mobile devices and the
company holds true to its mission and vision statement to create
life changing products. Apple has many opportunities in the
market, a factor that has all along build its competitive
advantage.
The company is surrounded by many opportunities to ensure
continued success. Apple commands a big part of the tablet, cell
phone and wearable tech industry. These can all be

complemented and improved by incorporating virtual reality
(VR) and augmented reality products (AR) into wearable tech.
According to IDC, the AR and VR markets are expected to
reach $18.8 billion in 2020 (“Worldwide Spending on
Augmented and Virtual Reality Expected To Reach $18.8
Billion In 2020”, 2019).
Getting involved in a trending and growing billion-dollar
industry can be very lucrative for Apple. Apple can integrate
VR and AR with the Apple Watch to bring more features and
offer more convenience to its users. This technology can also
make email, texts, and other apps come to life by being able to
display this information directly in the consumers field of
vision. Apple can also integrate VR or AR in text messaging or
Facetime and give users can have a whole new text and
FaceTime experience where users actually “see” each other,
choose a location like Italy and chat in an alternative
environment without physically being there. As an organization,
Apple will benefit from increased sales VR and AR but the
company will also benefit through improved efficiency and
reducing costs. Trainings and meetings can be done in a virtual
environment and employees separated by geographical regions
can come together without the expense of travel. Virtual
training can be done on a whole new level where new employees
can shadow and learn from a senior employee without
physically being there. AppleCare can also incorporate VR and
AR in troubleshooting devices and making the interaction more
human and personal. The possibilities are endless.
Create at least three measurable project objectives based on
your analyses. Determine timelines and responsibilities for each
purpose (e.g., with a RACI chart)
RACI Chart
Project Tasks
Project Owner
Business Analyst
Financial Lead
Design Director

1. Wearable Tech
Strategic Framework
A
C
A
I
Product Concept
A
C
C
I
User Testing
A
I
I
C
2. Virtual Reality and Augmented Reality
User Journey
C
R
I
I
Design Framework
C
A
I
I
Product Backlog

R
I
A
R
3. Customer Service
Measurement Framework
C
C
C
I
Delivery Roadmap
A
I
A
I
Technology Recommendations
R
C
I
C
Develop at least two metrics to evaluate the achievement of
each of the project objectives.
Brand Loyalty
Although Apple is not always the first to market with new
technology or features, the company has continually set the
standard for brand loyalty. This brand loyalty has given Apple
competitive advantage over its rivals. Apple’s mission and
vision statement focuses on quality and providing products that
can change their customers lives for the better. Apple products
have a sleek and simple design but are also extremely powerful
and advanced while still being easy to use. The company has

been successful at delivering a seamless interaction between all
their products, giving their customers ease and convenience.
Tracking and increasing brand loyalty will help solidify Apple’s
success when the company moves into the AR and VR markets.
Sales Revenue
Sales revenue shows if consumers are interested in the
company’s products or service, if the company’s marketing
efforts are effective and if the company is still competitive.
Tracking sales revenue allows the company to determine what
changes need to be made to the product, marketing and other
competitive actions.
References
Worldwide Spending on Augmented and Virtual Reality
Expected to Reach $18.8 Billion in 2020 (2019). Retrieved from
https://www.idc.com/getdoc.jsp?containerId=prUS45679219
BUS/475v10
WK 2 Apply: SWOT Analysis
BUS/475v10
Page 2 of 2
Wk 2 – Apply: SWOT Analysis
Name: Selected Organization: Apple Inc
Complete a SWOT analysis from a global perspective, if
applicable.
Strengths
Weaknesses

1) Global brand recognition
2) Strong product ecosystem with a proven ability to design,
manufacture and develop proprietary hardware, software and
applications
3) High profit margins
4) Extremely loyal customer base
1) High priced products
2) Over reliance on iPhone sales as a major source of revenue
3) Few new innovative products introduced over the past few
years
4) Technology that is incompatible with other programs or
products
Opportunities
Threats
1) Entry into the rirtual reality and augmented reality markets
2) Wearable technology
3) Voice controlled smart technology like Google Voice or
Alexa
1) Tariffs and trade restrictions can negatively impact
production and the company’s revenue and profit
2) Smartphones and tablets are increasingly common and may
reduce the company’s margins
3) Negative publicity from patent infringement cases and unfair
labor claims
Analysis
Summarize your findings from the SWOT analysis for the CEO
of the organization you chose. Address the following in your 2-
to 3-page summary:
Apple Inc was established in 1977 and is one of the most
valuable companies in terms of market capitalization and brand
value in the world (Fortune, 2019). The company has
revolutionized the smartphone and tablet market and is one of

the most iconic brands in the world.
Apple is most known for the iPhone, which accounts for 54.7%
of the company’s total revenue (Apple, Inc Form 10-K For The
Fiscal Year Ended September 28, 2019, 2019).
In addition to consumer electronics, Apple offers many services
to its customers like Subscription based services (Apple Music,
Apple TV), digital content like iTunes, and other services like
iCloud storage, Apple Pay and Apple News.
Apple operates in a highly competitive industry and has
continued to perform and stay ahead of the competition. There
are many large rivals in the industry that bring fierce
competition so Apple needs to consistently innovate and take
advantage of opportunities and explore new markets.
· How would you match the organization’s strengths to its
opportunities?
As the smartphone and tablet market become saturated, Apple
Inc needs to look for different growth opportunities. Augmented
and virtual reality can offer a big opportunity for Apple Inc to
break into. According to IDC, the AR and VR markets are
expected to reach $18.8 billion in 2020 ("Worldwide Spending
On Augmented And Virtual Reality Expected To Reach $18.8
Billion In 2020", 2019).
Tim Merel from TechCrunch (Merel, 2019) said that the AR
market needs to overcome 5 obstacles to become a mass market:
· hero device (i.e. an Apple-quality device, whether made by
Apple or someone else)
· all-day battery life
· mobile connectivity
· app ecosystem
· telco cross-subsidization
Apple’s product ecosystem, its ability to create proprietary
software partnered with the release of the new iPhone 11 and

Apple’s recent acquisitions of 3D technology and face
recognition companies like PrimeSense, Metaio and RealFace,
the company is capable of overcoming all 5 obstacles (Johnson,
2019).
Apple was the first company to come out with a voice-activated
virtual assistant called Siri. This gave Apple’s devices a
competitive edge over their rivals. Apple became complacent
and did not maintain their competitive advantage. This gave
competitors like Google and Amazon an opportunity to create
and market their own virtual assistants like Google Voice,
Amazon Alexa, Amazon Echo and Microsoft Cortana. Apple can
increase their efforts to continue and develop and expand Siri’s
capabilities to strengthen their product ecosystem, provide a
better user experience and remain competitive.
The IDC forecasts that the market for wearable technology will
grow to 489.1 million units by 2023. Out of all wearables, the
most common will be earwear and smartwatches that will
account for 55.9% and 22.3% of the market ("Wrist-Worn
Wearables Maintain A Strong Growth Trajectory In Q2
2019", 2019).
The top contributing factor to the increase in wearable market is
the demand for health-related wearables. The Apple Watch
comes equipped with features that measure activity levels, heart
rate, blood pressure and sleep patterns. Apple is well positioned
to take advantage of the increase in this market by enhancing
the features available in the Apple Watch.
· How would you convert the organization’s weaknesses into
strengths?
Apple has relied on iPhone sales as a main source of revenue.
When the iPhone entered the Chinese market in 2009, it became
the company’s second largest market compared to the US. Apple
products are also considered status symbols due its price but
also offered quality that no other company can beat. Since
iPhone prices were high, it was seen as a luxury item that only

rich people can afford. This created an opportunity for Chinese
rivals like Huawei, and Xiaomi to manufacture highly
comparable smartphones and tablets and sell them at much
lower prices. These new options converted many Chinese
consumers to support and buy products from Huawei and
Xiaomi instead of Apple. This resulted in 16% revenue drop in
China in 2019 ("China's Smartphone Market Falls 14% In
2018", 2019). Apple should change its strategy in China and
leverage their brand recognition and innovation to stay ahead of
the competition and increase market share.
· What recommendations do you have to mitigate the impact of
the threats?
When the iPhone was first released in 2007, it disrupted the
whole mobile phone market and set the standard for new
smartphones. Since that time, smartphones have improved a lot
and it is increasingly difficult for Apple to differentiate its
iPhones from other smartphones. New changes released by
Apple are very incremental and nothing ground-breaking. Many
smartphones offer the same features, similar designs and color
choices as the iPhone. The only major differentiator between
the iPhone and rival devices is Apple’s iOS. The only
competitor to iOS is Google Android, which is available on
every non-Apple smartphone around the world. If Android
continues to improve and offers a great customer experience,
the iPhone’s unique selling point will disappear. Apple’s brand
loyalty plays a significant role in Apple being able to maintain
market share. Apple needs to find a way to open its iOS
software to third party developers and make it compatible with
other operating systems while maintaining safety and brand
integrity.
· What action(s) does the organization need to take to advance
their organization goals and/or expand their competitive
advantage? Why does the organization need to take this/these
action(s)?
The smartphone and tablet market are getting saturated and this

has a negative impact on Apple’s revenue and profitability but
there are many avenues that Apple can pursue to maintain
competitive advantage and ensure continued growth and
success.
Apple Inc should continue to focus on developing and
expanding its proprietary software and hardware systems. These
are the company’s major differentiators and main competitive
advantage over its rivals. Apple should also improve its
research and development competencies and introduce more
innovative products at a faster pace.
Changing the strategy in China should be addressed as soon as
possible. The Chinese market is the largest smartphone market
in the world and increasing and maintaining market share is
vital to the company’s continued success.
Enhancing smartphone and wearable technology features leads
to many opportunities for continued growth for Apple. The
company should also increase focus on the AR and VR market
since Apple already has the capacity, resources and capability
to dominate in this field.
Citations
Global 500 | Fortune(2019). Retrieved from
https://fortune.com/global500/2019/search/
Apple, Inc Form 10-K For The Fiscal Year Ended September 28,
2019(2019). Retrieved from

https://s2.q4cdn.com/470004039/files/doc_financials/2019/ar/_1
0-K-2019-(As-Filed).pdf
Worldwide Spending on Augmented and Virtual Reality
Expected to Reach $18.8 Billion in 2020 (2019). Retrieved from
Merel, T. (2019). The Reality of VR/AR Growth. Retrieved
from https://techcrunch.com/2017/01/11/the-reality-of-vrar-
growth/
Johnson, L. (2019). Apple AR headset rumors: Apple may
release headset in 2022, glasses by 2023. Retrieved from
https://www.macworld.com/article/3446839/apple-ar-glasses-
rumors.html
Wrist-Worn Wearables Maintain a Strong Growth Trajectory in
Q2 2019(2019). Retrieved from
China's smartphone market falls 14% in 2018(2019). Retrieved
from https://www.canalys.com/newsroom/chinaâ€™s-
smartphone-market-falls-14-in-2018-with-just-under-400-
million-units-shipped
9

Performance Management and
Appraisal
9-1
4-
9
This chapter gives an overview of the performance appraisal
process and the different tools and methods available. The main
topics covered include the performance management process,
appraisal methods, appraisal performance problems and
solutions, and the appraisal interview.
Despite lots of attention, money, and effort, performance
appraisals remain an area with which few managers or
employees are satisfied.
The following questions are worth considering with respect to
why some managers and employees are dissatisfied.
Is it just that we don't have a good enough system yet?
Is there an intrinsic problem with performance appraisals?
Is it just human nature to dislike them?
1
9-2
Learning Objectives

Describe the appraisal process.
Define performance management and discuss how it differs
from performance appraisal.
Develop, evaluate, and administer at least four performance
appraisal tools.
4-
9
1. Describe the appraisal process.
2. Define performance management and discuss how it differs
from performance appraisal
3. Develop, evaluate, and administer at least four performance
appraisal tools.
2
9-3
Learning Objectives
Explain and illustrate the problems to avoid in appraising
performance.
Perform an effective appraisal interview.
Explain how to “segment” employees for appraisal and reward
purposes.
4-

9
4. Explain and illustrate the problems to avoid in appraising
performance.
5. Perform an effective appraisal interview.
6. Explain how to “segment” employees for appraisal and
reward purposes.
3
9-4
Describe the appraisal process.
4-
9
For this learning objective, we will discuss the need to have a
performance appraisal process, provide continuous feedback and
how to manage performance.
Effective appraisals begin before the actual appraisal, with the
manager defining the employee’s job and performance criteria.
Defining the job means making sure that you and your
subordinate agree on his or her duties and job standards and on

the appraisal method you will use.
4
9-5
The Basics of Performance Management and Appraisal
The performance appraisal process steps
Sets work standards
Assesses performance
Provides feedback to the employee
Figure 9-1 sample
evaluation survey
4-
9
Performance appraisal means evaluating an employee’s current
and/or past performance relative to his or her performance
standards. You may equate appraisal forms like Figure 9-1 with
“performance appraisal,” but appraisal involves more than
forms. Many employers still base pay and promotions on
employee appraisals.
Appraisals play an integral role in the employer's performance
management process. The appraisal lets the boss and
subordinate develop a plan for correcting any deficiencies while
reinforcing those things the employee does correctly. Appraisals

are a useful career planning tool.
5
9-6
Five reasons:
Used for pay, promotion, and retention decisions
Links performance management to company goals
The manager can correct deficiencies and reinforce strengths
With appraisals employee’s can review career plans
Training needs are identified
Performance Management and Appraisal
4-
9
Aligning the employee’s efforts with the job’s standards should
be a continuous process. When you see a performance problem,
the time to take action is immediately. Similarly, when someone
does something well, the best reinforcement comes
immediately, not six months later.
Performance management includes continuously adjusting how
an organization and its team members do things. Team members
who need coaching and training receive it, and procedures that
need changing are changed.
We have briefly discussed the process of appraising
performance results the steps and the need to do so.

6
9-7
Pay and promotions
Planning
Career planning
Training and development
Ongoing feedback
Teamwork and change
Review
4-
9
Employers frequently use appraisals as a base for pay and
promotions. Improvement and career development planning also
originate with an effective appraisal system. In addition,
training and development activities are based on the appraisal
system. Finally, providing continuous feedback and making
improvements to how employees and employers do things
contributes to organizational goals and success.
7
9-8
Define performance management and discuss how it differs
from performance appraisal.

4-
9
Performance management has to do with creating an
organizational system that is fair, effective, and widely
understood by all. The goal of the system is to support the
strategic aims of the firm by establishing a valid and reliable
process connecting the employees to it.
Performance appraisal involves:
setting work standards,
assessing actual performance relative to those standards, and
providing feedback to the employee.
8
9-9
Performance management definition
The continuous process of:
Identifying
Measuring
Developing performance
of individuals and teams
Aligning performance with the organization’s goals
Performance Management
4-

9
Performance management involves defining, measuring,
motivating, and developing
the employee’s goal-oriented performance on a continuing
basis.
9
9-10
Performance Management
Six Elements
Direction sharing
Goal alignment
Ongoing performance monitoring
Ongoing feedback
Coaching and developmental support
Recognition and rewards
4-
9
Performance management’s six basic elements as follows:
● Direction sharing means communicating the company’s goals
throughout the company
and then translating these into doable departmental, team, and
individual goals.
● Goal alignment means having a method to help managers and
employees to see the link

between their goals and those of their department and company.
● Ongoing performance monitoring usually includes using
computerized systems that measure
and then e-mail progress and exception reports based on the
person’s progress toward
meeting his or her performance goals.
● Ongoing feedback includes both face-to-face and
computerized feedback regarding
Progress toward goals.
● Coaching and developmental support should be an integral
part of the feedback process.
● Recognition and rewards keep the employee’s goal-directed
performance on track.
10
9-11
Information Technology Supports Performance Management
Assign financial and nonfinancial goals
Inform all employees of their goals
Use IT-supported scorecard software
Continuously take corrective action
4-
9
Many companies use information technology to automate
performance management and to monitor feedback, and correct
deviations in real time.
●Assign financial and nonfinancial goals to each team’s

activities along the strategy map
chain of activities leading from the team’s activities up to the
company’s overall strategic
goals. (For example, an airline measures ground crew aircraft
turnaround time in terms
of “improve turnaround time from an average of 30 minutes per
plane to 26 minutes per
plane this year.”)
● Inform all employees of their goals.
● Use IT-supported tools like scorecard software and digital
dashboards to continuously
display, monitor, and assess each team’s and employee’s
performance. (We discussed
these in Chapter 3, Human Resource Management Strategy and
Analysis.) Figure 9-2
Presents an employee’s online performance management report.
● Take corrective action on a continuous basis.
At the Hotel Paris, both Lisa and the firm’s CFO were
concerned by the current disconnect between (1) what the
current appraisal process was focusing on and (2) what the
company wanted to accomplish in terms of its strategic goals.
They wanted the firm’s new performance management system to
help breathe life into the firm’s strategic performance. To see
what they did, read the case on pages 288–289 of this chapter.
11
9-12
GDAS makes products for the military, industrial, and
commercial markets

Use scorecard reporting system
Team
Divisional
4-
9
Performance Management at General Dynamics Armament
Systems (GDAS)
GDAS uses multiple Scorecards to display performance metrics,
such as for team and for divisional performance. The Scorecards
allow GDAS to maintain all of its crucial performance data in
one system so managers can easily access the information
anytime via the Intranet. The Scorecards provide GDAS with
approximately 450 performance reports and charts. To produce
these charts manually would require 13 full-time employees.
Instead, the Performance Measures Reporting System, at a cost
of $1 million, generates the reports and charts automatically.
Discussion Question: Describe three examples of scorecard
displays GDAS might show on their performance management
system’s digital dashboard-type display.
12
9-13
Defining the Employee’s Goals and Performance Standards
Manager assess:
Attaining numerical goals

Meeting quality and quantity criteria
Mastering competencies
Managers goals are SMART:
Specific
Measurable
Attainable
Relevant
Timely
4-
9
Both performance appraisal and performance management
function by comparing “what should be” with “what is.”
Managers use one or more of three bases—goals, job
dimensions, and competencies—to establish ahead of time what
the employees' end results “should be.” Whichever you use,
remember that employees need and expect to know ahead of
time on what basis their managers will appraise them.
Employees appraised as having the requisite level of each skill
are qualified to fill the position.
13
9-14
HR as a Profit Center
Ball Corporation supplies packaging to manufacturers

worldwide
Trained plant leaders on:
How to set performance goals
Track daily goal attainment
Use scorecards
4-
9
Setting Performance Goals at Ball Corporation
Plant employees received special coaching and training to
ensure they had the skills required for achieving the goals.
According to management, within 12 months the plant increased
production by 84 million cans, reduced customer complaints by
50%, and obtained a return-on-investment of more than $3
million.
Discussion Question: Explain what performance management
behaviors the Ball program included.
14
9-15
HR Tools for Line Managers and Entrepreneurs
1. Should a manager tell employees what their
goals are or let them participate in setting the goals?
2. Write a short paragraph that addresses the question: “Why is
it not a good idea to simply tell employees to ‘do their best’
when assigning a task?”

4-
9
How to Set Effective Goals
1. Assign specific goals. Employees who receive specific goals
usually perform better than those who do not.
2. Assign measurable goals. Put goals in quantitative terms and
include target dates or deadlines. If measurable results will not
be available, then “satisfactory completion”—such as
“satisfactorily attended workshop”—is the next best thing.
3. Assign challenging but doable goals. Goals should be
challenging, but not so difficult that they appear unrealistic.
4. Encourage participation. Managers often face this question:
Should I tell my employees what their goals are, or let them
participate with me in setting their goals?
The evidence suggests that participatively set goals do not
consistently result in higher performance than assigned goals,
nor do assigned goals consistently result in higher performance
than participative ones. It is only when the participatively set
goals are set higher than the assigned ones that the
participatively set goals produce higher performance. Because it
tends to be easier to set higher standards when your employees
participate, participation tends to lead to improved performance.
15
9-16
Who Should Do the Appraising?
Peer appraisals
Rating committees

Self-ratings
Appraisal by subordinates
360-degree feedback
4-
9
Who should do the appraising? The immediate supervisor is
usually in the best position to observe and evaluate the
subordinate’s performance. He or she also is typically
responsible for that person’s performance.
Peer appraisals are becoming more popular with firms using
self-managing teams.
Rating committees consist of multiple raters, typically the
employee’s immediate supervisor and three or four other
supervisors.
Self-ratings tend to be higher than supervisor or peer ratings
although input from the subordinate is always to be encouraged.
Appraisal by subordinates is also known as upward feedback. In
this instance, subordinates anonymously rate their supervisor’s
performance.
FIGURE 9-3 Online 360-Degree Feedback
360-degree feedback has become more widely used. Ratings are
collected from the employee’s supervisors, subordinates, peers,

and occasionally, internal or external customers. The best
advice is that firms should carefully assess costs, train those
giving feedback thoroughly, and not rely solely on 360-degree
feedback.
16
9-17
Review
Performance management’s definition
The six basic elements
Improving performance examples
Use IT to automate performance management
Performance standards
SMART goals
4-
9
We discussed Performance management’s definition and the six
basic elements.
Many companies use information technology to automate
performance management and to monitor, feedback,
and correct deviations in real time.
We reviewed the company specific Improving Performance
examples.

We also discussed SMART goals that managers use with
performance appraisals.
Lastly, we discussed who should do the appraisal.
17
9-18
Review
4-
9
Use a check-list for performance reviews.
18
9-19
Develop, evaluate, and administer at least four performance
appraisal tools.
4-
9
Next, we will discuss and interpret performance appraisal tools.

19
9-20
Techniques for Appraising Performance
Graphic rating scale method
What to rate?
4-
9
The graphic rating scale method is the simplest and most
popular performance appraisal technique. First, a scale is used
to list a number of traits and a range of performance for each.
Then the employee is rated by identifying the score that best
describes his/her performance level for each trait.
Managers must decide which job performance aspects to
measure. Such aspects include generic dimensions, actual job
duties, or behaviorally recognizable competencies.
20
9-21
Performance Appraisal Tools
Alternation ranking
Paired comparison

Forced distribution
Critical incident
Narrative forms
Behaviorally Anchored Rating Scales (BARS)
4-
9
The Alternation Ranking Method ranks employees from best to
worst on a specific trait, choosing highest, then lowest, until all
are ranked.
The Paired Comparison Method involves ranking employees by
making a chart of all possible pairs of employees for each trait.
The manager then indicates which one is the better employee of
the pair.
Forced Distribution Method – Predetermined percentages of
employee ratings are placed in various performance categories,
similar to grading on a curve.
Critical Incident Method – A supervisor keeps a record of
uncommonly good and/or undesirable examples of an
employee’s work-related behavior. The supervisor then reviews
the record with the employee at predetermined times.
The Narrative Forms method involves rating the employee’s
performance for each performance factor needed on the job.
Written examples and an improvement plan is provided. The
process then aids the employee in understanding where his/her
performance was good or bad focusing on problem solving.

Behaviorally Anchored Rating Scales (BARS) is a method that
combines the benefits of narratives, critical incidents, and
quantified scales. It does so by anchoring a scale with specific
behavioral examples of good or poor performance. The
advantages of BARS include accuracy, clearer standards,
feedback, independent dimensions, and consistency.
21
9-22
Performance Appraisal Tools
Mixed standard scales
Management by objectives (MBO)
Computerized and web-based performance appraisal
Electronic performance monitoring (EPM)
Conversation Days
Using Multiple Methods
4-
9
Mixed Standard Scales are similar to BARS but generally list
just three behavioral examples or standards for each of the three
performance dimensions.
Management by Objectives (MBO) – The manager sets specific
measurable goals with each employee and then periodically
discusses the employee’s progress toward them. The process

consists of six steps:
set organizational goals
set departmental goals
discuss
define expected results
conduct performance reviews
provide feedback
Having a conversation is focused on stretched goals and career
interests there are no ratings.
Rating forms often merge multiple methods.
22
9-23
Review
Alternation
Pairs
Distribution
Incidents
Narratives
BARS
Scales
MBO
Computerized
EPM
4-
9

For this learning objective, we have discussed various ranking
and rating approaches. The alternation ranking requires
managers to rank employees from high to low while paired
comparisons examines employees one pair at a time. Forced
distribution is similar to grading on a curve while critical
incidents require managers to keep detailed notes throughout
the year on each person’s critical behaviors. A narrative is
similar to critical incidents in that it requires him or her to keep
ongoing notes but in narrative format.
23
9-24
Explain and illustrate the problems to avoid in appraising
performance.
4-
9
Understanding problems to avoid gives managers guidance when
its time to appraise their subordinates’ performance. We now
turn to appraisal problems and how to solve them, and to
several other appraisal issues.
24
9-25
Dealing with Appraisal Problems and Interviews

Potential appraisal problems
Unclear standards
Halo effect
Central tendency
Leniency or strictness
Recency effects
Bias
4-
9
If standards are unclear, ambiguous traits and degrees of merit
can result in an unfair appraisal.
The influence of a rater’s general impression on ratings of
specific qualities is known as the halo effect.
Central tendency occurs when supervisors stick to the middle of
the rating scales, thus rating everyone average.
Leniency or strictness occurs if supervisors have a tendency to
rate everyone either high or low.
Recency effects involve letting what the employee has done
recently blind the manager to the employee’s performance over
the entire year.
Bias is a tendency to allow individual differences such as age,
race, and sex affect employee appraisal ratings.
25

9-26
Guidelines for Effective Appraisals
Know the problems
Use the right tool
Keep a diary
Get agreement on a plan
Ensure fairness
Appraisals and the law
4-
9
See TABLE 9-3 Important Advantages and Disadvantages of
Appraisal Tools
See FIGURE 9-12 Check list of Best Practices for
Administering Fair Performance Appraisals
Appraisals can be more effective by following these five
guidelines:
Know the problem
Use the right appraisal tool
Keep a diary
Get agreement on a plan
Be fair
The courts have found that inadequate appraisal systems tend to
be at the root of illegal discriminatory actions. In addition to
being done legally, appraisals should be handled ethically and

honestly.
26
9-27
Review
4-
9
For this learning objective, we have covered various problems
to avoid while appraising performance. These include the halo
effect, bias, the effect of recency, the impact of leniency or
strictness, unclear standards, and the impact of central
tendency.
27
Unclear Standards
Central Tendency
Halo Effect
Recency Effect

Bias
Leniency/
Strictness
9-28
Problems

Tools
Records
Fairness
Legal
Ethics
Review
4-
9
For this learning objective, the best advice is to use common
sense. Find out the real problem and use the right tool to
address it. Keep a record, agree on a plan, be fair, and be aware
of legal issues.
28
9-29
Perform an effective appraisal interview.
4-
9
Most employees need and expect to know ahead of time on what
basis their employer will appraise them. Let’s discuss how you

can make this happen.
29
9-30
How to Conduct the Appraisal Interview
Prepare
Plan
Coach
Be objective
4-
9
Useful interviews begin before the interview. Beforehand,
review the person’s job description, compare performance to the
standards, and review the previous appraisals.
Give the employee at least a week’s notice to review his or her
work. Set a time for the interview. Interviews with lower level
personnel like clerical workers should take less than an hour.
Interviews with management employees often take 1 or 2 hours.
Conduct the interview privately with no interruptions.
30
9-31

Types of appraisal interviews
How to conduct the appraisal interview
Objective data
Don’t get personal
Encouragement
Agreement
4-
9
Supervisors face four types of appraisal interviews, each with
its unique objectives:
Satisfactory – Promotable This is the easiest interview, the
objective is to make development plans.
Satisfactory – Not Promotable This type of interview has the
objective of maintaining performance when promotion is not
possible.
Unsatisfactory – Correctable This has the objective to plan
correction via the development and successful implementation
of an action plan.
Prepare for the interview by assembling the data, preparing the
employee, and choosing the time and place. Be direct and
specific, using objective examples. Don’t get personal.
Encourage the person to talk. Plan on reaching agreement.
31

9-32
Managing the Appraisal Interview
Handling a defensive subordinate
Criticizing a subordinate
The formal written warning
Realistic appraisals
4-
9
Recognize that defensive behavior is normal. Never attack or
belittle a person’s defenses; they are legitimate to him or her.
Postpone action as appropriate and recognize your own
limitations.
When required, criticize in a private and constructive manner
that lets the person maintain his/her dignity and sense of worth.
Written warnings should identify the standards by which the
employee is judged, make it clear that the employee was aware
of the standard. Then specify any violation of the standard, and
show that the employee had an opportunity to correct the
behavior. You may place this in his or her permanent personnel
file. If circumstances warrant, you may remove the warning
after a specified amount of time, say 90 days or longer.
Be realistic and honest when giving an appraisal. It is important
that a manager be candid when a subordinate is
underperforming. Focus on specifics and allow opportunities to
improve.

32
9-33
Managing the Appraisal Interview
Type of interviews
Defensiveness
Criticism
Warnings
Realism
Review
4-
9
With this objective we have focused our energy on the types of
appraisal interviews and how to conduct effective interviews.
Using objective data, not getting personal, providing
encouragement and obtaining agreement are key ingredients.
We also discussed subordinate defensiveness, handling
criticism, using written warnings, and remaining realistic in the
process.

33
9-34
Explain how to “segment” employees for appraisal and reward
purposes.
4-
9
To perform effective talent management we segment employees
to emphasize active management
of high potential employees.
34
9-35
Talent Management and Employee Appraisal
Appraising and Actively Managing Employees
Segmenting and Actively Managing Employees in Practice
4-
9
Talent management-oriented employers do use performance
appraisal to evaluate how their employees are performing.

However, they also segment their employees based on how
critical the employees are to the company’s success. Then they
focus more effort and resources on the company’s “mission-
critical” employees.
Figure 9-16 illustrates this. Accenture uses a 4 × 4 strategic role
assessment matrix to plot employees by Performance
(exceptional, high, medium, low) and Value to the Organization
(mission-critical, core, necessary, non-essential).
Segmenting employees is a way to emphasize successful
management of high potential employees. It may include such
activities as identifying top performers and assessing them for
promotability, time-frame, and leadership potential. You also
may limit the “high potential group in whom the company
invests heavily to no more than 10% to 20% of managerial and
professional staff.” One company appoints “career stewards” to
meet regularly with “emerging leaders.” In all situations, the
goal is to focus effort and extra resources by investing in a
firm’s future leaders.
35
9-36
Review
Talent management and employee appraisal
Segmenting and actively managing employees in practice
4-

9
Talent management requires actively managing decisions
affecting employees and making certain they have input and a
clear understanding of expectations. The traditional practice of
allocating pay raises, development opportunities, and other
scarce resources across the board does not make for a
competitive, successful firm. Today, employers must focus their
attention and resources on their company’s mission-critical
employees essential to the firm’s strategic needs.
Segmenting and Actively Managing Employees in Practice:
Several examples can illustrate how this works in practice.
● McKinsey & Co. recommends limiting the “high potential
group in whom the company
invests heavily to no more than 10 to 20% of managerial and
professional staff.”
● Unilever includes 15% of employees per management level in
its high potential list each
year, and expects these people to move to the next management
level within five years.
● GE prioritizes jobs and focuses on what it calls its employee
“game changers.”
● Shell China appoints “career stewards” to meet regularly with
“emerging leaders.” They
make sure they’re getting the right development opportunities.
See FIGURE 9-16 Accenture’s Strategic Role Assessment
Matrix.
36

9-37
Focus the appraisal on strategic goal achievement
Actions that achieve hotel goals
A performance management system with a focus on
competencies and objectives
Job descriptions that include competencies
Improving Performance at The Hotel Paris
4-
9
Translating Strategy into HR Policies and Practices
Both Lisa and the firm’s CFO were concerned by the current
disconnect
between (1) what the current appraisal process was focusing
on and (2) what the company wanted to accomplish in terms of
its
strategic goals. They wanted the firm’s new performance
management
system to help breathe life into the firm’s strategic
performance, by
focusing employees’ behavior specifically on the performances
that
would help the Hotel Paris achieve its strategic goals.
37
9-38
1. Choose one job, such as front-desk clerk. Based on any

information you have (including job descriptions you may have
created in other …

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