Compensation

Supervisors’ Most Common PA Mistakes (2014 Performance Management Survey)

In yesterday’s Advisor, we shared the results of our 2014 Performance Management survey; today, the rest of the results.

Supervisors’ Role in Performance Appraisals

Management’s top responsibilities when it comes to performance evaluations are writing evaluations of their direct reports for 85.6% of survey participants, followed closely by setting goals for/with employees for 78.3%, conducting review meetings for 75.3%, and coaching employees for improved performance for 75.3%. Finishing out the field is reviewing evaluations prepared by their direct reports for their own employees (64.6%), deciding employee salary raises (50.8%), and providing input to other supervisors on their direct reports (40.5%).

The errors performance evaluators make include: not completing the evaluation (13.8%), halo effect (18.6%), and horn effect (12.3%). The three most common errors are:

  • Not following up with the employee to check on progress, 40.1%
  • Not wanting to hurt feelings or overrate so evaluations place all employees in the middle of the scale, 40%
  • Focusing on the most recent performance rather than the entire review period, 38.9%

Supervisor’s Error

Percent reporting that error

Rater does not follow up with employee after evaluation to check on progress

40.1%

Central tendency (Rater doesn’t want to hurt feelings or overrate so places all employees in the middle of the scale.)

40.0%

Recent effect (Rater focuses on most recent rather than entire review period.)

38.9%

Rater is late completing evaluations

38.3%

Leniency effect (Rater overrates to avoid making enemies.)

37.6%

Rater does not include details on why employee was rated a certain way

37.4%

Rater does not include a plan for improvement

25.5%

Halo effect (Rater evaluates overall performance based on a single area in which the employee excels.)

18.6%

Perceptual bias (Rater bases rating on their own perception of what is right or wrong or acceptable.)

16.4%

Rater does not complete the evaluations

13.8%

Primacy effect (Rater focuses on a good or bad incident from when the employee first came under his/her supervision.)

13.8%

Just like me tendency (Overrates employees who share his/her own interests/beliefs.)

12.6%

Horn effect (Rater underrates overall performance based on a single negative impression of the employee.)

12.3%

Other

3.5%


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Implementation of Performance Appraisals

When asked how they’ve successfully implemented performance appraisal programs, survey participants provided several helpful hints, including:

  • Publish a performance calendar at the outset of the year:
    • Personal follow up with delinquent supervisors/managers.
    • Inform department directors of delinquent reviews.
    • Send the CEO an overall status report on ratings, including who has not completed their reviews.
  • Offer assistance as needed; train individually as requested.
  • Tie to supervisor/manager job performance.
  • View the process as developmental, not punitive.
  • Make evaluation forms shorter.
  • Tie all bonus disbursement for team to completion.
  • Allow enough time to complete evaluations and supply support where needed.
  • Automate the process.

HR’s responsibility for the performance appraisal process varies but several functions were widely practiced, including:

  • Formal training for supervisors/evaluators, 50.8%
  • Reviewing all evaluations, 54.5%
  • Filing the paperwork, 56.9%
  • Informal coaching for supervisors/evaluators, 60.3%

Additionally, for 40.7% of survey participants, HR screens performance evaluations for anything that might be illegal before supervisors/managers meet with employees.

Merit Increases

Evaluations are tied to most salary increases for 47% and are completely separate for 21.9%, and are partially tied together for 31.1%. Those who separate evaluations from increases do so because:

  • A union agreement governs pay increases, 7.8%.
  • Evaluations are conducted more frequently than raises are issued, 9.9%.
  • Employee pay increases are on a different schedule than evaluations, 16.5%.
  • They fear supervisors will be tempted to give good yet false appraisals so employees receive a good raise, 18.1%.
  • Budget doesn’t allow for raises every time employees receive evaluations, 18.2%.
  • Appraisals are more valuable and constructive if raises aren’t tied to them, 19.5%.
  • It helps keep employees from having an entitlement mentality (evaluation = raise), 26.1%.
  • They want to focus attention on employee performance instead of on amount of raise, 32.7%.

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Appraisals Under Pay Freezes

Even if salary increases are not an option due to pay freezes or some other reason, 84.6% of survey participants still conduct performance appraisals.

Performance Pay by Employee Type

Type of Pay

Execu-tive

Middle manage-ment

Profes-sional

Exempt staff

Non-exempt staff

Bonus

49.8%

44.2%

37%

36.1%

27.5%

Merit plan

46.4%

55%

54.2%

56.1%

55.1%

Long-term incentive

18.9%

6%

3.9%

3.2%

2.1%

Commission

4.9%

3.7%

4.3%

4.1%

4.6%

Piece rate

 

 

 

 

1.9%

Other

6.4%

4.8%

4.7%

4.6%

6%

None

26.9%

28.4%

30.7%

30.1%

31.4%

Group Performance Pay by Employee Type

Type of Pay

Executive

Middle manage-ment

Profes-sional

Exempt staff

Non-exempt staff

Bonus

25.2%

22.5%

19.2%

19.4%

15%

Merit plan

16.7%

18.3%

18%

18%

17.7%

Long-term incentive

7.8%

3.1%

2.4%

1.6%

1.3%

Commission

2.4%

2.1%

2.9%

1.6%

2%

Piece rate

 

 

 

 

1.6%

Other

2.2%

2%

2.1%

2%

2.5%

None

66.8%

65.8%

67.5%

67.9%

69.1%

Survey Participants

Demographic breakouts of the 1,481 participants in the survey are below.

Number of Employees

Percent of Respondents

Up to 250 employees

57.4%

251 to 1,000 employees

22.9%

1,001 to 10,000 individuals

16.9%

More than 10,000 employees

2.8%

Of the participants responding to our survey, 39.4% have a workforce that is one-fifth or less exempt employees. Another 32.8% have a workforce that is more than one-fifth but less than one-half exempt and 27.8% have a workforce with more than one-half exempt employees. Unions represent employees at 22.2% of our survey participant employers.

Privately owned organizations are represented by 47.8% of survey participants and nonprofits account for 18.7%. Public corporations make up 8.6% and governments are represented by 10.1%.

Industries include manufacturing (15.4%); health care and social assistance (13.7%); finance and insurance (9.8%); and professional, technical, and scientific services (8.1%). Educational services represent 6.9% of our survey participants and retail trade accounts for 2.3%. 

Our 1,481 survey participants’ positions:

Job Title

Percent of Respondents

HR Coordinator

4.1% 

HR Generalist

9.5%

HR Specialist

4.9%

HR Manager

26.5%

HR Director

24.3%

HR VP or above

9.2%

Other area with HR responsibilities

18.7%

Thanks again to the 1,481 survey participants!

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