Effects of Demographics on Performance Appraisals

Effects of Demographics on Performance Appraisals 23 Geddes This study examined the effects of demographic similarity and dissimilarity on perceptions of performance appraisals and reactions to negative feedback. When organizational members accept task-relevant feedback, they are more likely to maintain and/or modify their behaviors in ways that will improve future performance. In contrast, when employees reject supervisor feedback, more common when an evaluation indicates performance deficits, they may respond unfavorably (Fedor et al., 2001; Ilgen Davis, 2000). Fedor, D.B., Davis, W.D., Maslyn, J.M. Mathieson, K. Performance improvement efforts in response to negative feedback: The roles of source power and recipient self-esteem. Journal of Management, 2001, 27, 79-97. Ilgen, D. Davis, C. Bearing bad news: Reactions to negative performance feedback. Applied Psychology, 2000, 49, 550-65. 9 Catano The limitations of performance assessment, such as inflated ratings, lack of consistency, and the politics of assessment (Tziner, Latham, Price, Haccoun, 1996), often lead to their abandonment. Managers responsible for delivering performance reviews who are uncomfortable with the performance rating system may give uniformly high ratings that do not discriminate between ratees. Poor ratings detract from organizational uses and increase employee mistrust in the performance appraisal system (Tziner Murphy, 1999). Employees on the receiving end of the appraisal often express dissatisfaction with both the decisions made as a result of performance assessment and the process of performance assessment (Milliman, Nason, Zhu, De Cieri, 2002), which may have longitudinal effects on overall job satisfaction (Blau, 1999) and commitment (Cawley, Keeping, Levy, 1998). legally sound performance appraisals should be objective and based on a job analysis, they should also be based on behaviors that relate to specific functions that are controllable by the ratee, and the results of the appraisal should be communicated to the employee (Malos, 1998). Second, the appraisals must be perceived as fair. Procedural fairness is improved when employees participate in all aspects of the process, when there is consistency in all processes, when the assessments are free of supervisor bias, and when there is a formal channel for the employees to challenge or rebut their evaluations (Gilliland Langdon, 1998). In addition to perceptions of fairness, participation by employees in the appraisal process is related to motivation to improve job performance, satisfaction with the appraisal process, increased organizational commitment, and the utility or value that the employees place on the appraisal (Cawley et al., 1998). Tziner A, Latham GP, Price BS, Haccoun R. (1996). Development and validation of a questionnaire for measuring perceived political considerations in performance appraisal. Journal of Organizational Behavior, 17, 179-190. Tziner A, Murphy KR. (1999). Additional evidence of attitudinal influences in performance appraisal. Journal of Business and Psychology, 13, 407-419. Milliman J, Nason S, Zhu C, De Cieri H. (2002). An exploratory assessment of the purposes of performance appraisals in North and Central America and the Pacific Rim. Asia Pacific Journal of Human Resources, 40, 105-122. Malos SB. (1998). Current legal issues in performance appraisal. In Smither JW (Ed.), Performance appraisal: State of the art in practice (pp. 49-94). San Francisco: Jossey-Bass. 60- Maurer Structured interviews can be quite demanding for interviewees, combining social and cognitive processes (Campion, Palmer Campion, 1997, Dipboyes, 2005) 55 Levinson Because management by objectives is closely related to performance appraisal and review, I shall consider these together as one practice, which is intended: To measure and judge performance, To relate individual performance to organizational goals, To clarify both the job to be done and the expectations of accomplishment, To foster the increasing competence and growth of the subordinate, To enhance communications between superior and subordinate, To serve as a basis for judgments about salary and promotion, To stimulate the subordinates motivation, and To serve as a device for organizational control and integration. Major Problems. According to contemporary thinking, the ideal process should proceed in five steps: 1) individual discussion with the superior of the subordinates own job description, 2) establishment of the employees short-term performance targets, 3) meetings with the superior to discuss the employees progress toward targets, 4) establishment of checkpoints to measure progress, and 5) discussion between superior and subordinate at the end of a defined period to assess the results of the subordinates efforts. In ideal practice, this process occurs against a background of more frequent, even day-today, contacts and is separate from salary review. But, in actual practice, there are many problems: No matter how detailed the job description, it is essentially static that is, a series of statements. However, the more complex the task and the more flexible an employee must be in it, the less any fixed statement of job elements will fit what that person does. Thus, the higher a person rises in an organization and the more varied and subtle the work, the more difficult it is to pin down objectives that represent more than a fraction of his or her effort. With pre-established goals and descriptions, little weight can be given to the areas of discretion open to the individual but not incorporated into a job description or objectives. I am referring here to those spontaneously creative activities an innovative executive might choose to do, or those tasks a responsible executive sees need to be done. As we move toward a service society, in which tasks are less well defined but spontaneity of service and self-assumed responsibility are crucial, this becomes pressing. Most job descriptions are limited what employees do in their work. They do not adequately take into account the increasing interdependence of managerial work in organizations. This limitation becomes more important as the impact of social and organizational factors on individual performance becomes better understood. The more employees effectiveness depends on what other people do, the less any one employee can be held responsible for the outcome of individual efforts. If a primary concern in performance review is counseling the subordinate, appraisal should consider and take into account the total situation in which the superior and subordinate are operating. In addition, this should take into account the relationship of the subordinates job to other jobs. In counseling, much of the focus is on helping the subordinate learn to negotiate the system. There is no provision in most reviews and no place on appraisal forms with which I am familiar to report and record such discussion. The setting and evolution of objectives is done over too brief a period of time to provide for adequate interaction among different levels of an organization. This militates against opportunity for peers, both in the same work unit and in complementary units, to develop objectives together for maximum integration. Thus, both the setting of objectives and the appraisal of performance make little contribution to the development of teamwork and more effective organizational self-control. Coupled with these problems is the difficulty that superiors experience when they undertake appraisals. Douglas McGregor complained that the major reason appraisal failed was that superiors disliked playing God by making judgments about another persons worth.[1] He likened the superiors experience to inspection of assembly-line products and contended that his revulsion was against being inhuman. To cope with this problem, McGregor recommended that an individual should set his or her own goals, checking them out with the superior, and should use the appraisal session as a counseling device. Thus, the superior would become one who helped subordinates achieve their own goals instead of a dehumanized inspector of products. Every management by objectives and appraisal program should include regular appraisals of the manager by subordinates, and be reviewed by the managers superior. Every manager should be specifically compensated for how well he or she develops people, based on such appraisals. The very phrase reporting to reflects the fact that although a manager has a responsibility, the superior also has a responsibility for what he or she does and how its done. 57 Lievens High structured interviews appear to be less frequently used in personnel management practice than might be expected given their good reliability and validity. Meta-analytic research has demonstrated that low structure interviews are considerably worse than high structure interviews in terms of reliabilitry (Conway, Jako and Goodman, 1995) and criterion-related validity (Huffcutt Arthur, 1994 Marchese) 6- Brewer Organizational commitment is the extent to which employees identify with their organization and managerial goals, show a willingness to invest effort, participate in decision making and internalize managerial values[10]. 10. OReilly, C. and Chatman, J., Organisational commitment and psychological attachment: the effects of compliance, identification and internalisation on prosocial behaviour, Journal of Applied Psychology, Vol. 71, 1986, pp. 492-9. 3 Baruch The process of performance appraisal (PA) is of most importance in human resource management (HRM). In a broad sense, PA systems are used for two main purposes: as a source for information for management; and as a feedback instrument for individuals employed by the organization. In the first case, the applications of the use of PA serve a variety of management functions. These could be decision-making about promotions, training needs, salaries, etc. Where feedback is the main goal, the fundamental purpose is to provide the employee with information that will improve personal performance and effectiveness. Recently the second approach has gained more attention. Providing the employee with feedback is widely recognized as a crucial activity. Such feedback may encourage and enable self-development, and thus will be instrumental for the organization as a whole. 47 Kuvaas Performance appraisal (PA) is among the most important Human Resource (HR) practices (Boswell and Boudreau, 2002; Judge and Ferris, 1993) and one of the more heavily researched topics in work psychology (Fletcher, 2002). PA has increasingly become part of a more strategic approach to integrating HR activities and business policies and may now be seen as a generic term covering a variety of activities through which organizations seek to assess employees and develop their competence, enhance performance and distribute rewards (Fletcher, 2001) failure (see, e.g. Cardy and Dobbins, 1994; Murphy and Cleveland, 1995). 44 Klehe The distinction between what people can do (maximum performance) and what they will do (typical performance) has received considerable theoretical but scan empirical attention in industrial-organizational psychology. The distinction between typical and maximum performance holdwide -researching practical and theoretical implications for performance appraisal and research validating fundamental assumptions of the typical-maximum performance distinction is as yet unavailable. 31 Harung Management is by nature a holistic profession. Management calls for the necessary understanding of a wide spectrum of factual knowledge and theories (economics, finance, technology, law, etc.). It calls for competence in the particular type of business one is managing and the ability to take part in and oversee manifold processes such as communication, team building, group decision and production. 39 Ivancevich Feedback of performance appraisal information has received increasing attention in the applied organizational behaviour literature (Latman Wexley, 1981). Ilgen, Fisher and Taylor (1979) in a thorough review of the literature discussed the nature of feedback, element of the feedback process and the implications of feedbacks in the work environment. Another related approach to providing feedback is the use of goal setting procedures. There has been an increasing number of studies that indicate that goal setting can be an effective approach for improving attitudes and increasing performance (). 82 Tziner Investigations of performance appraisal instruments have focused primarily on their psychometric properties (Bernardin, 1977, Borman 1979, Tziner, 1984). The result of the field experiment provided strong support for the proposition that a performance review consisting of performance feedback followed by goal setting would favourably influence work satisfaction and organizational commitment to a greater extent than performance review comprising feedback only. A plausible explanation as to why performance feedback has an impact rests with the fact that people are basically feedback seekers (Ashford, 1986). Feedback is a vehicle trough which the appraisee receives information about how well he meets organizational expectations and work requirements. Performance feedback followed by goal setting caused nonetheless a considerable magnitude of improvement. Most researchers have reported little or no training of appraisal with regard to proposed appraisal instruments. 65 Meyer To say that the performance appraisal feedback problem has been an enigma for managers and personnel specialists is probably a glaring understatement. The appraisal and feedback program is one of the psychologists and personnel specialists popular topics in the personnel literature. Problems experienced with performance appraisal programs are myriad. Significant eyidence has shown that most managers find the program onerous and distasteful. Feedback regarding job performance seems necessary to justify administrative decisions, such as whether a salary increase is awarded and the size of the increase, or whether an employee should be transferred to another job or scheduled for promotion. Feedback should contribute to improved performance. The positive effect of feedback on performance has always been an accepted psychological principal. For employees who are not in an obviously dependent role, an appraisal discussion designed to serve communication, motivation, and development purposes should be based on the subordinates self appraisal. To improve the value of a feedback discussion based on self-review, the grading aspect should be eliminated. If a goal setting program is being used, such as Management by Objectives, this annual review discussion is not the best place to establish detailed job goals for the year. Training supervisors to handle this type of discussion could be valuable. It need not be any more extensive than the training given for conventional appraisal programs, 29 Gunn A boss should ensuring privacy, removing distractions, setting context, providing specifics, allowing time for dialoguebut thats all blocking and tackling. It fails to address the fundamental problem: a blurred line between feedback and criticism. Even if we simply point out or describe another persons behaviour as a neutral observer, we are acting as a critic. Feeling judged, the person to whom we are giving feedback is likely to head south emotionally. Open-ended questions help maintain the right frame for the conversation. Feedback is truly a gift.. .but its the giver who receives it. In the process of delivering feedback in an open-minded way, we are invited to explore our own thinking, our mental assumptions, with another person. 58 Lindenberger They fear performance evaluations, so they avoid giving feedback. They dread the emotional part, so they refuse to risk saying anything that might make their colleagues unhappy. When they do give feedback, they send the wrong message by emphasizing only poor performance. 61 maylett Feedback has been used for decades as a measurement of past performance and behaviours. However, it wasnt until the mid-1980s that extensive use of 360-degree feedback became common for identifying strengths and development needs that might not be exposed in traditional performance evaluations. Similar to the 360 degrees of a circle, with the participant figuratively at the center of that circle, feedback is gathered from those most familiar with that participants performance: supervisors, peers, and direct reports. Most 360-degree feedback assessments and employee engagement initiatives fall under the umbrella of training and development, organizational development, or HR departments. It is important that these professionals understand the connections these instruments have to the bottom line. 13 Cook The importance of people to organizational performance has long been recognised (Pragald and Hamel, 1990), yet according to Fletcher (1993) more than 80 percent of UK organizations surveyed in the UK express some dissatisfaction with their performance appraisal systems, perceiving that they fail as a mechanism to develop and motivate people. The Achilles heel of the entire process, according to Kikoski (1999) is the annual performance review interview; line managers are under-preparated to handle the interview and reluctant to give negative feedback, leading to a situation where the people being appraised receive incomplete and inaccurate messages about their performance. The litterature suggests that people will only be satisfied with a performance appraisal peocess if it fulfils the criteria of fairness. It has also been suggested that a lack of appraisee trainibg in the PA process may cause discrepancies between expected and actual performance assessments which will contribute to dissatisfaction with the system (Bretz et al. 1992). People have been identified as the source of competitive advantage for organizations by numerous researchers (McGregor 1960, Barney, 1995, Prahalad and Hamel, 1990, Storey, 1991). People who are not appraisers, but are asked to provide input to another persons annual review, should also receive training to allow them to provide effective. The importance of training people to partecipate to PA is stressed by Bretz et al (1992) who advocate that it should be an ongoing process to achieve maximum effectiveness. Effective training should increase the effectiveness of the PAS and ultimately lead to greater organizational effectiveness. 50- Laird Mayfield documented that 90 percent of the people who had been evaluated expressed satisfaction with the performance appraisal procedure. While the idea of performance appraisal is almost universally accepted, its actual operation in some instances has failed to live up to its promise as an effective managerial tool. 64 Messmer Performance reviews can be a powerful tool for motivating team members to higher performance levels and improving relationship between managers and employees. - 16 deGregorio Research to date has clearly found that performance feedback is necessary in order to maintain and/or improve job performance (Catano, 1976; Erez, 1977; Kim Hamner, 1976; Komaki, Barwick, Scott, 1978). A self-appraisal instrument can provide a vehicle through which subordinate participation in the feedback process is ensured (Bassett Meyer, 1968; Kay, Meyer, French, 1965). The results indicated that performance appraisal based on a self-review was more satisfying to managers and subordinates than manager-prepared appraisals. Employees who have not previously participated in performance discussions are not always satisfied with the self-appraisal approach. In Bassett and Meyers study, such employees stated that when top-down appraisals were used, supervisor expectations were much clearer. 17 Dobbins If ratees are dissatisfied with the appraisal system or perceive it as unfair, they will be less likely to use evaluations as feedback to improve their performance (Ilgen, Fish Taylor, 1979). Similarity, dissatisfaction with appraisal procedures could potentially lead to employee turnover, decreased motivation and feeling of inequity. Past research suggests that appraisal satisfaction is a function of both the level of evaluation and the feedback provided by the evaluation. Ratees are also more satisfied with appraisal systems that provide useful feedback about job performance. As noted by Carroll and Schneier (1982), one of the primary purposes of the formal appraisal is to provide clear, performance-based feedback to employees. As noted earlier, it is widely recognised that appraisal system can provide employees with feedback concerning the adequacy of their job performance (Bernardin Beatty, 1984). Feedback can be defined as a subset of information that allow employees to judge the appropriateness or correctness of behaviours for attaining various goals (Ashford, 1986). 76 Segalla The future looked likely to prefer high performance, well trained and multi-lingual managers. 43 Jaworsky Supervisory feedback is a useful mechanism for controlling salespeoples performances (Teas 1983, Tyagi, 1985, Walker, Churchill and ford 1977). Importantly, supervisory control can be exercised at the input, process or output stages (Jaworsky, 1988). Further, given the positive feedback can pertain too to outputs or behaviours, the issue of comparative effectiveness of alternative types of supervisory feedback takes on greater complexity. The typology of supervisory feedback used in our study is drived from two dimensions. The first dimension is the locus of feedback, whether feedback pertains to a sales persons output or behaviour. The second dimention is the valence of feedback, whether feedback is positive or negative. Feedback is argued to improve performance through it informational and motivational effects. 35 Hiltrop Employees are expected to do their work and think of ways to improve it, achieve new levels of performance, contribute to change efforts and manage their own ongoing learning processes (Mohrman and Mohrman, 1993). Organizations will become more complex and ambiguous place to work (Handy, 1989) The role of the manager will become more lateral, with much more focus on people, customers and processes. As Cannon (1996) points out: managers are being asked to show their worth on a more decentralized workplace, worth valuated in terms of effectiveness in creating conditions in which people can deliver the best results. Most commentators agree that managers of the future will require a more extensive mix of skills and competencies than their processors. For instance, Allred et al. (1996) argues that, as more companies adopt some type of networked structure, managers need to have not only strong collaborative, partnership and relationship skills. In the organization of the future, managers role have been portrayed as those of portfolio specialists, whose work and income comes first and foremost from having high expertise in a particular field or subject that is essential to the business (Nicholson, 1996). Managers of the future will have to develop a much wider range of skills and competencies than their predecessors. According to Carson and Carson (1997) many organizations are burdened with workers who want to jump ship, but who stay firmly on board grasping for long-term security in the face of widespread job cuts. There is no doubt that the successful managers for the future will need a very different set of skills and competencies than their predecessors. 42 Jawahar A primary purpose of formal performance appraisals is the provision of clear, performance-based feedback to employees (Carroll Schneier, 1982; Ilgen, Fisher Taylor, 1979). The significance of feedback to the appraisal process as well as to the broader management process has been widely acknowledged (e.g., Bernardin Beatty, 1984; Ilgen et al., 1979; Lawler, 1994; Maier, 1958; Murphy Cleveland, 1995). Performance feedback has the potential to influence future performance (Ilgen et al., 1979; Kluger DeNisi, 1996), and significantly impact job and organizational attitudes (Ilgen, Peterson, Martin Boeschen, 1981; Pearson, 1991; Taylor, Fisher Ilgen, 1984). Thus, feedback is not only important to individuals but also to organizations because of its potential influence on performance and a variety of attitudes and behaviors of interest to organizations. Satisfaction with appraisal feedback is regarded as one of the most consequential of the reactions to appraisal feedback (e.g., Dorfman, Stephan Loveland, 1986; Giles Mossholder, 1990; Keeping Levy, 2000). For instance, Giles and Mossholder (1990) and others (e.g., Organ, 1988) have asserted that satisfaction as a measure of employees reactions is a more encompassing indicator of reactions to appraisal feedback than more specific, cognitively oriented criteria, such as perceived utility and accuracy of feedback (e.g., Keeping Levy, 2000). In summary, the central role of feedback to the appraisal process and the importance of examining ratees satisfaction with appraisal feedback are widely acknowledged (e.g., Ilgen et al., 1979; Keeping Levy, 2000; Murphy Cleveland, 1995). Satisfaction with appraisal feedback is likely to enhance employees feelings of selfworth and their feelings of positive standing within the organization (Lind Tyler, 1988). If organizations are to realize the benefits of performance feedback, they should take the appraisal process and particularly the feedback discussions between the rater and ratee seriously. Although satisfaction with feedback has been a focal construct in a number of studies, its nomological net is not well understood. The significant relationship between satisfaction with feedback and organizational commitment became non-significant when the influences of job satisfaction and satisfaction with manager on organizational commitment were statistically controlled. Results of this study indicate that the extent to which ratees are satisfied with the performance feedback benefits the ratee, rater and the organization. Ratees benefit as satisfaction with feedback is positively related to their job satisfaction and influences their future performance. Raters benefit as ratees satisfaction with feedback is positively related to ratees satisfaction with them, negatively related to turnover intentions, and influences future performance of ratees. 32 Heathfield Every method of assessing employee performance has its positive and negative characteristics. The traditional process of performance appraisal reflects and underpins an old-fashioned, paternalistic, top-down, autocratic mode of management that relies on organization charts and fear of job loss to keep troops in line. The traditional performance appraisal process treats employees as possessions of the company, fails to create a dialogue and rarely results in positive employee development and progress. Performance management is the process of creating a work environment or setting in which people are enabled to perform to the best of their abilities. Performance management is a whole work system that begins when a job is defined as needed and ends when its determined why an excellent employee left the organization for another opportunity. In a performance management system, feedback remains integral to successful practice. The feedback however becomes a discussion for both progress and personal business goals. 56 Liden Very little work has been done on the poor performers reactions to the leaders responses. Liden (1981) found that subordinates and leaders reported that the most common leader response to ineffective performance was to simply discuss the incident with the poorly performing subordinate. In such a discussion the leader is essentially giving negative feedback to the poor performer. Ilgen, Mitchell, and Fredrickson (1981a) found that poorly performing subordinates perceive specific feedback to be more helpful than general feedback. Similarly, results of a field study indicated that feedback timing, specificity, and frequency are all associated with subordinate satisfaction and perceptions of appraisal helpfulness (Ilgen, Peterson, Martin, Boeschen, 1981b). It was predicted that subjects would rate feedback containing consistency, distinctiveness, and consensus information (i.e., specific feedback) more positively than feedback containing information on none of these three dimensions (i.e., non-specific feedback). Subordinates rated specific feedback more positively than nonspecific feedback. Feedback including consistency, distinctiveness, and consensus information was rated higher than feedback containing information on none of these dimensions. This result supports the Ilgen, Fisher, and Taylor (1979) suggestion that subordinate misperceptions and nonacceptance of negative feedback might be corrected by providing more specific feedback. 19 Falcone In an era where intellectual capital defines any companys ability to stand out from its peers, measuring that human capital as a true asset may dictate the organizations ultimate success or failure. In reality, though, this challenge has gone mainly unresolved because managers see pertbnnance appraisal as an exercise that focuses only quantitatively on individual performance as the core foundation and building block of the performance review process. So much for the Golden Cycle of Performance Management, which is: Goal setting and planning. Ongoing feedback and coaching. Appraisal and reward. Under the current way of handling appraisals, the first two steps rarely get addressed, leaving the culmination in the third step more theory than reality. 27 Grensing-Pophal Many CU managers and business experts note that performance evaluation is perhaps the most important part of the interaction between supervisors and managers. 62- McGregor Formal performance appraisal plans are designed to meet three needs, one for the organization and two for the individual: 1. they provide systematic judgments to back up salary increases, promotions, transfers and sometimes demotions and terminations 2. they are a means of telling a subordinate how he is doing, and suggesting needed changes in his behaviour, attitudes, skills or job knowledge, they let him know where he stands with the boss. 3. They are also being increasingly used as a basis for the coaching and counselling of the individual by the superior. McGregor found that one of the bosss resistance to effective appraisal interview is related to the lack of skills needed to handle the interview. Training programs designed to teach the skills of appraising and interviewing do help, but they seldom eliminate manager