Consequences of the performance appraisal experience
| Published date | 13 April 2010 |
| DOI | https://doi.org/10.1108/00483481011030557 |
| Date | 13 April 2010 |
| Pages | 375-396 |
| Author | Michelle Brown,Douglas Hyatt,John Benson |
| Subject Matter | HR & organizational behaviour |
Consequences of the performance
appraisal experience
Michelle Brown
Department of Management, Faculty of Economics and Commerce,
University of Melbourne, Melbourne, Australia
Douglas Hyatt
Rotman School of Management, University of Toronto, Toronto, Canada, and
John Benson
School of Management, University of South Australia, Adelaide, Australia
Abstract
Purpose – The purpose of this paper is to examine the role of low quality performance appraisals
(PA) on three human resource management outcomes (job satisfaction, organisational commitment
and intention to quit).
Design/methodology/approach – Using data from 2,336 public sector employees clusters of PA
experiences (low, mixed and high) were identified. Regression analysis was then employed to examine
the relationship between low quality PA experiences and job satisfaction, organisational commitment
and intention to quit.
Findings – Employees with low quality PA experiences (relative to those with mixed and high
quality PA experiences) were more likely to be dissatisfied with their job, be less committed to the
organisation and more likely to be contemplating leaving the organisation.
Research limitations/implications – The data were collected in a large public sector research
organisation where the results of the appraisal were linked to pay increments. Further research is
needed to determine the applicability of the results to private sector employees.
Practical implications – The quality of the PA experience varies and a low quality experience
results in lower job satisfaction and organisational commitment and higher quit intentions. The
challenge for human resource (HR) practitioners is to decide whether the allocation of additional
resources to ensure that all employees have a uniformly high quality PA experience is a worthwhile
investment.
Originality/value – Research has tended to focus on the relationship between a single feature of a
PA process and HR outcomes. Organisations need to acknowledge the importance of the overall PA
experience when evaluating its consequences for HRM outcomes.
Keywords Performanceappraisal, Performance management,Job satisfaction, Pay,
Organizationalbehaviour, Employee turnover
Paper type Research paper
There is an increasing use being made of the performance appraisal process (Millward
et al., 2000; Nankervis and Compton, 2006; Wiese and Buckley, 1998) generally
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0048-3486.htm
This research was funded by grants received from the Faculty of Economics and Commerce,
University of Melbourne. The authors would like to thank management and staff of public sector
research (PSR) and the officials of the Community and Public Sector Union for their support for
the project.
Performance
appraisal
experience
375
Received 7 August 2008
Revised September 2008
Accepted 4 July 2009
Personnel Review
Vol. 39 No. 3, 2010
pp. 375-396
qEmerald Group Publishing Limited
0048-3486
DOI 10.1108/00483481011030557
motivated by an organisational desire to affect employee behaviours and attitudes and,
ultimately, organisational performance (Aguinis, 2009; Gardner, 2008; Murphy and
Cleveland, 1991; Shields, 2007). This occurs as a consequence of the establishment of
goals at the beginning of the evaluation cycle which provide employees with clear
performance targets, the monitoring of performance during the evaluation cycle (which
can be used to assist poor performers) and the reinforcement provided for good
performance through the provision of rewards, usually in the form of higher pay
(Milkovich and Wigdor, 1991). This process is seen to encoura ge employee
performance in subsequent performance cycles (Heneman and Werner, 2005; Mani,
2002).
The capacity to achieve these positive outcomes will be a function of the quality of
the performance appraisal (PA) experience. Taking a lead from the operations
management field, quality is typically defined as establishing and operating processes
that promote organisational efficiency (for example see: American Society for Quality
(available at: www.asq.org). The aim of a quality approach is to reduce variation in
every process in order to obtain greater consistency (Roberts and Sergesketter, 1993).
PA is a complex process and there is scope for variation, particularly when the
supervisor is required to make subjective judgments of employee performance (as
compared with an objective performance appraisal where the measurement focuses on
the quantifiable aspects of job performance). Subjective judgements have the potential
to dilute the quality of the PA process as they may be influenced by bias or distortion
as a result of emotion (for example, see Longenecker et al., 1987; Murphy and
Cleveland, 1995). Understanding the impact of PA quality is particularly important as
Treadway et al. (2007) suggest that PAs are becoming increasingly subjective.
Assessments of qualit y typically require the inv olvement of stakehold ers
(Ghorpade and Chen, 1995). In the context of performance appraisals, a critical
stakeholder is the employee: the PA process is designed to stimulate employee
performance (Aguinis, 2009). In this paper we use employees as our assessors of PA
quality as it is the behaviours and attitudes of employees that are important to the
overall success of a PA process (Keeping and Levy, 2000). Employees are sensitive to
quality variations in PA as its processes are a powerful determinant of employees’
prospects (for example, promotion, termination of employment) within the
organisation. Thayer (1987) suggests PA quality variations will generate strong
reactions among employees.
Organisational efficiency can be affected by the quality of the performance
appraisal process. In our paper, the focus is on the impact of low quality PA on three
indicators of organisational efficiency: job satisfaction, organisational commitment
and intent to quit. Past research has typically focused on a single outcome of PA (for
example, satisfaction with appraisal feedback: see Jawahar, 2006), though from a
practical perspective organisations need to weigh up the combined effects of an
appraisal process in order to determine if the advantages outweigh the costs (Taylor
et al., 1995).
In this paper, the quality of an employee’s PA experience is determined by
combining aspects of the PA process into a measure of their total experience. Our
definition of quality, developed in a subsequent section, focuses on the formal appraisal
procedures, the enactment of these formal appraisal procedures and the interpersonal
treatment of employees during the appraisal process. This approach is a response to
PR
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