What does the performance appraisal approach tell us about the organizational culture's basic assumptions?
| Date | 24 October 2023 |
| Pages | 1561-1579 |
| DOI | https://doi.org/10.1108/ER-04-2023-0221 |
| Published date | 24 October 2023 |
| Subject Matter | HR & organizational behaviour,Industrial/labour relations,Employment law |
| Author | Batia Ben-Hador |
What does the performance
appraisal approach tell us about
the organizational culture’s
basic assumptions?
Batia Ben-Hador
Department of Economics and Business Administration, Ariel University, Ariel, Israel
Abstract
Purpose –Performance appraisal (PA) is an organizational practice whose ultimate goal is to improve
employee performance. This goal can be achieved using two approaches: the administrative approach, which
emphasizes materialistic incentives and rewards excellent performers, and the developmental approach, which
focuses on employee personal and professional development. The literature points out that organizations
cannot utilize both approaches at the same time, but the reason for this is vague. Therefore, the research
purpose is to bridge this gap by exploring the basic assumptions behind the administrative and developmental
PA approaches as part of the hidden layers of organizational culture.
Design/methodology/approach –A qualitative document analysis (QDA) was used to analyze 124 Israeli
organizations’PA forms and employee reports.
Findings –The organization’s PA approaches were diagnosed as a first step in revealing the reason for the
inability to use both approaches simultaneously. In the next step, it was revealed that organizational culture
assumptions are the reason for the contradiction of the PA approaches. Eventually,McGregor’s theory X is the
basic assumption behind the administrative approach, and theory Y is the assumption behind the
developmental approach. Since these two approaches contradict each other, it explains the difficulty of using
both approaches simultaneously.
Originality/value –This study dives into the hidden levels of organizational culture and attempts to bridge a
long-standing but still current research gap, as well as extend and refine organizational culture and
performance appraisal theories.
Keywords Performance appraisal, Employee evaluation, Qualitative, Organizational culture, Theory X/Y
Paper type Research paper
Introduction
Performance appraisal (PA), is a common Human Resources practice (Tyskbo, 2020). It is a
structured process that examines the functioning of employees in organizations (Mckenna
et al., 2011). Many PA studies have been conducted to improve the planning and
implementation of this process (DeNisi and Murphy, 2017) and to make it more effective
(Collings and Sheeran, 2020). Nevertheless, the effectiveness of this process is frequently
disputed (Iqbal et al., 2015). Therefore, scholars and practitioners have tried to diagnose what
would make PA more effective (Otoo, 2020). The current study’s findings establish that the
answer lies in the compatibility of the PA approach with organizational culture (Oseghale
et al., 2023).
The ultimate goal of the PA process is to improve employee performance and the
effectiveness of their work (McKennac et al., 2011). Leading scholars (DeNisi and Murphy,
2017) agree that there are two main approaches to achieving this goal: administrative and
developmental (Hofstetter and Harpaz, 2015). Often, these approaches are referred to as
purposes (Eyoun et al., 2020). The administrative approach aims to distinguish between
employees, compensate the best performers, and impose sanctions on employees whose
performance does not meet expectations (Javad and Sumod, 2015). The developmental
approach is meant to distinguish within individuals such that their personal strengths and
The
performance
appraisal
approach
1561
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/0142-5455.htm
Received 30 April 2023
Revised 9 July 2023
1 October 2023
Accepted 2 October 2023
Employee Relations: The
International Journal
Vol. 45 No. 6, 2023
pp. 1561-1579
© Emerald Publishing Limited
0142-5455
DOI 10.1108/ER-04-2023-0221
weaknesses are identified and their capabilities are enhanced (Murphy, 2020). Cleveland et al.
(1989) assert that the simultaneous use of these approaches might be conflicting; however,
other scholars note that many organizations use both administrative and developmental
approaches simultaneously (DeNisi and Murphy, 2017); practitioners and organizations
would like to gain the benefits of the two approaches, and there seems to be no reason why
they cannot use both approaches at the same time. Nevertheless, scholars such as Eyoun et al.
(2020) maintain that there is always one approach that is more prominent, but the profound
reason for this is often vague. Therefore, there is a research gap concerning why
organizations cannot hold these approaches equally at the same time. The current study
attempts to bridge this research gap by detecting the hidden layers of organizational culture.
Chatman and O’Reilly (2016) defined organizational culture in terms of its underlying
psychological mechanism, which they identify as social norms that operate through
informational and normative social influence. Schein (1990) distinguished between overt and
covert layers of organizational culture; the innermost and the most hidden level is that of
basic assumptions that are considered by some researchers (Eaton and Kilby, 2015) as the
DNA of organizations. Hidden layers such as the basic assumptions are difficult to observe;
deciphering them, however, can make the organizational culture more understandable as well
as better connect employees to their organization (Hoover and Harder, 2015).
This study suggests that organizations should use only one of the two approaches during
the PA process because the basic assumptions behind each approach differ, and therefore, the
use of PA approaches is dependent on the organizational culture, specifically on the hidden
layers. Moreover, it was found that the basic assumptions behind the approaches are
McGregor’s (1960) theory X and theory Y (Daneshfard and Rad, 2020). Theory X is the basic
assumption behind the administrative approach, and theory Y is the basic assumption
behind the developmental approach. These two basic assumptions are contradictory
(Thunnissen, 2016), and therefore, using both approaches at the same time or using an
approach that does not fit the particular organizational culture’s basic assumption could
create confusion among the organization’s members and PA process ineffectiveness.
Consequently, the research question is as follows: What are the basic assumptions behind the
two PA approaches? Answering this question will bridge the research gap as to why
organizations cannot hold administrative and developmental approaches equally at the same time.
The importance of this study is threefold: first, it exposes the basic assumptions behind
the PA approaches; these assumptions are difficult to comprehend because of their
invisibility. Second, bridging the research gap as to the necessity to choose one PA approach,
this research gap is not only irksome to scholars but also impacts the PA process in
organizations, and bridging it can improve its effectiveness. Third, the organizational culture
theory was expanded and pointed to new theoretical insights that are drawn from another
classic theory –McGregor’s X theory and Y theory.
The major contribution of this study is the disclosure of hidden assumptions underlying
PA approaches, even though it is challenging to diagnose these assumptions because they lie
within the hidden level of organizational culture. This study elaborates and refines
organizational culture theory and PA theory, two essential Human Resources and Employee
Relations theories. The study also provides a practical contribution to organizations by
pointing out a common mistake in the process of PA and explaining why it occurs, therefore
improving the PA process.
The paper is structured as follows: it begins with a literature review on PA approaches
and organizational culture that leads to the presentation of the research question. Then,
a qualitative examination that has three phases is presented, and the data are analyzed with
QDA –qualitative document analysis. Finally, in the discussion, all parts of the article are
linked, and the basic assumptions based on McGregor’s Theory X and Theory Y are
explained as well as the contributions of the study.
ER
45,6
1562
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