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interpersonal effect on performance appraisal

interpersonal effect on performance appraisal

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01/26/2014

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The role of interpersonal affect in
performance appraisal: evidence
from two samples \u2013 the US and India

Arup Varma, Shaun Pichler and Ekkirala S. Srinivas
AbstractThe interpersonal affect, a li ke \u2013 dislike relationship between a supervisor and

his/her subordinate, has traditionally been conceptualized as a source of bias in performance appraisals. However, some researchers have argued that the interpersonal affect may not be a bias, especially where it develops as a result of past performance. In this \ufb01eld study, using data from 190 supervisors in the US, and 113 supervisors in India, we delineate the relationship between interpersonal affect and performance ratings. In both samples, interpersonal affect and performance level were found to have signi\ufb01cant effects on performance ratings. Results from the US sample indicated that raters are able to separate their liking for a subordinate from actual performance when a ssigning performance ratings, suggesting that the interpersonal affect does not operate as a bias in the appraisal process. Results from the Indian sample, however, suggest that supervisors in\ufb02ate ratings of low performers, suggesting that local cultural norms may be operating as a moderator.

KeywordsInterpersonal affect; performance appraisal; performance ratings; cross-
cultural studies; bias in appraisals; US versus India.
Introduction

Over the years, several researchers (see, e.g., Zajonc, 1980 and Dipboye, 1985) have suggested that the performance appraisal literature has ignored affective and behavioural variables. Since the publication of these reviews, several researchers have attempted to integrate the interpersonal affect into studies of performance appraisal. A majority of these studies treat interpersonal affect as a potential source of bias in performance ratings (see, e.g. Landy and Farr, 1980; Latham and Wexley, 1981). In this study, we investigate the relationship between interpersonal affect and performance ratings, and further examine whether interpersonal affect operates as a bias under all performance conditions. Additionally, we expand the growing literature on cross-national comparative analyses, by conducting our investigations in two separate samples \u2013 US and India.

The International Journal of Human Resource Management
ISSN 0958-5192 print/ISSN 1466-4399 onlineq 2005 Taylor & Francis
http://www.tandf.co.uk/journals
DOI: 10.1080/09585190500314904

Arup Varma, Institute of Human Resources & Industrial Relations, Loyola University Chicago, 820 North Michigan Avenue, Chicago, IL 60611, USA (tel:\u00fe 1-312-915-6664; fax:\u00fe 1-312-915-6231; e-mail: avarma@luc.edu). Shaun Pichler, School of Labor and Industrial Relations, 4th Floor, South Kedzie Hall, Michigan State University, East Lansing, MI 48824, USA (tel:\u00fe 1-517-410- 6046; fax:\u00fe1-619-465-4019; e-mail: pichlers@msu.edu). Ekkirala S. Srinivas, Xavier Labor Relations Institute (XLRI), PO Box 222, Circuit House Area (East), Jamshedpur 831001, India (tel:\u00fe 91-657-222-5506; fax:\u00fe 91-657-222-7814; e-mail: srinivas@xlri.ac.in).

Int. J. of Human Resource Management 16:11 November 2005 2029 \u2013 2044

The interpersonal affect is de\ufb01ned as a \u2018like\u2013dislike relationship\u2019 between a supervisor and his/her subordinate, and has been shown to occur very early in stimulus observation (Zajonc, 1980) and performance evaluation (Cardy and Dobbins, 1986). In other words, if a supervisorlikes his/her subordinate, s/he is deemed to have a high interpersonal affect toward that subordinate. In this connection, research has consistently indicated that a rater\u2019s interpersonal affect towards a ratee is dif\ufb01cult to separate from performance information when assigning ratings (Cardy and Dobbins, 1986; Robbins and DeNisi, 1994). As such, if interpersonal affect for a ratee develops before the rater processes performance-related information, and is dif\ufb01cult to disconnect from actual performance, it is logical to argue that interpersonal affect is a source of bias in performance appraisal, diminishing rater accuracy. Recent research and theory suggest, however, that this conclusion may be premature (e.g. Lefkowitz, 2000; Robbins and DeNisi, 1998; Varmaet al., 1996).

Most of the studies examining interpersonal affect have been conducted in the laboratory, where interpersonal affect and performance levels can be easily manipulated. The laboratory, however, is not the best setting for studying interpersonal affect, and the external validity of laboratory results is often suspect (Lefkowitz, 2000). Indeed, interpersonal affect develops over time between a supervisor and subordinate, and systematically in\ufb02uences the performance rating process (Robbins and DeNisi, 1998). Further, the relationship between a supervisor and subordinate is also a developmental process (Bauer and Green, 1996) that is a function of the length of the relationship. As such, the effects observed in the laboratory may differ in important ways to the effects of interpersonal affect in the \ufb01eld. Indeed, it was Dipboye\u2019s (1985) criticism that passive- observer research had led to such an over-emphasis on cognitive determinants of performance ratings that directed researchers to studying affective variables in the appraisal process in the \ufb01rst place.

Clearly, there is a critical disconnect between performance appraisal research and practice (Arvey and Murphy, 1998). Accordingly, this paper adds to the growing body of literature that examines the relationship between interpersonal affect and performance ratings in the \ufb01eld. This is an important way to facilitate the uni\ufb01cation of research \ufb01ndings and practice in organizational settings.

India versus the US

Furthermore, we combine the interest in performance appraisal with the growing interest in cross-national research, speci\ufb01cally comparing the US and India. The recent media coverage of US jobs being outsourced to India, and the attractiveness of India as a potential investment location due to its large domestic market (Datt and Sundharam, 1999) make it a prime candidate for a cross-national study. Indeed, several authors have called for more cross-national studies (e.g. Brewsteret al., 1996). However, most of the cross-cultural research in the existing management literature is limited to studying and/or comparing management practices in European and/or North American countries (Budhwar and Debrah, 2001; Napier and Vu, 1998).

This seems rather ironic, given that multinational corporations (MNCs) are increasingly establishing operations in developing countries such as India and China, and foreign direct investment to these nations has also substantially increased (Budhwar and Debrah, 2004). Clearly, if organizations are to succeed in their international operations, they need a clear understanding of local workplace norms and management practices (Hofstede, 1993). In this connection, several authors (e.g. Kapur and Ramamurti, 2001) have noted that India is becoming an increasingly important

2030The International Journal of Human Resource Management

player on the world economic scene, and is projected to have the fourth largest economy by 2020, according to World Bank estimates. This is not surprising, given that India offers several unique features that are very attractive to MNCs \u2013 a highly-skilled and educated workforce, a rapidly growing middle class, and an English-speaking populace.

Historically, India has shared a special relationship with the US. For decades, Indian students have continued to \ufb02ock to the US for higher studies (Harbison and Myers, 1964; Kapur and Ramamurti, 2001), while the US has been the largest foreign investor in India (Budhwar, 2001). Clearly, this exchange of human resources between these two nations is likely to continue and increase in the foreseeable future. As such, an understanding of the unique cultures and workplace norms would help organizations in both nations develop suitable policies and procedures (Gopalan and Stahl, 1998) to help them succeed. Given the context-speci\ufb01c nature of HR practices (Budhwar and Khatri, 2001), it is important that organizations understand the unique factors that might impact the design, implementation, and success or failure of management systems in different countries (e.g. Schuleret al., 2002).

Performance appraisal \u2013 India versus the US

In the Indian scenario, it is important that US organizations (and managers) become aware that \u2018hierarchy and inequality are deeply rooted in India\u2019s traditions\u2019 (Jain and Venkata Ratnam, 1994). As Sinha (1990) points out, this often leads to subordinates being dependent on their supervisors to help resolve their problems. In the context of performance appraisal, this would mean that subordinate performance (and, hence, performance rating) is much more dependent on the supervisor\u2019s relationship with the subordinate, than it would be in the US. Furthermore, India is a \u2018collectivist\u2019 nation (Hofstede, 1980), and managers are likely to motivate their subordinates through social and interpersonal interventions (Budhwar and Khatri, 2001). The US, on the other hand, is deemed to be much more \u2018individualistic\u2019, and managers are less likely to rely on social and interpersonal interactions in their dealings with subordinates. In this connection, Kanungo and Mendonca (1994) suggest that employees in India are often more concerned with their personal relationships with the supervisor, instead of the actual job performance. Again, this situation is very different from what one might expect to \ufb01nd in the US, where work-related outcomes take precedence over personal relationships in the workplace.

It is in this context that we were interested in studying the impact of interpersonal affect on performance appraisal. Clearly, if being \u2018liked\u2019 by the supervisor is more important to the subordinate than the actual job performance, as in India, interpersonal affect is more likely to have in\ufb02uence the subordinate\u2019s performance evaluation.

Interpersonal affect as bias in performance appraisal

A review of the relevant literature reveals that evidence on interpersonal affect as a source of bias in performance appraisals, is mixed, at best. Speci\ufb01cally, some scholars (e.g. Dipboye, 1985) have suggested that affect in\ufb02uences performance ratings independent of actual performance, and some evidence con\ufb01rms this (e.g. Dobbins, 1982; Ferriset al., 1994; Lefkowitz and Battista, 1995). For example, Tsui and Barry (1986) suggest that affect is a source of bias in appraisal, as it reduces rater accuracy in performance ratings. Indeed, several laboratory studies (e.g. Cardy and Dobbins, 1986; Wayne and Ferris, 1990) have reported that interpersonal affect has a signi\ufb01cant positive, main effect on performance ratings.

Varmaet al.:Interpersonal affect in performance appraisal 2031

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