Introduction to Psychology – Class notes: Job performance - Appraisals,

Observation and Judging Performance, Multiple-Source Feedback, Improving

Performance
Appraisals

What are performance appraisals (PA)? Who conducts them? Who should conduct them? How often
should they be conducted? Are they fair and appropriate?

There are many questions in the workplace concerning the function and real value of PAs. On the
whole, and even in today’s more, apparently, enlightened workplace, PAs can and do still present
cause for concern, and inflict stress on the appraisee, as well as the appraiser. Why? Because the
manner in which employees understand what an appraisal is for is misapprehended, as well as the
misapprehension of the same by the manager conducting the appraisal. The former feels like it is a
test of their worth, and the latter a way to wield some power. One could say that both attitudes are
human, or represent human prevalences, but in the end it comes down to a misrepresentation of the
value appraisals can afford both the employee and the organisation for which s/he works.

A performance appraisal (PA) is a method which should allow a manager and an employee to discuss
and assess performance, give and gain feedback, and consider how/if things could be done
differently. Some key issues could be:

 Providing an employee with information about how they have been performing
 Determining whether an employee has developmental needs
 Identifying areas where the performance can be improved
 Establishing future goals or objectives
 Making appropriate performance-related rewards
 Identifying individuals with potential to mover to more senior or challenging roles
 Determining reasons for poor performance
 Comparing individual performance with that of other employees.

PAs are complex social interactions that should allow managers to both make sure that individual
performance meets with business goals, as well as a chance for managers to help employees
understand how personal objectives link, or can be linked, to overall business strategy, creating an
opportunity for shared understanding about (wider) organisational needs and how to achieve them.
An overarching question in appraisal/assessment tool development is ‘what’s the aim?’ (Fletcher,
2008), the point being that if this (the PA) is done wrongly/badly, then problems will/could happen…
as is demonstrated in a number of studies which illustrated that performance following a PA actually
reduced in up to 30% of those surveyed (e.g. Kluger and DeNisi, 1996).

A common problem is when PAs are used for both developmental and reward purposes as
employees are less likely to be open about what needs to be developed when linked to how much
they will be paid (in performance-related pay schema). So it might be better to keep the two issues
separate.

Commonly, PAs are conducted every 6 – 12 months. The manager gives feedback on performance
relative to expectations (e.g. from the previous PA), and supporting evidence of good and bad

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performance. Employees (usually) provide a self-review of achievements etc. over the same period,
incl. any areas that might be developed. The two can then have an open dialogue. In theory, this
allows for employee sense of control and engagement.

However, PAs can be stressful and dissatisfying – managers may find it difficult to be fair when an
employee is underperforming in relation to other colleagues, or hasn’t met the expectations
previously agreed upon, or hasn’t been able observed in a broad and varied capacity (e.g. feedback
only comes from one source – him or her), or simply does not like the employee, or is of
questionable ‘value’ to the manager in other ways (Arvey and Murphy, 1998).

Some employees may not have the skills to ‘talk themselves up’ – misrepresent themselves as to
what they have actually achieved etc. Whereas others are skilled at impression management (IM)
and can distort the reality of what has been achieved etc. If such happens then there are distortions
in the ratings, by the manager, which may be damaging to either the employee or the business. Then
again, if IM is important for leadership roles, IM may actually improve the validity of PA judgements.

Another issue to consider is if a manager is motivated to distort assessment for their own reasons;
e.g. to keep a valued team member, or lose a difficult or non-performer. It has been argued that such
decisions affect ratings and assessments far more commonly than many business managers either
think or admit to (e.g. Ferris and King, 1991; Murphy and Cleveland, 1995). And it is an issue that has
been rarely investigated/studied. Related to this is that while managers often make accurate private
ratings, they may distort the publicly available version of the same, which may have something to do
with personal attributes such as high conscientiousness or high agreeableness: to avoid post PA
conflict, to sustain or improve an employee’s self-efficacy etc.

What can change this is managers having the skills and confidence to manage both difficult situations
and discussions within PAs, as well as the tools to self-reflect on what is fair for and to the employees
and his/her colleagues etc. The latter is especially important as working has become increasingly co-
dependent (Griffin et al, 2007). Performance then is interlinked and interlocked with other
colleagues, and perhaps in varied departments and so on, making it difficult to separate individual
performance, and so by default difficult to make rewards. Villanova and Bernardin (1991) suggest:

 Make sure that performance criteria used by managers in PAs are relevant to the job and
essential or at least important to job performance
 Provide clear definitions for performance criteria so that both managers and employees have
a shared understanding of what is being assessed
 Train appraisers and appraises so that they know how to use the system
 Ensure that appraisal happens frequently to avoid managers relying too much on memory
or generic impressions
 Aggregate individual performance to a group or team level when the performance of
employees is co-dependent on others
 Increase the number of people who provide performance rating and combine ratings from
these raters statistically
 Hold appraisers accountable for their ratings.

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Observing and judging performance

Interpersonal judgements can often be selective and biased – i.e. subjective rather than objective.
Individuals tend to make positive or negative judgements of people based on initial judgements or
prior information. Ratings can also be vulnerable to primacy and recency effects – where information
provided early or late in a sequence dominates memory, and so judgement: early on performance
can effect long-term expectations or perceived potential.

Managers may also overlook the role of the work environment or their own actions on employee
behaviour because of the fundamental attributional error; where performance is attributed to the
qualities of the individual but not the influence of the environment – e.g. the equipment available to
do the work or the support received (from colleagues). In the same vein, managers may demonstrate
a ‘like me’ or similarity effect, where employees seen as more similar to themselves are rated more
highly: managers seem to attract, select and promote those with similar personalities and values to
themselves.

Having said that, it is also true that often these types of bias are unconscious and result from
cognitive shortcuts that our brains have developed over time to more quickly process complex
situations, people and surroundings. In a way this can be viewed as stereotyping, which in and of
itself is a process to allow us to make sense of new situations, circumstances and experiences rapidly,
from prior knowledge, without having to use up too much cognitive processing power or capacity
(within our brains). Yet these benefits (may) come at the cost of accuracy and fairness as the
(stereotype) information is often logged into long term memory early on in a relationship and so then
may contaminate later judgements (about performance) (Barnes-Farrell, 2001): a manager may hold
a stereotype of a new graduate as being ‘clever but poor at understanding client needs’. This may
lead the manager to prioritise training, but it may cause the manager to attribute a client’s complaint
to the graduate’s lack of experience rather than a failure of another work group. And of course there
are further severity issues/effects when considering race and gender.

Performance judgements can also effect making decisions about leadership potential, where
managers may make their decisions of such based on their perception of what makes a good leader.
This may earmark someone for extra training and development, greater access to mentors and
networks which will be advantageous in developing the skills required for leadership. Such
‘earmarking’ is often based on a prototype schema of what are good leadership characteristics,
themselves based on access to perceptions and experiences of known leaders – in Western cultures
this would be (a bias towards) white males. As such it is important to train managers responsible for
performance assessment to be aware of unconscious bias that can differentially impact on the
progression of different groups and individuals.

The reliability and validity of assessment decisions can be reduced dependent on how/if an observer
allows his or her relative power to (un)consciously to govern their decisions. Kipnis et al (1980) found
that power-holders often fail to realise their power and status can do this, when explaining why
others agree or disagree with them. Leaders believe that people agree with them because they think
their decisions are good, rather than taking into account that employees may actually agree because
they want to boost/bolster their careers. Over time, it may become clear that power corrupts as
leaders come to believe that they are superior to their subordinates. Fiske (2001) developed this in a
power-as-control theory:

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 1. Power-holders have influence and resources and so do not need to spend the cognitive effort
required to overcome stereotypes and individuate others
2. Those at higher organisational levels have a large number of people working for them and so
would have to expend great effort to come to know them all individually
3. Those who self-select, or are selected, for positions of power may simply be the types of
people who are not/less motivated to or interested in individuating others lower down the
hierarchy.

Ways to prevent stereotyping and bias are:

 Holding people accountable for assessment decisions can lead to more care concerning and
reduce automatic stereotyping thinking
 Requiring assessors to record their observations and explain their decisions leads to more
engagement in processing of information
 Sharing and clarity of criteria regarding good and poor performance.

Multiple-source feedback (MSF)

MSF, or 360˚ feedback, involves managers, colleagues, subordinates, clients. Anonymously. Use of
MSF is reported to be on the increase (CIPD, 2005a) and which might be attributable due to its more
rounded, potentially more accurate picture of an individual’s performance (London and Smither,
1995).

Performance ratings are thus provided by different (people in different) roles and who will highlight
different aspects of the individual’s work, so contributing to the validity of the assessment.

MSF typically involves 8 – 10 people, is now largely automated, removing a lot of effort from the
process of inputting and deciphering all the information received.

The use of MSF appears to be more successful when it is first introduced as a developmental tool
and, at least initially, individuals should not be expected to share their feedback with their boss(es).
This helps foster trust in the system (Bolton et al, 2004), who also found that online feedback helped
to protect the anonymity of the raters, which increased the level of trust that individuals had in the
system. However, lack of accountability may have an impact on the quality of the ratings (as
mentioned previously).

It appears that individual differences may be important in determining reactions to feedback. Those
who receive feedback positively are able to understand that change is something beneficial and is
often related to those who can set realistic goals for themselves (Smither et al, 2005). Similarly,
individuals with high conscientiousness and self-efficacy, low anxiety and an internal locus of control
are more likely to use feedback for development. Smither and colleagues also found that leaders
who had received negative feedback actually, after 6 months, had set more performance goals than
leaders who had originally received positive feedback. Suggesting that processing of information
(feedback) may take some time before the practical impacts of it are completely processed (what
may at first seem unfavourable, is actually helpful and useable for development and improvement).

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Continued support following feedback is also seen to provide enhanced effects as to the value of it
on performance. Workers who believe that colleagues and supervisors support (their) development
react positively to feedback, and being able to discuss such with managers significantly increases
performance in the long term (e.g. Mabey et al, 2001). The same is true of post-MSF coaching.

Improving Performance

When employees improve performance, it is expected that a reward process will (at some time)
follow. But how can this be done effectively? The most immediate is pay, but there are other ways to
reward that do not necessarily require (large) financial outlays, and may be even more effective.

Some approaches to rewards advocate the concept of modifying behaviour through rewards of a
timely, desired and appropriate nature. Behaviour modification seeks to identify desired behaviours,
isolate the critical behaviours that need changing and then apply reinforcement principles to weaken
those and strengthen the identified desired behaviours:

1. discussion (with relevant personnel), systematic observation or via focus groups.

2. creating a baseline measure of the frequency of critical behaviours: observation, recordings
or existing records
3. functional analysis that identifies the cues that trigger the behaviour, and the consequences
that are maintaining that behaviour: by understanding the triggers it is possible to identify
what behaviours to change and how to change them.

Now it is possible to complete the intervention strategy that will encompass positive and/or negative
reinforcement strategies. Where the former increases the frequency of the desired behaviour when
the reinforcement is introduced, and the latter the opposite – i.e. reducing the negative behaviour by
removing the negative reinforcer. For example, a manager who emails to say thank you is using a
social reinforcer to increase the likelihood that the employee will continue with such efforts. On the
flip side, removing the need to complete time sheets on how the day has been spent will lead to
increased performance (as the employees will perceive that they are trusted and thus self-efficacy
etc. increases).

The above can also be seen as elements of the increasingly appreciated and researched phenomenon
of ‘nudge theory’.

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References

Fletcher, C. (2008) Appraisal, Feedback and Development: Making Performance Review Work, 4th
edition. Oxford: Routledge.

Kluger, A.N. and DeNisi, A. (1996) ‘The effects of feedback interventions on performance: A historical
review, a meta-analysis, and a preliminary feedback intervention theory’, Psychological Bulletin, 119,
254-84.

Arvey, A.D. and Murphy, K.R. (1998) ‘Performance evaluation in work settings’, Annual Review of
Psychology, 49, 141-68.

Ferris, G.R. and King, T.R. (1991) ‘Politics in human resource decisions: A walk on the dark side’,
Organizational Dynamics, 20, 59-71.

Murphy,K and Cleveland, J. (1995) Understanding Performance Appraisal: Social organizational and
goal-based perspectives. London: Sage.

Griffin, M.A., Neal, A. and Parker, S.A (2007) ‘A new model of work role performance positive
behaviour in uncertain and interdependent contexts’, Academy of Management Journal, 50, 327-47.

Villanova, P. and Bernadin, H.J. (1991) ‘Performance appraisal: The means, motive and opportunity to
manage impressions’, in R.A. Giacalone and P. Rosenfeld (eds), Applied Impression Management.
Newbury Park, CA: Sage Publications.

Barnes-Farrell, J.L. (2001) ‘Performance appraisal: Person perception, processes and challenges’ in M.
London (ed.), How People Evaluate Others in Organizations. London: LEA.
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Kipnis, D., Schmidt, S.M. and Wilkinson, I. (1980) ‘Intraorganizational influence tactics: Explorations in
getting one’s way’, Journal of Applied Psychology, 65, 440-52.

Fiske, S.T. (2001) ‘Effects of power on bias: Power explains and maintains individual, group and
societal disparities’, in A.Y. Lee-Chai and J.A. Bargh (eds), The Use and Abuse of Power: Multiple
perspectives on the causes of corruption. New York: Taylor & Francis.

CIPD (2005a) Survey Report. http://www.cipd.co.uk/subjects/perfmangmt/general/_permagmt.htm

(accessed 15 May 2009). London: CIPD

Bolton, G.E., Katok, E. and Ockenfels, A. (2004) ‘How effective are electronic reputations
mechanisms? An experimental investigation’, Management Science, 50, 1587-602.

Smither, J.W., London, M. and Reilly, R.R. (2005) ‘Does performance improve following multi-source
feedback? A theoretical model, meta-analysis and review of empirical findings’, Personnel
Psychology, 58, 33-66-

Mabey, C. (2001) ‘Closing the circle: Participant views of a 360-degree feedback programme’, Human
Resource Management Journal, 11, 41-54.

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