PERFORMANCE APPRAISAL CYNICISM: SUBORDINATE & MANAGER PERSPECTIVES

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1 PERFORMANCE APPRAISAL CYNICISM: SUBORDINATE & MANAGER PERSPECTIVES Michelle Brown (University of Melbourne) Maria Kraimer (The University of Iowa) Virginia Bratton (Montana State University)

2 Growth in use of performance management (Nankervis & Compton, 2006) Extent of change? 85-86% in 1990 & % in % in 2006

3 Nankervis & Compton, 2006

4 Overview 1. Define performance appraisal cynicism (PAC) 2. The theory of PAC 3. Antecedents and consequences of PAC a. from an employee/subordinate perspective (study 1) b. from a managers perspective (study 2) 4. Research and practical implications

5 A quick supermarket quiz yes no Have you ever felt angry at the performance appraisal process in your organisation? Have you ever felt that the performance appraisal process does not serve any useful purpose in your organisation? Do you think those charged with carrying out the performance appraisal process have the resources to do the job well? Do you doubt that attempts to improve the performance appraisal process will amount to anything useful? Does your manager have the proper training to conduct the performance appraisal effectively? How to score your quiz: Add up the number of 1 on your quiz

6 How to interpret your score? If you have one or more 1 on your quiz you are probably experiencing performance appraisal cynicism But do not despair it is not your fault! Organizational cynicism research regards cynicism as a learned response rather than a personality-based predisposition (Wanous, Reichers, & Austin, 2000). organizational cynicism are not simply the feelings that negative people bring into the organization, but that these attitudes are shaped by experiences in the work context (Johnson & O'Leary- Kelly, 2003, pp ). People do not decide to become cynical. Rather, a cynical nature develops from experiences in one or more organizations (Reichers et al., 1997).

7 What is performance appraisal cynicism? Organizational cynicism has been defined as a negative attitude toward one s employing organization the core belief is that principles of honesty, fairness and sincerity are sacrificed to further the self-interests of the leadership, leading to actions based on hidden motives and deception (Abraham, 2000, p. 269). We define performance appraisal cynicism as employees and managers beliefs that the organization s performance appraisal process lacks integrity and is not very useful.

8 Why might employees & managers develop PAC? Organizations typically describe a performance appraisal process as the procedures used to identify and reward the best performers (Campbell, Campbell, & Chia, 1998; Kessler & Purcell, 1992). Cynical beliefs may result from inconsistency in management words and deeds (Naus, van Iterson, & Roe, 2007) or disappointment in the actions taken by the organization and its management (Reichers, Wanous & Austin, 1997). The PA system will identify & reward our best employees The PA system is about making us work harder for less

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10 A theoretical perspective: COR According to conservation of resources (COR) theory, resources provide the individual with the means to attain job objectives (Hobfoll, 1989). When subordinates fail to acquire the necessary job resources or believe they have insufficient resources to meet work demands they try to limit their losses by psychologically detaching themselves from the organization or withdrawing from work tasks (Bakker, Demerouti, & Schaufeli, 2003; Demerouti et al., 2001). PAC lack of resources to do one s job leads to withdrawal (Emmerick et al (2008) argue that resources are the most important drivers of cynicism COR theory defines resources as those objects, personal characteristics, conditions or energies that are valued by the individual or that serve as a means for attainment of these objects Guides the selection of our antecedent variables

11 OBJECTS Tools & equipment STUDY 1 PAC employee perspective PERSONAL CHARACTERISTICS negative affect (general disposition) Cohesion LMX Feedback delivery PAC Turnover intentions CONDITIONS PA fairness Org tenure Employee involve ENERGIES Feedback available Performance planning

12 Data We administered a survey to all 1481 subordinates subject to annual performance reviews in a motor/insurance company in Australia 384 subordinates responded (26% response rate). Checks for non response bias Sample characteristics: average age was years The majority of the subordinate respondents were female (62%). 75% of respondents were employed full time, 22% were parttime, and 3% were casual (e.g., temporary) workers 11% of respondents were union members.

13 Measuring PAC (α=.83) (5=SA; 1 = SD) 1. The people responsible for evaluating my performance do not care enough about what they are doing, 2. The performance review process isn't very useful, 3. I doubt that attempts to improve the performance appraisal process will amount to anything useful, 4. The people responsible for performance reviews around here do not have the skills needed to do this job, 5. The people responsible for implementing performance reviews around here do not take it seriously.

14 Results - subordinates Inadequate job resources are positively related to subordinates performance appraisal cynicism. High level of negative affect will be positively related to subordinates performance appraisal cynicism Low levels of co worker cohesion will be positively related to subordinates performance appraisal cynicism Low levels of LMX will be positively related to subordinates performance appraisal cynicism Low Quality feedback delivery is positively related to subordinates performance appraisal cynicism Unfair performance appraisals will be negatively related to subordinates performance appraisal cynicism Subordinates with longer tenure are more likely to report performance appraisal cynicism Subordinate involvement in setting performance objectives is negatively related to subordinates performance appraisal cynicism. Low performance feedback availability is positively related to subordinates performance appraisal cynicism. Low performance planning will be positively related to a subordinates performance appraisal cynicism Subordinates performance appraisal cynicism is positively related to turnover intentions. (p<.01) ns (p<.01) ns (p<.0.1) (p<.01) (p<.01) (p<.01) (p<.01) (p<.05) (p<.05)

15 OBJECTS Adequate job resources to do PA (T1) STUDY 2 PAC manager perspective PERSONAL CHARACTERISTICS Self efficacy T1 PADS T1 Co worker support T1 PAC (T2) Turnover Intentions (T2) CONDITIONS Accountability (T1) Org tenure ENERGIES Number of reports T1 Yrs of PA experience T1

16 The Hypotheses OBJECTS PERSONAL CHARACTERI STICS Inadequate resources available for performance appraisals are positively related to managers performance appraisal cynicism. Managers with low self efficacy will report higher levels of performance appraisal cynicism Performance feedback discomfort is positively related to managers performance appraisal cynicism. Managers with low levels of co worker support will report higher levels of performance appraisal cynicism. CONDITIONS Managerial accountability for performance appraisals is positively related to managers performance appraisal cynicism. There will be a positive relationship between managerial tenure and performance appraisal cynicism ENERGIES There will be a positive relationship between the number of subordinates of a manager and performance appraisal cynicism. There will be a positive relationship between the number of years in which a manager has assessed subordinate performance and performance appraisal cynicism. Turnover intent Managers performance appraisal cynicism is positively related to their turnover intentions.

17 Data School principals from a state in Australia The time 1 survey was sent to all 1524 school principals and we received 317 completed replies (response rate of 21%). Six months later we sent all the time 1 participants (n=317) a short follow up survey and received 240 completed surveys, a time 2 response rate of 75.7%. Check for non response bias Sample characteristics: average age was years The majority of the managers were male (59.9%) organizational tenure ranged from 6 years to 43 years with an average tenure of years.

18 Measuring PAC (α =.73) 1. i doubt that attempts to improve the performance appraisal process will amount to anything useful 2. the performance appraisal process isn t very useful. 3. i don t think it is worthwhile to improve the performance appraisal process Measuring resources to do appraisals (α =.76) i do not have the resources to do effective performance reviews i do not get the cooperation from others that i need to do effective performance i have too many other job responsibilities to do effective performance reviews i was not given the proper training to do the process effectively.

19 Results OBJECTS PERSONAL CHARACTERISTICS CONDITIONS ENERGIES Turnover intent Inadequate resources available for performance appraisals are positively related to managers performance appraisal cynicism. Managers with low self efficacy will report higher levels of performance appraisal cynicism Performance feedback discomfort is positively related to managers performance appraisal cynicism. Managers with low levels of co worker support will report higher levels of performance appraisal cynicism. Managerial accountability for performance appraisals is positively related to managers performance appraisal cynicism. There will be a positive relationship between managerial tenure and performance appraisal cynicism There will be a positive relationship between the number of subordinates of a manager and performance appraisal cynicism. There will be a positive relationship between the number of years in which a manager has assessed subordinate performance and performance appraisal cynicism. Managers performance appraisal cynicism is positively related to their turnover intentions. (p<.05) ns ns (p<.05) ns ns ns (p<.05) (p<.05)

20 Concluding observations Researchers have tended to focus on the intended consequences of a performance appraisal process, such as motivation to improve (Taylor et al., 1995). We examine an unintended consequence of the performance appraisal process, namely performance appraisal cynicism. We have provided insights into how cynicism develops within the performance appraisal process absence of resources important Gap between statements about PM and the practice Subordinates and managers with high levels of performance appraisal cynicism were more likely to contemplate leaving the organization.

21 Thank you! Looking forward to your questions, comments and observations!