- Email: [email protected]
Truth or consequences: Politics and performance appraisals
Business Horizons / November-December1989
Truth or Consequences: Politics and Performance Appraisals Clinton O. Longenecker
76 Clinton O. Longenecker is an associate
professor of management at the University of Toledo.
Politics often enters the performance appraisal process, thereby gumming up the works. A conscious effort must be made by both the manager and those training him or her in appraisal techniques to keep the process from becoming mired in a political game.
p
erformance appraisal. These two relatively unassuming words generally evoke an immediate and, at times, negative reaction from both managers and subordinates. Feelings of dread, anxiety, and frustration frequently accompany the appraisal process as facts of organizational life. Yet, every manager recognizes that, like it or" not, performance appraisals are here to stay. For decades, employee evaluations have been used for a variety of different organizational purposes. Previously, the appraisal process was generally considered to be one of the more difficult and yet routine and narrow management practices. In contrast, it is now widely recognized as a significant vehicle for improving performance and productivity of both employees and organizations. To this end, many organizations and managers are currently reexamining their appraisal procedures and practices. Why is performance evaluation currently viewed in such an expanded light after its rather difficult and humble past?
One of the likely reasons for this attention appears to be that both human resource managers and researchers have recently moved away from their rather myopic concern with refining the nature of the appraisal instrument itself. Over the last several decades emphasis has been placed on creating an appraisal instrument that would allow managers to generate ratings that were close to 100 percent accurate. As is perhaps evident to any manager who has conducted an appraisal, that effort was a somewhat misguided, maybe even futile, pursuit. More appropriate goals for appraisals include employee development and productivity, which are attainable by focusing not on the content of the instrument but rather on the process of evaluation. That recognition and the awareness that the appraisal process, properly done, provides a w a y of improving employee and organizational performance probably best explains w h y appraisal is becoming a hot topic. In theory, employee appraisal is an objective, rational, and systematic at-
Truth or Consequences. Politics and PerformanceAppraisals tempt on the part of the manager to accurately describe subordinate performance. However, recent research has demonstrated that in reality managers have some very pragmatic concerns in evaluating their people. These concerns are clearly more pressing than simply generating brutally accurate ratings. In a dynamic organizational environment, accuracy might not be as important to a manager as discretion, effectiveness, and (ultimately) survival. Managers require latitude and flexibility in their efforts to make their departments productive. In managers' dynamic environments, they often find it necessary to exercise some creative discretion over employee ratings. It happens to the best of managers at times. Put bluntly, occasionally managers feel the need to manipulate ratings in the perceived best interest of their employees, their departments, and perhaps even themselves. Managers will use the appraisal process to their advantage, rather than allowing the appraisal event to derail their efforts for the sake of mere accuracy in employee performance ratings. As a consequence, there are other barriers to the optimal use of appraisal as a performance-enhancing device. Any serious discussion of performance appraisal must recognize that organizations are political entities and that few, if any, important decisions are made without the key actors attempting to protect their own interests. Performance appraisals are no exception. Thus, it is likely that political considerations (factors not related to actual performance) influence managers when they evaluate subordinates. Politics in this context refers to raters' deliberate attempts to enhance or protect their own interests when conflicting courses of action are possible in the ratings they provide their subordinates. In this sense, factors other than the subordinate's actual performance are likely to affect the actual rating the subordinate receives. Political activity on the part of the person doing the rating therefore represents a conscious source of bias or inaccuracy in employee appraisal. Stated more simply, no matter how well designed the appraisal system, no matter how effective the organization's
training program, no matter how hard the issue of accuracy is stressed--when you turn managers loose in the real world, they consciously fudge the numbers. The major upshot of this recognition of how appraisals are really conducted is twofold: first, rating accuracy is automatically derailed; second, political activity on the part of managers can become a prominent feature of the appraisal process and can have a debilitating effect on employee trust, motivation, and development. The occurrence of politically induced behavior in appraisals is essentially a natural phenomenon; it should be expected, and it is not likely to be stamped out (despite the efforts of human resource managers and trainers who continually tell us that inaccuracy in ratings will lead to the death of the organization). The goal of the astute manager and organization should not be to eliminate the politics of appraisals. Rather, the goal should be to understand and manage the bias and to create an organizational culture that stimulates effective rater behavior. The main purpose here is to 1) look at some of the political aspects of the appraisal process and 2) suggest ways of setting the stage for and conducting appraisals that will simultaneously minimize the adverse impact of political behavior on appraisals. In doing so, it is beneficial to briefly examine some recent research findings about the nature of politics in appraisals. The findings were derived from in-depth interviews with upper-level executives in seven large corporations (Longenecker, Gioia, and Sims 1987). APPRAISAL POLITICS irst and perhaps most importantly, managers note that political considerations are almost always part of the appraisal process. Specifically, factors other than the subordinate's actual performance frequently influence the manager's evaluation process. When it comes right d o w n to it, it is generally not that managers have not been trained to do the proper things to create accurate ratings; it is that they choose to play by their own rules rather than those cre-
F
ated by "the system." Although this line of reasoning is something managers find distasteful and unacceptable in others, no savvy manager is going to use the appraisal process to shoot himself or herself in the foot (especially when the process is rough enough in the first place). There are many factors that discourage managers from being completely honest and accurate in evaluating their people. Avoiding confrontation with subordinates, damaging working relationships, and creating permanent written documents are all real considerations for a manager. In addition, managers are concerned about the impact of evaluations on subordinate pay, motivation, and career advancement. In this light, a manager must weigh the short-run ramifications of the ratings he or she provides each subordinate. Managers in this study stated that when the projected impact of the ratings is perceived to be negative, the temptation to manipulate ratings to lessen their negative impact is very strong. Secondly, organizational culture was found to have a major influence on the manager's use of politics in appraisal. If top-level management tended to be politically oriented, a "political culture" t e n d e d to cascade d o w n through the organization. Likewise, if top management viewed the appraisal process itself as merely a necessary bureaucratic exercise and did not support and encourage proper appraisals, a similar sort of belief system tended to characterize lower levels of the organization. Also, organizations that invested in training and coaching of managers who do appraisals tended to be associated with lower levels of political behavior. Finally, organizations with cultures that were more open about discussing appraisals experienced lower incidences of political appraisal bias. The rule turns out to be a simple one: If an organization takes performance appraisal seriously from the top down and creates a positive, performanceoriented culture, managers will be less likely to play political games with ratings. Thirdly, the main outcome of politics in the appraisal process typically involved managers inflating or deflat-
77
Business Horizons / November-December1989
"The practice of political ratings can produce a number of less-than-desirable side effects for the manager, the subordinate, and the organization in the long run." 78
ing a subordinate's overall performance rating. Longenecker, Gioia, and Sims reported that deliberate distortions of appraisals are typically biased in the subordinates' favor. Managers have identified a number of compelling reasons for int6ntionally inflating subordinate ratings, including: • The belief that accurate ratings would have a damaging effect on the subordinate's motivation and performance; • The desire to i m p r o v e an employee's eligibility for merit raises; • The desire to avoid airing the department's dirty laundry, especially if the written appraisal will be reviewed by others; • The wish to avoid creating a negative permanent record of poor performance that might hound the employee in the future; • The need to protect good performers whose performance was suffering because of personal problems; • The desire to reward employees for good recent performance, although their overall performance might not be up to snuff; • The wish to reward employees displaying great effort even when results are relatively low; • The need to avoid confrontation with certain hard-to-manage employees; • The desire to promote a poor or disliked employee up and out of the department; and
• The manager's strong positive feeling about the employee. For the most part, managers reported that they were very hesitant to deflate a subordinate's rating because of the legal, ethical, and motivational consequences of such behavior. Nevertheless, negative distortions do occur, and managers have identified the following rationales: • To scare better performance out of an employee; • To punish a difficult or rebellious employee; • To encourage a problem employee to quit; • To create a strong record to justify a planned firing; • To minimize the amount of the merit increase a subordinate receives; and • To comply with an organization edict that discourages managers from giving high ratings. These findings reveal that not all reasons for intentionally inflating or deflating appraisals would normally be considered bad. The reasons generally seem 5o stem from basic human inclinations such as loyalty, sympathy, concern, conflict avoidance, deviance, and power seeking. Rating accuracy is much less important to managers than the motivation that performance appraisals can create in their employees. In fact, most of the executives surveyed for this research did not believe that these actions qualified as politics per se
or as rating errors. Rather, they classified them as discretionary actions that were necessary for effective management. Still, it is also clear that although a number of these actions can produce desirable or less painful results in the short run, the practice of political ratings can produce a number of lessthan-desirable side effects for the manager, the subordinate, and the organization in the long run. Political anarchy should not prevail in the appraisal process. U N D E R S T A N D I N G THE
POLITICS OF APPRAISAL n attempting to offer some advice on how individual managers and their organizations can better manage the political aspects of appraisal, we must start with a brief discussion of two primary factors that affect rater behavior and ultimately subordinate ratings. First, there is the rater's ability to generate accurate ratings. Ability is a function of the manager's skill at: 1) clarifying and communicating the subordinate's job description, goals, and performance s t a n d a r d s ; 2) o b s e r v i n g the subordinate's actual performance on a regular basis and providing ongoing feedback; 3) storing and later recalling relevant performance data; 4) rendering effective valuative judgment in completing the organization's appraisal form; and 5) conducting an open and
I
Truth or Consequences:Politics and PerformanceAppraisals Traditionally, inaccuracy in ratings has been attributed to "rating errors" from the viewpoint that accuracy is the rater's paramount concern. In this zone however, the manager's activity is not an error but rather a specific, preferred course of action. At this point, factors extraneous to the manager's knowledge of the subordinate's performance can play a key role in influencing the overall ratings the subordinate receives. Managers are plagued by the nagging question, "What will the outcome be if I give this employee this particular rating?" It is at this point that the key reasons for inflating or deflating ratings, identified earlier, have their impact on the rating process. Most frequently the result is an inflation of the subordinate's overall rating.
Figure A Typology of Rating Outcomes
Strong
Unintentionally Inaccurate Ratings
Brutally Accurate Ratings
Inaccurate Ratings
Politically Influenced Ratings
Manager's Willingness to Provide Accurate Ratings
Weak Weak
Strong
M A N A G I N G THE POLITICS OF
APPRAISAL
Manager's Performance Rating Ability/Skill
honest appraisal interview. The second issue deals with the manager's willingness to generate accurate ratings on an individual subordinate. The manager's willingness is the degree to which he or she wants to generate honest and accurate ratings. Varying degrees of both of these qualities exist in all managers. The Figure provides a framework for understanding these concepts in unison. When a manager has never been properly trained in how to conduct proper appraisals and has no real inclination to conduct the appraisal, the appraisal will generally produce inaccurate, ineffective ratings. In this case, the organization has done little to prepare the manager either psychologically or technically for the appraisal event, and an effective appraisal would be an aberration. Ifa manager has never received proper training and yet possesses a strong willingness to conduct appraisals, the end product will be wellintended ratings that have an unintended degree of inaccuracy. This inaccuracy could diminish with time as the manager learns the art of appraisal through trial and error. But the absence of training can potentially cause the manager to have a variety of rather negative appraisal experiences that
could potentially diminish his or her willingness to conduct appraisals (something not easily regained). Managers who are skilled in conducting appraisals and have a desire to generate accurate ratings for each of their subordinates would be on the surface a human resource manager's "dream come true." The outcome of this combination of skill and motivation would be brutally accurate ratings, although some psychometricians might debate this assertion. Yet one must ask the question, "Are accurate ratings always the most effective vehicle for motivating and managing people?" This research suggests most managers would say no. Such ratings can have mixed results in enhancing employee motivation, performance, and development because, at times, the naked truth can be painful and problematic. And that takes us to the situation in which managers frequently find themselves. They have the ability to conduct an accurate appraisal of a subordinate, but their willingness to be completely objective, honest, and accurate is constrained. It is in this "zone" that conscious, intentional, political manipulations of performance ratings occur.
t is very difficult to pass judgment on managers that frequently operate in this zone; it would be unwise to do so without fully understanding the intricacies of their relationship with individual subordinates and the culture of their organization. Instead, let us stop and think about the consequences of intentionally biased ratings at both the individual and organizational level. At the individual level, political ratings can diminish the manager's ability to reward high performers, damage the trust factor that is so critical, cause uncertainty and doubt among subordinates, raise a host of legal and ethical dilemmas for the manager, and ultimately create more performance problems than they solve. At the organizational level, a strong degree of cynicism will surround the appraisal process, pay-for-performance programs will become meaningless, data gathered for promotional and training decisions will be inaccurate and suspect, and the notion of using such a process to enhance performance and productivity will be lost.
I
The Manager's Role Douglas McGregor (1957) shed a great deal of light on the issue of politics in
79
Business Horizons / November-December1989
80
the appraisal process when he discussed the reluctance of managers to "play God" in evaluating their subordinates. The bottom line is that most of us are less than comfortable passing judgment on someone else when we know we are going to have to look them in the eyes and share our views with that person. When our views are favorable the task is less painful, at times even pleasant, because it makes us feel good to make someone else feel good. But when the news is less positive, maybe even bad, the task becomes very difficult. In the context of the workplace the process becomes even more difficult because of the high stakes, strong egos, money, pride, desire to be liked, and a host of other organizational and human variables that are involved. To the manager who allows politics to enter the rating process, it is easy to understand w h y it happens. There are some very compelling reasons to generate inaccurate ratings, especially those that are slightly inflated. The danger lies in the fact that these behaviors can hurt employee performance. The manager's strategy should be to conduct appraisals that have long-term performance impact. The following steps may be helpful in evaluating appraisal techniques: • Rethink your purpose for the appraisal itself. Ask yourself w h y you do appraisals: because the organization requires.you to, or because you see the importance of the process? It is probably a combination of those two points, leaning toward being required to do them. It is useful to realize that the appraisal process causes certain things to happen that most likely would not otherwise take place. You must realize that properly conducted appraisals can provide you and your people with an arena in which to legitimately talk about performance and development. Without formal appraisals there is a good chance these factors might be ignored until a crisis develops. Appraisals force us to stop and take stock of where we are and where we are going in a proactive manner. If a manager views appraisals as an annualbureaucratic hoopjumping ritual, political ratings will be a natural outcome. • Rethink your approach to the appraisal process. Performance ap-
praisal is not an event, it is a process. If we approach it as an event of paramount impact and importance, we put excessive pressure on both ourselves and our subordinates. If we approach appraisals as part of an ongoing process, the annual formal appraisal will not become bigger than life and will not place pressure on us to provide palatable ratings. Evaluation must be ongoing and frequent. • Be sure to set the stage for subordinate performance. Many managers are compelled to inflate ratings because they failed to clarify what the subordinate would be held accountable for at the end of the performance period. The manager and the subordinate must do interactive performance planning in order to agree upon performance standards and to "set the stage" for performance. If we clarify these expectations up front we reduce the probability of confrontation during the appraisal. Thus, a manager can proactively remove a potential reason for manipulating ratings while simultaneously improving the subordinate's sense of direction. • Make appraisal an ongoing activity. Appraisals are anxiety-producing events because both parties fear the unknown. The subordinate is anxious about what the manager will say. The manager is anxious about how the subordinate will react. Subordinates need ongoing feedback concerning their performance; providing feedback has the twofold effect of keeping the subordinate on track in the short run and taking the mystery out of what will be said in" the formal appraisal. This approach helps the manager stay in contact with his or her people, manage short-run changes in work priorities, nip poor performance in the bud, and provides him or her with data for the formal performance evaluation. Monthly, semiformal, "mini-appraisals" are highly recommended. • Use a long-term strategy in writing appraisals. When it is time to do the formal written review, remember four things: a) what is written is generally what is going to be remembered; b) people really do want the truth; c) written ratings are a potentially powerful form of reinforcement and direction;
and d) subordinates compare ratings with each other. The politics of appraisal come to life when we are tempted to knowingly manipulate a subordinate's written appraisal. At times, we can help the subordinate in the short run by using such discretion. Protecting an employee with a personal problem, trying to get more merit-based pay increases for people, or trying to shock an employee into action to prevent termination are all good examples of "positive discretion." But at times the converse is true. We might inflate ratings to avoid a subordinate's caustic personality, to hide our neglect in clarifying performance standards, to get a problem employee promoted out of our hair, or to avoid conflict. In the long run this can damage your attempts as a manager to maximize performance from your subordinates. When you ask yourself the question, " H o w will the subordinate respond if I give him this particular rating?" ask yourself one more question: "How will this particular rating affect the subordinate's longrun performance in this department?" Managers must not underestimate the motivational potential of the written appraisal; if we give higher ratings than are deserved, we will get lower performance than we desire. • Base the appraisal interview on trust. As you approach the appraisal review, remember its function. It is a communication vehicle used for looking back and then forward with the intent of enhancing employee performance and development. It has been suggested that there are frequently two appraisals, the written one and the real one. The "real" one is the evaluation that is communicated directly to the individual. This stems from the belief that managers are more comfortable bringing something up in conversation than they are writing it down. Some people are more difficult to appraise by the nature of the personalities, jobs, and performance. When approaching the appraisal review, be psychologically and emotionally prepared to tell each individual the truth. To do otherwise will only create more problems later. Politics should be minimized in the appraisal interview by making it no more than an extension of regular dis-
Truth or Consequences:Poht~csand PerformanceAppraisals
"The organization has two key responsibilities to its managers where appraisals are concerned: to enhance their appraisal skills, and to take steps to encourage their willingness to conduct effective appraisals." 81 cussions of the subordinate's performance. Ultimately, subordinates know when the manager is being open and honest and when he is not. The manager has little to gain and much to lose in the long run if appraisal interviews are conducted in an environment that is anything less than open and honest.
The Organization's Role Most organizations operate with the belief that performance appraisals serve a valuable function in managing people. The reality is not always so optimistic. The organization has two key responsibilities to its managers where appraisals are concerned: to enhance their appraisal skills, and to take steps to encourage their willingness to conduct effective appraisals. In this sense, the organization's goal is to create an organizational culture that stimulates appraisal effectiveness. These issues can be addressed as follows: • Lead by example. To have a topnotch appraisal system requires top management support. The importance of doing appraisals well should be demonstrated through the actions of top management. In many organizations, managerial appraisals are notorious for being poorly conducted and politically driven. If this is true at the top of the organization it will be emulated at lower levels of the organization as well. Proper appraisal techniques and attitudes have to be modeled by executives. • Performance appraisal training
must be multifaceted and intense. Managers need specific training on how to conduct good appraisals. Equally important are topics such as performance planning, effective supervision, providing feedback, conflict resolution, and communication. Performance appraisal training must be conducted not in isolation but within the context of management training. Skills training should be intertwined with training designed to enhance the motivation to provide accurate appraisals. The goal is to enhance the manager's selfefficacy and confidence in conducting appraisals and to make him feel comfortable in approaching various appraisal situations. In addition, some training programs address the topic of political behavior in ratings and fail to distinguish between managerial discretion and detrimental manipulation. The program described above cannot be accomplished in a two-hour "here's the rating form" format. Intense appraisal training can enhance both rater skill and motivation and can ultimately improve the effectiveness of appraisals as a performance-enhancing process. • Create a more open and positive appraisal environment. Discussion of appraisal reviews and ratings is often taboo in organizations, and the taboo typically applies to discussions about the process itself. That taboo is dysfunctional. The goal of the organization should be to increase the degree to which people trust and support the appraisal system. The organization benefits when discussions about the
policies and procedures concerning appraisal are open to all concerned. Managers frequently view the appraisal process as a bureaucratic procedure developed by the h u m a n resource department to create more paperwork. The h u m a n resource d e p a r t m e n t should take active steps to get the performance-appraisal users more involved in the process. Consider installing a "Quality Circle" approach to soliciting managers' input on how to improve the process. The human resources department should have the responsibility for conducting periodic roundtable discussions aimed at improving the corporate process and, perhaps of equal importance, keeping the issue of effective appraisal in the forefront of managerial consciousness. These efforts can go a long way toward enhancing a manager's willingness to be part of the system. • Do not make organizational policy a political stumbling block for the rater. Organizations must think about policies and procedures that potentially reduce the manager's willingness to generate accurate ratings. This suggestion can be something as simple as reducing the number of people who have access to specific appraisal information or as intricate as taking extreme care in formulating merit increase percentages and policies. Forcing managers to rate all of their subordinates in an unreasonably short period of time, asking managers to use inappropriate or outdated rating forms, and implementing unwritten policies such as
Business Horizons / November-December1989
82
"we've had a bad year so there will be no outstanding performance ratings this year" are all potential examples of organizations diminishing a manager's willingness to generate accurate ratings. Policymakers should put themselves in the position of those who must live with these policies before acting. • Provide managers with feedback on their appraisal performance. To enhance a manager's willingness to do effective appraisal, those who manage managers need to provide their subordinates with feedback on their ability and willingness to conduct high-quality appraisals. Effective appraisal efforts need to be recognized and rewarded on an individual level. In addition, consider the use of organizational surveys to assess managerial and subordinate perceptions of appraisal and its effects and outcomes. It is often surprising how far apart perceptions of the same process can be and how damaging mutual misconceptions can become. All parties to the process ideally should understand how others see it. It is easier to solve a problem if all affected parties first agree on what is right and wrong (or at least improvable) with the process. A survey assessing the strengths and weaknesses of an organization's appraisal system can provide managers with useful feedback on how subordinates view the process and a chance for self-assessment. Political activity can be discouraged by convincing managers that their subordinates know when they are being truthful and when they are not.
ppraisal politics can be reduced if the organization takes appraisals seriously from the top down and builds a culture that actively supports appraisal efforts. Managers must be allowed discretion in their use of performance appraisal. And they must remember that developing their skills both as managers and raters will most likely increase their motivation to make accurate appraisals and diminish their desire to manipulate ratings. Managers' concerns go well beyond mere accuracy in ratings. However, discreet appraisals are not necessarily at odds with accurate appraisals. Minimizing the politics that can negatively affect the process can help a manager turn a potentially useful vehicle for performance improvement into an instrument for achieving performance effectiveness. ~3
A
References H.J. Bernardin and R. W. Beatty,Performance Appraisal: Assessing Human Behaviorat Work (Boston, Mass.: Kent, 1984). H.J. Bernardin and M.R. Buckley, "A Consideration of Strategies in Rater Training," Academy of Management Review, 6 (1981): 205-212. W. C. Borman, "Exploring Upper Limits of Reliability and Validity in Performance Ratings," Journal of Applied Psychology, 63 (1978): 135-144. W.E Cascio, Applied Psychology in Personnel Management (Englewood Cliffs, N.J.: Prentice-Hall, 1987).
J.S. Kane and E.E. Lawler, "Performance Appraisal Effectiveness:AnAssessment and Determinants," in B. Staw ed., Research in Organizational Behavior (Greenwich, Conn.; JAI Press, 1979). F.J. Landy and J.L. Farr, "Performance Rating," PsychologicalBulletin, 87 (1980): 72107. G.P. Latham and K.N. Wexley, Increasing
Productivity Through Performance Appraisal (Reading, Mass.: Addison Wesley,1981). E. Lawler, A. Mohrman, and S. Resnich, "PerformanceAppraisal Revisited," Organizational Dynamics, Summer 1984, pp. 20-35. C.O. Longenecker and D.A. Gioia, "Neglected at the Top Executives Talked About ExecutiveAppraisal," SloanManagement Review, Winter 1988, 29 (2): 41-47. C.O. Longenecker,D.A. Gioia,and H.P.Sims, "Behind the Mask: The Politics of Employee Appraisal," The Academy ofManagement Executives, August 1987, 1 (3): 183-193. C.O. Longenecker, P.R.Liverpool, and K.A. Wilson, "An Assessment of Managerial/ Subordinate Perceptions of Performance Appraisal Effectiveness,"Journalof Business and Psychology,Summer 1988, 2 (4):311-320. D. McGregor, "An Uneasy Look at Performance Appraisal," Harvard Business Review, 1957, pp. 89-94. J. Pfeffer,Powerin Organizations(Marshfield, Mass.: Pittman Publishing, 1981).
Truth or Consequences: Politics and Performance Appraisals Clinton O. Longenecker
76 Clinton O. Longenecker is an associate
professor of management at the University of Toledo.
Politics often enters the performance appraisal process, thereby gumming up the works. A conscious effort must be made by both the manager and those training him or her in appraisal techniques to keep the process from becoming mired in a political game.
p
erformance appraisal. These two relatively unassuming words generally evoke an immediate and, at times, negative reaction from both managers and subordinates. Feelings of dread, anxiety, and frustration frequently accompany the appraisal process as facts of organizational life. Yet, every manager recognizes that, like it or" not, performance appraisals are here to stay. For decades, employee evaluations have been used for a variety of different organizational purposes. Previously, the appraisal process was generally considered to be one of the more difficult and yet routine and narrow management practices. In contrast, it is now widely recognized as a significant vehicle for improving performance and productivity of both employees and organizations. To this end, many organizations and managers are currently reexamining their appraisal procedures and practices. Why is performance evaluation currently viewed in such an expanded light after its rather difficult and humble past?
One of the likely reasons for this attention appears to be that both human resource managers and researchers have recently moved away from their rather myopic concern with refining the nature of the appraisal instrument itself. Over the last several decades emphasis has been placed on creating an appraisal instrument that would allow managers to generate ratings that were close to 100 percent accurate. As is perhaps evident to any manager who has conducted an appraisal, that effort was a somewhat misguided, maybe even futile, pursuit. More appropriate goals for appraisals include employee development and productivity, which are attainable by focusing not on the content of the instrument but rather on the process of evaluation. That recognition and the awareness that the appraisal process, properly done, provides a w a y of improving employee and organizational performance probably best explains w h y appraisal is becoming a hot topic. In theory, employee appraisal is an objective, rational, and systematic at-
Truth or Consequences. Politics and PerformanceAppraisals tempt on the part of the manager to accurately describe subordinate performance. However, recent research has demonstrated that in reality managers have some very pragmatic concerns in evaluating their people. These concerns are clearly more pressing than simply generating brutally accurate ratings. In a dynamic organizational environment, accuracy might not be as important to a manager as discretion, effectiveness, and (ultimately) survival. Managers require latitude and flexibility in their efforts to make their departments productive. In managers' dynamic environments, they often find it necessary to exercise some creative discretion over employee ratings. It happens to the best of managers at times. Put bluntly, occasionally managers feel the need to manipulate ratings in the perceived best interest of their employees, their departments, and perhaps even themselves. Managers will use the appraisal process to their advantage, rather than allowing the appraisal event to derail their efforts for the sake of mere accuracy in employee performance ratings. As a consequence, there are other barriers to the optimal use of appraisal as a performance-enhancing device. Any serious discussion of performance appraisal must recognize that organizations are political entities and that few, if any, important decisions are made without the key actors attempting to protect their own interests. Performance appraisals are no exception. Thus, it is likely that political considerations (factors not related to actual performance) influence managers when they evaluate subordinates. Politics in this context refers to raters' deliberate attempts to enhance or protect their own interests when conflicting courses of action are possible in the ratings they provide their subordinates. In this sense, factors other than the subordinate's actual performance are likely to affect the actual rating the subordinate receives. Political activity on the part of the person doing the rating therefore represents a conscious source of bias or inaccuracy in employee appraisal. Stated more simply, no matter how well designed the appraisal system, no matter how effective the organization's
training program, no matter how hard the issue of accuracy is stressed--when you turn managers loose in the real world, they consciously fudge the numbers. The major upshot of this recognition of how appraisals are really conducted is twofold: first, rating accuracy is automatically derailed; second, political activity on the part of managers can become a prominent feature of the appraisal process and can have a debilitating effect on employee trust, motivation, and development. The occurrence of politically induced behavior in appraisals is essentially a natural phenomenon; it should be expected, and it is not likely to be stamped out (despite the efforts of human resource managers and trainers who continually tell us that inaccuracy in ratings will lead to the death of the organization). The goal of the astute manager and organization should not be to eliminate the politics of appraisals. Rather, the goal should be to understand and manage the bias and to create an organizational culture that stimulates effective rater behavior. The main purpose here is to 1) look at some of the political aspects of the appraisal process and 2) suggest ways of setting the stage for and conducting appraisals that will simultaneously minimize the adverse impact of political behavior on appraisals. In doing so, it is beneficial to briefly examine some recent research findings about the nature of politics in appraisals. The findings were derived from in-depth interviews with upper-level executives in seven large corporations (Longenecker, Gioia, and Sims 1987). APPRAISAL POLITICS irst and perhaps most importantly, managers note that political considerations are almost always part of the appraisal process. Specifically, factors other than the subordinate's actual performance frequently influence the manager's evaluation process. When it comes right d o w n to it, it is generally not that managers have not been trained to do the proper things to create accurate ratings; it is that they choose to play by their own rules rather than those cre-
F
ated by "the system." Although this line of reasoning is something managers find distasteful and unacceptable in others, no savvy manager is going to use the appraisal process to shoot himself or herself in the foot (especially when the process is rough enough in the first place). There are many factors that discourage managers from being completely honest and accurate in evaluating their people. Avoiding confrontation with subordinates, damaging working relationships, and creating permanent written documents are all real considerations for a manager. In addition, managers are concerned about the impact of evaluations on subordinate pay, motivation, and career advancement. In this light, a manager must weigh the short-run ramifications of the ratings he or she provides each subordinate. Managers in this study stated that when the projected impact of the ratings is perceived to be negative, the temptation to manipulate ratings to lessen their negative impact is very strong. Secondly, organizational culture was found to have a major influence on the manager's use of politics in appraisal. If top-level management tended to be politically oriented, a "political culture" t e n d e d to cascade d o w n through the organization. Likewise, if top management viewed the appraisal process itself as merely a necessary bureaucratic exercise and did not support and encourage proper appraisals, a similar sort of belief system tended to characterize lower levels of the organization. Also, organizations that invested in training and coaching of managers who do appraisals tended to be associated with lower levels of political behavior. Finally, organizations with cultures that were more open about discussing appraisals experienced lower incidences of political appraisal bias. The rule turns out to be a simple one: If an organization takes performance appraisal seriously from the top down and creates a positive, performanceoriented culture, managers will be less likely to play political games with ratings. Thirdly, the main outcome of politics in the appraisal process typically involved managers inflating or deflat-
77
Business Horizons / November-December1989
"The practice of political ratings can produce a number of less-than-desirable side effects for the manager, the subordinate, and the organization in the long run." 78
ing a subordinate's overall performance rating. Longenecker, Gioia, and Sims reported that deliberate distortions of appraisals are typically biased in the subordinates' favor. Managers have identified a number of compelling reasons for int6ntionally inflating subordinate ratings, including: • The belief that accurate ratings would have a damaging effect on the subordinate's motivation and performance; • The desire to i m p r o v e an employee's eligibility for merit raises; • The desire to avoid airing the department's dirty laundry, especially if the written appraisal will be reviewed by others; • The wish to avoid creating a negative permanent record of poor performance that might hound the employee in the future; • The need to protect good performers whose performance was suffering because of personal problems; • The desire to reward employees for good recent performance, although their overall performance might not be up to snuff; • The wish to reward employees displaying great effort even when results are relatively low; • The need to avoid confrontation with certain hard-to-manage employees; • The desire to promote a poor or disliked employee up and out of the department; and
• The manager's strong positive feeling about the employee. For the most part, managers reported that they were very hesitant to deflate a subordinate's rating because of the legal, ethical, and motivational consequences of such behavior. Nevertheless, negative distortions do occur, and managers have identified the following rationales: • To scare better performance out of an employee; • To punish a difficult or rebellious employee; • To encourage a problem employee to quit; • To create a strong record to justify a planned firing; • To minimize the amount of the merit increase a subordinate receives; and • To comply with an organization edict that discourages managers from giving high ratings. These findings reveal that not all reasons for intentionally inflating or deflating appraisals would normally be considered bad. The reasons generally seem 5o stem from basic human inclinations such as loyalty, sympathy, concern, conflict avoidance, deviance, and power seeking. Rating accuracy is much less important to managers than the motivation that performance appraisals can create in their employees. In fact, most of the executives surveyed for this research did not believe that these actions qualified as politics per se
or as rating errors. Rather, they classified them as discretionary actions that were necessary for effective management. Still, it is also clear that although a number of these actions can produce desirable or less painful results in the short run, the practice of political ratings can produce a number of lessthan-desirable side effects for the manager, the subordinate, and the organization in the long run. Political anarchy should not prevail in the appraisal process. U N D E R S T A N D I N G THE
POLITICS OF APPRAISAL n attempting to offer some advice on how individual managers and their organizations can better manage the political aspects of appraisal, we must start with a brief discussion of two primary factors that affect rater behavior and ultimately subordinate ratings. First, there is the rater's ability to generate accurate ratings. Ability is a function of the manager's skill at: 1) clarifying and communicating the subordinate's job description, goals, and performance s t a n d a r d s ; 2) o b s e r v i n g the subordinate's actual performance on a regular basis and providing ongoing feedback; 3) storing and later recalling relevant performance data; 4) rendering effective valuative judgment in completing the organization's appraisal form; and 5) conducting an open and
I
Truth or Consequences:Politics and PerformanceAppraisals Traditionally, inaccuracy in ratings has been attributed to "rating errors" from the viewpoint that accuracy is the rater's paramount concern. In this zone however, the manager's activity is not an error but rather a specific, preferred course of action. At this point, factors extraneous to the manager's knowledge of the subordinate's performance can play a key role in influencing the overall ratings the subordinate receives. Managers are plagued by the nagging question, "What will the outcome be if I give this employee this particular rating?" It is at this point that the key reasons for inflating or deflating ratings, identified earlier, have their impact on the rating process. Most frequently the result is an inflation of the subordinate's overall rating.
Figure A Typology of Rating Outcomes
Strong
Unintentionally Inaccurate Ratings
Brutally Accurate Ratings
Inaccurate Ratings
Politically Influenced Ratings
Manager's Willingness to Provide Accurate Ratings
Weak Weak
Strong
M A N A G I N G THE POLITICS OF
APPRAISAL
Manager's Performance Rating Ability/Skill
honest appraisal interview. The second issue deals with the manager's willingness to generate accurate ratings on an individual subordinate. The manager's willingness is the degree to which he or she wants to generate honest and accurate ratings. Varying degrees of both of these qualities exist in all managers. The Figure provides a framework for understanding these concepts in unison. When a manager has never been properly trained in how to conduct proper appraisals and has no real inclination to conduct the appraisal, the appraisal will generally produce inaccurate, ineffective ratings. In this case, the organization has done little to prepare the manager either psychologically or technically for the appraisal event, and an effective appraisal would be an aberration. Ifa manager has never received proper training and yet possesses a strong willingness to conduct appraisals, the end product will be wellintended ratings that have an unintended degree of inaccuracy. This inaccuracy could diminish with time as the manager learns the art of appraisal through trial and error. But the absence of training can potentially cause the manager to have a variety of rather negative appraisal experiences that
could potentially diminish his or her willingness to conduct appraisals (something not easily regained). Managers who are skilled in conducting appraisals and have a desire to generate accurate ratings for each of their subordinates would be on the surface a human resource manager's "dream come true." The outcome of this combination of skill and motivation would be brutally accurate ratings, although some psychometricians might debate this assertion. Yet one must ask the question, "Are accurate ratings always the most effective vehicle for motivating and managing people?" This research suggests most managers would say no. Such ratings can have mixed results in enhancing employee motivation, performance, and development because, at times, the naked truth can be painful and problematic. And that takes us to the situation in which managers frequently find themselves. They have the ability to conduct an accurate appraisal of a subordinate, but their willingness to be completely objective, honest, and accurate is constrained. It is in this "zone" that conscious, intentional, political manipulations of performance ratings occur.
t is very difficult to pass judgment on managers that frequently operate in this zone; it would be unwise to do so without fully understanding the intricacies of their relationship with individual subordinates and the culture of their organization. Instead, let us stop and think about the consequences of intentionally biased ratings at both the individual and organizational level. At the individual level, political ratings can diminish the manager's ability to reward high performers, damage the trust factor that is so critical, cause uncertainty and doubt among subordinates, raise a host of legal and ethical dilemmas for the manager, and ultimately create more performance problems than they solve. At the organizational level, a strong degree of cynicism will surround the appraisal process, pay-for-performance programs will become meaningless, data gathered for promotional and training decisions will be inaccurate and suspect, and the notion of using such a process to enhance performance and productivity will be lost.
I
The Manager's Role Douglas McGregor (1957) shed a great deal of light on the issue of politics in
79
Business Horizons / November-December1989
80
the appraisal process when he discussed the reluctance of managers to "play God" in evaluating their subordinates. The bottom line is that most of us are less than comfortable passing judgment on someone else when we know we are going to have to look them in the eyes and share our views with that person. When our views are favorable the task is less painful, at times even pleasant, because it makes us feel good to make someone else feel good. But when the news is less positive, maybe even bad, the task becomes very difficult. In the context of the workplace the process becomes even more difficult because of the high stakes, strong egos, money, pride, desire to be liked, and a host of other organizational and human variables that are involved. To the manager who allows politics to enter the rating process, it is easy to understand w h y it happens. There are some very compelling reasons to generate inaccurate ratings, especially those that are slightly inflated. The danger lies in the fact that these behaviors can hurt employee performance. The manager's strategy should be to conduct appraisals that have long-term performance impact. The following steps may be helpful in evaluating appraisal techniques: • Rethink your purpose for the appraisal itself. Ask yourself w h y you do appraisals: because the organization requires.you to, or because you see the importance of the process? It is probably a combination of those two points, leaning toward being required to do them. It is useful to realize that the appraisal process causes certain things to happen that most likely would not otherwise take place. You must realize that properly conducted appraisals can provide you and your people with an arena in which to legitimately talk about performance and development. Without formal appraisals there is a good chance these factors might be ignored until a crisis develops. Appraisals force us to stop and take stock of where we are and where we are going in a proactive manner. If a manager views appraisals as an annualbureaucratic hoopjumping ritual, political ratings will be a natural outcome. • Rethink your approach to the appraisal process. Performance ap-
praisal is not an event, it is a process. If we approach it as an event of paramount impact and importance, we put excessive pressure on both ourselves and our subordinates. If we approach appraisals as part of an ongoing process, the annual formal appraisal will not become bigger than life and will not place pressure on us to provide palatable ratings. Evaluation must be ongoing and frequent. • Be sure to set the stage for subordinate performance. Many managers are compelled to inflate ratings because they failed to clarify what the subordinate would be held accountable for at the end of the performance period. The manager and the subordinate must do interactive performance planning in order to agree upon performance standards and to "set the stage" for performance. If we clarify these expectations up front we reduce the probability of confrontation during the appraisal. Thus, a manager can proactively remove a potential reason for manipulating ratings while simultaneously improving the subordinate's sense of direction. • Make appraisal an ongoing activity. Appraisals are anxiety-producing events because both parties fear the unknown. The subordinate is anxious about what the manager will say. The manager is anxious about how the subordinate will react. Subordinates need ongoing feedback concerning their performance; providing feedback has the twofold effect of keeping the subordinate on track in the short run and taking the mystery out of what will be said in" the formal appraisal. This approach helps the manager stay in contact with his or her people, manage short-run changes in work priorities, nip poor performance in the bud, and provides him or her with data for the formal performance evaluation. Monthly, semiformal, "mini-appraisals" are highly recommended. • Use a long-term strategy in writing appraisals. When it is time to do the formal written review, remember four things: a) what is written is generally what is going to be remembered; b) people really do want the truth; c) written ratings are a potentially powerful form of reinforcement and direction;
and d) subordinates compare ratings with each other. The politics of appraisal come to life when we are tempted to knowingly manipulate a subordinate's written appraisal. At times, we can help the subordinate in the short run by using such discretion. Protecting an employee with a personal problem, trying to get more merit-based pay increases for people, or trying to shock an employee into action to prevent termination are all good examples of "positive discretion." But at times the converse is true. We might inflate ratings to avoid a subordinate's caustic personality, to hide our neglect in clarifying performance standards, to get a problem employee promoted out of our hair, or to avoid conflict. In the long run this can damage your attempts as a manager to maximize performance from your subordinates. When you ask yourself the question, " H o w will the subordinate respond if I give him this particular rating?" ask yourself one more question: "How will this particular rating affect the subordinate's longrun performance in this department?" Managers must not underestimate the motivational potential of the written appraisal; if we give higher ratings than are deserved, we will get lower performance than we desire. • Base the appraisal interview on trust. As you approach the appraisal review, remember its function. It is a communication vehicle used for looking back and then forward with the intent of enhancing employee performance and development. It has been suggested that there are frequently two appraisals, the written one and the real one. The "real" one is the evaluation that is communicated directly to the individual. This stems from the belief that managers are more comfortable bringing something up in conversation than they are writing it down. Some people are more difficult to appraise by the nature of the personalities, jobs, and performance. When approaching the appraisal review, be psychologically and emotionally prepared to tell each individual the truth. To do otherwise will only create more problems later. Politics should be minimized in the appraisal interview by making it no more than an extension of regular dis-
Truth or Consequences:Poht~csand PerformanceAppraisals
"The organization has two key responsibilities to its managers where appraisals are concerned: to enhance their appraisal skills, and to take steps to encourage their willingness to conduct effective appraisals." 81 cussions of the subordinate's performance. Ultimately, subordinates know when the manager is being open and honest and when he is not. The manager has little to gain and much to lose in the long run if appraisal interviews are conducted in an environment that is anything less than open and honest.
The Organization's Role Most organizations operate with the belief that performance appraisals serve a valuable function in managing people. The reality is not always so optimistic. The organization has two key responsibilities to its managers where appraisals are concerned: to enhance their appraisal skills, and to take steps to encourage their willingness to conduct effective appraisals. In this sense, the organization's goal is to create an organizational culture that stimulates appraisal effectiveness. These issues can be addressed as follows: • Lead by example. To have a topnotch appraisal system requires top management support. The importance of doing appraisals well should be demonstrated through the actions of top management. In many organizations, managerial appraisals are notorious for being poorly conducted and politically driven. If this is true at the top of the organization it will be emulated at lower levels of the organization as well. Proper appraisal techniques and attitudes have to be modeled by executives. • Performance appraisal training
must be multifaceted and intense. Managers need specific training on how to conduct good appraisals. Equally important are topics such as performance planning, effective supervision, providing feedback, conflict resolution, and communication. Performance appraisal training must be conducted not in isolation but within the context of management training. Skills training should be intertwined with training designed to enhance the motivation to provide accurate appraisals. The goal is to enhance the manager's selfefficacy and confidence in conducting appraisals and to make him feel comfortable in approaching various appraisal situations. In addition, some training programs address the topic of political behavior in ratings and fail to distinguish between managerial discretion and detrimental manipulation. The program described above cannot be accomplished in a two-hour "here's the rating form" format. Intense appraisal training can enhance both rater skill and motivation and can ultimately improve the effectiveness of appraisals as a performance-enhancing process. • Create a more open and positive appraisal environment. Discussion of appraisal reviews and ratings is often taboo in organizations, and the taboo typically applies to discussions about the process itself. That taboo is dysfunctional. The goal of the organization should be to increase the degree to which people trust and support the appraisal system. The organization benefits when discussions about the
policies and procedures concerning appraisal are open to all concerned. Managers frequently view the appraisal process as a bureaucratic procedure developed by the h u m a n resource department to create more paperwork. The h u m a n resource d e p a r t m e n t should take active steps to get the performance-appraisal users more involved in the process. Consider installing a "Quality Circle" approach to soliciting managers' input on how to improve the process. The human resources department should have the responsibility for conducting periodic roundtable discussions aimed at improving the corporate process and, perhaps of equal importance, keeping the issue of effective appraisal in the forefront of managerial consciousness. These efforts can go a long way toward enhancing a manager's willingness to be part of the system. • Do not make organizational policy a political stumbling block for the rater. Organizations must think about policies and procedures that potentially reduce the manager's willingness to generate accurate ratings. This suggestion can be something as simple as reducing the number of people who have access to specific appraisal information or as intricate as taking extreme care in formulating merit increase percentages and policies. Forcing managers to rate all of their subordinates in an unreasonably short period of time, asking managers to use inappropriate or outdated rating forms, and implementing unwritten policies such as
Business Horizons / November-December1989
82
"we've had a bad year so there will be no outstanding performance ratings this year" are all potential examples of organizations diminishing a manager's willingness to generate accurate ratings. Policymakers should put themselves in the position of those who must live with these policies before acting. • Provide managers with feedback on their appraisal performance. To enhance a manager's willingness to do effective appraisal, those who manage managers need to provide their subordinates with feedback on their ability and willingness to conduct high-quality appraisals. Effective appraisal efforts need to be recognized and rewarded on an individual level. In addition, consider the use of organizational surveys to assess managerial and subordinate perceptions of appraisal and its effects and outcomes. It is often surprising how far apart perceptions of the same process can be and how damaging mutual misconceptions can become. All parties to the process ideally should understand how others see it. It is easier to solve a problem if all affected parties first agree on what is right and wrong (or at least improvable) with the process. A survey assessing the strengths and weaknesses of an organization's appraisal system can provide managers with useful feedback on how subordinates view the process and a chance for self-assessment. Political activity can be discouraged by convincing managers that their subordinates know when they are being truthful and when they are not.
ppraisal politics can be reduced if the organization takes appraisals seriously from the top down and builds a culture that actively supports appraisal efforts. Managers must be allowed discretion in their use of performance appraisal. And they must remember that developing their skills both as managers and raters will most likely increase their motivation to make accurate appraisals and diminish their desire to manipulate ratings. Managers' concerns go well beyond mere accuracy in ratings. However, discreet appraisals are not necessarily at odds with accurate appraisals. Minimizing the politics that can negatively affect the process can help a manager turn a potentially useful vehicle for performance improvement into an instrument for achieving performance effectiveness. ~3
A
References H.J. Bernardin and R. W. Beatty,Performance Appraisal: Assessing Human Behaviorat Work (Boston, Mass.: Kent, 1984). H.J. Bernardin and M.R. Buckley, "A Consideration of Strategies in Rater Training," Academy of Management Review, 6 (1981): 205-212. W. C. Borman, "Exploring Upper Limits of Reliability and Validity in Performance Ratings," Journal of Applied Psychology, 63 (1978): 135-144. W.E Cascio, Applied Psychology in Personnel Management (Englewood Cliffs, N.J.: Prentice-Hall, 1987).
J.S. Kane and E.E. Lawler, "Performance Appraisal Effectiveness:AnAssessment and Determinants," in B. Staw ed., Research in Organizational Behavior (Greenwich, Conn.; JAI Press, 1979). F.J. Landy and J.L. Farr, "Performance Rating," PsychologicalBulletin, 87 (1980): 72107. G.P. Latham and K.N. Wexley, Increasing
Productivity Through Performance Appraisal (Reading, Mass.: Addison Wesley,1981). E. Lawler, A. Mohrman, and S. Resnich, "PerformanceAppraisal Revisited," Organizational Dynamics, Summer 1984, pp. 20-35. C.O. Longenecker and D.A. Gioia, "Neglected at the Top Executives Talked About ExecutiveAppraisal," SloanManagement Review, Winter 1988, 29 (2): 41-47. C.O. Longenecker,D.A. Gioia,and H.P.Sims, "Behind the Mask: The Politics of Employee Appraisal," The Academy ofManagement Executives, August 1987, 1 (3): 183-193. C.O. Longenecker, P.R.Liverpool, and K.A. Wilson, "An Assessment of Managerial/ Subordinate Perceptions of Performance Appraisal Effectiveness,"Journalof Business and Psychology,Summer 1988, 2 (4):311-320. D. McGregor, "An Uneasy Look at Performance Appraisal," Harvard Business Review, 1957, pp. 89-94. J. Pfeffer,Powerin Organizations(Marshfield, Mass.: Pittman Publishing, 1981).