ISSUES IN EMPLOYEE PERFORMANCE

Issues in Employee Performance

Issues in Employee Performance

Introduction

Performance appraisal has long been recognized as an important personnel function with the potential to improve employee motivation and hence performance, and to provide management with the control needed to achieve organizational objectives. Increasingly, at the heart of the appraisal function is the performance appraisal interview (PAI) where superiors meet individually with their subordinates to assess, with them, how well they have performed and to agree on what should be their future aims. Given the role of appraisals in improving performance, it is not surprising that research attention should have focused on factors affecting the effectiveness of PAIs.

Reviews of such research, notably those by Cederblom, Cummings and Schwab and Goodson and McGee have shown that the impact of PAI processes such as goal setting are not invariable, but depend on various contextual factors, two of which will be examined in the present study; namely, employee performance and relations between employee and superior.

According to the open system model proposed by Klein et al. , the PAI process is defined by three classes of variables which interact to determine effectiveness:

* inputs - forces that define the context in which the PAI is carried out, such as employee performance and employee relations with superior;

* throughputs - features of the PAI itself, such as the nature of goal setting in the PAI;

* outputs - hyposynthesized consequences of the PAI, such as employee attitudes to the PAI and their work motivation.

Klein et al. argue that PAI outputs depend on the interaction between employee performance and goal setting, and between employee-superior relations and goal setting.

Arguing from postulates in the model, it is hypothesized that because superiors treat good and poor performing employees differently when setting goals with them in the PAI[6], and goal setting has different implications for these two groups of employees[3], the impact of PAI goal setting on employee attitudes should be moderated by employee level of performance. In addition, given that the PAI is essentially a dynamic exchange between two persons, superior and employee, the quality of their relationship ought to affect how employees react to the PAI, especially to an aspect as personally sensitive as goal setting.

It is thus hypothesized that the quality of the employee-superior relationship should interact with PAI goal setting in determining differences in employee attitudes to the PAI and in their work motivation. The present study is designed to test these two hypotheses derived from the open system model of PAI effectiveness.

Method

The subjects of the study were 135 non-managerial employees of a medium-sized Australian manufacturer, doing a variety of tasks ranging from cleaner and machine operator to production supervision and salesman. Their average age was 36.4 years and their average tenure with their present employer 4.7 years. Forty-one per cent of the sample were female. The PAIs were conducted by the immediate superior of each subject, as part of a company-wide appraisal scheme designed and implemented by the personnel department...