PERCEPTION CAN BE MANAGED

Perception Can Be Appropriately and Effectively Managed In a Work Organization Context



Perception Can Be Appropriately and Effectively Managed In a Work Organization Context

Performance appraisal (PA) is often considered one of the most important human resource practices (Boswell and Boudreau, 2002; Judge and Ferris, 1993) and is one of the more heavily researched topics in work psychology (Fletcher, 2002). PA has increasingly become part of a more strategic approach to integrating HR activities and business policies and is now a generic term covering a variety of activities through which organizations seek to assess employees and develop their competence, enhance performance and distribute rewards (Fletcher, 2001). While both practice and research have moved away from a narrow focus on psychometric and evaluation issues to the more developmental and motivational aspects of PA (e.g. Fletcher, 2001; Levy and Williams, 2004; de Waal, 2003; Lefkowitz, 2000), many organizations still express dissatisfaction with their appraisal schemes (Fletcher, 1997). According to Fletcher (2001), this may signal a lack of success of PA as a mechanism for developing and motivating people. Although this is not a new observation (e.g. Coates, 1994; Meyer et al., 1965; Pearce and Porter, 1986), little systematic research exists on developmental PA (i.e. any effort concerned with enriching attitudes, experiences, and skills that improve the effectiveness of employees (Boswell and Boudreau, 2002)) and the potential it has to build a committed and motivated work force.

In recent years, an increasing number of organizations have implemented performance management systems based on critical success factors (CFSs) and key performance indicators (KPIs) (de Waal, 2003). A frequently used format in this context is the often-recommended balanced scorecard (BSC), a comprehensive management system of performance measurement linking strategic and short-term action planning (Kaplan and Norton, 1996). BSC focuses on clarifying and translating vision and strategy, communicating and linking strategic objectives and measures, planning and setting targets, and enhancing strategic feedback and learning (Kaplan and Norton, 1996). The main objective of a BSC is that organizations can translate vision and strategy into operational terms - from management level down to day-to-day activities (Nielsen and Sørensen, 2004). Accordingly, BSC shares the interest of contemporary PA in the developmental and motivational aspects of performance management, making BSC an interesting research context for developmental PA. Besides, BSC is a widely used management tool in which managers report more than acceptable satisfaction with (Malina and Selto, 2001; Rigby, 2001). Yet, most of the existing literature on BSC is either normative prescription or uncritical reports of BSC successes (Ahn, 2001; Malina and Selto, 2001).

The purpose of this study is to explore two different models of the relationship between PA in a BSC context and work performance: a mediation model and a moderation model. There is a strong belief that as long as employees accept or are satisfied with PA, or when PA is properly managed, PA will be positively related to work performance (e.g. Muczyk and Gable, 1987; Pettijohn et al., 2001a). Still, despite the rhetoric of developmental PA and ...