addition, employees would receive feedback directly from their supervisor/coach,
rather than from the EPM system. This should promote perceptions of procedural
justice, by giving employees a voice in the interpretation of the data. These ideas
suggest a second question for which there is currently no answer:How might we
best integrate EPM into a performance management system?
Employees improve their performance on simple tasks when EPM is present, yet
performance decreases with diYcult tasks in the presence of EPM (Davidson and
Henderson 2000 ). A social facilitation explanation for this result is that perform-
ance tends to increase for relatively simple tasks because the worker is aware of the
monitoring and motivation is heightened as a result. If the task is perceived to be
too diYcult, however, the presence of monitoring may create some degree of
internal anxiety (due to being observed by others)—leading to performance
decrements.
Moreover, the employees may not have been committed to performing well on
the diYcult task. If a diYcult goal is set, and progress is tracked via EPM,
performance should lead to goal attainment, given commitment (Locke and
Latham 2002 ). Thus, a third research question that has yet to be addressed:Does
EPM facilitate goal attainment when goal commitment is high?
- 4 Context
Raters and ratees have diVerent deWnitions of an eVective appraisal system. Balzer
and Sulsky ( 1990 ) found that raters perceive appraisal instruments eVective if they
are easy to use, and eVective in helping them change employee attitudes and
behavior. Alternately, an eVective appraisal system from the lens of employees is
one that clariWes linkages between behavior and rewards, and is seen as fair in terms
of process and outcome (e.g. rewards) allocation.
A second contextual variable that is potentially relevant to appraisal formats is
an organization’s culture. An organization that values internal competition and
hence is concerned with identifying high-potential individuals may be inclined to
use rankings rather than ratings of employees. Wagner and GoYn( 1997 ) showed in
a laboratory setting that comparative rating formats yield ratings that are sign-
iWcantly higher in accuracy than ratings of absolute performance. Because the
generalizability of thisWnding to organizational settings is not known, a fourth
research question needs to be addressed:Are comparative rating scales preferred
in organizations that value internal competition?The downsides to a positive answer
to this question are at least twofold. First, rankings are prohibited by the 1978
Carter Civil Service Reform Act in the United States. This legislation applies
to Federal Government employees. Second, a comparative rating may make it
diYcult to provide an employee feedback for setting goals to substantively improve
performance.
performance management 371