Academic journal article
By Sager, Jeffrey K.; Varadarajan, Rajan
Akron Business and Economic Review , Vol. 21, No. 1
The Fine Art of Performance Appraisal: The Case of Overkill
Performance appraisal can be conceptualized as a memory-based task in which raters acquire, encode, store, and later retrieve performance information to make a judgment. A close review of recent studies addressing the issue of employee performance appraisal reveals varied foci. A number of the studies are concerned with the effect of various forms of rater predisposition or bias on performance ratings (e.g., Binning, Zaba, and Whattam; Hogan; Huber, Neale, and Northcraft; Kingstrom and Mainstone; Williams et al.). Other studies have investigated the effect of the timing of the appraisal process and contrast effect on the manager's ratings of subordinates. While the rater and various characteristics that are associated with the administration of the appraisal have been extensively researched, the context of the appraisal instrument itself relative to the task of appraising employee performance has been neglected. The situation is paradoxical because the format and content of the appraisal instrument are more controllable by management than the characteristics and disposition of the rater.
Several areas of concern manifest themselves relative to the context of the performance appraisal instrument. Among the areas of concern are: format (e.g., forced choice or behavioral format); type of appraisal items (e.g., subjective areas of rating as opposed to objective indices); and instrument length. The relationship between appraisal items and instrument length is the area of primary concern in the present investigation. The research concentrates on the issue of whether an appraisal instrument may actually over-represent a (selling) job. Idiomatically speaking, the study investigates appraisal instrument overkill.
Although the researchers lacked multi-company descriptive data necessary to substantiate the claim, experience suggests that management sometimes "overkills" in its attempts to evaluate the performance of skilled employees such as salespeople. Although the financial effects of overkill are indeterminate, the utility of appraisal reduction in terms of cost savings, increased ability to reward performance, providing feedback to employees, and making effective promotion decisions is very real. As well, inaccurate or overstated performance appraisal instruments can frustrate the efforts of operational management to use the instrument as a device for employee coaching and reward administration.
Using multiple item performance appraisal data, the researchers examine the dimensionality and sensitivity of a company performance appraisal instrument. In line with the research objectives for the study of performance appraisal outlined by Feldman, the objective of the investigation is to assess the relevance of information provided by a salesperson performance appraisal in terms of: (a) underlying structures of rating items (such an objective has been suggested by Guion; and (b) the contribution of individual appraisal items to the instrument.
Performance appraisal data were obtained for 115 of the 136 sales representatives (85%) employed by a national manufacturer of branded consumer products. Performance appraisals were completed during the first three months of the year by the salesperson's immediate manager. Data from two consecutive years would have been helpful from the standpoint of item stability. However, processes of attrition and promotion of salespeople and raters substantially altered the composition of the salesforce between annual rating periods.
Following Moncrief's taxonomy, the salesperson for the subject company can best be described as a trade servicer. For each store in a geographic territory, the salesperson is responsible for: encouraging store managers and wholesale distributors who service retail outlets ("rack jobbers") to stock larger quantities of certain product items; securing store participation in product promotions; familiarizing store managers and rack jobbers with new product items; and setting up promotional displays. …