The Effect of Appraisal Instrument on Managerial Perceptions of Fairness and Satisfaction with Appraisals from Their Peers

By Latham, Gary P.; Seijts, Gerard H. | Canadian Journal of Behavioural Science, October 1997 | Go to article overview

The Effect of Appraisal Instrument on Managerial Perceptions of Fairness and Satisfaction with Appraisals from Their Peers


Latham, Gary P., Seijts, Gerard H., Canadian Journal of Behavioural Science


Abstract

The implicit hypothesis underlying the present study is that the reason for the unacceptability of peer appraisals reported in previous studies is due to the use of inappropriate appraisal instruments that fail to facilitate perceptions of fairness. Managers (n = 91), while working in teams on a simulated task, provided one another feedback. Satisfaction with peer appraisals was higher when BOS, BARS or no formal instrument (control) was used to give feedback than was the case with a trait scale. Procedural justice was perceived as higher when either BOS or no instrument at all was used to give feedback than was the case when the feedback was based on a trait scale.

Team based activities are commonplace in both European and North American organizations (Guzzo & Shea, 1992; Lawler, 1986; Wimmer, McDonald, & Sorensen, 1992). The reliance on work teams by organizations requires the development of performance appraisal procedures that are useful for evaluating the individual in a team setting (Murphy & Cleveland, 1991; Saavedra & Kwun, 1993).

Komacki and Desselles (1994) found that supervisors spend less than one per cent of their time observing their subordinates. Nagle (1953) cited the lack of opportunity to observe a person's performance as a primary source of unreliability in the measurement of performance. Similarly, both Dunnette (1996) and Wherry and Bartlett (1982) argued that rater errors often occur when the observer has limited opportunity to observe job relevant behaviour of the employee.

Peers may be an ideal source of appraisals because of their on-going contacts with their team members (Kane & Lawler, 1978). Thus they often have more job-relevant information than do other appraisal sources (Borman, 1991). Moreover, peer appraisals have been found to be both reliable and valid (Latham, 1986; Latham, Skarlicki, Irvine, & Siegel, 1993), even more so than supervisory appraisals (Wexley & Klimoski, 1984). Drawing on Festinger's (1954) social comparison theory, Mumford (1983) argued that this is because employees believe that rewards are based on the differential possessions of abilities and competencies. Thus they closely observe and compare themselves against the task relevant abilities of fellow workers.

In spite of the attractive psychometric properties of peer appraisals, they have not been well accepted by employees. This is because employees sometimes feel that peer evaluations are popularity contests, and that their evaluation is biased by friendship or the lack thereof (Downey, Medland, & Yates, 1976; Cederblom & Lounsbury, 1980; Love, 1981). In addition, some employees fear the possibility of retaliation in subsequent ratings when providing colleagues with a negative appraisal (DeNisi & Mitchell, 1978).

One of the reasons peer ratings have been found to be unacceptable to employees in previous studies (Cederblom & Lounsbury, 1980; Downey et al., 1976; Love, 1981; McEvoy & Buller, 1987) is that these studies have used inadequate appraisal instruments, that is, the performance criteria were not well specified. For example, in a university setting, Cederblom and Lounsbury (1980) found that the peer evaluation procedure was criticized for lack of specific feedback on ways of improving performance. The appraisal instrument consisted of four global criteria, namely, professional development, cooperation with colleagues, teaching effectiveness, and contribution to organizational objectives on which people were evaluated on a 5-point scale. Behavioural items operationally defining each criterion were missing. The participants may not have believed that feedback on global dimensions would help them perform their jobs effectively. Latham and Wexley (1994) argued that only when the appraisal instrument contains specific, behavioural statements derived from a job analysis do employees understand exactly what they need to do to improve their performance. …

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