Hannah Cox

ENC 1102 B029

Professor Wolcott
July 17, 2014
The Ethics of, and Related to, Performance Appraisals
Business Dictionary explains a performance appraisal (PA) to be: The process by which
a manager or consultant (1) examines and evaluates an employee's work behavior by comparing
it with preset standards, (2) documents the results of the comparison, and (3) uses the results to
provide feedback to the employee to show where improvements are needed and why.*
(Business Dictionary) Even though performance appraisals are meant to provide accurate
feedback to employees for their work performance and let them know what to improve on in
order to continue to be successful, that is not a common result. Business Dictionary mentions
that: Performance appraisals are employed to determine who needs what training, and who will
be promoted, demoted, retained, or fired.* (Business Dictionary) These performance appraisals
are an extremely hot and controversial topic among the business discourse community.
Conversation and research as to why/how they work, the effect on the employee, and what effect
they have on the organization, is continuing to grow. Bias in the appraisal process is
controversial and has led to hundreds of studies offering employee insight to what affect these
PAs have, biased or not. Many of the studies also touch on whether or not PAs are a waste of
time in general. Some offer critiques and some want to do away with them completely. The goals
of PAs are to improve the employees performance in order to breed a successful and profitable
organization. However, when not preformed properly, the opposite happens. When these PAs
are biased, the employee is not getting honest feedback. Links continue to be made to the effect
of these dishonest results and employee self-esteem. Other employees view employees that
continually receive low scores on their PA unethical. If they do not understand their feedback, it
becomes common to witness people giving up or even quitting. Consequently, the organization is
being hurt and achieves the opposite of what is it intended to do. Another issue discussed is the
feedback interview held with a subordinate and the manager. Many employees state that it is a
waste of time. The meeting often is very short and the only conversation that occurs is that of the
manager telling the employee of the scores. Many employees report it to be a very uncomfortable
meeting where they feel limited as to how many questions, and what feedback they can offer.
Management comes across as very intimidating and sometimes careless about the feedback they
are providing. To many employees these PAs are extremely important because it lands them the
raise or promotion that they want. Yet, results are often not accurate.
A number of my sources come from business journals and a number of my authors are
business professors, concerned about the ethics behind these PAs. The purpose of this annotated
bibliography is to provide insight into some of the studies and research articles done by people in
the business discourse community-in regards to the ethics and controversies behind performance
appraisals. Sources excluded from this topic are anything that does not offer insight or research
about ethics related to the PA. Finding sources was not extremely difficult; as this genre is up
and coming in the business discourse community due to new findings and reports on these PAs
that cause a large uprising of controversy. All subjects tested or involved are employees
(subordinates) and/or management (executives), this can include those writing the journals who
are limited to professors of business or employees of the management or business community.
People outside of this discourse community would not be interested in studying these articles nor
would they necessarily understand the context as this genre has very specific lexis involved.
PAs have a purpose defined for them, but now, ethics are coming into play and it all is
addressed in this annotated bibliography regarding the genre of PAs and their ethics within the
discourse community of business, specifically human resources.
Axline, Larry L. "Viewpoints The Ethics Of Performance Appraisal." SAM Advanced
Management Journal (07497075) 61.1 (1996): 44. Business Source Premier. Web. 15
July 2014.
Larry Axline has published frequently on the effectiveness of business-based ethics and
values based leadership. His consulting organization provides services to clients involved
in implementing values-based leadership and development. In this article, he reports on
the abandonment or abuse of the performance appraisal, which is a breach of business
ethics. He reports that the handling of performance review sessions is far more critical
than the decision made or the information given in the session. He notes that sometimes,
miscommunication occurs in performance review sessions because of different ethical
orientations. The overall objective of the performance review process should be to
provide an honest assessment to performance and to mutually agree on a way to improve
it. Some managers feel that being legal is enough in review sessions, however, being
legal and being ethical are two things that do not equate and sometimes being legal is
not good enough. He concludes that the effect on self-esteem is the critical issue. A blow
to the self-image of a person can be damaging to the employee, their performance and to
the organization as a whole. Treatment of people is the most important ethical issue;
therefore, PAs are all about ethics.
Banner, David K., and Robert Allan Cooke. "Ethical Dilemmas In Performance Appraisal."
Journal Of Business Ethics 3.4 (1984): 327-333. Business Source Premier. Web. 15 July
2014.
David Banner is an associate professor of management and organization at DePaul
University Chicago. He is also area coordinator of Business Administration. Robert
Cooke is the director at the Institute for Business Ethics, DePaul University. The purpose
of this article is to sketch an outline of the major conceptual issues surrounding PA and to
offer insight to the ethical dilemmas that commonly arise. They discussed that; when
properly understood, performance can provide a fair basis for allocating benefits/rewards,
and that a merit-based system of distributive justice must address the problem of unfair
advantage, if it is to succeed. They also state that cooperation among employer and the
employees is needed to assure that the PA will be objective, reasonable, and fair and that
if the PA system is fair, consistent, and evenly applied to all; it will be morally justified.
Conant, James C. "THE PERFORMANCE APPRAISAL: A Critique And An Alternative."
Business Horizons 16.3 (1973): 73. Business Source Premier. Web. 14 July 2014.
James Conant is a faculty member in management at California State University
Fullerton. He states that: the purposes of this article are to acquaint managers with the
interpersonal dynamics that accompany the appraisal process; to highlight its deficiencies
as a measurement device and a motivator of performance and to urge the adoption of
some sort of management by objectives procedure to strengthen the role of a manager as
a resource person to his people. (Conant, 1) He finds that the appraisal interview fails
in regards to an employees measurement of their success. It often lowers the moral and
performance of a good employee. It is costly to both people and organizations. Conant
believes that management by objectives, which establishes guidelines and on objectives
from the beginning, offers a far better solution. The common performance appraisal
immediately turns an employee in an avoidance to change by activating psychological
resistance that occurs when someone is satisfied with how they are now, or dissatisfied
with the person telling them what to change. Management by objectives will make
change possible by strengthening the identification process.
Dusterhoff, Carrie, J. Cunningham, and James MacGregor. "The Effects Of Performance Rating,
Leader-Member Exchange, Perceived Utility, And Organizational Justice On
Performance Appraisal Satisfaction: Applying A Moral Judgment Perspective." Journal
Of Business Ethics 119.2 (2014): 265-273. Business Source Premier. Web. 17 July 2014.
Carrie Dusterhoff, J. Cuningham and James Macgregor are part of the School of Public
Administration at Victoria University. Their article takes a moral cognition perspective
on appraisal reactions. They propose that employees may judge a PA from the
perspective of its moral justification. To test their theory, the provided an internet survey
to 166 employees in an organizational unit. Only 71 responded, however. The survey
included measures of performance rating, LMX (Leader-member exchange), Utility (how
they understood the process after this survey), justice, and performance appraisal
satisfaction. The results were unsurprising, showing that employees felt an overall
dissatisfaction with PAs and with their jobs. And poor satisfaction ratings came in on all
of those areas. All of the factors and areas mentioned above were found to be viewed as
relevant factors when making moral judgments. In other words, these PAs are not
favored by employees because of the unethical behavior involved.
Finn, R.H., and P.A. Fontaine. "Performance Appraisal: Some Dynamics And Dilemmas."
Public Personnel Management 13.3 (1984): 335. Business Source Premier. Web. 9 July
2014.
R.H Finn and P.A Fontaine, who are both professors, conduct this study. Finn is a
professor at the University of Georgia in management and Human Resources, received
his Ph.D., and also has work experience in Human Resource Departments of businesses
organizations. Fontaine is an assistant government professor at Northeastern Louisiana
University and is the head of the pre-law program and also, received her Ph.D. in political
science from the University of Georgia. The setting of this study was a large human
services department of a state government. Here, it was required to perform PAs and to
hold an interview after discussing the results. This PA also became part of the employees
personnel file. In order to conduct this study, three interviewers conducted interviews that
lasted from one to one and a half hours and each interview composed of a manager(PE)
and a few of his/her employees(who were also in managerial or professional positions). It
was important that this interview process included input from all levels of management
and employment so they held interviews with various types of employees from all
different levels. 111 people were interviewed, 43 of these were the PEs and the
remaining 68 were the subordinates, or employees. The interview was conducted with
open ended questions that keyed into information such as; attitudes about the
performance appraisals and their use, experiences with the PA, and discussions that occur
in the post-PA interview process. It was found that most employees linked PAs to
negative thoughts and viewed them as a waste of time and not very useful. They viewed
the post-appraisal interview as uncomfortable and frustrating because it was only about a
15 minute process with almost no interaction between the PE and the subordinate except
in the context of giving the ratings. This study found that there are discrepancies with the
performance appraisal system and problems that occur with it. The central dilemma
found is in creating a PA system that fulfills what it is really supposed to do and meeting
not only company expectations, but also fulfilling subordinate wants and desires.
Participants recognized the need for PAs and for them to be documented in the
employees personnel file. They also expressed the desire for an informal meeting where
the results could be discussed in a non-intimidating atmosphere. They suggest that these
interviews only be held if either the subordinate or superior requests it and they like the
typical scale and format used in the PA that they already receive. The clearest result is
that we expect too much from these systems and that all of the desired outcomes are not
possible.

Heisler, William J., and Maureen Hannay. "ETHICAL ISSUES IN PERFORMANCE
APPRAISAL: A STAKEHOLDER PERSPECTIVE." The Association on Employment
Practices and Principles (AEPP) (2011): 67.
In this article, William Heisler and Maureen Hannay, both professors of business,
evaluate employee and management perspectives on the PA process to determine what
aspects that they think are ethical. To get a perspective of views, a study was conducted
using employed adults in the graduate business and criminal justice programs of a large
Southeastern University. A survey was conducted which included 30 questions related to
PA practices that potentially have ethical implications. A limited number of demographic
variables (i.e., gender, managerial status, amount of work experience) were also included
to assess if ethical responses were affected by these factors. For each question/situation,
the person was asked to respond with if the act was ethical. One extremely frequent result
was that honesty and integrity are a huge concern in the process. Manipulation was
viewed unethical. They viewed appraisals to be ethical, however, not if they were not
provided with the results or an explanation as to why they got that result and what it
meant. There were mixed responses in regards to terminating employees who scored low
on these PAs and to setting goals higher for those who performed excellent. This was
a pilot study with a very small sample size; therefore, it was hard to draw any specific
conclusions from the data. Nevertheless, one can gather that these tested employees do
view PAs as ethical, so long as honesty is included along with proper explanation of the
results.
Jacobs, Gabriele1, gjacobs@rsm.nl, Frank2, f.d.belschak@uva.nl Belschak, and Deanne2,
d.n.denhartog@uva.nl Hartog. "(Un)Ethical Behavior And Performance Appraisal: The
Role Of Affect, Support, And Organizational Justice." Journal Of Business Ethics 121.1
(2014): 63-76. Business Abstracts with Full Text (H.W. Wilson). Web. 17 July 2014.
Gabriele Jacobs is a professor in the Rotterdam School of Management at Erasmus
University in the Netherlands. Frank Belschak is a professor at Amsterdam Business
School at the University of Amsterdam, and Den Hartog is also a professor at the
Amsterdam Business School at the University of Amsterdam. The purpose of this study is
to examine the effects of performance appraisals from a behavioral ethics perspective. To
perform the study, they gathered up 332 police officers in Germany who receive a PA
once per year. 500 questionnaires were sent to randomly selected police officers, in
addition, these police officers were asked to attach their own short questionnaire and a
letter attached to a return envelope to a colleague whom they best viewed as being able to
honestly rate their performance. Only questionnaires that were completely filled out and
included a matching colleague PA were evaluated. The results showed that employees
interpret their PA as a symbolic situation in which they test the trustworthiness of both
their superior and their organization towards them. They expect just treatment; unjust
treatment leads to feelings of tension and motivates behaviors to decrease feelings of
injustice. Therefore, the justice perceptions in performance appraisals can trigger long-
lasting effects on organizational outcomes. They also found that the employees
perception of the fairness of their PA gave them feelings of either support or none from
their employer and supervisor. In result, a single year performance appraisal is linked to
both ethical and unethical behaviors at work.
Landy, Frank J., Janet L. Barnes, and Kevin R. Murphy. "Correlates Of Perceived Fairness And
Accuracy Of Performance Evaluation." Journal Of Applied Psychology 63.6 (1978): 751-
754. Business Source Premier. Web. 18 July 2014.
Frank Landy, Janet Barnes, and Kevin Murphy are all professors at Pennsylvania State
University and conducted this survey to find any employee satisfaction with the PA
system, since ethical issues have become such an issue. They also wanted perceptions of
fairness, and ideas of the PA system. Employee perceptions of the fairness and accuracy
of a performance evaluation system were examined by means of a questionnaire
administered to all exempt managerial and professional employees of a large
manufacturing organization. Primary (n = 355) and hold-out (N = 356) samples were
identified, and a forward stepwise multiple regression analysis was performed on the
primary sample. Frequency of evaluation, identification of goals to eliminate weaknesses,
and supervisor knowledge of a subordinate's level of performance and job duties were
significantly related to perceptions of fairness and accuracy of performance evaluation. A
majority of the employees did not agree with, or understand, any of these factors.
Therefore, it is shown that employees do not view PAs to be fair or accurate.
Longenecker, Clinton, and Dean Ludwig. "Ethical Dilemmas In Performance Appraisal
Revisited." Journal Of Business Ethics 9.12 (1990): 961-969. Business Source Premier.
Web. 14 July 2014.
The author, Clinton Longnecker, is an associate professor of management at the
University of Toledo and has published multiple articles on the topic of performance
appraisals. Dean Ludwig is an assistant professor of marketing at the University of
Toledo whose research and teachings relate to ethical issues in marketing and
management. Both men have extensive industrial and educational experience and are
active management consultants. This journal is based off of Ethical Dilemmas In
Performance Appraisal by Banner and Cooke(1984) which discussed a number of
ethical dilemmas that surround the formal appraisal process in organizational settings. By
revisiting that study and journal, Longnecker and Ludwig were able to conclude that
future research into this topic needs to do and understand a number of things; the
cognitive process of manipulating ratings, what struggles mangers face in the use of
manipulative rating behavior, what effect an organizations culture has on the managers
willingness to play rating games, what steps can be made to up manager willingness to
give fair and honest appraisals, and the long term effects of inaccurate ratings on business
organizations. They believe that short-term manipulation of employee ratings can lead to
long term motivational, behavioral and legal difficulties for all parties involved. In
addition, that trust is the basis of the manager-employee relationship and that any activity
that tampers with this relationships is a threat to employee and company success. They
state that the conclusion may be, honesty is the best policy regardless of the procedure or
setting involved.
Nathan, Barry R., Allan M. Mohrman Jr., and John Milliman. "Interpersonal Relations As A
Context For The Effects Of Appraisal Interviews On Performance And Satisfaction: A
Longitudinal Study." Academy Of Management Journal 34.2 (1991): 352-369. Business
Source Premier. Web. 18 July 2014.
Barry Nathan is a professor at the University of Wisconson-Madison, Allan Mohrman
and John Milliman are professors at the University of Southern California. The purpose
of their study is to examine the effect of interpersonal relations between supervisors and
subordinates on the content and efficacy of performance appraisal reviews. One to two
months after the reviews occurred and two to four months after interpersonal relations
were measured; they measured subordinates' reactions to their review, their job
satisfaction, and their supervisors' evaluations of their performance. Even after
statistically controlling for the favorableness of performance evaluations, they found that
subordinate reactions to review were affected by interpersonal relations and by three
measures of review content: the evaluation criteria used the opportunity for subordinate
participation, and the presence of career discussion. The three content variables also had
effects on subordinate performance and satisfaction.
Reinke, Saundra J. "Does The Form Really Matter?: Leadership, Trust, And Acceptance Of The
Performance Appraisal Process." Review Of Public Personnel Administration 23.1
(2003): 23-37. Business Source Premier. Web. 18 July 2014.
Saundra Reinke is a professor at Augusta State University. Her research aims to explore
an assumption made by business organizations; that employees view the PA process as
legitimate. It seeks to measure employee and supervisor satisfaction with the PA and
explore variables that may shape this acceptance. She sent out 651 surveys to
organizational business nationwide, but only 241 responded. She finds what she
expected, that employees and supervisors were not pleased with the PA. Only 31.4%
agreed that it is an effective measurement of peoples performance and ethics levels.
Trust also emerged as the most important predictor of an attitude towards a PA process.
A broad understanding of the system was also found to be essential to acceptance.
Another finding she found astounding was the supervisor surveys, where she found that
they reject the idea that interpersonal issues (i.e. favoritism) are issues with PAs.
Supervisor leadership also played a significant role in employee support of the system.
Selvarajan, Rajan, and Peggy A. Cloninger. "The Importance Of Accurate Performance
Appraisals For Creating Ethical Organizations." Journal Of Applied Business Research
24.3 (2008): 39-44. Business Abstracts with Full Text (H.W. Wilson). Web. 15 July
2014.
Rajan Selvarajan and Peggy Cloninger, both professors at the University of Houston,
preformed this study to examine how employees job performance outcomes influence
how others judge the employees ethical performance. To perform this study, they used a
series of interviews, which included only subordinate employees, not management. They
asked their opinions on the ethical performance of employees who performed high or low
on their PA. Results found that employees felt that employees with higher PA scores
exhibited more ethical behaviors than those who scored lower. This pattern was
consistent regardless of the employees ethical beliefs. (Rajan, Cloninger.1) This proves
that accurate PAs and ethical PAs are important because of how society will view your
organization. If your employees are scoring low on the PA, the study proved that many
people would view the employees behaviors as unethical, which is linked back to the
organization. It is a chain affect so accurate and unbiased ratings are critical.
Sillup, George P., and Ronald Klimberg. "Assessing The Ethics Of Implementing Performance
Appraisal Systems." Journal Of Management Development 29.1 (2010): 38-55. Business
Source Premier. Web. 9 July 2014
In this article, George P. Sillup and Ronald Klimberg- whom both have their Ph.D. and
are professors at Saint Josephs University, are preforming a study to test how effective
Performance Appraisal Systems (PA) conducted by performance evaluators (PEs) help
to manage more effectively and meet employee expectations in a U.S based company. In
order to test this 54 PEs were gathered and interviewed form 5 major corporations
(Aetna Insurance, IBM, Johnson & Johnson, Valspar, Wyeth Pharmaceuticals). It was
found that PEs with the highest amount of education and most experience spent the least
amount of time conducting PAs (1.86 vs 3.19 hours). Time became a very important
factor in relation to ethical issues. 20% of PEs also did not solicit peer ratings as part of
the PA process. No PEs had a specific amount of time laid out to preform PAs or to
make it an objective, so this made it increasingly more difficult to find time to perform
these PAs. Older PAs found that PAs helped them to manage more effectively. Race
and field of study also played a factor, in addition to age and education level. PEs who
were Black or White and from Marketing/Sales were most favorable about meeting
employees' PA expectations. There were no significant differences among the PA
systems in the 5 corporations. This study shows that PAs need to be an objective for
PEs, it is shown that PAs help to manage more effectively and help employees preform
their tasks better as well, because they know what is expected from the management.
Sims, Jr., Henry P., Dennis A. Gioia, and Clinton O. Longenecker. "Behind The Mask: The
Politics Of Employee Appraisal." Academy Of Management Executive (08963789) 1.3
(1987): 183-193. Business Source Premier. Web. 15 July 2014.
Henry Sims Jr. is currently professor of management at George Mason University where
his special area of research is managerial leadership. He has published over 75 articles on
this subject and has consulted with many U.S and multinational firms. Dennis Gioia is an
assistant professor of organizational behavior in the College of Business at Pennsylvania
State University. Clinton Longnecker is an associate professor of management at the
University of Toledo and has published multiple articles on the topic of performance
appraisals. The purpose of this article is to determine if executives manipulate PA results
for political purposes. In this study, they performed in depth interviews with 60
executives. They came from seven large organizations and represented 11 functional
areas. Each interview was designed so that executives would give his/her perception of
their own PA process. The interviews allowed the subjects to respond freely and
subjectively. The authors state that the most interesting find of this study was that
accuracy was not the primary concern for the executives preforming the PA. The
managers identified that they used the PA process to their advantage because they would
not allow extremely accurate ratings to cause problems for themselves. Some managers
stated that the politics in the PA process will never be driven out and most agree that
some politics are necessary to facilitate necessary executive discretion. The main concern
is how to best use the appraisal process to motivate and retain subordinates. The goal
then, is not to eliminate politics from the PA process, but to manage the role that they
play.
Varma, Arup, Shaun Pichler, and Ekkirala S. Srinivas. "The Role Of Interpersonal Affect In
Performance Appraisal: Evidence From Two Samples The US And India."
International Journal Of Human Resource Management 16.11 (2005): 2029-2044.
Business Source Premier. Web. 9 July 2014.
In this article, Arup Varma-a professor of human resource management at Loyola
University Chicago, Shaun Pichler-an associate professor of management at the Mihaylo
College of Business and Economics, and Ekkirala Srinivas-a professor in the Xavier
School of Management, are trying to determine if the relationship between the PE and the
employee affects the results of the employees PA results. This study used data from 190
supervisors in the US and 113 in India. Both studies found that intrapersonal affect and
performance levels both played a role in the results of the PA. The US study showed that
PEs were able to separate personal bias from actual performance levels when assigning
results, therefore finding no bias. However, results from the Indian sample showed that
employees with lower performance levels actually got higher ratings. This suggests that
local cultural norms play a bias in PA reports.
*"What Is Performance Appraisal? Definition and Meaning." BusinessDictionary.com. N.p., n.d. Web. 18
July 2014.