Downside of performance appraisals & the potential for deviant behaviors.

AuthorSelvaraj, Patturaja
PositionReport - Statistical data

While performance appraisals are considered to be rational systems necessary for human development in organizations, they can have potentially negative consequences. The judgments involved in performance appraisals could be experienced in subjective and partisan ways. Appraisals could be experienced as dirty work and could lead to deviant behaviors inside organizations. Particularly, those who receive good appraisals could develop emotions of contempt towards those who receive poor appraisals and thus better performers may feel justified in engaging in deviant behaviors towards poor performers. Further, it is only the sense of organizational support that may help in attenuating deviant behaviors actuated as a consequence of performance appraisals.


In this study, we develop a series of hypotheses and test them by adopting a structural equation modeling approach to understand whether performance appraisals have negative consequences for employees. Performance appraisals have been argued to be legitimate, rational systems through which human development can be brought about inside organizations (Ilgen & Feldman, 1983). However, several gaps remain in the design and implementation of performance appraisal processes as issues of politics and bias often come up (Banner & Cooke, 1984; Pichler, 2012). While performance appraisals are meant to have developmental implications for organizations, since judgments involved in appraisals have consequences in the form of rewards and punishments, they can create a sense of anxiety among employees (Thomas & Bretz, 1994). This means that employees can react to performance appraisals in unpredictable ways, and the way appraisals are carried out could define perceptions that employees hold about the fairness of human resource processes in organizations (Greenberg, 1990).

From a social exchange perspective, organizations may believe that it is only important to design a fair and just performance appraisal system (Wayne, Shore, Bommer & Tetrick, 2002). The standard view is that any performance appraisal system is likely to throw up winners and losers. In fact, it may be the rational prerogative of performance appraisal systems to differentiate between the top and average performers (Shrivastava & Purang, 2011). The social categorization implied in performance appraisal processes could also lead to unproductive workplace behaviors among peers (Pettijohn, Pettijohn & d'Amico, 2001). Employees could often perceive negative appraisals as a form of breach of the psychological contracts with their organizations (Robinson, 1996).

Thus, it is important for organizations to remember that the losses and gains implied by performance appraisal processes need not be organically accepted by employees. The losses and gains which are a part of performance appraisal processes could lead to evaluations of trust among employees (Schaubroeck, Peng & Hannah, 2013). The breakdown of trust and the rise of narcissism among winners of performance appraisal processes could lead to deviant behaviors becoming normal among employees. While the losers of performance appraisal processes could engage in organizationally deviant behaviors, the winners of performance appraisal processes could engage in interpersonal deviant behaviors (Bennett & Robinson, 2000). In order to attenuate these negative consequences, it may be important for organizations to build support structures for employees, so that their trust in their organizations is sustained (Wayne, Shore & Liden, 1997).

Hypotheses Development

From a social exchange (Wayne, Shore, Bommer & Tetrick, 2002) and procedural justice theory perspective (Greenberg, 1990), Pichler (2012) argues that irrespective of favorable performance ratings (Dulebohn & Ferris, 1999), if there exists a high quality relationship between the rater and the ratee, then the ratee is likely to be satisfied with performance appraisals. However performance appraisals are complex and may evoke negative reactions from employees forcing raters to "fear, postpone or even discontinue performance appraisals" (Pettijohn, Pettijohn & d'Amico, 2001: 141) and therefore performance appraisals will be effective only when employees perceive them to be fair (Thomas & Bretz, 1994). One of the objectives of performance appraisals is to distinguish between high and low performers in an organization (Ilgen & Feldman, 1983).We contend that when managers have trust in their organization, their faith in the organization's ability to distinguish between high and low performers in the organization will increase. Consequently, we hypothesize that:

Hypothesis 1: Trust positively affects satisfaction with performance appraisals

Lasch (1979) states that society as a whole has become more narcissistic. Some of the employees in the narcissistic world whose performance appraisal outcome is always favorable to them perceive that they are superior to others in the organization (Wallace & Baumeister, 2002) and start demeaning other employees whose performance appraisal outcome may not be great. Social retaliation victimization may happen when supervisors or peers who are satisfied with their performance appraisal blame or threaten other members who are not performing very well, which results in interpersonal deviance. The challenges faced by Indian organizations are attracting and retaining talented employees and also overhaul of HR practices (Shrivastava & Purang, 2011). In the absence of strong HR practices, satisfaction with performance appraisals can lead to a strong sense of contempt for those who are perceived to be weak performers in an organization.

Hypothesis 2: Satisfaction with performance appraisals leads to a sense of contempt for weak performers in the organization.

From a social identity theory perspective (Brewer & Gardner, 1996) it is well known that employees nurture high quality relationships in order to obtain psychological and instrumental resources for higher performance (Schaubroeck, Peng & Hannah, 2013). Similarly when an organization treats an employee well and pays him adequately, the employee might not indulge in organizational deviance. In fact s/he will work for enhancing the productivity of the organization...

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