29 June 2016 WG01
M. de Haas College year 2015/2016
Bachelor thesis Semester 2 period 2
Towards a new perspective on performance appraisals David de Carpentier 10576401
Statement of Originality
This document is written by student David de Carpentier who declares to take full
responsibility for the contents of this document. I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is
Abstract
Most employees and supervisors of organizations look with fear towards the annual
performance appraisal. Employees are often not satisfied with the performance appraisal. In this study I want to investigate whether more frequent performance appraisals will be more effective than an annual performance appraisal. The influence of motivation and autonomy on the more frequent performance appraisal is also investigated. I have done a qualitative study and conducted 6 interviews to answer this question. In the interviews a vignette of the
hypothetical situation was proposed to the respondents. The sample contained 6 employees of a Dutch university. The main conclusion is that more frequent performance appraisals can be more effective as long as the autonomy of the employees is maintained. More frequent performance appraisals increased the motivation for most employees. The implications of the findings and some potential practical applications for management and future research are discussed.
Introduction
In many companies employees annually have a conversation with their supervisor about their work performance as part of the performance appraisal. In most companies this appraisal is given only once a year and Thomas and Bretz (1994) found in their study that supervisors as well as employees look with fear towards the appraisal process. According to Longenecker & Goff (1992) approximately 90% of the large organizations in the United States still have a performance appraisal. The question that remains is if the annual performance is actually effective in these organizations, or that the performance appraisal is more an established order. So, in most companies employees have a performance appraisal once a year. This might change because there are companies which are trying to develop alternatives for the annual performance appraisal. For example, General Electric (GE) is creating a new system that provides employees with more frequent feedback via a mobile app (‘’Why GE had,’’ 2015). With this new system GE follows companies like Microsoft and Adobe, who also want to stop with the annual performance appraisals. The main reason for GE to do this was that the millennials are used to receive more frequent and faster feedback, because they use their mobile phones all the time (‘’Why GE had,’’ 2015). Only one moment in the year might not be enough for the new generation. More feedback might also be more motivating for
employees. Ryan & Deci (2000) found that feedback and communication can enhance intrinsic motivation. Pressured evaluations, evaluations where employees have little self-regulation, and imposed goals are extrinsic motivators that were found to be negatively related to intrinsic motivation (Ryan & Deci, 2000). In contrast, choice and opportunities for self-direction enhance intrinsic motivation because it gives the employee a feeling of
autonomy (Deci & Ryan ,1985). GE does not completely waive their annual performance appraisals. Managers and employees will still have their yearly performance appraisal, but in the interval between these conversations employees will receive frequent feedback (‘’Why GE had,’’ 2015).
The idea of having a performance appraisal more frequently is not yet explored systematically. Most companies are still holding on to their annual performance appraisal. Also there has been little research into the effects of having a performance appraisal more frequent. That is why this is an interesting subject to study. It is also interesting to see whether the relationship between more frequent performance appraisals and employee performance is
influenced by employee motivation and autonomy.
Literature review Performance appraisals
Performance appraisals enable employers and employees to define, communicate, and review expectations, goals, and progresses in achieving strategic objectives (Bacal 2004). According to Dusterhoff, Cunningham & MacGregor (2014) the purpose of a performance appraisal is to improve an employee’s contribution to the organization and improve his or her job
performance. If these performance reviews are of sufficient quality they can provide
important feedback to employees and able them to develop their skills (Lawler, 1994). With high quality feedback employees often get intrinsically motivated (Deci & Ryan, 1975).
But employees are often dissatisfied with the feedback they receive during the performance appraisal (Elicker, Levy & Hall, 2006). If these appraisals are experienced as low quality by the employees these reviews often fail to change how people work or to motivate the employees (Keeping and Levy 2000). Supervisors have to make sure that the appraisals are of sufficient quality. Deci & Ryan (1975) add that positive feedback leads to high intrinsic motivation and negative experienced feedback to low intrinsic motivation. So, negative feedback probably will also not motivate employees to improve their performance. A reason for this dissatisfaction with the feedback in the performance appraisal could be that the employee feels controlled by his or her supervisor. According to the self-determination theory people need to have autonomy to get motivated (Deci & Ryan, 1985). This is confirmed by Brown, Hyatt and Benson (2010) who found that people with low quality performance appraisals are more likely to be dissatisfied with their job and less committed to their organization. Negative feedback by the supervisor will lead to low motivation for the
employee. This is because negative feedback decreases the competence of employees, which leads to a lower intrinsic motivation (Ryan & Deci, 2000). But also low quality feedback will result in an overall low quality performance appraisal.
On the other hand, other researchers found that the annual performance appraisal is effective. Performance appraisals result in higher employee performance (Rodgers and Hunter, 1991). According to Brown et all (2010) the results of performance appraisals are used for most human resource decisions. In contrast, the article about GE claims that annual performance appraisals make the human resource department focus on the processes instead
of the outcomes. Kuvaas (2011) also found that performance appraisals are effective as long as employees receive high quality and frequent feedback. This suggests that frequent
performance appraisals with high quality feedback might improve employee satisfaction and performance. Besides the annual performance appraisal, there can be feedback provided by the manager on informal basis. Extra feedback on informal basis might lead to an overflow of feedback for the employee. This overflow may actually lower the employee motivation and decrease the effect of the performance appraisal (Kuvaas, 2011). This might suggest that more frequent performance appraisals can be effective as long as the employee does not receive a lot of additional informal feedback.
Employee motivation and autonomy
In this study I want to investigate whether employee motivation and autonomy influence the relationship between more frequent appraisals and employee performance. There are many motivational theories from previous research. In this study the agency theory, expectancy theory and self-determination theory are reviewed and their relationship with performance appraisals is explained.
In a performance appraisal the annual goals are provided to the employee by their supervisor or employees set goals themselves. In practice, the desires or goals of the
employees and supervisors can be conflicting (Eisenhardt, 1989). This is known as the agency problem, where different parties work together, but with different goals (Jensen & Meckling, 1976). When the employee and supervisor have conflicting goals this will most likely not result in higher employee performance. According to agency theory, supervisors need instruments – such as rewards or appraisals – to align the behavior of employees with the goals of the organization.
Another motivational theory is the expectancy theory. According to the expectancy theory a person will be motivated/satisfied if a task or goal will lead to the expected and desired outcome (Lawler & Suttler, 1973). The only important part is the outcome, not the process towards the outcome. From an employee’s perspective a certain level of effort will lead to high performance (Heneman & Schwab, 1972). So as long as employee and employer do not have conflicting goals, achievement of tasks or goals will lead to satisfied and
motivated employees.
The self-determination theory is an adjustment of the expectancy theory. First of all the self-determination theory distinguishes between autonomous and controlled motivation. Autonomous motivation means that a person has the experience of choice (Gagné & Deci,
2005). An example of autonomous motivation is intrinsic motivation. Intrinsic motivation refers to doing something because it is inherently interesting or enjoyable for the individual and extrinsic motivation refers to doing something because it leads to a separable outcome (Ryan & Deci, 2000). Extrinsic motivation is an example of controlled motivation. A person will be extrinsically motivated when the activity itself is not interesting, but the consequences are (Gagné & Deci, 2005). Then the motivation of the person is ‘controlled’ by external factors. Examples of external factors are bonuses, pressured evaluations and imposed goals. Because these factors are controlling they do not respect or increase the autonomy of
employees and therefore will not increase the intrinsic motivation (Ryan & Deci, 2000). In the performance appraisal new goals are determined and existing goals are evaluated. These prescribed goals might decrease the intrinsic motivation for the employee. The positive feedback that is provided in the performance appraisals might positively influence the intrinsic motivation, because positive feedback enhances the perception of competence. In the self-determination theory there are three crucial factors for a person to get intrinsically motivated, competence, autonomy and relatedness. These factors were added by the Cognitive evaluation theory (CET). This is a sub theory within the self-determination theory. The CET determined social and environmental factors that influenced or undermined intrinsic motivation (Deci & Ryan, 1985). According to Gagné et al. (2007) people need to have both competence and autonomy to get intrinsically motivated. In this study relatedness is expected to be less relevant, because in performance appraisals the employees are on their own and do not necessarily need to feel related to their co-workers to get motivated. A performance appraisal probably will not make an employee feel more related to his or her co-workers. Most intrinsic motivation happens in isolation (Ryan & Deci, 2000). As in the expectancy theory only the outcome is important, in the self-determination theory the process towards the outcome is also important. The self-determination theory suggests that only if an employee has autonomy, competence and in some cases relatedness the employee will be motivated to improve his or her performance. More autonomy will improve motivation (Deci & Ryan, 1985). When employees do not experience autonomy, but instead feel controlled by their supervisor, rewards will have the opposite effect on performance (Gagne & Forest, 2008). The annual performance appraisal method may not improve employee performance if it results in diminished autonomy and thus a low intrinsic motivation (Kuvaas, 2006, 2007). Fletcher (2001) and Kuvaas (2007) found that encouraging employee development and
motivation is extremely important in the performance appraisal process.
while when someone has more autonomy the person will be intrinsically motivated. (Gagne & Forest, 2008). The feedback by the performance appraisal will influence the competence of the employee. Positive and high quality feedback will probably increase the competence of the employee, while negative or low quality feedback might decrease this.
In this paper it will be interesting to see if more frequent performance appraisals will be more effective than an annual performance appraisal. It is also interesting to see what effect more frequent performance appraisals have on the motivation and autonomy of the employee. The research question therefore is: Does increasing the frequency of the performance appraisal enhance the effectivity of the appraisal and how does employee motivation and autonomy influence this relationship?
Methods
In this study I explored performance appraisal methods in a specific context. There has been little research about having performance appraisals more frequently and qualitative research is a valuable method to explore new subjects. Also, in qualitative research, people want to study real-world settings and try to describe narratives (Patton,2005). Qualitative research therefore was useful to study performance appraisals in a specific context. Bryman (2003) defines subjectivism where social phenomena and their meanings are influenced by their social actors. The employees in this study experienced the performance appraisals in different ways,
depending on for example other employees and managers or the interviewer (social actors). Therefore the participants are subjective and this can be linked to an interpretivistic view of the epistemology.
Qualitative research is a research process that might use inductive data analysis to learn about the meaning that participants attribute to a problem or issue by identifying
patterns or themes (Lewis, 2015). An inductive data analysis was used in this study to identify whether employees are satisfied with the annual performance appraisal. In this study I used a case study to research this subject. A case study focuses on the dynamics within single settings (Eisenhardt, 1989). When the research question contains a how question a case study is the best possible method (Yin, 2003). With a case study it is possible to get a rich
understanding of context and processes and that can be useful for this study as well. Interviews are among the most common strategies for collecting qualitative data (DiCicco‐Bloom & Crabtree, 2006). In-depth interviews, especially a vignette interview, was used as data collection method. This is a research technique in which a short hypothetical story in a specific context is submitted to the respondent who is asked to respond to it ( Finch,
1987). A vignette is a short scenario where people can respond or give their opinion about that scenario (Hill, 1997). A vignette study is specifically designed to explore new research and useful to research hypothetical situations. In this study the employees were able to give their opinion about the more frequent performance appraisal scenario, which they did not have experience with yet. With this hypothetical situation the employees could imagine what more frequent performance appraisals would be like. These interviews are also useful to learn about individuals and the meaning they give to a set of issues (DiCicco-Bloom & Crabtree, 2006). In this study I wanted to know how the participants experience the performance appraisal method and what their perspective is in relation to the appraisal. For the interviews I had access to the VU university communication department located at the Boelelaan.
The participants were selected with a purposeful sampling method. In a purposeful sampling method a researcher actively selects the most productive sample to answer the research question (Marshall, 1996). For this study it was appropriate to select participants and really learn how they feel about the performance appraisal. This is a non-probability sampling process and this is used because probability sampling aims to generalize results, but does not develop an understanding of complex issues relating to human behavior (Marshall, 1996). And in this study it was necessary to understand the employees and try to identify their motivational drivers.
In this study 6 employees were selected working on different jobs in the organizations. These jobs were press and science information officer, activities coordinator, administrative assistant and communication officer. As mentioned earlier no supervisors were interviewed. The topics covered in the interview were determined in advance. This gives the researcher the possibility to create an overview and feel more comfortable. Most of the questions were open questions and gave the interviewer the chance to dive deeply in to the subject. The interviews were conducted in the month may during work time. The interviews were conducted in a secluded room at the communication and marketing department. An advantage of a secluded room is that it creates a formal atmosphere and that both interviewer and interviewee stay focused on the subject. A disadvantage is that the interviewee probably does not want to critically discuss the supervisor or organization. The interviews had an informal but focused character.
Before the interview the participants were told that the interview was recorded with a mobile phone. After the interviews were conducted the researcher could transcribe these interviews on the computer. When the interviews were transcribed they were analyzed using open coding, axial coding and selective coding. The participants were also told that they
remain autonomous and that they can read the thesis when it is finished. In the following table the different participants and their function are listed.
Respondent Gender Function
Respondent 1 Male Press and science
information officer
Respondent 2 Female Press and science
information officer
Respondent 3 Female Activities coordinator
Respondent 4 Female Administrative assistant
Respondent 5 Female Coordinator and
communication officer
Respondent 6 Female Web editor
Results The organization
The research has been done at the Vrije Universiteit (VU), communication and marketing department. All the employees that were interviewed have higher education. Two years ago there has been a reorganization at this department. Approximately 80% of the employees lost their job. These employees could apply for different jobs at the VU. But a great part of the employees who got fired had to apply for a job somewhere else. Also, all the employees who stayed had to apply for new jobs, because the job structure changed. For this employees it was not possible to develop themselves in their function, because higher positions in most
functions have been deleted. It were all communication jobs. This has led to budget cuts, time pressure and for some employees a lack of appreciation of their work. This situation could have affected their view on the performance appraisal.
Most of the employees co-operate intensively and appreciate this co-operation. The most challenging activity for most of the employees is to see meaningful results of their work. The employees have a team meeting once every week and a bilateral meeting every 3 weeks. The team meeting consists of the employees of the team and their supervisor. These teams consists of 3 or 4 employees. In the team meeting the program of the next week is provided
and the task distribution is made. The bilateral meeting is a conversation between the employee and the supervisor. Bottlenecks in the daily work for the employee are discussed and the supervisor advises the employee how to improve his or her work. Both these meetings are informal. These meetings take place during work time; there is not a fixed meeting
schedule. The employees greatly value both these meetings and think that these meetings are important to perform well. In the current situation the employees have a performance
appraisal once every year. To prepare for this performance appraisal the employees make an overview of what went well or wrong. They also check whether they met the targets that were agreed with their supervisor. At last the employees note what they want to achieve in the future. In the following paragraphs, the effectiveness of this performance appraisal will be discussed as well as the influence on motivation and autonomy.
Aversion of the performance appraisal
Some employees fear the annual performance appraisal , others do not; of those, some are pondering about the coming appraisal and think about before they have it. ‘’Well, not in a negative way, but the performance appraisal is something that I want to properly think about before, for example what have I done this year, how did these things go and what do I want to do in the future’’(respondent 1). But the job of the employees is clearly described, the
supervisor is also clear to the employees about what she expects from them. ‘’Well, because it is always clearly described what the supervisor and company expects from me, and I always have the feeling that I meet these expectations’’(respondent 2). This is why some employees do not fear the performance appraisal, they do not expect surprises.
The employees who fear the appraisal do this a whole year is being judged in an hour, that it feels like a final judgement. ‘’I think it is the subcutaneous feeling that you are being judged on a whole year in an hour, and have this conversation with your
supervisor’’(respondent 3). Also the colleagues rate the other employees, some employees are nervous about what other employees say about them. ’’The supervisor asks other employees to rate you as well, how do they think about you’’(respondent 4). Nerves and the subconscious feeling are important factors that make these employees fear the conversation. And for some employees the opinion of their colleagues as well.
Relatedness
As mentioned before, in the annual performance appraisal employees are also rated by their co-workers. The feeling of relatedness with their co-workers influences the employee
motivation. ‘’So, i was positively surprised the way people see you, because you actually do not know that’’(respondent 5). It is interesting and important for the employees how their co-workers think of them.
Feedback and supervisor
All the employees attach great value to and appreciate the feedback from their supervisor. The supervisor gives positive feedback when the employees did perform well. When the employees did not, they perceive the feedback as constructive criticism.’’ The feedback is not necessarily negative like you have done something wrong, but more like how to do something better next time’’(respondent 2). The employees appreciate that and it helps them in their work. Most employees feel that the positive feedback and constructive criticism increase work performance and improve the relationship between the employee and the supervisor. ‘’Yes, I think that the supervisor and the employee can understand each other better, the supervisor and the employee can adjust the expectations to another and the supervisor can help with the task distribution or collaboration, this really helps’’(respondent 1). The employees always try to integrate the feedback into their work as far as possible. The supervisor gives most of the time relevant answers to the questions of the employees. This helps the employees to do their work well. The employees describe their supervisor as a relaxed person, who gives the employee a lot of freedom to do their work.
Effectiveness
According to some employees the annual performance appraisal does not improve employee work performance. There are various reasons for this. Some problems that exist are not being tackled in the performance appraisal. Most of these problems are caused by the
reorganization. In this way, the performance appraisal does not help the employee in the daily work. ‘’Actually the same example as with Smis, I indicated to my supervisor that I do not want to ask things four times to someone, I bring this up in the yearly performance appraisal and tell my supervisor that this does not work well, but after the performance appraisal the situation stays the same’’(respondent 4). In this way the performance appraisal does not increase the work performance of the employee.
Also because the performance appraisal is only once a year, after the appraisal the items that were discussed fade away during the year. Because the employees tend to forget the appraisal’s feedback items, the work performance is not affected by the performance
appraisal you just start with your daily work and it fades a little bit’’(respondent 1). On the other hand, some employees think the performance appraisal could increase employee work performance. When there is something that hinders the employee from doing the work well, the performance appraisal is a good moment to intervene and ask the
supervisor for help. ‘’Well, when there is a problem that makes me unable to perform well, the yearly performance appraisal is a good opportunity to ask my supervisor for help and solve the problem together’’(respondent 6). So, according to the employees the performance
appraisal could be effective when problems are being tackled, but in the current situation daily problems still exist.
Motivation
A performance appraisal should be a tool for employees to develop themselves. In the current situation the annual performance appraisal does not give the employees this opportunity according to an employee. ‘’When I review the yearly performance appraisals of last year, I literally asked if I have opportunities do develop myself and grow in my function, but it did not happen. Also with the new supervisor I got the same answer, this does not motivate me and in the last performance appraisal the supervisor told me that if I want to develop myself I should work somewhere else’’(respondent 1).
The reason for this is the reorganization in the company, which has been discussed above. Because of this the performance appraisal has no motivating effect on the employee. ‘’Because of the reorganization certain things got stuck, I am at the end of my salary and me and my supervisor both think I should earn a higher salary, but then it is said that there are budget cuts and it is not possible to do’’(respondent 2). The reorganization caused budget cuts, makes it impossible for employees to develop themselves and time pressure, which leads to an obstacle for employee development, which leads to lower employee motivation.
In case the performance appraisal has been experienced positively by the employee, there are for example new ambitious goals for the employee in the future, the employee can get more enthusiastic and motivated. ‘’It are the compliments of my supervisor, when the supervisor tells me that something that I have been working on is appreciated by the client, the client is satisfied, then I start working more enthusiastic’’(respondent 6). Also, feedback from the supervisor is important in the performance appraisal. A good rating from your supervisor in the yearly performance appraisal can enhance motivation. ‘’When you have had a good performance appraisal, a good rating, you can get more excited to work’’(respondent 5). When the employee receives compliments from the supervisor, the employee will become
enthusiastic. It is the positive feedback from the supervisor in the yearly performance
appraisal that increases employee motivation. When the supervisor provides compliments to the employees they can develop a good relationship with each other, which increases the employee motivation.
Autonomy
After the annual performance appraisal the employees have room to make their own
decisions, but to a limited extent. ‘’Yes it is possible, but to a limited extent, there is room to make own decisions but to a limited extent’’(respondent 1).
On the other hand, the supervisor already gives the employees a great amount of autonomy. For some of the employees the annual performance appraisal does not increase or decrease this amount. But for others the freedom they feel during the year is large, but when they have had the performance appraisal they remember they are being controlled by their supervisor. ‘’ Well, normally I have room to make own decisions, I try to determine my own goals, try to collaborate with colleagues, and i have the feeling that in the yearly performance appraisal this room to make own decisions decreases, You have to review and explain your work performance to your supervisor and this may decrease the room to make own decisions on short term after the performance appraisal’’(respondent 5). So, after the performance appraisal the room to make own decisions can decrease on short-term.
For almost all the employees it is very important to be able to make their own
decisions. ‘’The organization should be based on the strength and ambitions of the individual employees, that leads to the best overall performance ‘’(respondent 1). Also, the highest degree of freedom and room for own decisions leads to the highest quality of work. ‘’My work performance is higher when I feel that I have a great degree of freedom, then I perform
better’’(respondent 2).
Because most of the employees have higher education, it is very important the employees can execute their function autonomously. They do not appreciate it when the supervisor tells them exactly what to do. ‘’ I think that it is the fact you are in a function for higher educated employees, I am not a factory worker that has to do the same thing every day, that is why it is important to me that I can autonomously decide how I want to execute my function’’(respondent 3).
On the other hand, a lot of room to make own decisions for employees can lead to a loss of connection between the employee and the work, because employees do not have the ability to make this fit. ‘’ You lose connection with the tasks and tasks that should happen are
not done because employees think I do not like this task so I will not do it’’(respondent 4). But most employees think they are capable of making the fit between their own decisions and their work.
Performance appraisal in the new situation
In the new situation the employees will have a performance appraisal 4 times per year. Every quarter there are goals agreed between the employee and the supervisor. These goals are also evaluated every quarter. These appraisal meetings last 30 minutes and will replace the yearly performance appraisal. In the interview this hypothetical situation is submitted to the
respondents, they could read it and after that answer the questions.
Most of the employees will fear the performance appraisal less if they have these appraisals more frequent. This is because the employees know more about what is going on in the company and the way the supervisor thinks. Also, because a shorter time period is
included in the appraisal, the employee will fear the performance appraisal less. ‘’I think it is less, I said a year is a relative short time period, but on the other hand when you have a yearly performance appraisal the one before feels a long time ago, so I think the fear towards it will be less’’(respondent 1).
According to one employee more frequent performance appraisals will make the employee fear the conversation more, this is because of the pressure to achieve your quarterly goals. ‘’ Well, because the goals become very detailed, you really have to achieve these goals, because with a yearly performance appraisal I do not have very concrete goals’’(respondent 6). There are also some employees who do not fear the appraisal more or less, because the idea of the performance appraisal stays the same in their opinion. But, most of the employees fear the performance appraisal less when they have it more frequent.
According to some employees four times per year a performance appraisal will be too much, but two times per year will be fine. They think there is not enough material to discuss in these appraisals if it will be 4 times per year. They also have the weekly team meeting and the bilateral meeting where they discuss a lot. Some employees think more frequent
performance appraisals can lead to frustrated employees, because all these extra meetings can be experienced as controlling and lectured. ‘’The disadvantage of more frequent performance appraisals is that, because of the amount of meetings and goals we already have, it is
something extra you have to focus on, and I think that this will lead to aversion from the employees’’(respondent 2).
that in a company where almost everyone is higher educated, more frequent performance appraisals can be experienced as lectured’’(respondent 3). Also the fact that there are a lot of high educated employees will influence the effectiveness of the performance appraisal. The advantages of the more frequent performance appraisal according to the employees is that you can intervene earlier when you are not achieving your goals and an improved relationship/involvement with the supervisor. ‘’The idea of having more frequent performance appraisals is really good, because you have you have goals and feedback following up very shortly, and this creates a mutual influence that can be good in that situation’’(respondent 4).
Effectiveness
According to the employees, when having more frequent performance appraisals the goals will become more specific and then the employee knows exactly what is expected. ‘’ With these concrete goals you have a handhold to realize some things’’(respondent 4). Also, the employee and the supervisor can intervene earlier when the employee is not achieving the goals, because the goals are short-term and are evaluated more frequently. Because the goals are more specific and supervisor and employee can intervene earlier this will increase
employee work performance.
On the other hand, according to one employee this focused short-term goals can lead to lower work performance, because this is already done in the team meeting. ‘’ I think my work performance decreases, because you are too focused with the short-term goals, but it in the team meetings we already discuss the short-term goals, and I think that it is not good to also focus on short-term in performance appraisals, the advantage of a yearly performance appraisal is that you can focus on the future’’(respondent 2).
So, according to the employees having more frequent performance appraisals can increase work performance because the goals are more concrete, more often evaluated and the employee knows what is expected by the supervisor. But, in the team meetings short-term goals are already discussed, when this also the case in the performance appraisal, this will get too much for the employee and decrease work performance.
Motivation
Some employees get more motivated when having more frequent performance appraisals. Because the employee is now more focused on the tasks and has more contact with the supervisor the motivation increases. The improved relationship with the supervisor is
important. ‘’ I think that I would experience greater involvement with my supervisor, because you do these things often, that will motivate me’’(respondent 4). And ‘’Well it could be an improvement. That the supervisor gives you a lot of attention and that the supervisor gives you the time to focus on my work’’(respondent 3). So, the enhanced relationship and involvement with the supervisor can increase the motivation of the employees.
For other employees more frequent performance appraisals do not increase motivation. The shorter time period does not influence motivation. ‘’ The idea of the performance
appraisal stays the same, the way you look back and ahead does not change it is just more often, I do not think that this will influence my motivation’’(respondent 1).
According to some employees, appreciation from their supervisor motivates them. ‘’ But my motivation comes from within, it is not really something that will be influenced by a
conversation, but what influences your motivation the most is the feeling of being
appreciated’’(respondent 6). The supervisor in this company provides a lot of compliments and positive feedback, this will increase the employee motivation.
Autonomy
According to some employees, because the goals are evaluated more quickly, you have less time to develop yourself and to give your own twist to your work. This will decrease autonomy. ‘’I think that the room to make own decisions will decrease when you have a performance appraisal more frequent, because you are forced to focus on the goals that are determined every quarter’’(respondent 2). The supervisor will probably also tell you how to execute your tasks, one employee thinks this will lead to a decrease in freedom. ‘’So I think that the supervisor will really tell you how to execute your job, and I like to find my own way, so I think your work will be very directed’’(respondent 5).
On the other hand, one employee thinks you will get more room for own decisions, when there are performance appraisals more frequent. ‘’This might even become even greater, because there are 4 moments per year where you can have your own investment’’(respondent 4). But, most employees think the room to make own decisions will decrease.
Personal goals
Most of the employees would like to determine their own goals, because they attach great value to have room to come up with own initiatives. ‘’ That there is given more room to employees to really evolve themselves, not too much on short notice’’(respondent 1). According to these employees, their sense of freedom will be limited when their supervisor
determines all the goals. Most employees are higher educated, they know what they can and want, a supervisor does not need to tell them. ‘’Yes absolutely, and I think that as a supervisor you do not achieve the maximum performance out of your employees in that way, there are a lot of higher educated employees here, who know what they are capable and incapable of, what they want and what they do not want’’(respondent 1).
One employee did not want to determine her own goals. The employee is afraid that she will not be able to give accurate deadlines to these goals. ‘’Yes it is difficult for me to determine my personal goals. I would rather have someone else to determine my goals, because when I have to determine my own goals, I need to determine a deadline as well and that is difficult. I might plan too much or too less time to complete the goals’’(respondent 6). Also, this employee does not feel limited in freedom when only the supervisor determines the goals.
Almost all the employees would like to determine their own goals, because all the employees have a higher education and when the supervisor gives the employees freedom, they can achieve high employee performance. When the supervisor determines the goals for the employees it will decrease their degree of freedom. Only one employee does not want to determine own goals, because of the insecurity about her own skills to determine deadlines.
Discussion Meetings
The respondents have at least two weekly meetings. One with their co-workers and the supervisor and one bilateral meeting with the supervisor. Most of the time these meetings are informal. Instead of fixed time points in a week, these meetings take place when employee and supervisor have time in that particular week. According to Kuvaas (2011) a lot of
informal feedback for the employee may lead to an overflow of information for the employee. This overflow may lead to lower employee motivation and result in a less effective
performance appraisal. The bilateral meetings between the employee and the supervisor are often informal and when this leads to an overflow of extra informal feedback this could lead to lower employee motivation (Kuvaas, 2011).
Supervisor and feedback
However, in this study the employees value the informal meetings with the supervisor and they think these meetings are important to perform well. It also strengthens the relationship
between the supervisor and the employee. In this study the employees do not appear to loose motivation because of the informal feedback, but actually appreciate this. A reason for this could be that the supervisor in this organization only provides positive feedback or
constructive criticism. According to Deci & Ryan (1975) positive feedback leads to high intrinsic motivation and negative experienced feedback to low intrinsic motivation. This is why the motivation of the employees in this study does not decrease but might increase, because the supervisor provides positive feedback. Also, in the weekly meetings and the performance appraisal, the supervisor provides constructive criticism instead of negative feedback. This is important, because according to Brown, Hyatt and Benson (2010) negative feedback provided by the supervisor will lead to low motivation for the employee and results in a low effectiveness of the performance appraisal. In this situation the annual performance appraisal might be effective despite the additional weekly informal feedback.
Aversion of the performance appraisal
Thomas and Bretz (1994) found in their study that supervisors as well as employees look with fear towards the performance appraisal. Because only employees were interviewed in this research, the focus is on whether the employees fear the performance appraisal. Nerves and the feeling that a whole year is being judged in an hour were important factors that make these employees fear the performance appraisal.
Other employees do not fear the annual performance appraisal. They are pondering about the coming appraisal and think about it before they have it. But the job of the
employees is clearly described and the supervisor is also clear to the employees about what she expects from them. The difference between the employees might be explained by their personality. Employees who are more insecure about themselves and really care what the supervisor thinks of them might be more averse to this appraisal than employees who are confident and are less dependent on the opinion of their supervisor For insecure employees more frequent performance appraisals might be more effective, because the impact of the appraisal decreases and their supervisor can give them more clarity during the year. Effectiveness
There are differences between the employees regarding the perceived effectiveness of the performance appraisal. According to some respondents the performance appraisal does not increase their work performance because the problems that exist in the daily work are not tackled in the performance appraisal. This suggests that the performance appraisal lacks
quality. In general, employees are often dissatisfied with the feedback they receive during the performance appraisal (Elicker, Levy & Hall, 2006).According to the theory, when employees experience the performance as low quality, these appraisals fail to improve employee work performance.
According to the employees, when these daily problems will be tackled or solved together with their supervisor in the performance appraisal, it will increase employee work performance. This is in accordance with the theory, that as long as in performance appraisals high quality feedback is provided, the appraisal is effective. That is why it is very important for firms and supervisors to provide high quality feedback in the performance appraisals to make sure that the appraisals are effective.
Also, when there is only one performance appraisal each year, the items that are discussed in these meetings are forgotten in the months after the appraisal and therefore do not increase work performance.
Motivation
In the current situation the performance appraisal cannot lead to development opportunities for employees, because the necessary time and means for development are lacking after the recent reorganization. This is contrary to the advice of Fletcher (2001) and Kuvaas (2007) who found that encouraging employee development and motivation is extremely important in the performance appraisal process. The respondents were mostly motivated by the feedback of the supervisor in the performance appraisal. Compliments and positive feedback increase the intrinsic motivation of the employee. This is confirmed by Deci & Ryan (1975), positive feedback leads to higher intrinsic motivation.
In the research it became clear that the respondents attach great value to see results of their effort. For example a marketing campaign they have been working on resulting in success . This can be explained by the expectancy theory, that employees are motivated when they see that a certain task leads to a desired outcome (Lawler & Suttler, 1973). This refers to the intrinsic motivation of the employees.
It is important for a supervisor to provide positive feedback to the employees and try to make sure that the employees perform well, this will enhance their motivation.
Autonomy
According to the respondents the supervisor gives a great degree of freedom to the employees. They feel they have freedom in their daily work, but according to some employees this
freedom is limited by the performance appraisal. Almost all the employees greatly appreciate to be able to make their own decisions. This great degree of freedom increases their work performance. The employees perform best when they have a high degree of autonomy. Most of the employees would not appreciate if for example the supervisor determines their goals. This is not in line with the expectancy theory. According to this theory an employee expects that a certain desire will lead to an outcome and that the process towards it is not important (Lawler & Suttler, 1993). As long as the employee is satisfied with the outcome the employee will be motivated. But in this case it is important for the employees that they experience a great degree of freedom in their work. This is in line with the self-determination theory. Where in the expectancy theory only the outcome is important, in the self-determination theory the process towards the outcome is also important. This theory suggests that only if an employee has a great degree of autonomy, the employee will be motivated to improve his or her performance (Deci & Ryan, 1985). According to the employees a high degree of
autonomy will increase employee performance and therefore the performance of the organization. Important for supervisors to make sure the autonomy of employees is not limited by the performance appraisal.
This need for autonomy might be even higher, because these employees are higher educated. These employees do not like it if their supervisor tells them exactly what to do. The need for autonomy for the higher educated employees can be explained by existing literature. In studies about the autonomy of professionals, which are higher educated people.
Professionals work a lot in complex and unpredictable situations, where employees own intuition and decisions are more important than routine (Hoyle and John, 1995). Strict rules or control by their supervisor only constraints this (Furlong, Whitty, Whiting. Miles & Barton, 2000). It is important for the supervisor to provide a lot of freedom to the higher educated employees, they will have a high performance and will be more motivated.
Employee competence
The employees in this research are satisfied with the feedback they receive from their
supervisor. The employees appreciate the positive feedback and constructive criticism and try to process this in their daily work. With high quality feedback employees often get
intrinsically motivated (Deci & Ryan, 1975). Performance appraisals with high quality feedback can therefore improve the competence of the employees. When having more frequent performance appraisals, the employees can process this feedback into their daily work more often, which might increase their competence.
Relatedness
In this company, the employees also get rated by their co-workers in the annual performance appraisal. That is why in this case, relatedness might actually be an important factor to influence employee motivation. If an employee is rated positively by the co-workers, the feeling of relatedness might increase and the motivation also increases, which leads to a more effective performance appraisal. On the other hand, when someone is rated negatively by co-workers, the motivation may decrease.
Aversion more frequent performance appraisals
One might expect that when the employees have performance appraisals more frequent the employees will fear the performance appraisal less. In the new situation the appraisal is not based on a whole year but on a shorter time period. As mentioned earlier, what employees fear the most is the feeling of being evaluated over a whole year in one performance appraisal. When they have appraisals more frequent they would probably fear the appraisals less. More frequent performance appraisals feedback and effectiveness
In this study, when the employees would have more frequent performance appraisals some of them actually think it will lead to an overflow of information. Because they already have the weekly informal meetings, the extra goals and meetings from the performance appraisals will become too much. This is explained by Kuvaas (2011), that an overflow of information for the employee will decrease the effect of the performance appraisal. This might suggest that more frequent performance appraisals can be effective as long as employees do not receive a lot of informal feedback. With an annual performance appraisal the informal feedback does not lead to an overflow for the employees, but with more frequent performance this might lead to an overflow of information. With more frequent performance the focus is more on short-term and the other meetings of the employees are also on short-term. That is why the employees think it will lead to an overflow of feedback.
Other employees think the goals in the appraisals will become more concrete and specific. And because these goals will be evaluated more often the supervisor can also intervene earlier when one is about not achieving the goals. This will increase the work performance and thus the effectiveness of the more frequent performance appraisal. According to the employees, the items that are discussed in the annual performance appraisal are forgotten in the months after the appraisal and therefore do not increase work
performance. When the employees have performance appraisals more frequent, the items might not fade away and the employees can process these items in their work. Then the work performance of the employees could increase.
Motivation
The employees in this study attach great value to the relationship with their supervisor. Compliments and the feeling of being appreciated by their supervisor are very important. With more frequent performance appraisals, the employees think this relationship can even be improved ,because of the greater involvement with the supervisor, the more frequent
evaluation of your work and goals.
This relationship with the supervisor enhances the motivation of the employees. This refers that the employees attach great value to their intrinsic motivation. They do not like to be controlled by their supervisor, because this decreases their autonomy. But they want their supervisor to give them compliments and give them the feeling of being appreciated, because this will motivate them. Important for the supervisor to provide feedback in such a way that it improves the relationship with the employees, but make sure that the employees do not see these feedback as controlling. The employees see their supervisor as a relaxed person and someone who gives them freedom. They really appreciate this and they perform best in that way. For supervisors who work together with higher educated employees it would be effective to give the employees a lot of freedom.
Autonomy
When having more frequent performance appraisals, some employees think their possibilities to develop themselves will decrease, because they will be forced to focus on the goals. As mentioned earlier, the development possibilities of employees is an important element of an effective performance appraisal. The supervisor might tell you how to execute your task because there is less time to complete the goals and the goals are also evaluated more often. This would not be effective, because with limited freedom and less room for own decisions the employees will be less motivated to improve performance. (Deci & Ryan, 1985). Because the goals are evaluated more frequently, the employee can also feel more controlled by the supervisor. This has a negative effect on employee performance (Gagne & Forest, 2008). According to some employees, in a company with a lot of higher educated employees, more frequent performance appraisals can be experienced as controlling. It is known that higher educated people perform best when they have a lot of freedom and can make own decisions
(Furlong et al., 2000).
One employee thought the autonomy could improve with more frequent performance appraisals, because there are more moments in the year for the employees to have an
investment for the decisions made in the appraisal. But, this employee already experiences a lot of freedom from the supervisor. The idea of more frequent performance appraisals does not influence this freedom.
Most of these employees would like to be able to determine their personal goals. When the supervisor determines the goals they would feel limited in freedom and autonomy. When the supervisor determines the goals and does not include the employees in this decision the goals of the supervisor and the employee can conflict (Eisenhardt, 1989). This most likely results in a lower employee performance. This is important, because when there are
performance appraisals more frequent, more new goals are determined and the chance of conflicting goals increases.
With more frequent performance appraisals, there are more goals which need to be achieved by the employee. If the supervisor probably wants the employee to achieve these goals in a particular way, very strict and on time, while the employees want to achieve these goals with more time and more personal influence it can lead to a conflict. In this case the agency problem can occur, where different parties work together, but with different goals (Jensen & Meckling, 1976). If this problem occurs, this most likely results in lower employee performance. But, with more frequent performance appraisals clear and equals goals are determined by the supervisor and employee. With more frequent feedback it is possible to explicitly bring the goals of supervisor and employee together. The possibility for the agency problem to occur is therefore probably lower for more frequent performance appraisals then for an annual performance appraisal.
Personal goals
There was one employee who did not want to determine personal goals by herself. She was afraid she was not able to determine the proper deadlines for the goals. This employee was insecure and not really confident about her own skills. This person does not mind if the supervisor tells her how to execute the tasks. Then she is sure she does it right. This might suggest that people who are confident about their own skills want to work independent of their supervisor and might see the more frequent performance appraisals as controlling and a decrease in their autonomy. People who are more insecure about themselves, might appreciate
more frequent performance appraisals, because the supervisor can help them in their work by providing more frequent feedback and give them security and stability.
Limitations
The sample in this research was small and only contained 6 interviews. Therefore the findings cannot be generalized to a larger population and the study has a low external validity.
However, when you want to generalize your results by having a big sample, you do not develop an understanding of complex issues relating to human behavior (Marshall, 1996). In this study an understanding of complex issues might be more important. It might also be more important that the findings are specific for the organization, rather than generalized to all organizations. In this study only employees were interviewed. A disadvantage is that only information is obtained from the side of the employee. Interesting for future research to interview both employees and managers to obtain information from both sides and see if these have a different or a corresponding view on the more frequent performance appraisal. Only qualitative research methods are used in this study. There is no triangulation of the data possible in this study, which makes the research less valid. There is a low internal reliability in this research, because there was only one researcher who had to see and hear everything during the interviews. The external reliability refers to whether the study is replicable and is moderate to high.
Implications for future research and management
To investigate if more frequent performance appraisals are more effective than an annual performance appraisal, an experimental study can be used in the future. An experimental study design would be probably be effective to analyze the differences between more frequent performance appraisals and the annual performance appraisal. This study contains 2
departments, one which will have an annual performance appraisal and one with more frequent performance appraisals. After the study the management team might be able to conclude if more frequent performance are more effective and what influence it had on the employee motivation and autonomy.
Conclusion
I can conclude that it is very important for the employees to have a great degree of autonomy in their job. Especially high educated employees want to have the opportunity to make their own decisions. When the employees would have a performance appraisal more frequently,
they believe this will decrease their freedom and autonomy. On the other hand, most of the employees think their motivation will increase because of the improved relationship with the supervisor. Also, the goals will become more concrete and specific, which can improve the employee performance and thus the effectiveness of the performance appraisal. The additional feedback can also increase the competence of the employees, because the employees find the feedback of the supervisor useful. Disadvantage of the additional feedback is that can lead to an overflow for the employees. Most of the employees think they would fear the more frequent appraisal less than the annual performance appraisal, because the evaluation of the supervisor is over a shorter period of time.
More frequent performance appraisals bring more goals and evaluations. As long as the supervisor gives the employees freedom and let them for example determine their own goals, more frequent performance appraisals can be more effective than the annual
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