How to let subjectivity in performance
evaluation work? Determining the
conditions that attenuate its negative
impact on organizational justice
2018
MASTER’S THESIS
LARS KOOLHOF S2745240
SUPERVISOR AND CO-ASSESSOR:
MR. N.J.B. MANGIN & MRS. P. VAN VEEN-DIRKS
DATE: 24-6-2018
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Thesis Outline
1. Abstract ... 2
2. Introduction ... 3
3. Theoretical background ... 8
3.1 limitations of objective financial metrics ... 8
3.2 Inclusion of non-financial performance indicators ... 9
3.3 Issues arising from more metrics ... 9
3.4 Advantages of subjectivity in performance evaluation ... 10
3.5 Organizational justice ... 11
3.6 Organizational cynicism ... 13
3.7 Subjectivity versus organizational justice ... 13
4. Methodology ... 17
4.1 Justification of the research approach ... 17
4.2 Description of the questionnaire ... 17
4.3 Questionnaire outline ... 18
4.4 Sample descriptions ... 18
4.5 Data collection procedure ... 19
4.6 Data analysis ... 20
5. Results ... 21
5.1 Central tendency bias. ... 21
5.2 Supervisor’s presence at the work floor ... 22
5.3 Supervisor-subordinate trust ... 26
5.4 Frequent meetings ... 28
6. Discussion ... 30
6.1 Summary of research findings ... 30
6.2 Synthesis with current literature ... 31
7. Conclusion ... 36
8. Limitations ... 37
9. Recommendations for future research ... 38
10. Acknowledgements ... 39
11. References... 40
12. Appendix... 45
12.1 Questionnaire ... 45
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1. Abstract
Subjective performance evaluation is used in virtual all organizations. Subjectivity is used to overcome the shortcomings of an exclusive focus on financial performance indicators which include the narrow scope, short-termism and the lack of ex-post flexibility to correct for unforeseen, special circumstances. Therefore, firms need to attract managers’ attention on
performance drivers by introducing non-financial performance indicators to broaden the scope of performance evaluation and avoid short-termism. However, the introduction of more metrics in performance evaluation results in greater subjectivity as metrics are more subjective and
weighting is less codified. This subjectivity may enhance or on the contrary hurt organizational justice (table 1). Organizational justice is important because a lack of perceived justice could lead to organizational cynicism which is found to influence organizational success negatively.
To prevent organizational cynicism, it is important to understand which conditions shape the relationship between subjectivity and organizational justice. This research investigates these conditions by using in-depth semi-structured interviews in a setting of highly subjective performance evaluation. The results of this study indicate that perceived supervisor’s bounded rationality weakens organizational justice as it results in a central tendency bias in evaluating performance. The findings indicate further that supervisor’s presence at the work floor attenuates the negative impact of subjectivity on organizational justice. Third, subjective evaluation
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2. Introduction
Effective performance evaluation is known as a key success factor for today’s companies (Humphreys et al., 2016; Sezgin & Sankur, 2004). Supervisors use it as an important tool to change, assess and reward managers and employees’ behavior and results (Lambert, 2001). In return, performance evaluation provides employees constructive feedback, helps them learn from their mistakes and indicates improvement points. The performance indicators help both
supervisors and subordinates to gain insight in the consequences of specific behavior or actions and, if necessary, quickly adapt to negative outcomes.
A variety of performance measures can be used to adapt to the specific circumstances the company faces (Kaplan & Norton, 2016; Simons, 1995). Performance evaluation can include both objective and subjective elements. The difference between these elements is that objectivity relates to judgment based on observable phenomena and uninfluenced by emotions or personal prejudices. In contrast to objectivity, subjectivity is judgment based on individual personal impressions and feelings and opinions rather than external facts. (Ittner et al., 2003).
There is a long-standing debate about the relative merits and flaws of objective and subjective evaluation. Objective performance evaluation is associated with equal treatment, transparency, fairness, reduced uncertainty and prevents favoritism and discrimination by supervisors. (Botelho & Abraham, 2017).
In their search for objectivity, firms often rely on financial performance indicators in
performance evaluation (Boldeanu, 2009). However, there are problems related to an exclusive focus on financial performance indicators. An exclusive focus on financial performance
indicators might lead to an exclusive, short-term focus on these parameters and could be at the expense of other performance indicators (Hayes and Abernathy, 1980). For companies the consequences of a short-term focused business culture can be huge. Previous research found that a lack of attention to long-term performance indicators is one of the major contributors to
business failure. (Maze, 2017).
4 Research on CEO-compensation shows that organizations experience huge difficulties to
determine and measure financial performance metrics that give a good and overall assessment of an individual employee (Bushman et al, 1996).
Employees focused on simplified financial performance indicators are likely to deviate from what is desirable with regard to the long-term goals of an organization. (Engelhardt, 1989; Kurtz, 2015). This conflicts with the overall trend that firms encourage a long-term orientation and are willing to reward employees that provide the largest overall contribution to the frim (Marr, 2006).
Therefore, firms need to attract managers’ attention on underlying performance drivers to avoid short-termism and overcome controllability issues (Kaplan & Norton, 2016) As a result, an increasing stream of organizations broaden their scope in individual performance assessment by allowing supervisor’s discretion to correct for special circumstances and through the introduction of non-financial performance indicators (Luft et al., 2015).
These non-financial performance indicators steer employee’s focus to more underlying
performance drivers that match the long-term orientation of the organization. Examples of these performance drivers include teamwork and cooperation, listening, customer service, performance orientation, personal development, innovativeness etc. By including these performance
indicators in the overall, individual performance evaluation, organizations create the opportunity to correct for the shortcomings in financial performance indicators. More and more are
employees prepared for lifelong learning and stimulated to develop themselves in all aspects every day. This creates an increasing mismatch with a narrow, financial focus in performance evaluation (Chang & Tsai, 2015).
However, the inclusion of more and broader metrics and the fact that some performance
5 The inclusion of more metrics increases subjectivity, even if all metrics themselves are objective. The weighting of different metrics includes subjective components as decisions might differ based on context and preferences. This subjectivity increases the responsibility of the manager and demands a careful consideration to be able to come to a final verdict that gives a good picture of the overall performance of the employee involved.
Nevertheless, subjectivity can be used to enable supervisors to change focus, correct flaws, eliminate ineffective measures quicker and incorporate qualitative measures. These advantages result in greater flexibility and more possibilities to correct for special circumstances both negatively and positively (Moers, 2005).
However, this flexibility allows for potential ill-treatment and it may raise trust issues and
conflicts in perceptions between the employee and supervisor (Gibbs et al., 2004) which threatens organizational justice. Organizational justice refers to employee perceptions of fairness in the workplace and in this case in the performance evaluation system (Greenberg,1993). Altogether, the increasing degree of subjectivity in individual performance evaluation might improve or on the contrary deteriorate organizational justice along its various dimensions.
Organizational justice matters as it recognized as one of the cornerstones of employee’s motivation, commitment, job satisfaction and deployment. These factors are all found to be critical to firm success. Employees who believe their supervisors are organizationally fair are more satisfied with their jobs, more confident in their authority, and more likely to commit themselves to organizational goals (Simha, Elloy, & Huang, 2014).
On the other hand, a lack of justice could easily lead to negative attitude in employee’s behavior. This negative attitude is known as organizational cynicism. Organizational cynicism can be seen when employees who have a strong belief that organization practice lack of justice and sincerity believe that their organization, including management, cannot be trusted and incoherent in terms of their behaviors or evaluation (Acaray & Yildirim, 2017).
6 statistically significant relationship between organizational justice and (1) organizational
cynicism and (2) turnover intention.
By developing a greater understanding of the complex web of relationships between, subjectivity and organizational justice the conditions under which these relationships unfold can be analyzed and considered in practice. Current research is scattered, lacks integration and is rather
incomplete on these relationships (Bicudo de Castro, 2017). Especially, the relation between subjectivity in performance evaluation and relational justice is ill-explored in literature. No previous research has explained how, why and when subjectivity affects the perceived treatment one receives from authority figures. By understanding these relationships, organizations can gain the advantages of a broader scope in performance evaluation but to minimize the risk of
organizational cynicism.
By researching the perceptions, feelings, experiences and opinions of both supervisors and subordinates a greater insight can be obtained in those practices that enhance or weaken the perception of justice. The outcomes of this study will help supervisors to understand the relationship between subjectivity and justice.
This study aims to contribute to the field of performance evaluation, subjectivity management and uncertainty management by filling the ill-explored gap that describes what companies and managers can do to overcome the negative aspects associated with subjectivity in performance measurement and evaluation. This lead to the research question: How does subjectivity influence procedural, distributive, relational and informational justice and which conditions shape these relationships?
By using semi-structured in-depth interviews with both supervisors and subordinates, I explore which conditions and contexts determine perceived organizational justice in a setting of
subjective performance evaluation. Then, the qualitative data is analyzed by the use of both deductive and inductive coding, systematic comparison between perspectives and contexts within and across companies.
7 performance evaluation is perceived to be justified and which determinants affect these
perceptions. The idea is that subjectivity could surpass objective evaluation if the negative effects of subjectivity are constrained. Results indicate that weighting of the different factors
contributing toward performance evaluation are indeed less codified. This subjectivity enhances and on the contrary hurt organizational justice.
My research shows that managers tend to experience difficulties when searching for a balance between the advantages of more subjective, non-financial performance drivers in their
performance evaluation system while minimizing the negative aspects that arises from this
subjectivity. This research helps managers with the conditions and practices that will help them to overcome these negative aspects and to maximize the benefits of being able to assess an
individual’s performance in all its aspects. My research contributes to the ongoing debate by exploring practices that help to enhance organizational justice in performance evaluation and by providing suggestions for future research.
My research shows an integration of current scattered literature on the relationships between objective and subjective evaluation on the one side and the various dimensions of organizational justice on the other. Additionally, my research provides insight in the conditions that allow subjectivity to work in performance evaluation and potentially surpass a pure focus on objective performance measures.
The results of this study show that subjectivity enhances organizational justice when perceived supervisor’s bounded rationality is low. This perception could increase of perceived evaluator biases and harm perceived justification of the performance evaluation process. The findings indicate further that supervisor’s presence at the work floor attenuates the negative impact of subjectivity on organizational justice. Third, subjective evaluation enhances organizational justice along all dimensions when subordinates perceive high levels of trust in their supervisor and in the performance evaluation system design.
The outline of the paper addresses after the introduction, the theoretical background of
subjectivity in performance evaluation. This section provides a detailed discussion of the known advantages and disadvantages of subjectivity regarding organizational justice. Next, the
8 After the methodology, the findings of the study are presented and discussed afterwards. This discussion compares my findings to the existing literature and leads to three propositions. The discussion is followed by the conclusion which summarizes the main contributions of my
research. Finally, the limitations of the research are discussion and suggestions for future research are made.
3. Theoretical background
In the last two decades, research on performance management and evaluation increased
considerably as managers and supervisors became more interested in finding useful methods to base their decisions on (Taticchi, et al., 2008). Along with this development, managers
recognized the need to evaluate individual employees to steer and enhance their performance. These developments led to the use of financial performance indicators to objectively measure performance of organizations and individual employees (Boldeanu, 2009).
3.1 limitations of objective financial metrics
In practice it turned out that there are problems related to an exclusive focus on financial
performance indicators. Employees, being evaluated based on such simplified, general indicators, show manipulative behavior in order to increase these parameters (Chang & Tsai, 2015). Often there are both positive (incentives, promotion, appreciation etc.) and negative (warnings,
dismissal etc.) consequences linked to the outcomes of the evaluation which enhances the effect of short-termism (Engellandt & Riphahn, 2011).
Engellandt & Rphahn (2011) suggest that an incentive-structure motivates employees to focus on the selected parameters. This short-term oriented behavior might go at cost of the long-term interest of the company. An exclusive focus on accounting-driven metrics and profit
maximization fails to fully reflect both the complexity in individual decision making and the risk for the firm as people are more likely to deviate from the long-term orientation of the firm to fulfill their own desires in the short-term.
9 financial parameters. For example, long-term investments to increase customer service levels harm financial results in the short-term but are needed for future growth. An excessive focus on the short-term is one of the largest causes for business failure as long-term interests are neglected (Engellandt & Riphahn, 2011; Chang & Tsai, 2015).
Li & Cropanzano (2009) indicate that organizations and manager struggle with determining and measuring adequate financial performance indicators that provide insight in the actual
performance of an individual employee. As employees often work in teams or are dependent on other people’s performance in their own work, they can be hold only partly accountable for the end results.
3.2 Inclusion of non-financial performance indicators
Therefore, firms have attracted managers’ attention on underlying performance drivers to avoid short-termism. An increasing stream of organizations broaden their scope in individual
performance assessment through the introduction of non-financial performance indicators (Taticchi et al, 2008). These performance indicators are heavily focused on individual behavior and personnel development.
These types of indicators help organizations to make a full assessment of the individual employee as all sorts of non-measurable behavior, like cooperation, listening, helpfulness, personnel
development, innovativeness and many more, can be included in the evaluation. All these
competencies are desired by the organization as it helps to enhance human capital and knowledge within the organization. Human capital and knowledge are key success-indicators for firms as they are potential sources for competitive advantage (Jin et al, 2011; Campbell, 2012).
By extending the focus to non-financial performance indicators organizations are able to steer employee’s focus to more underlying performance drivers that match the long-term orientation of the organization (Guthry & Neuman, 2007).
3.3 Issues arising from more metrics
10 levels of uncertainty for the employee as it is not clear what will be measured and how it will be interpreted (Bol et al., 2011).
Supervisor’s impressions and opinions can be expressed through the use of subjective
performance measures, ex post flexibility in the weighting of objective performance measures, or ex post discretional adjustment, all of which are based on factors other than performance
measures specified ex ante. In return, this increases uncertainty for subordinates and results in decreased transparency (Bol et al., 2011; Gibbs et al., 2004).
Objective measures of employee performance are rarely available as many aspects of individual performance are not measurable or the time and costs of measuring are too high. Instead, firms rely on subjective judgments by supervisors. This subjectivity opens the door to favoritism, where evaluators act on personal preferences towards subordinates to favor some employees over others (Prendergast & Topel, 1996). Ittner & Meyer (2003) found that a high level of subjectivity in performance measurement led many branch managers to complain about favoritism and discrimination in bonus awards and uncertainty in the criteria being used to determine rewards.
3.4 Advantages of subjectivity in performance evaluation
Subjectivity in performance evaluation has also great advantages as supervisors are enabled to correct for outliners, include information behind parameters and include non-measurable behavior in their final verdict on individual performance (Maas et al, 2012). This helps to make use of all available information ex-post, that is needed for good employee assessment.
Subjectivity could be very helpful and promising in complex work environments, where job designs involve multiple tasks and various decision-making activities that can’t be measured in terms of financial performance indicators (Frederiksen et al, 2017). Similarly, it could be helpful and important in unpredictable environments where flexibility is required and risks need to be estimated and managed. In such environments, a focus on a few standardized parameters does not fulfill the organizational needs and does not match the organizational culture.
11 Qualitative research study of Daverth et al. (2016), among 35 Irish managers, explored how managers make organizational allocation and evaluation decisions by means of subjective measures. The findings suggest that managers put emphasis on caregiving and most usually parenting and use their decision-making powers actively to minimize injustice within their departments. In other words, where managers may be more consciously aware of their notions of fairness in allocating supports and resources, these notions are themselves subject to and filtered through largely hidden beliefs. This implies that managers are aware of the importance of minimizing injustice when using subjective measures but that their decisions are still heavily influenced by hidden beliefs and personal values.
On the one side, subjectivity might help to overcome the limited scope that financial performance indicators provide but on the other hand increase perceptions of injustice as there are less cold facts involved in the decision-making process and the norms, values and beliefs of the supervisor play a large(r) role. Therefore, the increasing degree of subjectivity in individual performance evaluation might improve or on the contrary deteriorate organizational justice along its various dimensions.
3.5 Organizational justice
Justice research has clearly established that the concept of organizational justice is covered by procedural justice, distributive justice and interactional justice (Moon; 2017; Suifan et al., 2017). Greenberg (1995) suggests that interactional justice can be further divided in relational justice and informational justice.
Procedural justice describes the formalization and standardization of the evaluation process to ensure equal treatment of all employees. Employees should be treated based on accurate information as all important stakeholders are involved in the decision-making process and no person or group is singled out for discrimination or ill-treatment. Further there is the possibility included for employees to appeal in order to correct mistakes. (Colquitt, 2001; Folger &
12 The findings of Du et al. (2018) indicate that adopting more performance measures creates
fairness concerns that motivate supervisors to consider their personal preferences in subjective adjustment decisions. These personal preferences increase the opportunity that not all employees are treated the same but that it heavily depends on their supervisor’s preferences. The results of Belleavance et al. (2013) suggest that only the superior's use of ex post flexibility in weighting multiple performance measures adversely affects subordinate’s perceptions of procedural justice. They further found that supervisor-subordinate relationship quality reduces the negative effects of ex post flexibility in weighting multiple performance measures on procedural justice, whereas voice opportunity amplifies this negative effect.
Distributive justice refers to the appropriateness of outcomes by rewarding employees based on their contributions and providing each employee a compensation that is in line with their
performance. In case of distributive justice, a company provides a benefit based on one’s personal requirements (Folger & Cropanzano, 1998). Subjectivity may help distributive justice as the actual performance and contribution can be taken into account and not only the results of standardized measurements (Gillenkirch and Kreienbaum).
Gillenkirch and Kreienbaum (2017) showed further, by performing experiments, that supervisors using subjective evaluation, have a greater focus on subordinate’s individual behavior and want to enforce the norm of cooperation by rewarding high and punishing low effort. This indicates that people are not purely rewarded on a joint result but are rewarded or punished according to their own actions and behavior within the group. In that way an individual employee’s reward or punishment becomes a more thorough reflection of the actual performance of an employee.
Relational justice includes the appropriateness of the treatment one receives from authority figures. Supervisors should threat an employee with dignity, courtesy and respect. Literature shows an ill-explored gap about the relationship between relational justice and subjectivity. Other than that, the personality of the evaluator plays a key role in developing trust and mutual respect during the evaluation process, it is yet unclear whether subjectivity enhances or deteriorates relational justice and which conditions shape this relationship.
decision-13 making process (Greenberg, 1993). Moers (2005) indicates that a performance evaluation system with increasing subjectivity, lacks transparency as the interpretation of the manager plays a larger role. This interpretation is very personal and is therefore difficult to describe. Employees are, in case of a high degree of subjectivity, highly dependent on their supervisor’s norms, values, preferences, impressions and beliefs. These personal properties are often difficult to explain and to transparentize as the cognitive processes of the supervisors with regard to all streams of information available play a crucial role in the evaluation (de Castro, 2017).
3.6 Organizational cynicism
A lack of overall organizational justice perceived by employees could harm the organization goals enormously. Perceptions and experiences of unfairness and injustice could easily cause a negative attitude to the organization. This negative attitude, known as organizational cynicism, leads often to negative behavioral tendencies (Simha et al., 2014; Gillenkirch & Kreienbaum, 2017). In case of ill-treatment employees may feel discomfort, anger, and less respect towards their organizations. High organizational cynicism leads to unwanted outputs such as lower performance or lower loyalties that can appear in every kind of sector (Acaray & Yildirim,
2017).Organizational cynicism decreases motivation, effort, personnel development and increases emotional exhaustion and thereby burnouts (Burnley et al., 2006; Simha et al., 2014). Chiaburu et al (2013) found in their meta-analysis that there is a strong negative correlation between
perceived organizational justice and organizational cynicism. This underlines the importance of managing organizational justice in performance evaluation as the consequences can be huge to employee performance and thereby to the organization in general.
3.7 Subjectivity versus organizational justice
14 However, our current knowledge of the relations between subjectivity and justice remains too incomplete and uncertain to make any strong statement. It is, for example, not possible to unambiguously, define under which circumstances relational justice benefits form subjectivity and when it does not. The various advantages and disadvantages as described in Table 1 show that the relationships are mediated by various factors and contexts. To understand this complex web of relationships we need more studies investing those. My research intends to contribute to the ongoing debate and aims to identify the conditions and factors that shape the relationships.
Table 1: Relationships between objective and subjective evaluation and the dimensions of organizational justice
Procedural justice Distributive justice
Interactional justice
Relational justice Informational justice Objective
evaluation
+ Standardization of methods increases certainty and fairness (Boldeanu, 2009).
+ Minimized opportunity for favoritism or discrimination (Watson et al., 2010). + High codification in weighting information (Ittner & al. 2003)
+ Little uncertainty (Bol et al., 2011)
+ Personal evaluation based on measures determined ex ante to determine personal rewards (Gillenkirch and Kreienbaum, 2017).
- Results oriented, limited focus on underlying causes. (Chang & Tsai, 2015).
- Narrow scope towards performance and often limited influence on generic parameters. Li & Cropanzano (2009) - Short term (incentive) focused, possible damage towards sustainability/long term goals (Hayes and Abernathy, 1980; Engelhardt, 1989; Engellandt & Riphahn, 2011; Kurtz, 2015)
- Rewards are based on incomplete, non-qualitative information (Bushman et al, 1996).
- No opportunity to correct outliners in performance evaluation
+ Standardization of evaluation methods increases trust in the supervisor and in the
performance evaluation system. (Gibbs et al., 2004)
- No opportunity to use supervisor’s expertise towards employee’s performance (Fisher et al., 2005)
+ Transparency ex ante decreases uncertainty for employees (Prendergast & Topel, 1996; Moers, 2005) + Access to information and consequences are the same for everyone (Prendergast & Topel, 1996)
Subjective evaluation
- Chance for favoritism increases (Watson et al., 2010).
- metrics are not always known in advance (Ambrose & Arnaud, 2005; Bol et al., 2011)
+ Tries to overcome incompleteness of information by adding qualitative measures (Kaplan & Norton, 2006; (Gillenkirch and Kreienbaum, 2017).
+ Opportunity to correct for special circumstances (Moers, 2005; Maas et al., 2012)
+ Opportunity to include (subjective) view of all stakeholders (Colquitt, 2001).
+ Opportunity to monetarize non-financial performance indicators and thereby broaden the scope of the evaluation. (Luft et al., 2015).
+ Supervisors personality and skills helps to increase support for subjective evaluation (Gibbs et al., 2004; Maas et al., 2012; Belleavance et al., 2013) - Relationship between supervisor and employee might influence evaluation outcomes (Prendergast & Topel, 1996)
- Lacks transparency as evaluation measures change throughout the process (Moers, 2005; Bol et al., 2011)
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- the weighting of information is likely to be less codified and thereby up to interpretation (Ittner & al. 2003; Du et al., 2018)
+ Opportunity to shift focus to most important aspects of organization success (Moers, 2005; Bol et al., 2011). + Possibility to correct for short-term focused employees Engellandt & Riphahn, 2011
- Difficult/impossible to include everything that an employee does that contributes or harms organizational success. (Frederiksen et al, 2017).
- Supervisor’s interpretation of information based on values, norms and beliefs is difficult, if not impossible, to
transparentize. (Prendergast & Topel, 1996)
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4. Methodology
4.1 Justification of the research approach
Academic literature on subjectivity in performance evaluation is very fragmented and needs integration. Additionally, the different concepts of subjectivity in relation to organizational justice are argued to be far from complete (Bicudo de Castro, 2017). Therefore, theory
development will help to explore this business phenomenon (Van Aken, et al., 2005). Qualitative research helps to identify and explain the relationships between subjectivity in performance evaluation and organizational justice. Justice is fundamentally a situated perception in wich the context as well as subjective interpretation are crucial. Therefore, it is beneficial to explore rich data collection by in-depth interviewing various people in different roles and contexts about their perceptions and experiences towards justice.
Theory development research aims at offering preliminary insights in which practices moderate the positive and negative effects between the nature of the performance evaluation system and organizational justice. Eisenhardt (1989) states that addressing such questions are most suited for qualitative research, since the research question requires an in-depth understanding of the
underlying relationships and need rich explanations based on practice.
The research is conducted in the service industry or in-service departments within manufacturing companies as in these work environments a variety of tasks are performed that increase
complexity in performance evaluation through difficulties in quantifying performance indicators. In this environment, the subjectivity in performance evaluation can be researched with increased richness of information.
4.2 Description of the questionnaire
18 sessions. Combining data collection methods enhances information richness and allow the
opportunity to build stronger constructs and propositions (Eisenhardt, 1989).
4.3 Questionnaire outline
To gather the primary data needed 4 supervisors and 8 subordinates, in different companies, were interviewed. The questionnaires (appendix 1) followed a fixed outline as they first aim at
understanding the context in which one operates. Next, the performance evaluation design and subsequent the perceptions and evaluations towards this design are explored. This is followed by questions aiming at discovering the supervisor-subordinate relationship and interrelated factors.
Finally, questions about experiences with other, previous, performance evaluation systems are asked. As described in the theoretical background, justice is a very private and sensitive subject. Therefore, the questionnaire first aims at exploring the context in which one operates and is evaluated, and subsequently the characteristics of the performance evaluation design. This allows me to build trust before asking about perceptions and experiences which might be very difficult to talk about in the first place.
All questions are formulated in such an abstract way that they are non-interpretive and are not sending the interviewee in any direction. This is needed to explore true, first line, perceptions and opinions about the subjective performance evaluation process they are part of.
4.4 Sample descriptions
This research was conducted in a setting of high subjectivity in performance evaluation. All companies were selected based on preliminary talks to investigate this level of subjectivity. This setting was chosen to explore the rich information in perceptions and experiences that results from this context. Subjectivity, in this context, results from large supervisor discretion and numerous performance drivers that are included in the performance evaluation.
19 based on preferences and relationships with specific subordinates. In the end, subsequently and separately, one supervisor and two subordinates were interviewed within every company.
This approach is chosen because all evaluations sessions always include at least these two parties. Interviewing both decreases respondents bias as the information provided by both groups can correct and complement each other and prevents perspective-based outcomes (Van Aken et al., 2012). Supervisors can provide insight in their experiences with evaluation sessions, different types of employees and their way of dealing with subjectivity in the performance evaluation. Supervisors can answer the ‘why’ aspect of performance evaluation system design, how to create and maintain support towards the system design and express their struggles with subjective evaluation.
The subordinates can explain their perception of organizational justice in relation to the performance evaluation and indicate what improvements they desire. Performance evaluation system analysis is used to gain insights in how the evaluation process takes place and to determine which and to what extend objective or subjective measures are used to evaluate subordinates’ performance. This includes observing the digital systems that are used to record and measure performance and progress.
A detailed company and participant description can be found in, respectively, table 2 and 3 in appendix 2.
4.5 Data collection procedure
20 4.6 Data analysis
The qualitative data analysis (Development of codes, content coding, and interpretation) follows the procedure that is provided by Campbell et al. (2013) for semi-structured in-depth interviews. Both inductive (in-situation) and deductive (from literature) coding takes place based on the transcribed interviews. Examples of deductive codes are supervisor’s bounded rationality (Gigerenzer et al., 2002) and the previously defined dimensions of organizational justice. All recorded interviews were transcribed to enhance the coding process. Several codes were
combined and subsequently themes did emerge. These themes could be related to the dimensions of organizational justice when analyzing the transcriptions again.
Following from the coding process, a within systematic comparison was made to explore differences and similarities for both perspectives (supervisor vs subordinate) within a company. Subsequently, a cross-case analysis was conducted to search for similarities and differences between companies and contexts. The patterns found were compared with existing literature (both conflicting and additional) to increase validity and develop or enhance theory.
1
Ik vind wel dat iedereen altijd heel makkelijk een gemiddelde score krijgt terwijl er in die categorie wel vaak heel veel verschil zit tussen bepaalde werknemers. Onder gemiddelde en bovengemiddelde scores geven ze niet zo snel dus wordt de score gemiddeld voor heel veel mensen gebruikt terwijl er tussen die mensen best wel grote verschillen kunnen zitten.
2Ik heb slechts beperkt zicht op wat iedereen doet en vaak geven verschillende observaties een vertekend beeld. Ookal heb je dan een
overheersend beeld, dan nog is het lastig om dan vergaande uitspraken te doen zowel positief als negatief. Om eerlijk te zijn is dan de middenweg de veiligste optie om te voorkomen dat iemand zich heel erg benadeeld voelt of dat anderen zich niet herkennen in jouw positieve oordeel. 3
Ik zie iemand niet 100% van de tijd werken en dan is het moeilijk om uit te leggen of te verdedigen waarom je tot een bepaald oordeel bent gekomen. Jouw eigen interpretatie speelt een dusdanig grote rol dat het moeilijk is om met cijfers of feiten je beoordeling hard te maken.
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5. Results
My findings are reported below, organized based on themes that resulted from the analysis of the data and informed by the theory background: i) Central tendency bias, ii) Supervisor’s physical attendance at the work floor, iii) Regular meetings. Quotes from participants are included for illustration.
5.1 Central tendency bias.
In relation to high subjectivity in performance evaluation, a central tendency bias is experienced by both supervisors and subordinates.
“From my experience, I believe that everyone gets quite easily an average score, although there are large differences in that category. Under and above average scores are quite rare and that results in the fact that a lot of people are placed in the same group.”1 S2_F4
“To be honest, it is really difficult to make large distinctions between subordinates based on the limited information you have. You are always aware of the risk that you make unsupported, far reaching, statements. In that case the middle road the safest option”2 M1_F3
Supervisors lack the “facts” and hard numbers to transparentize their evaluation outcomes to their subordinates which on itself decreases informational justice.
“When you have limited information, it is hard to make far-reaching statements about someone’s performance both positively and negatively. Because if you do, it is difficult to defend and explain your evaluation because you lack hard numbers or facts and your own interpretation has great influence”3 M1_F2
4
Je moet ook niet vergeten welke gevolgen een negatieve beoordeling kan hebben voor een werknemer zijn zelfvertrouwen, motivatie en zelfbeeld. Je wilt eerlijk zijn in je beoordeling maar soms moet je ook rekening houden met de gevolgen op de lange termijn. Ben je dan streng genoeg? Misschien niet. Maar je kan als manager ook niet als een olifant in een porseleinkast tekeergaan. Als je de goede relatie met je werknemer beschadigt dan ben je soms veel verder van huis.
5
Ik zou graag zien als er tussen die mensen ook wat meer onderscheid gemaakt kan worden. Ik denk dat dat goed is om iedereen een beoordeling te geven die recht doet aan hun prestaties en daar ook de juiste consequenties aan te kunnen verbinden.
6
Ik heb het gevoel dat de uitkomsten soms opzettelijk worden gecorrigeerd om te voorkomen dat een conflict ontstaat. Persoonlijk vind ik dat ik hierdoor benadeeld word doordat de uitkomsten en consequenties van de beoordeling niet meer in verhouding staat. Ik vind dit niet respectvol tegenover de mensen die wel goed presteren en daardoor onderscheiden zouden moeten worden.
22
“A negative evaluation can be fatal to someone’s confidence, motivation and self-esteem. That will harm someone’s future performance enormously. As a manager you try to estimate the consequences of your evaluation.” ….. “As a manager you can’t work like a piece of heavy machinery. If you lose your people, being frustrated, it is too late to fully restore the relationship. Sometimes it is needed to adjust your evaluation a bit to prevent these consequences.”4 M1_F1
Employees, however, criticize their supervisors for the lack of distributive justice that results from the limited distinction among employees which no longer fully represents actual
performance.
“I would like to see that supervisors made a larger distinction within that group because I think that is good to give everyone an assessment that fits their performance and to be able to fit the right consequences to the evaluation.”5 S2_F4
Subordinates argue that the perceived central-tendency bias in performance evaluation may go at cost from their perceived relational justice in the long term.
“I get the feeling that the outcomes and thereby the consequences of the performance evaluation are purposely adjusted to prevent conflicts from occurring. This takes the proportion and justification out of the process. I think this is not respectful and fair towards those that perform above average.”6 S2_F1.
5.2 Supervisor’s presence at the work floor
7
Ik moet echt op de werkvloer aanwezig zijn om iemand zijn gedrag en beslissingen goed te kunnen beoordelen. Als je alleen afgaat op beoordelingen van anderen of gegevens uit een systeem krijg je nooit het volledige plaatje. Ik wil volledig geïnformeerd zijn om uiteindelijk een goede en gegronde beoordeling te geven.
8
Onze manager brengt veel tijd met ons door dus ik kan me niet voorstellen dat hij niet in staat is een goede afweging te maken aan het einde van het jaar…… Ik vind het fijn dat mijn manager specifieke voorbeelden kan noemen en daar feedback op kan geven. Dan heb ik wel het idee dat hij weet waar hij het over heeft. Tuurlijk is het dan nog steeds zijn mening, maar dan is er wel met de juiste informatie een afweging gemaakt. Ookal hoef je het er niet mee eens te zijn, vind ik dit wel de manier waarop het moet gaan.
23
“To be able to assess subordinate’s performance, first line information from the work floor is required. Only then I can make unbiased observations that provide a good picture of the actual performance and make a justified evaluation in the end.”7M1_F4.
This ability to relate to examples from practice during the evaluation process helps supervisors to increase transparency and thereby perceived informational justice. Subordinates argue that these detailed examples compensate to some extend for the lack of numbers and figures in subjective evaluation.
“Our manager spends a lot of time with all of us. I can’t imagine that my manager does not know in detail how everyone works.…. Regarding my performance evaluation, my supervisor can give detailed feedback and specific examples. This gives me the confidence that he knows what he is talking about. Even though these examples are still up to
interpretation, I accept the final assessment more easily when I understand where it is coming from”8 S1_F4.
9
Mijn resultaten worden door heel veel factoren bepaald. Dat kan niet worden teruggebracht tot een aantal cijfers, formules of grafieken. Ik ben afhankelijk van wat verkoop en productie mij doorgeven. Daarmee maak ik een zo goed mogelijke afweging. Ik wil dan niet afgerekend worden op verkeerde informatie die ik heb gekregen. Ik kan wel alles goed doen maar omdat de informatie verkeerd was, zijn mijn resultaten slecht. Dan moet mij manager kijken wat ik daadwerkelijk gedaan heb en niet alleen naar de eindcijfers kijken.
10
Ik wil niet afgerekend worden op resultaten waar ik geen 100% invloed op heb. Mijn manager mag mij beoordelen maar ik verwacht wel dat hij zich informeert of laat informeren om een goede afweging te maken. Alleen kijken naar de verkoopcijfers is dan niet genoeg. Want daar zijn heel veel andere dingen van op invloed, waar ik zelf niks aan kan doen.
11
Vroeger toen we nog werkten met die streepjes cultuur, had ik het gevoel dat wij niet interessant waren maar alleen onze resultaten. Dan lijkt het wel of je een robot bent of een simpel nummertje. Nu is dat veranderd en tel jij echt als persoon. De manager moet zich nu echt in jou verdiepen en kijken wat en waarom jij dingen doet. Naast dat dat een betere en eerlijkere beoordeling oplevert, vind ik het vooral heel fijn dat je nu als persoon wordt gezien.
24
“I have a limited ability to influence my own results. No parameters can be designed that fully show my contribution towards results. I rely heavily on information delivered by other departments and other people. I do not want to be held accountable for results that I have limited influence on. My supervisor needs to see me working and inform himself about my decision-making process in order to understand my behavior and correct for the results.”9 S1_F4
“I do not want to be held accountable for (negative) results where I had less than 100% influence on. My manager has every right to judge me, but I want him to be informed about underlying matters, so he can make a distinction between my effort and actions and the results on a metric. I want my manager to correct for these outcomes if there are any circumstances that influenced my chances of reaching my targets.”10 S2_F4
Subordinates argue that the greatest advantage of their evaluation system is that they are not seen as numbers, but as human beings and that the supervisor must make an effort to look through figures and results to assess actual performance, behaviors and contributions, which contains more than number and figures could possible include. This evaluation based on more extensive information of actual performance greatly increases both relational and distributive justice. An employee that previously worked with a very-result oriented performance evaluation made this difference very clear:
12
Ik beoordeel een grote groep werknemers die ook nog eens verdeeld over 6 locaties werken. Waarvan ook nog een aantal parttime. Om eerlijk te zijn, kan ik dan niet goed genoeg beoordelen hoe iedereen werkt. Daardoor moet ik, naast de zaken die ik zelf zie, afgaan op meningen van anderen, verkoopcijfers en zelfbeoordelingen. Dat is niet ideaal maar wel de realiteit.
13Ik zie wel dat sommige collega’s zich anders gedragen wanneer de manager aanwezig is. Iets fatsoenlijker tegen klanten en net iets harder werken. Hierdoor zou het heel goed kunnen dat de manager een vertekend beeld krijgt van iemand zijn werkhouding. Als hij er vaker zou zijn zou het moeilijker worden je anders voor te doen dan hoe je daadwerkelijk bent.
14
Soms zouden leugentjes voor bestwil je evaluatie positief kunnen beïnvloeden. De manager heeft weinig zicht op jouw ontwikkeling ten aanzien van je persoonlijke doelstellingen. Daardoor kan hij ook moeilijk een goed en gerechtvaardigd oordeel geven. Tuurlijk ziet hij ons wel werken maar het systeem maakt hem wel kwetsbaar.
25 However, when subordinates work at different locations or in large teams, supervisor’s ability to be present is limited. In this context, supervisor needs to rely on second line information
(observations of other’s, activity tracking systems, self-assessments) which increases the opportunity to exploit information asymmetry.
“I have to manage a large team of people that work over 6 different locations. To be honest, I am not able to see enough of all of them to make a fully informed assessment. Therefore, I rely on other people observations, data from systems, self-assessment by subordinates and on the limited amount of observations I make myself. That is far from ideal and limits me to make grounded and justified evaluations “12 M1_F2
Employees in larger teams or departments perceive less personal attention and indicate that supervisor’s bounded rationality harms the evaluation process as it offers indeed the possibility for influencing activities and wrong judgement. This behavior decreases both perceived
distributive and relational justice.
“I note influencing behavior at some colleagues and that can be very frustrating. It is reasonably possible that the supervisor sees things, both positive and negative, when he his present that give not a good picture of someone’s actual performance. Being present more often, is needed to prevent this behavior.”13 S2_F2
15
Ik moet mijn manager vertrouwen dat hij iedereen gelijk behandeld. Zijn interpretatie speelt een belangrijke rol en hij zou best onderscheid tussen werknemers kunnen maken, mocht hij dat willen. Maar dat gevoel heb ik niet. Hij is altijd open en eerlijk in wat hij zegt en doet. Daardoor vertrouw ik hem volledig.
16
Vertrouwen is ongelofelijk belangrijk als de manager zoveel invloed heeft op de uitkomsten van de evaluatie. Ik moet ervan uit kunnen gaan dat hij eerlijk en naar geweten beslissingen neemt. Als dat niet het geval is, of wanneer ik dat gevoel zou krijgen, dan zou dat onze relatie erg beschadigingen. Dan zou ik niet graag meer voor hem werken.
26 5.3 Supervisor-subordinate trust
The findings indicate that supervisor-subordinate trust plays a crucial role in performance evaluation when subjectivity increases. All employees and managers emphasize the importance of mutual trust within the performance evaluation process. Supervisor’s discretion allows for favoritism and discrimination. This is perceived to be a potential risk regarding procedural justice. However, openness and transparency and thereby perceived informational justice seems to enhance perceived trust.
“I need to trust my supervisor that everyone is treated equal. There is a lot of freedom to interpret results and judge everyone’s behavior. This allows for nepotism and
discrimination... By being open and transparent in her arguments, my level of trust increases. ”15S1_S3
Although no employees perceived low mutual trust between themselves and their supervisor, subordinates argue that low-trust levels would be fatal towards the current evaluation system including a high degree of subjectivity as it harms perceived relational justice greatly.
“Trust is crucial within our evaluation system. I need to rely on my supervisor that his decisions are made in good conscience, even when they are turn out to be negative for me. If the supervisor misuses power and discretion to influence evaluation, this would heavily affect our relationship and my motivation to work for him.”16 S1_F2
17
Als mensen heel lang voor een organisatie werken dan is het heel moeilijk om uit de familiaire sfeer te blijven. Dan heb je een kortere afstand tot elkaar dan wanneer je minder lang met elkaar werkt. Omdat ik al heel lang samen werk met diverse werknemers is je beeld over het algemeen ook al wel gevormd. Dus ik weet ook dat dat een beperking is. Wat daarvan een gevolg kan zijn, is dat iemand waarbij ik een goed gevoel heb, makkelijker kansen krijgt dan iemand waar ik dat niet mee heb. Zelfs als je dan iets negatiefs waarneemt duurt het erg lang voordat dit invloed heeft op het positieve beeld dat je al gevormd hebt.
18
Soms gun je iemand ook iets omdat je diegene sympathiek vindt. Dan is het belangrijk dat er iemand bij zit bij de beoordelingsronde die je daaropaan spreekt en kritische vragen stelt. Zo voorkom je dat deze voorkeuren te veel invloed hebben. Je hebt dan meerdere perspectieven. Wij zijn immers ook niet opgeleid als rechters die hun gevoel volledig kunnen uitschakelen.
19Het is goed dat de manager ook verantwoording moet afleggen tegenover andere managers en de HR-afdeling. Als zij volledig zelf beslissingen kon nemen dan zouden persoonlijke voorkeuren een te grote rol kunnen spelen. Deze extra controle helpt om iedereen gelijk te behandelen en eerlijke kansen te geven en vriendjespolitiek uit te sluiten. Daar heb ik nu wel genoeg vertrouwen in.
27
“With some of my subordinates I work already over a decade. I know almost everything about them. Then it is hard to stay out of a family atmosphere. I can’t ensure that this plays, maybe unconsciously, no role in my evaluation…Even when some information shows a negative performance, it does not quickly outweigh your previous positive experiences.”17 M1_F2
Another supervisor with a close relationship with some of the employees addressed similar difficulties regarding personnel relationships with subordinates and notes the importance of supervisors being controlled as well to increase the procedural justice.
“Of course, as a manager you have people that you like more than others and sometimes you may want to give something to someone based on these preferences. Then it is really helpful and necessary that there is a third party looking at the process to prevent
favoritism or discrimination. The supervisor needs to be controlled as well, otherwise you rely too much on a single view. After all, we are not trained as judges”18 M1_F3
This accountability for their evaluation decisions is encouraged by subordinates as well. All subordinates argue that their perception of fairness in the evaluation process benefits from their supervisor being controlled. The supervisor’s accountability increases perceived procedural justice as it decreases the perceived risk of favoritism and discrimination.
20
Veel van de zaken die meegenomen in de beoordeling zijn moeilijk of helemaal niet meetbaar. Je ziet en hoort heel veel verschillende zaken en die moet je dan zo afwegen dat je uiteindelijk tot een eerlijk en gegrond oordeel komt. Daarbij moet je ervoor zorgen dat je dit voor iedereen hetzelfde doet maar dat is heel moeilijk omdat elke situatie anders is, je een bestaand beeld gevormd hebt en je ook je eigen waarden, normen of zelfs emoties hebt. Als je daarvoor wilt corrigeren door anderen om hun mening te vragen, krijg je van iedereen een verschillend antwoord gevormd door hun voorkeuren et cetera. Dan komt het aan op jouw mensenkennis om alles goed af te wegen en een goed beeld te vormen. Je begeeft je altijd op glad ijs en het is moeilijk om voor iedereen een volledig eerlijk proces tot stand te brengen. Dan is het zeer belangrijk dat de werknemer er vertrouwen in heeft dat jij het uiterste doet om een zo eerlijk mogelijk beoordelingsproces tot stand te brengen.
28 One manager with a large experience in people management and with subjectivity in performance evaluation described the difficulties in weighing different information streams and the importance of subordinate’s trust that the supervisor deals with his responsibilities in a justified manner.
“Because lots of activities and behavior are not measurable or at least not measured, you need to hear and see all kind of things so that you are able to try to weigh everything so that there will eventually be a fair judgement. Then you should also ensure that you handle the information in the same way for everyone. That is quite tricky because you always remain a human-being with values, norms, believes and emotions. When you try to include opinions of others, with their own values, you get a lot of different answers. Then it comes to your people skills to filter out all opinions that really give a good picture. I am fully aware that I am skating on thin ice and that it will be difficult to ensure fairness and justice for everyone. At that point, your subordinate needs to trust you that you do your upmost to come to an equal and fair process for everyone.”20 M1_F4
Supervisors emphasize the difficulties they experience with the lack of codification when more, often non-measurable, metrics are included in the evaluation process. The supervisor argues that, in such a context, trust is crucial to overcome this bounded rationality and increase both
perceived procedural and distributive justice.
5.4 Frequent meetings
21Ik ben erg tevreden met het nieuwe systeem. Nu zijn er meer momenten waarin ik dingen kan aangeven en bespreken. Dit helpt om sneller terug te komen op zaken die ik heb gezien. Voor werknemers is het ook fijn dat ze meer inzicht krijgen in hoe ik zaken beoordeel en wil zien. Op die manier kunnen samen een goede samenwerking ontwikkelen.
22
Doordat we een korter beoordelingscyclus hebben met meer gesprekken heb ik meer momenten om mijn manager te leren kennen en vertrouwen op te bouwen. Ik weet hoe hij denkt en daarop baseer ik verwachtingen voor de toekomst. Ik heb een hechtere band met de manager en dat geeft mij het vertrouwen dat hij niemand zal voortrekken en discrimineren want dan zou dat direct worden opgemerkt door mij en door anderen.
23
Ik wil mijn beslissingen kunnen uitleggen. Dit is nodig omdat mijn beslissingen zichzelf goed kunnen zijn, kunnen leiden tot slechte resultaten omdat ik verkeerde informatie heb gekregen van verkoop of productie. Heb ik dan iets verkeerd gedaan? Ik denk het niet. Als je dan verschillende sessies hebt waarin je deze zaken kan bespreken, kan de manager inzicht krijgen in mijn denkwijze en door resultaten heen kijken. Daarnaast is het ook handig dat je weet hoe je gedrag en beslissingen gezien worden en wat je zou kunnen of moeten veranderen.
29
“We shifted recently to an evaluation system with more regular meetings. This works out very positively. We have now more meetings where we can discuss issues, progress and I have more moments to explain my view on actions and behavior. This helps me to quicker discuss my observations. Employees benefit from the fact that they learn more about my evaluation standards and preferences. This helps us both to get on the same line.”21
M1_F3
In addition, these frequent exchanges also help building trust which fosters perceived distributive justice.
“Because we often discuss things in various sessions my trust level increases towards my supervisor. I know how he thinks and I build expectations about his behavior and actions. A closer relationship gives me the confidence that he won’t favorize or discriminate as this could easily be discovered by me and others.”22 S1_F4
Frequent meetings also provide subordinates with the opportunity to appeal against their evaluation or supervisor’s interpretations during the evaluation process. This opportunity to appeal increases perceived procedural justice as it allows subordinates to express their displeasure and to defend themselves.
“I want to explain why I made particular decisions. This is needed because on-itself good decisions might lead to worse results as the initially available information was wrong. In that case: Did I do anything wrong? I don’t think so! Regular meetings help to discuss the decision-making process and gives my supervisor insight in my rationale. “23 S1_F4
Frequent meetings foster information sharing and mutual understanding which increases
24
De periode-eind gesprekken geven mij inzicht in mijn progressie en verbeterpunten. Ik krijg dan inzicht in hoe, dat wat ik doe, wordt beoordeeld. Ook kan ik dan uitleg vragen. Op die manier kunnen we makkelijker op 1 lijn komen. Zulke gesprekken geven je echt het gevoel dat je mee telt en dat er naar je gekeken en geluisterd wordt.
30
“Frequent meetings help to discuss my progress and get on the same page. It get insight in how my actions are evaluated and if necessary can ask for further explanation. Further it also helpful to hear how your behavior is interpreted and what your supervisor might want to see changed. During these meetings I perceive to be seen and heard.”24 S2_F3.
6. Discussion
6.1 Summary of research findings
First, the findings show that a central tendency bias is the result of supervisors aiming to enhance relational justice, which may go at cost of distributive justice. This evaluating-behavior harms subordinate’s perceived distributive justice and potentially perceived relational justice on the long-term.
Second, to gather sufficient information about actual performance of subordinates, supervisor’s presence at the work floor is desired by both supervisors and subordinates. Supervisor’s presence enhances perceived distributive, informational, relational justice as subordinates are evaluated with more accuracy, transparency and dignity. Lack of supervisor’s presence provides the
opportunity for the exploitation of information asymmetry by subordinates which decreases both perceived distributive and relational justice.
Third, the results emphasize the importance of mutual trust, openness and transparency between supervisor and subordinate to increase perceived informational and procedural as it prevents the perceived chances of ill-treatment. When the relationship between supervisor and subordinate lacks trust, this could potentially harm perceived relational justice as the evaluation process lacks perceived dignity and respect.
Finally, the findings show that frequent meetings increase perceived organizational justice. Frequent meetings enhance transparency and building trust which foster perceived informational and distributive justice. Further, frequent exchanges allow subordinates to appeal to their
31 6.2 Synthesis with current literature
The findings indicate that the different perspectives of supervisors and subordinates creates a tension regarding perceptions of justice. On the one side, employees desire a fair and honest evaluation that is in line with their relative performance but on the other side, supervisors argue that they cannot easily make large distinctions in performance evaluation and they are very careful in doing so.
My results indicate that subjectivity in performance evaluation can only work under specific conditions. The theoretical background indicated that subjectivity allows supervisors to adopt a broader scope in performance evaluation by including more and more diverse qualitative measures to overcome the incompleteness of information in an exclusive focus on financial parameters. (Li & Cropanzano, 2009; Gillenkirch and Kreienbaum, 2017).
This broader scope is in line with the increasing importance of organizational citizen behavior. (Bachrach et al, 2004). By including a person's voluntary commitment within an organization that is not part of his or her contractual tasks into performance evaluation, organizations aim at
maximizing employee’s total contribution to the firm. However, these advantages are not self-evident.
Supervisor’s Bounded rationality seems to be an important limitation in subjective performance evaluation. Bounded rationality is defined as supervisor’s limited ability to gather all possibly available information due to cognitive limitations and limited time to gather information and make decisions (Gigerenzer et al., 2002).
The results indicate that perceived bounded rationality limits supervisor’s ability and willingness to make large distinctions between employees as these decisions could be potentially based on incomplete or distorted information. Diff erences between supervisors in cognitive abilities, knowledge, and/or motivation lead to individual diff erences in interpretations of information. Under these conditions, additional information can increase agency costs by reducing the eff ectiveness of subjective performance evaluation in motivating the subordinate (Luft et al., 2014).
32 simple solutions in solving decision problems which are much closer to the irrational sphere of making choices (Tarka, 2017).
This is in line with the findings of Prendergast & Topel (1993) which describe that supervisors find it difficult to distinguish genuinely good performance from favoritism in the eyes of other subordinates. By opting for less deviation in their final verdicts, supervisors believe they can prevent this perception from occurring and enhance perceived procedural justice.
Belschak & Den Hartog (2009) found that negative feedback affects recipients’ emotions and that such emotional reactions mediate the relationship between feedback and counterproductive behavior, turnover intentions, citizenship, and affective commitment. This implies that the effect of a negative evaluation highly depends on the character properties of the subordinate. My findings indicate that supervisors estimate the potential effects of a negative evaluation based on their people knowledge and might adjust their evaluation based on these considerations. This rationale weakens perceived distributive justice but enhances in return perceived relational justice.
In line with the equity theory of Adams (1963), subordinates do heavily compare their performance-reward ratio to other people around them and build their perceptions of justice hereupon. According to Adams, when this balance is perceived to be justified it would lead to a more productive relationship with management and thereby higher levels of relational justice.
However, my findings indicate that this performance-reward ratio is perceived to be distorted by a central tendency bias in evaluating subordinates. This perception of inequity, could potentially harm both the relationship with the supervisor and cause motivation and effort problems.
(Brockner et al., 1986) This could ultimately cause negative behavioral tendencies in the end as subordinates perceive that they are not rewarded conform their performance (Chiaburu et al., 2013). This leads to the following proposition:
P1a: Subjectivity in performance evaluation increases the potential risk of
organizational cynicism when supervisor’s bounded rationality is perceived to be high
33 supervisor and subordinate and thereby seems to increase relational justice as employees receive attention and appreciation for their actual contribution and them as a human being.
To partly overcome the bounded rationality that supervisors experience when evaluating subordinates, it is desired by both supervisors and subordinates to increase supervisor’s attendance at the work floor. This allows supervisors to rely on own observations and provide feedback based on detailed examples seen in practice. Sharing detailed experiences and
examples, both positive and negative, helps to transparentize the evaluation process by providing insight in supervisor’s way of interpreting information.
The findings on supervisor’s presence on the work floor indicate that these practices enhance both informational justice and distributive justice. Informational justice increases due to the increased availability of information and the increased transparency about supervisor’s interpretation. Distributive justice benefits form the fact that the supervisor relies on first line information that gives a good picture of subordinate’s performance.
Further it helps to decrease the success rate of influencing activities as the supervisor has more extensive and thorough knowledge of what takes place at the work floor. By increasing the attendance at the work floor, supervisors can ensure a performance evaluation that is more in line with subordinate’s actual performance as their bounded rationality can be minimized. This complements with the finding of Naumann and Bennett (2000) that greater a supervisor's visibility in managing the members of a work group, the greater the members' agreement regarding procedural justice climate.
Employees encourage supervisor’s attendance at the work floor, especially when they have limited influence on their own results. Especially, in a context where results highly depend on external factors, employees want their supervisor’s to be informed about the difficulties and problems regarding their decision-making process.
34 performance evaluations perceived by subordinates when it is used in a justified and dignified manner (Maas et al., 2012).
The results indicate that manager’s ability to ensure individual attention to gather enough information about someone’s actual performance is lower when teams size increases and subordinates work at different physical locations. Participants desire their supervisor to be informed and see it as a problem when this is not the case. This emphasizes that supervisor’s presence at the work floor allow subjectivity to work in performance evaluation. This leads to the following proposition:
P2: Presence of the manager at the work floor attenuates the negative impact of subjectivity on perceived justice.
The theory framework (table 1) indicated that subjectivity in performance evaluation destroys procedural and informational justice. However, the results hat under some circumstances this negative effect may be limited. To justify their discretion and prevent perceived ill-treatment, supervisor’s need to build supervisor-subordinate trust. As the weighting is less codified and supervisor discretion influences the evaluation, trust is needed to overcome the threat of favoritism and discrimination.
Although no interviewees perceive low trust levels, many emphasized the importance of
sufficient trust to sustain the performance evaluation system. When employees perceive misuse of this ability to influence results, this perception could heavily influence the
supervisor-subordinate relationship and thereby decrease motivation and negatively affect perceived dignity and respect. Subjectivity, therefore, needs to be managed in worthy and faithful manner. It depends on the evaluator how well the responsibilities that arise from increased subjectivity are handled and how risks are managed.
The findings are in line with previous research, that the supervisor-subordinate trust benefits form openness, honesty, privacy, transparency and accessibility of their supervisor (Foster and
McAdams, 2009). This requires a pro-active attitude from the supervisor to share information and create a culture where subordinates feel free to speak out.
