Performance Appraisal and Performance Management: …

1 Performance Appraisal and Performance Management: 100 Years of Progress?Angelo S. DeNisiTulane UniversityKevin R. MurphyUniversity of LimerickWe review 100 years of research on Performance Appraisal and Performance management , highlightingthe articles published in JAP, but including significant work from other journals as well. We discusstrends in eight substantive areas: (1) scale formats, (2) criteria for evaluating ratings, (3) training, (4)reactions to Appraisal , (5) purpose of rating, (6) rating sources, (7) demographic differences in ratings,and (8) cognitive processes, and discuss what we have learned from research in each area. We also focuson trends during the heyday of Performance Appraisal research in JAP (1970-2000), noting which weremore productive and which potentially hampered progress.

2 Our overall conclusion is that JAP s role inthis literature has not been to propose models and new ideas, but has been primarily to test ideas andmodels proposed elsewhere. Nonetheless, we conclude that the papers published in JAP made importantcontribution to the filed by addressing many of the critical questions raised by others. We also suggestseveral areas for future research, especially research focusing on Performance : Performance , criteria, ratings, Appraisal , evaluationSupplemental materials: assessment of people s Performance at work performanceappraisal has been of interest to scholars and practitioners forliterally hundreds of years. More recently, there has also been agrowing interest in the process of managing Performance .

3 The twotopics are clearly related, but they are not identical. Performanceappraisalrefers to a formal process, which occurs infrequently, bywhich employees are evaluated by some judge (typically a super-visor) who assesses the employee s Performance along a given setof dimensions, assigns a score to that assessment, and then usuallyinforms the employee of his or her formal rating. Organizationstypically base a variety of decisions concerning the employeepartially on this managementrefers to the wide variety of activi-ties, policies, procedures, and interventions designed to help em-ployees to improve their Performance . These programs begin withperformance appraisals but also include feedback, goal setting, andtraining, as well as reward systems.

4 Therefore, Performance man-agement systems begin with Performance Appraisal as a jumping-off point, and then focus on improving individual Performance ina way that is consistent with strategic goals and with the ultimategoal of improving firm Performance ( & Pierce, 2008). Performance management is a relatively recent term, however, andthroughout the 100-year history reviewed here, the vast majority ofarticles are concerned with the type of Performance Appraisal morecommonly done in review will focus on the issues associated with the twoprocesses and how they have developed over the years. We willpay special attention to the role that theJournal of Applied Psy-chology(JAP) has played in this history, noting when articles inthe journal have made real contributions and when the journal hashad less impact.

5 Space limitations make it impossible to describeall of the important articles that contributed to the body of researchin Performance Appraisal and Performance management , but thesupplemental material for this issue ofJAPincludes more infor-mation on articles that had the greatest impact in each area (re-gardless of where they were published) as well as a bibliographyof relevant articles inJAPover the last 100 Appraisal ResearchAlthough interest in the evaluation of Performance at work datesback to ancient China, and although there were efforts at estab-lishing merit ratings in various settings as far back as the 19thcentury (Murphy & Cleveland, 1995), psychological research onperformance rating did not begin in a serious way until the body of research can be traced back to Thorndike s classicarticle, A Constant Error in Psychological Ratings (Thorndike,1920).

6 He identified what eventually became known as haloerror. The assumption at the time was that errors of this sortwould reduce the accuracy of ratings and therefore make them lessuseful. This article, along with articles byRugg (1921)andRem-mers (1931), which argued that graphic rating scales were espe-cially prone to this error, helped drive Appraisal research for atleast the next 50 article was published Online First January 26, S. DeNisi, A. B. Freeman School of Business, Tulane Univer-sity; Kevin R. Murphy, Department of Personnel and Employment Rela-tions, University of concerning this article should be addressed to Angelo , Freeman School of Business, Tulane University, 7 McAlisterDrive, New Orleans, LA 70118.

7 Document is copyrighted by the American Psychological Association or one of its allied article is intended solely for the personal use of the individual user and is not to be disseminated of Applied Psychology 2017 American Psychological Association2017, Vol. 102, No. 3, 421 4330021-9010/17/$ help characterize the development of Performance appraisalresearch, particularly research published inJAP, we sorted perfor-mance Appraisal articles into eight substantive categories: (a) scaleformat research, (b) research evaluating ratings articles examin-ing various criteria for evaluating Performance ratings ( , ratererrors), (c) training research, (d) research on reactions to apprais-als, (e) research on purpose of rating, (f) research on rating source,(g) research on cognitive processes studies of information pro-cessing and judgment in rating, and (h) research on Review of Performance Appraisal Researchin JAPP erformance Appraisal has been the major focus of a largenumber of articles published inJAP.

8 There were 94 articles dealingprimarily with job Performance measurement or Performance ap-praisal published inJAPprior to 1970, several of which representimportant contributions to the literature ( ,Bingham, 1939;Hollander, 1957;Smith & Kendall, 1963), although most of themdeal with rating scale formats and ways to reduce rating errors. There were also 30 articles dealing with Performance appraisalsince 2000, but it seems clear that the period 1970 to 2000represented the heyday of Performance Appraisal research this period,JAPpublished 187 articles in which perfor-mance Appraisal was the primary topic (we should also note that,during this period, there were also a number, but simply reportedon a new rating scale that was developed for some job or reporteddata on some other type of Performance measure [ ,Ferguson,1947;Rothe & Nye, 1958], and this is the main focus of ourreview).

9 We analyzed the content of these 187 articles to identify trendsin the topics covered during the period 1970 2000. We groupedarticles into 5-year spans and examined the content ofJAParticlespublished 1970 1974 (23 articles), 1975 1979 (29 articles),1980 1984 (34 articles), 1985 1989 (43 articles), 1990 1994 (30articles), and 1995 2000 (24 articles).Figure 1illustrates theproportion in each content category for the six time periods stud-ied. We conducted a similar analysis for the earlier and laterperiods; those data can be found in the online supplemental ma-terials associated with this article, as can a list of especiallyinfluential articles in each area we discuss (Archival Table 1).There are three particularly noteworthy trends inFigure 1.

10 First,scale format research was very popular inJAP, particularly from1970 1979, representing well over 40% of the Performance ap-praisal articles published in this period (and, as noted in theprevious paragraph, this was the case for the earlier period aswell). In hindsight, this emphasis might be seen as regrettable,sinceLandy and Farr s (1980)review of Performance appraisalresearch lamented the unproductive nature of these scale formatstudies, and called for a moratorium on studies of scale formats,and, in fact, our data suggest this was the case, but as we shalldiscuss later, this research did help move the field in Performance Appraisal research, 1970 2000. See the online article for the color version ofthis document is copyrighted by the American Psychological Association or one of its allied article is intended solely for the personal use of the individual user and is not to be disseminated AND MURPHYS econd, starting in the 1980s, studies of the criteria used forevaluating ratings ( , criteria for criteria, such as rater errors,interrater agreement, rating accuracy) started to appear with someregularity;JAPpublished 26 articles on these topics between 1980and 1997.