The turn of the year and the onset of spring mark the start of the performance appraisal season in many firms. Performance appraisals are worthwhile. Manager and subordinate sitting down together to review performance over the past year provides huge benefit as does agreeing future development.
But for many it’s a time of dread. Both parties can leave meetings and the process feeling aggrieved, having not had a fair hearing and not been given a fair rating. This type of previous experience makes both parties wary. So whilst it’s an invaluable activity, much can go wrong and the relationship between manager and subordinate can be damaged forever. There are many reasons for this but one stands above others: an unwanted exploitation of power that one party has over the other.
Forms of appraisal
We need to pause first and charcterise performance appraisal. There are many forms. There are single rater systems (where manager rates and appraises subordinate) and there are multi-rater systems (where managers, colleagues, subordinates and others are invited to express opinion). In every case the common denominator is a single dyadic or pair relationship: the rater and the rateee. Multi-rater systems just comprise many of these relationships.
And power in this context is the ability of one person to influence control over another through the appraisal process. In the performance appraisal case, the power players are the rater and ratee. In the single rater system, it’s therefore manager and subordinate and this blog will focus on this relationship.
Commonly, power is the mechanism by which a manager effects behaviour change in a subordinate. That’s, after all, the commonly accepted key benefit of the appraisal for the manager. Even if the subordinate is a high performer, the manager would likely want something further, even if just maintenance of the status quo for the coming year. And even if assured of this, the manager would surely seek the maintenance of a good relationship. Power is also the mechanism by which the subordinate influences the manager to ensure a good rating, a pay rise and favourable future work.
Both manager and subordinate hold some power but often one will have the upper hand. Power can therefore be unilateral or bilateral, imbalanced or balanced.
Unless controlled, both parties will use their power to distort the performance appraisal outcomes in their favour.
Power comes from a number of sources. Here are some examples:
- Authority: the manager is the boss and hence holds legitimate power through appointment. The boss is also the one to grant meaningful reward like a pay rise.
- Social class: one party is from a higher class than the other and hence is seen as holding power.
- Charisma: the subordinate is in awe of the manager and would follow them anywhere. Charismatic managers influence because subordinates want to share in the limelight that goes with that charisma.
- Expertise: the manager is trained and is seen as having higher expertise. Or perhaps power in the reverse direction exists because the subordinate knows how to do the job whilst the manager doesn’t.
- Persuasion: the manager is acknowledged as being better at using argument to persuade – or vice versa. Either party may be an accomplished arguer, making the other disinclined to enter the debate.
- Knowledge: one party is known to have greater knowledge about the job, the market or the firm.
- Moral persuasion: drawing on moral argument, one party is acknowledged as able to persuade the other. This is not just restricted to charities and public services like teaching, though it’s here where perhaps moral arguments for action pervade.
- Tradition: it’s always been the case that one holds power over the other.
Power is a function of the relationship between manager and subordinate and hence personality of the parties plays a part. Agreeable managers will avoid conflict and will have difficulty in addressing issues with poorly performing subordinates. Those high in the agreeableness trait seek harmony. Conscientious raters tend to seek rating accuracy. And extroverts tend to be able to dominate the discussions.
Gender plays a part too. Male managers tend to enable bidirectional power, permitting male manager and male subordinate to discuss as equals. Whether the power is in balance is a different issue. Women tend to foster unidirectional power relations where the woman holding the power assumes total power over the other.
Women also resort to indirect tactics to distort the power in their favour.
Power is measured both in terms of its force and its legitimacy. The more power one party has, the less they will take the perspective of the other. That gives a clue about what management’s aims should be when implementing and running performance appraisals: the environment should ensure that both parties accept what the other is saying and reach consensus. But often that’s not achieved.
So if both parties set out to use their power to distort the outcome of the performance appraisal, how can the manager run a satisfactory performance appraisal?
Here are some simple guidelines.
Firstly, decouple reward and rating. Base the salary reviews on competency. Employees then only get a pay rise if they are more valuable to the firm. This becomes a committee evaluation process and not a manager-led performance rating activity. Done right, it becomes objective, with salary based on meeting set competency criteria.
If such definite decoupling is not possible, at least space the pay review and performance review by six months. That way, the employee has six months to put into effect anything discussed at the performance review.
Both these reduce the manager’s near-inevitable upper hand.
Secondly, design the performance appraisal to demand evidence. Basing discussion around evidence tends to make the relationship bilateral with both parties coming to the table with facts. This avoids either party saying that they “believe that…”.
This does, of course, assume that the subordinate has a job description that is specific enough to permit evidence to be gathered. It also supposes that general statements on a job description have been made specific through agreed annual objectives.
Thirdly, train both appraisers and appraises. If both parties have a chance to understand what the appraisal aims to achieve and the method intended, they can be optimally prepared and hence many of the sources of power cited above will be reduced in effect.
Power play in performance appraisals
Ultimately, management must take action to move the performance appraisal between manager and subordinate to a joint problem solving activity where the aim is to develop the subordinate to improve competency and to encourage behaviour. That way the manager gets what they want and the subordinate progresses.
With that done, the performance appraisal moves from a polarised event in which power determines outcomes to a social exchange activity. In this, both parties desire something of the activity without necessarily expecting specific action in specific timescales. In this case, both want to progress. And in fact this idea of exchange continues from performance appraisal to everyday management.
If both are set to benefit and both believe that benefit is equitable, though not necessarily equal, both will come to the table with minimised power, one over the other. Under such conditions, the performance appraisal stands to yield maximum perceived justice in subordinates and maximum benefit for all.
For a general overview of power as a general concept, see http://en.wikipedia.org/wiki/Power_%28social_and_political%29.
For a general overview of appraisals, see Chapter 6 of Arnold, J & Randall R et al (2010) Work Psychology: understanding human behaviour in the workplace, pub. Prentice Hall.
For an overview of social exchange theory see Blau, P.M. (1964) Exchange and Power in Social Life. New York: Wiley.