Confronting the "politics" in performance appraisal.

"It is foolish to believe that managers are completely rational and objective in the rating process, yet that is how many organizations approach performance appraisals ... The fact is, managers have discretion in evaluating their people and, at times, they adjust things. Some people are quite political and play games with ratings; some don't. In the end there is a lot of room to operate, so managers often use the rating process to help them get results they need."

In these days of escalating global competition and economic pressure, top management in virtually every company in the U.S. is demanding increased effectiveness from all areas of their operations. Not surprisingly, they are asking human resources managers to take a leading role and a more active hand in helping to create and sustain competitive advantage. As an important part of this effort, organizations are working hard to upgrade, realign, refocus, and enhance their performance appraisal systems. Many organizations are placing greater emphasis on: (1) doing more effective performance planning; (2) developing more appropriate rating instruments; (3) giving more timely performance feedback; (4) providing more rater and ratee appraisal training; (5) using more employee self-appraisals and 360 degree feedback techniques; and (6) installing more streamlined information systems for managing performance appraisal data. (1) Thus, more of everything seems to be the watchword.

The goal of all these efforts, of course, is to make the appraisal process contribute more to the organization's efficiency, effectiveness, and competitiveness. Yet, in spite of the many appraisal system refinements, few of these steps are aimed at addressing the age-old issue--the very human issue--of politics in performance appraisal. Appraisal 'politics' refers to superiors' deliberate manipulations of employee ratings to enhance or protect their self-or departmental interests. (2) Politics (and perhaps especially the suspicion of politics) in such a personally important process as performance appraisal can undermine all the good intentions and efforts to improve individual performance. Although politics is a common subject of discussions in cafeterias, hallways, parking lots, and hushed corners of the office, it still receives surprisingly little official airplay or formal attention.

Nonetheless, it is apparent to anyone with even a little bit of organizational savvy that political activity is a common part of organizational life (and perhaps even that the presence of politics is not a necessarily bad for the larger organization). The perception that politics might play a bigger role than actual performance in the performance ratings people receive, however, is frequently harmful. (3) An important question, therefore, is this: Have all the recent, widespread attempts to introduce changes in appraisal systems affected either the presence or perception of politics in modern organizations? Or, is the issue of politics in employee appraisal still a taboo topic?

For better or for worse, such questions are relatively easy to answer. Politics in performance appraisal is still very much with us. Our research over the last few years has shown that despite all the tweaks made to appraisal systems, managers are still wonderfully creative in assuring that formal appraisal systems do not diminish their desire for discretion. In fact, managers often want to maintain a role for politics in the system because they see it as granting them the flexibility they need to deal with a more demanding and more ambiguous business world. (4) The purpose of this article is to explore the nature of politics in employee appraisal in the modern era, to investigate why politics is still forcefully present, and to offer some recommendations about what do to confront an issue that so many organizations are still unwilling to address head-on.

The Human Side of Performance Appraisals

In theory, managers are called upon to be objective, rational, dispassionate, and unbiased in evaluating the performance of their employees. They are invariably instructed by their organizations-whether large or small, public or private, manufacturing or service-based-to conduct an "accurate" appraisal of the subordinate's performance. (5) Yet, look again at the words of the manager in our opening quote. He calls it "foolish" to see managers as objective in the rating of employees; he uses notions like discretion, politics, and game playing to conjure up a realistic description of the rating process.

In the current organizational climate of downsizing, do-more-with-less, and reengineering, managers have a whole host of practical concerns that often (usually?) are much more pressing than simply generating a painfully accurate assessment of an employee's most recent performance. And, in the dynamic, competitive, and even hostile arena of modern, global business, accurate performance ratings might conceivably interfere with managers' desires to protect their people, encourage employee loyalty, minimize conflict, and create the "wiggle room" they need to achieve effectiveness through their employees (in spite of well-intended, but unacceptably constraining, bureaucratic guidelines about ratings).

In this context, any serious attempt to improve an organization's performance appraisal system needs to recognize that organizations are political entities and that few, if any, important decisions are made without key people deliberately attempting to obtain their preferences and protect or enhance their interests. Therefore, when astute managers conduct appraisals, they not only look at an employee's performance, but also at "other factors." It is precisely the attempt to account for these "other factors" that infuses the process with its potentially political character.

Over the last decade we have conducted a number of studies with executives from Fortune 500 companies to explore the dynamics of the appraisal process. (6) We have repeatedly seen that managers regularly exercised some creative discretion" over employee ratings, manipulating performance ratings in the perceived best interest of their employees, their departments, their organizations, and even themselves. Although they did not dismiss the desirable criterion of accuracy, they refused to allow it to override their efforts to run their operations. In general, we found that managers were more likely to inflate employee ratings (give higher ratings than deserved) than to deflate them. Interpersonal tension, economic pressure, competition, resource shortages, and the corporate culture were all factors that increased the likelihood of rating manipulation. There also was strong consensus that the higher a person rose in the hierarchy, the more that factors other than actual performance affected the ratings received. (7)

Put simply, then, performance rating does not happen in a vacuum; a wide variety of issues go into assessing performance. No matter how well designed the appraisal system, no matter how effective the organization's training program, no matter how much the issue of accuracy is stressed-managers intentionally fudge the numbers for their own "good reasons." No apology for that reality was offered or deemed necessary. The upshot of this realization is twofold: First, politics should be recognized as a subtle but important part of the appraisal process that is unlikely to be stamped out by pleas for accuracy. Second, however, although politics in the service of legitimate interests might be necessary in the modern business environment, and indeed might be quite functional, it nonetheless can have detrimental effects on employees. (8) The goal of an enlightened, pragmatic manager should not be to eliminate politics in appraisals, but rather to understand and manage it to best effect.

Exploring the Politics of Appraisal

Research and discussions of the appraisal process frequently have a certain naivete about the political aspects of the practice (or, most often, managers simply ignore the issue). We wanted to take a more firing-line view by developing a better understanding of the factors that lead managers to manipulate employee ratings. To explore this issue we asked 249 managers from ten different large U.S. manufacturing and service organizations two open-ended questions:

* Based on your experience, what are the primary reasons a manager might intentionally increase or decrease a subordinate's performance rating(s)?

* What are the potential problems associated with giving an employee a less than candid, accurate, or honest rating?

All of these managers had a minimum of six years of performance appraisal rating experience. We encouraged them to respond freely to each of these questions in an open-ended fashion and then content-analyzed the responses. Table One displays the top ten reasons managers intentionally manipulated employee ratings.

These findings demonstrate the very human side of the evaluation process and suggest that a wide range of factors leads managers toward self-interested subjectivity in the formal rating process. The table also suggests that there are upsides and downsides to the use of politics in the rating process. Even a cursory look at these findings shows that politics is used to both a beneficial and detrimental effect. We see managers trying to use the rating process to generate more effective performance, to maximize pay raises for their people, to nurture employee commitment and loyalty, to avoid hanging dirty laundry in public, and to protect employees in times of trouble-all by the judicious inflation of ratings. Conversely, however, we see managers appearing cowardly by using the system to avoid conflict, giving in to the temptation to raise and lower ratings because of personal attraction, allowing current organizational climate to sway their ratings instead of rendering fair assessments, covering themselves fro m potential embarrassment, engaging in covert attempts to look good, and simply being clueless and out of touch with their people.

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