Assessing the ethics of implementing performance appraisal systems

Purpose – The purpose of this paper is to try to understand better whether performance appraisal (PA) helps performance evaluators (PEs) to manage more effectively and meet employees' expectations in US‐based corporations. Design/methodology/approach – A 54‐item research instrument was developed and implemented using structured interviews with 54 PEs, who worked at five US‐based corporations (Aetna Insurance, IBM, Johnson & Johnson, Valspar, Wyeth Pharmaceuticals). Responses were statistically analyzed with descriptive statistics and decision trees. Findings – Time dedicated to implementing PA was the most important factor leading to ethical issues. PEs with the highest educational levels and most experience spent the least amount of time (1.86 vs 3.19 hours) implementing PA. Most PEs (79.6 percent) solicited feedback about employees' performance from employees' peers but 20 percent did not. Additionally, not a single PE had PA as a specific objective, making it difficult to sequester time necessary for PA. Older PEs felt PA helped them manage more effectively and PEs who were Black or White and from Marketing/Sales were most favorable about meeting employees' PA expectations. There were no remarkable differences among PA systems at the five corporations, e.g. 360‐degree training. Research limitations/implications – Structured interviews required delicate interaction due to sensitivity about the US economy and resulting layoffs within interviewees' corporations. Practical implications – PEs, particularly older managers with higher educational levels, should have a PA objective and be held accountable to it to ensure that they dedicate time necessary to complete PA in the way the PA system intends. Originality/value – The paper provides insight about PA within the US corporate setting and will be highly interesting to those in that field.