The Use of Performance Appraisals and Employees' Presenteeism Behavior

Presenteeism behavior, i.e. working despite illness, is a common phenomenon wordwide and can have severe consequences for employees and firms alike. In this study, we investigate the relation between the use of company performance appraisals and employees' presenteeism behavior. We use linked-employer-employee data (the German Linked Personnel Panel) and apply pooled Poisson as well as linear fixed effects estimations. We show that the use of performance appraisals is associated with significant lower annual presenteeism days in the amount of one-half to one full day. In addition, the presence of a works council strengthens the negative relationship between performance appraisals and presenteeism. The results are driven by performance appraisals that are linked to performance-related pay, in particular. Our study contributes to the understanding of context specific behavioral consequences of HRM practices such as performance appraisals.