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The Dynamics of Effective Performance Appraisal: An Integrated Model

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Abstract

This paper presents further exploration of the quest for accurate and effective performance appraisals. Attempts to design and implement more effective performance appraisal systems have led to some improvements in the mechanics of appraisal. The process of performance appraisal, however, often fails to live up to expectations. One factor contributing to the gap between expectations and experience is the relative lack of research on organizational context and the motivations of managers as determinants of appraisal outcomes. This paper presents an integrated model in which appraisal context is defined in terms of senior management concern, clarity of purpose, accountability and instrument adequacy. The impacts of these contextual variables on appraisal outcomes are mediated through their influence on the perceived validity of the appraisal process and self-efficacy assessments of managers who must conduct appraisals. Appraisal effectiveness is defined as a multidimensional set of outcomes, with the appropriate criteria depending upon the purpose of the appraisal. A distinction is drawn between judgment and rating behaviour and how each contributes to the perceived effectiveness of appraisals.
Accuracy and effectiveness in appraisal
outcomes: the influence of self-efficacy,
personal factors and organisational variables
Robert E. Wood, Professor, Australian Graduate School of Management,
University of New South Wales, Sydney
Verena Marshall, Associate Professor, Graduate School of Business, Curtin
University of Technology, Perth
Human Resource Management Journal, Vol 18, no 3, 2008, pages 295–313
Two studies tested relationships of personal factors and organisational context
variables with rating accuracy and perceived effectiveness of appraisals, and the role
of self-efficacy as a mediator of the relationships between the two sets of variables.
Study 1 was a controlled experiment in which nurse supervisors appraised a video
stimulus of a nurse’s performance. Study 2 was a field study in which nurses and
their supervisors each independently completed an assessment of their annual
appraisal review, following the meeting. A ten-item scale for performance appraiser
self-efficacy (PASE) was developed and tested for measurement properties on a large
sample of nurses that included those who participated in either Study 1 or Study
2. The PASE scale was found to have high reliability and reasonable predictive
validity. PASE predicted rating accuracy, appraiser and appraisee perceptions of
effectiveness, and appraiser-appraisee agreement on the effectiveness of an actual
appraisal, after controlling for the effects of personal factors and organisational
context. The main contextual influences were accountability, importance and
management concern but the effects varied for self-efficacy and different appraisal
outcomes. The main predictor of self-efficacy was the amount of training received by
appraisers across the multiple sub-tasks of appraisal.
Contact: Graduate School of Business, Curtin University of Technology,
Perth, Australia. Email: verena.marshall@gsb.curtin.edu.au
INTRODUCTION
A
mong the many outcomes of the appraisal process, accuracy of ratings and
perceived effectiveness of the interview is critical (Greguras and Robie, 1998;
Scullen et al., 2000). The use of appraisal ratings as inputs to a range of
administrative decisions, such as training and development, compensation and
promotion contributed to the focus on appraisal accuracy as the primary criterion of
appraisal effectiveness (Ilgen et al., 1992). Consistent with this emphasis, performance
appraisal researchers in the past paid more attention to errors in information
processing and judgments than to understanding what appraisers do well (Murphy
and Cleveland, 1991, 1995; Forgas and George, 2001).
Competent appraisals require both skills and the motivation to use those skills
effectively (Murphy and Cleveland, 1995). Even well-designed appraisal forms,
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along with knowledgeable and skilful appraisers, may not be sufficient for accurate
ratings. The tasks associated with the production of performance appraisal ratings
are numerous, and often difficult to accomplish within the complex and dynamic
environment of most work contexts. Poorly constructed forms, biased judgments,
lack of information about the appraisee’s performance and concern regarding
appraisee reaction to feedback are among the many factors that can undermine a
manager’s motivation during the appraisal process. While performance appraisal
systems embrace some aspects of motivation theory (Appelbaum and Hare, 1996),
the evaluation of self-efficacy and outcomes in relation to this management practice
are relatively unexplored.
The hypotheses presented and tested in this paper are derived from social
cognitive theory, which espouses that human behaviour reflects the reciprocal
relationships and resultant processes between individuals’ social cognitions,
motivations and behaviours and the specific environmental context in which those
personal reactions and behaviours occur (Bandura, 1986, 1997; McCormick and
Martinko, 2004; Wood and Beckmann, 2006). In the context of performance appraisal,
social cognitive theory enables us to view the appraiser as a motivated decision-
maker processing a range of social cues in making judgments about other people
(Landy and Farr, 1980; Feldman, 1981). In these analyses we include the motivational
variable of self-efficacy, which has been established as a robust explanation for
cognitions, behaviour and outcomes of many tasks with dynamic and complex
characteristics similar to those found in the performances appraisal process.
This research seeks to make three contributions to the study and understanding of
performance appraisal processes. First, we develop and test a ten-item scale measuring
appraisal self-efficacy within both Study 1 and Study 2. The scale is consistent with
Bandura’s (1986, 1997) prescribed approach to measuring self-efficacy, and described
in the Measures section of Study 1 in this paper. Second, we examine the effects of a
range of personal factors and organisational context variables on appraisal outcomes
in a common set of analyses and thereby add a level of understanding that goes
beyond the many studies that study personal and organisational factors. Our third
contribution is to report on the effects that self-efficacy has on appraisal outcomes,
including rating accuracy and perceived effectiveness of actual appraisals, and to
study self-efficacy as a mediator to explain how personal factors and organisational
context variables influence appraisal outcomes.
THEORETICAL FRAMEWORK AND HYPOTHESES
The social cognitive theory framework explains behaviour and associated outcomes
as products of personal factors and contextual variables whose effects are mediated
through self-evaluations and other reactions to the context (Moe and Zeiss, 1982;
Jones, 1986; Bandura, 1997; Mischel and Shoda, 1998; Bandura and Locke, 2003;
Wood and Beckmann, 2006). Specific relationships for a social cognitive theory model
of the performance appraisal process are shown in Figure 1. The personal and
organisational context variables in the model are those that have been identified as
important in previous performance appraisal models and found to have some
support in empirical studies of the effectiveness of appraisals (cf., Ghorpade and
Chen, 1995; Witt, 1998; Vigoda, 2000). These include the personal factors of appraiser
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training and experience, and the organisational factors of management concern for
appraisal, appraiser accountability for conduct of the appraisal process, adequacy
and sensitivity of appraisal instrument, and the importance of appraisal ratings
credited to the appraiser’s job.
Performance appraiser self-efficacy (PASE)
Self-efficacy is a judgment in which individuals evaluate ‘how well (they) can
execute courses of action required to deal with prospective situations’ (Bandura,
1982: 122). Self-efficacy beliefs have consistently been shown to influence
performance on a wide range of tasks requiring information gathering, judgment
and interpersonal effectiveness, including: managerial decision-making (Wood and
Bandura, 1989; Goodman and Wood, 2004), adaptability to new technology (Hill
et al., 1987), and academic achievement and persistence (Wood and Locke, 1987;
Multon et al., 1991). Bandura (1997) provides a review of further literature examining
this construct in both laboratory and field settings. In the conduct of appraisals, an
appraiser’s self-efficacy beliefs will be based on assessments of whether he or she can
effectively carry out the range of required sub-tasks in order to provide a rating that
is perceived as fair and accurate.
There are many potential sources of inefficacy for the appraiser. Some may doubt
their ability to rate accurately or feel that they do not understand the appraisee’s
job. Others may doubt their interpersonal skills and feel uncomfortable providing
feedback or justifying the ratings to appraisees. Successful completion of the
different appraisal tasks will often require perseverance in the face of emotional
obstacles, information gaps, interpersonal conflict and misunderstandings that can
impede an appraiser’s accuracy in rating performance. When facing difficulties in an
appraisal process, appraisers who lack efficacy may begin to doubt their capabilities
and are more likely to reduce their efforts, be less systematic in their processing of
FIGURE 1 Proposed relationships between personal factors, appraisal context, appraiser
self-efficacy and appraisal outcomes for Studies 1 and 2
Personal Factors
Appraisal experience
Training
Appraisal Context
Management concern
Accountability
Instrument adequacy
Instrument sensitivity
Importance of appraisal
Appraisal Outcomes
Rating accuracy
Perceived effectiveness
-
by appraiser
-
by appraisee
-
agreement
Appraiser
self-efficacy
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information, avoid conflict and provide lenient ratings (Benedict and Levine, 1988;
Wood and Bandura, 1989; Bandura, 1997).
Hypothesis 1a: Appraiser self-efficacy will be positively related to the accuracy
of appraisal ratings.
Hypothesis 1b: Appraiser self-efficacy will be positively related to perceived
effectiveness of appraisals.
Personal factors
Determinants of appraiser capabilities, such as level of training and experience on
the task (Woehr and Huffcutt, 1994), will not translate into a greater rater accuracy
or more effective appraisal reviews without an accompanying sense of personal
mastery (Sedikides and Skowronski, 1991; Hartel, 1993) and the appraiser’s belief in
his or her ability to handle associated difficulties and problems as they arise
(Bandura, 1997). Training in appraisal tasks can be effective or ineffective depending
upon the confidence of the appraiser in implementing the procedures and techniques
learned (Lievens, 2001). To be effective, training in appraisal activities and the
feedback process must develop the efficacy needed to transfer skills acquired in the
seminar room to the dynamic and changing circumstances of an appraisal process
(e.g., Gist and Mitchell, 1992; Martocchio and Judge, 1997). Therefore, even
experienced and well-trained supervisors may perform sub-optimally as appraisers
if they doubt their capability to effectively execute the various tasks required in the
rating of staff and conduct of appraisal reviews. Those who have a strong sense of
efficacy will make greater use of the skills and knowledge acquired through training
and experience, and will exert greater effort to overcome difficulties and complete
appraisals accurately.
Hypothesis 2a: The personal factor of appraiser experience will have a positive
relationship with accuracy of ratings and perceived effectiveness of appraisals.
Hypothesis 2b: The personal factor of amount of training will have a positive
relationship with the accuracy of ratings and perceived effectiveness of
appraisals.
Hypothesis 3a: The personal factor of appraiser experience will have a positive
relationship with appraiser self-efficacy.
Hypothesis 3b: The personal factor of amount of training will have a positive
relationship with appraiser self-efficacy.
Hypothesis 4: Impacts of personal factors on the accuracy of appraisal ratings
and perceived effectiveness of appraisals will be partially mediated through their
influence on self-efficacy.
Contextual variables
The effects of organisational context on appraisals have been considered by
numerous authors and the list of context variables is yet to be exhausted, partly
because descriptions of the appraisal context can range from micro-level variables,
such as the type of task performed, to macro-level variables, such as organisational
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climate (Cawley et al., 1998; Tesluk and Mathieu, 1999). Following a review of the
literature, the contextual variables chosen for inclusion were: management concern
for appraisal, appraiser accountability for conduct of the appraisal process, adequacy
of appraisal instrument and the importance of appraisal ratings to the appraiser’s
job.
Management concern for the conduct of the appraisal process refers to senior
management’s demonstrated concern about the accuracy of ratings and their
commitment to the appraisal process, reflected in the steps taken to ensure that
norms regarding practice, standards and outcomes of appraisal are understood and
accepted by appraisees. A lack of management concern provides opportunity for
political and social pressures (Vigoda, 2000) within the organisation to prevail over
the required process. The politics of appraisal and ‘concern’ of management were
studied by Bjerke and colleagues (1987; cited in Longenecker et al., 1987, and Murphy
and Cleveland, 1991). Several factors were identified by executives as having a
strong influence on the political culture in which the appraisal process operates. One
of these factors was the extent to which the formal appraisal process was ‘taken
seriously’ in the organisation. The second factor was the extent to which senior
managers use political favours in rating subordinates, and the subsequent modelling
effect on junior managers. Management concern over the performance appraisal
process may vary within organisations, and this may influence rating behaviour and
appraiser and appraisee reactions to the process, encouraging or discouraging
political behaviour identified by Longenecker et al. (1987). However, to date, there
have been no direct tests to investigate the impact of this variable on appraiser
behaviour.
Related to, but separate from, management concern is accountability for conduct of
the appraisal process. While ‘management concern’ refers to a general attitude
towards performance appraisal, accountability refers to the specific expectations and
mechanisms by which appraisers are called to account for their conduct and outcomes
of appraisals. Accountability for ratings was one of the variables identified by
Longenecker and Gioia (1988) as a source of appraisal apprehension for appraisers.
Accountability has been shown to influence performance appraisals by distorting
performance evaluations when assessments were made in anticipation of having to
provide feedback to appraisees (Ilgen and Knowlton, 1980; Ilgen and Feldman, 1983)
and in the evaluation of poor performers (Mitchell and Klimoski, 1984; cited in
Klimoski and Inks, 1990). Other studies (e.g., Mero and Motowidlo, 1995; Klimoski and
Inks, 1990) suggest that situations in which a supervisor anticipates face-to-face
feedback sharing with a subordinate will promote greater accountability to the
subordinate, than situations in which feedback is not transmitted in a face-to-face
meeting. In this research, the proposition that appraisers, who are accountable for their
ratings and conduct in appraisal, will be motivated to conform with what he or she
perceives as senior management’s expectations is tested.
Simple-to-use appraisal documentation, linked to a clear purpose and clear
accountability, will produce more accurate ratings than those that lack these
motivational characteristics (Ilgen et al., 1992; Ostroff, 1993). The most significant
determinants of perceived quality of the instrument are thought to be how easily the
rater can understand the content and instructions of the instrument, and its apparent
bearing on, or sensitivity towards, a given purpose (Murphy and Cleveland, 1991).
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If an appraisal instrument is viewed as lacking the quality needed to support the
task at hand, the manager will be less likely to invest the effort required to collect
and process data, obtain accurate ratings and communicate those ratings to an
appraisee.
The final context variable considered in this study is perceived importance of
appraisal. If the consequences of rating accurately are viewed as important, and if a
manager believes that the ratings will influence those consequences, he or she will
be motivated to provide accurate ratings and undertake effective interviews. This
perception will, in turn, be reinforced by organisational policies and procedures that
clearly state the benefits of effective appraisals and the positive consequences of
accurate ratings. The level of perception will also depend upon the effort and
resources expended by the organisation in implementing and maintaining appraisal
systems. Training, supportive statements from senior managers and evidence that
actions flow from appraisals may all contribute to the perceived importance of
appraisal. In view of the above, the following hypotheses are considered:
Hypothesis 5a: The contextual variables of management concern, accountability,
adequacy and sensitivity of appraisal instrument and importance of appraisals
will have a positive relationship with accuracy of ratings.
Hypothesis 5b: The contextual variables of management concern, accountability,
adequacy and sensitivity of appraisal instrument and importance of appraisals
will have a positive relationship with perceived effectiveness of appraisals.
The characteristics of the context in which appraisals are conducted will also
influence the efficacy with which appraisers approach the many tasks required for
the completion of an appraisal rating and its communication to an appraisee.
Information that is used in the formation of appraiser self-efficacy beliefs may be
conveyed through direct experience with appraisals, vicarious experiences derived
from observations and reports of others, verbal messages regarding one’s capability
to conduct appraisals, and the physiological and affective states that are associated
with the appraisal activities (Bandura, 1986, 1997). Contextual variables can both
influence the information received through these different modes, and how that
information is attended to and weighted in efficacy judgments.
The positive effects of context variables on appraisal outcomes outlined above are
expected to be mediated through their positive effects on appraiser self-efficacy.
When appraisal systems have the support of senior management, utilise relevant
and easy-to-use forms and are considered an important part of managers’ roles,
appraisers are more likely to have positive experiences with appraisal and observe
more positive reactions in their peers and staff (Murphy and Cleveland, 1991, 1995).
If appraisers feel unsupported by management, find the forms difficult to complete
or irrelevant to the job of the person being rated, they may give little attention to
preparation for ratings, and are more likely to find the tasks difficult and frustrating.
Based on this reasoning, we expect appraisers to have higher levels of self-efficacy
in organisational contexts in which there is management concern for appraisal, clear
accountability, the conduct of appraisals, effective forms and where appraisals are
considered an important part of the appraiser’s job.
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Hypothesis 6: The contextual variables of management concern, accountability,
adequacy and sensitivity of appraisal instrument and importance of appraisals
will have a positive relationship with appraiser self-efficacy.
Hypothesis 7: The impacts of organisational context on the accuracy of ratings
will be partially mediated through their influence on self-efficacy.
STUDY 1 METHODS
Data for this study were collected in two phases. The first phase was a survey of
appraisers’ attitudes about performance appraisal, drawn from a sample of 695
nurses working in Australian hospitals. The second phase consisted of an
experimental study in which 194 participants ‘rated’ the performance of a nurse
shown on a video. The nurses’ ratings of the video were compared with those of an
expert group to establish a measure of objective accuracy. The purpose of this phase
was to examine the effects of personal factors and contextual variables, and the
mediating impact of self-efficacy, on rating accuracy in a controlled setting. The
baseline measures were also used to establish the measurement properties of
the ten-item appraiser self-efficacy. The measures of personal factors, organisational
context variables and PASE, plus the scoring of rating accuracy, are described below.
Measures
The baseline survey for the study contained 50 items covering the two personal and
six context variables and PASE. The baseline survey was completed one month prior
to the measurement of rating accuracy in the controlled video experiment.
Personal factors Organisational level (of appraisers), number of staff appraised and
appraisal-related training, provided proxies for the experience and skill components
of appraiser capability. Including these variables in the analyses for Hypothesis 2
provided a control for the effects of non-motivational, personal determinants of
appraisal outcomes when examining the impact of self-efficacy on rating accuracy
and perceived appraisal effectiveness.
The participants’ position in the 5-Level nursing hierarchy was included as a
proxy for appraisal experience. A more direct measure of experience in the conduct
of appraisals was also considered but rejected due to the inadequacy of available
records, which only identified whether or not the nurse had previously conducted
an appraisal, but not the extent of such experience. Nurses at senior supervisory
levels have generally been appraising staff longer than those at more junior levels,
although in some cases, senior staff experiencing rapid promotion may have less
appraisal experience than supervisory staff at lower levels. Nonetheless, to be
promoted, they would have been judged as highly effective supervisors in a range
of areas, including the appraisal of their staff.
‘Amount of training’ related to the number of appraisal training modules
participants had completed. The modules were run by experienced trainers, targeted
specific appraisal activities of the nurse supervisors and included practice exercises
with feedback. Therefore, while the number of training modules is a measure of
attendance, the contents of the modules were consistent with the principles of
guided mastery training, which have been shown to be a highly effective method of
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skill development (Bandura, 1997). The time spent on each of the modules for
individual nurses was a minimum of three hours. The average numbers of training
modules completed by appraisers in this study were 2.68 (SD = 1.33). Only two
participants (1 per cent) received no training, with all remaining participants
completing at least two modules.
Organisational context Measures for each of the organisational context scales were
taken from the original studies that had reported their effects on appraisal outcomes.
All items were rated on a seven-point Likert-type scale ranging from ‘strongly
disagree’ to ‘strongly agree’. Because of the potential overlap in the content of the
various constructs when they are all included in a single study, we factor analysed
all items for the measures of the organisational context variables, and PASE, in order
to identify the variables and select items for inclusion in the measures for each of the
variables. In addition to the PASE factor discussed below, factor analysis identified
five contextual factors. The labels, number of items reliability coefficients and an
example item for each of these factors include importance (7 items; a = 0.81; e.g.,
‘Contribution of feedback to appraisees is important’), instrument adequacy (5 items;
a = 0.73; e.g., ‘Forms refer to critical tasks to be rated’), instrument sensitivity (3
items; a = 0.66; e.g., ‘Form accommodates special criteria relating to the job being
appraised’), accountability (5 items; a = 0.67; e.g., ‘Appraisers will be asked to justify
ratings’) and management concern (3 items; a = 0.66; e.g., ‘Management are
concerned about the process of rating’). While some of the alpha coefficients are
relatively low, we chose to include them in the analyses in order to provide controls
for the context when testing for the effects of personal factors and self-efficacy.
Performance appraiser self-efficacy (PASE) The ten items in the PASE scale were
developed from a review of the literature and through interviews with human
resource managers and consultants responsible for the design, implementation and
management of appraisal processes. A copy of the scale is provided in Table 1. Items
were written to cover what were considered the major sub-tasks for the conduct of
TABLE 1 Performance appraisal self-efficacy (PASE) scale
Item Factor
loading
I can gather sufficient information to make an evaluation. 0.78
I can communicate goals clearly during the performance appraisal interview. 0.78
I can give examples of behaviour to appraisees to support ratings. 0.77
I can direct performance appraisal interview to a conclusive ending. 0.76
I can assign accurate ratings. 0.79
I can actively listen to appraisees. 0.74
I can talk about the most important parts of the appraisee’s job during the
interview.
0.82
I can explain to a person of higher authority the reasons for assigned ratings. 0.83
I can give appraisees feedback which is fair and worthwhile. 0.84
I have the opportunity and resources to help the appraisees reach their goals. 0.71
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effective appraisals. An initial list of items was culled and refined into the final set
through focus group discussions with 20 senior nurse educators, nurse managers
and clinical nurses who rated the importance of each sub-task.
Nurses rated the strength of their belief in their ability to execute each of the
ten appraisal tasks on a scale ranging from 1 = ‘totally unconfident’, through
4 = ‘moderately confident’, to 7 = ‘totally confident’. In a factor analysis of all 50
items in the baseline measure, all ten self-efficacy items loaded on the same factor
(a = 0.94). The strength of self-efficacy measure used in the analyses, therefore, is
comprised of the average ratings across the ten items.
Rating accuracy Rating accuracy was measured by a comparison of appraisers’
ratings of eight dimensions of a nurse’s performance on video with the true scores
obtained from expert ratings of the same video, utilising the procedure described by
Borman (1977, 1978) and used by Murphy and colleagues (1982). Before the video
was prepared, ten senior nurses read the scripts to establish that the examples of
eight performance dimensions and different levels of performance were identifiable.
Thereafter, two groups of 20 senior clinical nurses read the scripts and viewed the
video, and identified examples of performance dimensions, as well as levels of
performance for each dimension that could be rated from a viewing of the video.
True score estimates were then obtained from ratings of seven senior clinical
nurses who each had at least five years’ experience in the evaluation of nurses’
performance. They read the video scripts, previewed the rating forms, watched the
video twice and took notes during the viewing to ensure they were thoroughly
familiar with the rating task (Borman, 1977; Murphy et al., 1982; Sulsky and Balzer,
1988). Each expert rated the performance of the nurse in the video on each of the
eight dimensions on a scale ranging from 1 = ‘does not meet requirements’ to 7 = ‘far
exceeds requirements’.
This research focuses on appraisers’ accuracy in ratings of the eight performance
dimensions portrayed by the appraisee in the video. Accordingly, the measure of
rating accuracy used was the square root of the D
2
index, which represents the
squared differences between the appraiser ratings (x
i
) and true scores (t
i
) for each
performance dimension (i = 1,...8), averaged across the eight dimensions (Sulsky
and Balzer, 1988; Cronbach, 1955). Measures were also calculated for elevation
accuracy, stereotype accuracy and leniency (Cronbach, 1955; Murphy et al., 1982;
McIntyre et al., 1984; Sulsky and Balzer, 1988).
STUDY 1 RESULTS
Table 2 displays the full correlation matrix, means and standard deviations for the
Study 1 variables. Consistent with Hypothesis 1a, self-efficacy was positively related
to rating accuracy (r = 0.39, p < 0.001). The two personal factors, organisational level
and amount of training, were both positively related to rating accuracy (Hypotheses
2a and 2b). Three of the five context variables were positively related to rating
accuracy (Hypothesis 5a), with instrument adequacy and sensitivity being the
exceptions. The two personal factors and all five organisational context variables
had significant positive relationships with appraiser self-efficacy, as predicted in
Hypotheses 3a, 3b and 6, respectively.
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The mediational model shown in Figure 1 was also tested using the three-step
mediated regression procedure recommended by Baron and Kenny (1986). When
self-efficacy was regressed on the full set of personal factors and contextual variables,
the model and Hypotheses 3a, 3b and 6 received partial support, the results of which
are shown in Table 3. The personal factors and several of the contextual variables
were significant direct predictors of self-efficacy and the full set of personal factors
and contextual variables explained a significant proportion of the variance in
self-efficacy (R
2
= 0.37, p < 0.001). In separate regressions, the personal factors
(R
2
= 0.18, p < 0.001) and context variables (R
2
= 0.31, p < 0.001) were significant
predictors of self-efficacy. Therefore, both personal factors and context variables had
independent, direct effects on self-efficacy, as shown in Figure 1.
When rating accuracy was regressed on all personal factors and contextual
variables in the mediation analyses, Hypothesis 5 was supported, but Hypothesis 2a
and 2b received only limited support. The personal factors and context variables
explained a significant proportion of the variance in rating accuracy (R
2
= 0.15,
p < 0.01) and, as shown in the second column of Table 3, there was one significant
contextual predictor and one personal factor, training (b = 0.12, p = 0.07), which
approached, but did not reach, conventional significance levels as a predictor of
rating accuracy. In a separate regression, excluding the context variables, the
personal factors explained a small but significant proportion of variance (R
2
= 0.04,
p < 0.05); organisation level was a marginally significant predictor (b = 0.14, p < 0.06)
of rating accuracy, and level of training was a significant predictor (b = 0.18, p < 0.05).
Regression analyses of all personal factors, contextual variables and self-efficacy
on rating accuracy did not support the partial mediation (Hypotheses 4 and 7).
However, after controlling for the effects of the personal factors context variables,
self-efficacy (b = 0.25, p < 0.01) was a significant predictor of rating accuracy,
explaining a significant proportion of its variance (R
2
= 0.18, p < 0.01).
TABLE 2 Means, standard deviations and correlations for Study 1 (n = 196)
123456789
Organisation level
Training 0.05
Management concern 0.15** 0.12
Accountability 0.27** 0.09 0.48**
Instrument adequacy 0.26** 0.07 0.57** 0.41**
Instrument sensitivity 0.23** 0.08 0.50** 0.43** 0.47**
Importance 0.32** 0.20** 0.35** 0.45** 0.45** 0.30**
Appraiser self-efficacy 0.33** 0.31** 0.24** 0.47** 0.27** 0.33** 0.48**
Rating accuracy 0.14* 0.18* 0.24** 0.34** 0.23** 0.13 0.33** 0.39**
X
1
2.07 2.69 4.08 5.57 4.74 5.02 5.58 4.71 1.11
SD
1
0.59 1.33 1.29 1.01 1.14 1.25 1.00 0.85 0.41
* p < 0.05.
** p < 0.01.
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STUDY 2 METHODS
This study provided the opportunity to examine, from the point of view of both
appraisers and appraisees, rating behaviour and perceptions of accuracy and
effectiveness. The data for this study, conducted in the applied organisational setting,
were also drawn from two phases. The first phase was the distribution of the initial
baseline survey used in Study 1. This was followed by a second questionnaire given
to subjects (n = 75) after they had conducted appraisal on their staff to measure
perceptions of their accuracy in rating performance and effectiveness in undertaking
the interview. A corresponding questionnaire was sent to the subjects’ staff with
whom they had conducted appraisal interviews, asking them to record the degree to
which they felt the subject (their appraiser) gave an accurate rating of their
performance and supported them in the interview.
Measures
As stated above, the baseline measures for the contextual variables and self-efficacy
were the same as those used in Study 1. However, an item measuring the number
of staff appraised by the respondents was used as a further proximal measure of the
personal factor of appraisal experience.
Perceived appraisal effectiveness Perceived appraisal effectiveness was assessed
through the two questionnaires that had the same 12 items, which asked for
TABLE 3 Standardised betas for the three-step mediated regression analyses, with self-
efficacy as the mediator of personal factors and contextual variables on rating accuracy in
Study 1 (n = 196)
Step 1 Step 2 Step 3
Dependent variable Self-efficacy Rating accuracy Rating accuracy
Predictors bb b
Personal variables
Organisation level 0.15** 0.02 -0.02
Training 0.22*** 0.12* 0.07
Contextual variables
Management concern -0.09 0.07 0.09
Accountability 0.28*** 0.24*** 0.17**
Instrument adequacy -0.03 0.03 0.04
Instrument sensitivity 0.13 -0.08 -0.12
Importance 0.27*** 0.17** 0.11
Self-efficacy n.a. n.a. 0.25***
F = 17.32***,
R
2
= 0.37
F = 5.77***,
R
2
= 0.15
F = 6.37***,
R
2
= 0.18
* p < 0.07.
** p < 0.05.
*** p < 0.01.
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assessments of interview outcomes and behaviours performed by the appraiser
during the interview. Examples of items, as worded on the appraisee questionnaire,
included: ‘I believe that the appraiser was accurate in his/her evaluation of my
performance’; and ‘The interview covered most or all of the key aspects of my job’.
The 12 items were combined into summary measures of perceived appraisal
effectiveness for the appraiser (a = 0.91) and the appraisee (a = 0.95).
Appraiser-appraisee (dis)agreement Appraiser–appraisee (dis)agreement was
calculated as the sum of the squared differences in the ratings of the 12 items by the
matched pairs of appraisers and appraisees.
STUDY 2 RESULTS
The correlation matrix, means and standard deviations for the Study 2 variables are
provided in Table 4. Appraiser self-efficacy was positively correlated with appraisers’
self-reported effectiveness and appraisee-appraiser agreement, but not with
appraisee perceived effectiveness. The more senior nursing managers, and those who
had received more appraisal training, had stronger self-efficacy and rated themselves
as more effective at the appraisal task. The variable of number of staff appraised was
not related to either appraiser-perceived effectiveness or their self-efficacy but was
the only personal factor that significantly correlated with appraisee ratings of
effectiveness.
Three of the five contextual variables significantly correlated with self-efficacy.
Accountability, which was one of the two contextual variables that predicted
self-efficacy and rating accuracy in Study 1, was not significantly related to self-
efficacy (r = 0.15, not significant [ns]) and, contrary to Hypothesis 5b, had a
significant negative relationship with appraisee perceived effectiveness (r =-0.18,
p < 0.05). None of the other contextual variables were significantly related to
appraisee-perceived effectiveness.
The results for the regressions of personal factors and contextual variables on
self-efficacy, perceived appraisee effectiveness, perceived appraiser effectiveness and
appraiser-appraisee agreement are shown in Table 5. The full set of personal factors
and contextual variables explained a significant proportion of the variance in
self-efficacy (R
2
= 0.24, p < 0.01) and, consistent with Hypotheses 3a, 3b and 6, the
significant predictors of self-efficacy included personal factors and contextual
variables.
With all other personal factors and contextual variables controlled, self-efficacy
became a significant predictor of appraisee perceptions of appraisal effectiveness
(Hypothesis 1b). Appraisers who conducted more appraisals (b = 0.38, p < 0.01) and
who approached the appraisal task with greater efficacy (b = 0.22, p < 0.01) were
rated as more effective by appraisees. However, nursing supervisors in higher levels
of the organisation were perceived as less effective by appraisees (b =-0.19, p < 0.05).
The levels of accountability and importance for appraisals were marginally
significant, negative predictors of appraisee perceptions of effectiveness (b’s =-0.19,
p’s = 0.06).
The regression for appraisers’ perceptions of the effectiveness of the appraisal
interview revealed one similarity, one difference and two contrasts with the
Accuracy and effectiveness in appraisal outcomes
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TABLE 4 Means, standard deviations and correlations for Study 2 (n = 75 appraisers and n = 194 for appraisees)
123456789101112
Organisation level
Training 0.09
Number appraised 0.50** 0.05
Management concern -0.01 -0.13 -0.09
Accountability -0.03 0.06 -0.10 0.38**
Instrument adequacy 0.08 0.07 -0.05 0.48** 0.24*
Instrument sensitivity -0.01 0.03 -0.06 0.60** 0.31** 0.40**
Importance 0.47** 0.06 0.28* 0.29** 0.12 0.41** 0.42**
Self-efficacy 0.28** 0.25* 0.13 0.29** 0.15 0.23* 0.21 0.44**
Appraiser effectiveness rating 0.24* 0.33** -0.06 0.25* 0.12 0.10 0.18 0.24* 0.43**
Appraisee effectiveness rating 0.01 0.00 0.26* -0.05 -0.18* -0.03 -0.13 -0.05 0.12 0.05
Appraiser-appraisee agreement 0.07 0.16* 0.17* -0.09 -0.06 -0.04 -0.14 -0.08 0.17* 0.21* 0.69**
X1 2.43 4.72 2.76 4.36 5.73 4.95 5.14 5.86 5.01 5.59 5.25 1.36
SD 1 0.68 1.12 1.78 1.25 0.96 1.06 1.25 0.83 1.05 1.72 1.73 1.42
* p < 0.05.
** p < 0.01.
Robert E. Wood and Verena Marshall
HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 18 NO 3, 2008 307
© 2008 The Authors.
Journal compilation © 2008 Blackwell Publishing Ltd.
predictors of appraisee perceptions of effectiveness. The similarity was for appraiser
self-efficacy (b = 0.25, p < 0.05), which was again a significant predictor of the
(appraisers’) ratings of appraisal effectiveness. The difference was for training. The
more training modules completed by appraisers, the greater their self-reported
effectiveness (b = 0.30, p < 0.01). The two contrasts were for the organisational level
of the appraiser (b = 0.25, p = 0.06) and number of staff appraised (b =-0.23, p = 0.06).
Both of these variables were marginally significant predictors of appraiser
perceptions of effectiveness, but in the opposite directions for the predictions of
appraisee perceptions of effectiveness.
Appraiser self-efficacy, personal factors and organisational context variables were
also significant predictors of the level of agreement in appraiser and appraisee
perceptions of appraisal effectiveness. Following the appraisal interview, appraiser
and appraisee perceptions of effectiveness were unrelated (r = 0.05, ns); however, as
shown in Table 5, appraiser-appraisee agreement on the effectiveness of the appraisal
interview across the 12 behavioural items on the post-appraisal questionnaire was
significantly correlated with appraisers’ training (r = 0.16, p < 0.05), number of staff
TABLE 5 Standardised betas for the regression analyses for predictions of self-efficacy,
appraiser effectiveness ratings, appraisee effectiveness rating and appraiser-appraiser
agreement on effectiveness in Study 2 (n = 75 appraisers and n = 194 appraisees)
Dependant variable Self-efficacy
(n = 75)
Appraiser
effectiveness
(n = 75)
Appraisee
effectiveness
(n = 194)
Appraiser-
Appraisee
agreement
(n = 194)
Predictors bbbb
Personal factors model
Organisation level 0.11 0.25* -0.19 -0.05
Training 0.28*** 0.30**** 0.03 0.12
Number appraised -0.03 -0.23* 0.38**** 0.22***
Organisation context model
Management concern 0.32*** 0.25 0.10 -0.02
Accountability -0.06 0.01 -0.19** -0.04
Instrument adequacy -0.05 -0.17 0.07 0.08
Instrument sensitivity -0.09 0.02 -0.06 -0.07
Importance 0.36**** 0.05 -0.19** -0.21***
Self-efficacy n.a. 0.25*** 0.22**** 0.23****
F = 3.64****,
R
2
= 0.12
F = 3.84****,
R
2
= 0.26
F = 4.08****,
R
2
= 0.12
F = 2.76****,
R
2
= 0.08
* p < 0.07.
** p < 0.06.
*** p < 0.05.
**** p < 0.01.
n.a., not applicable.
Accuracy and effectiveness in appraisal outcomes
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appraised (r = 0.17, p < 0.05) and self-efficacy (r = 0.17, p < 0.05). In the regression
analysis, the combined personal and contextual variables explained a significant
proportion of the variance in appraiser-appraisee agreement, F(9,193) = 2.76, p < 0.01,
R
2
= 0.08 (final column, Table 5). The significant predictors were the number of staff
appraised (b = 0.22, p < 0.05) and self-efficacy (b = 0.23, p < 0.01), both of which were
positively related to agreement. Perceived importance of the appraisal (b =-0.21,
p < 0.05) was negatively related to appraiser-appraisee agreement. This latter result
indicates that the more important the appraisal to the appraiser, the lower his or her
agreement with the appraisee in the ratings of appraisal effectiveness.
DISCUSSION
The results of Study 1 and Study 2 show that the motivational variable self-efficacy
has a significant influence on several critical outcomes of the appraisal process.
Nursing supervisors who were confident about their capacity to effectively complete
the required tasks of performance appraisal gave more accurate ratings (Study 1).
They were also perceived as being more effective by appraisees and had higher
levels of agreement with appraisees regarding the effectiveness of the appraisal
(Study 2). In both studies, self-efficacy was a significant, additive predictor of
appraisal outcomes after controlling for the effects of appraiser capability and
appraisal context. The mediation pathways shown in Figure 1 were not supported.
The unique contributions of the self-efficacy construct compared with other
motivational variables, such as expectancies and goals, lie in its relationship to the
generative use of the many skills required to complete the sub-tasks and to cope with
the stresses and obstacles that can arise during the appraisal process (Bandura, 1997).
Individuals with strong efficacy beliefs are more likely to possess the resilience
needed to cope with conflicting work demands in complex hospital environments
and in doing so make difficult appraisal judgments, communicate effectively with
staff who receive lower than expected ratings and conduct constructive appraisal
interviews.
Among the personal variables, training was the most potent predictor of self-
efficacy in both studies. Training in the different sub-tasks of appraisal strengthened
appraiser self-efficacy and had direct effects on rating accuracy. More narrowly
focused training programs, such as those that focus on rating behaviour and errors,
are likely to be less effective in strengthening appraiser efficacy for the full range of
demands encountered when completing appraisals in organisational settings. The
appraisal training modules completed by the nursing supervisors in the two studies
covered a range of sub-tasks required in the appraisal process, including goal setting,
monitoring and observing performance, and conducting appraisal interviews.
Certain aspects of the study design and sample need to be taken into account
when interpreting the results from the two studies, including the relatively small
proportions of variance in rating accuracy and appraisee ratings of effectiveness
explained by self-efficacy, personal factors and the organisational contextual
variables. First is the use of appraiser self-report measures for the organisational
context variables and their collection in the baseline questionnaire that included the
self-efficacy scale. We cannot rule out the possibility that the observed impacts of
organisational context on self-efficacy were caused by the common self-reports for
Robert E. Wood and Verena Marshall
HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 18 NO 3, 2008 309
© 2008 The Authors.
Journal compilation © 2008 Blackwell Publishing Ltd.
the measures of these variables. In future field studies, alternative sources of data on
organisational context, such as appraisees and senior managers, and supporting
documentation could be used to cross-validate appraiser ratings.
A second factor, which may have influenced the lack of agreement between
appraiser and appraisee perceptions of appraisal effectiveness, was the novelty of the
appraisal interview for many of the nurses being appraised. It transpired that while
many appraisers had prior experience with appraisals, many of the Level 1 nurses
in the participating hospitals, who made up the majority of the appraisees in Study
2, had not been previously appraised since graduating and joining the nursing staff.
Also, because of shift work and rotations amongst wards, the nurses being appraised
often had limited direct contact with their appraisers. Further research is needed to
establish whether appraiser self-efficacy, along with other motivational determinants,
would have a stronger influence on appraisee perceptions of appraisal effectiveness
and agreement between the appraiser and appraisee in more stable performance
appraisal settings.
CONCLUSION
This research examines, through the experiential Study 1 and field-based Study 2, the
influence of and causality between personal and organisational variables and self-
efficacy on appraisal accuracy and effectiveness. The findings of the two studies do
provide causality, although not strongly, between the variables considered in this
research. Therefore, while the two studies contribute to understanding Bandura’s
predicted reciprocity of personal and organisational context and behaviour within
the dynamics of appraisal, the complexity of that process warrants further
investigation.
The results also indicate that the ten-item PASE scale employed in the two studies
is psychometrically sound and has the potential for more widespread use in studies
of performance appraisal dynamics in organisational contexts. By framing the
efficacy judgments to cover the range of sub-tasks required to complete appraisals,
and not just focusing on the rating accuracy outcome, the PASE scale provides a
measure that can be used to predict a range of appraisal outcomes covering many
different work domains. Further, the time lags between the measure of self-efficacy
and the measures of appraisal outcomes indicate that the scale can predict appraisal
accuracy over a reasonable time period.
It is a limitation of this research, inherent in the data collection, that the constructs
of self-efficacy and appraisal effectiveness in this research are uni-dimensional, and
acknowledged multi-dimensions of sub-tasks related to the appraisal process are not
explored. Future research is also required to examine the numerous tasks comprising
the appraisal process in relationship to self-efficacy and appraisal effectiveness.
Similarly, future research could examine further dimensions of the personal factor of
organisation level, such as the number of employees under supervisory control,
opportunity in terms of number of staff and time to observe performance and
workload. Such examination would provide broader perspectives on appraiser
experience, and contribute to increased understanding of the effects of self-efficacy
on appraisal accuracy and effectiveness.
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... Executive accountability is defined as the expectations and processes through which senior public managers (executives) give account for their organizations' performance to oversight agencies, legislatures, and political officials (Marshall & Wood, 2000). Executive accountability ties executives' fortunes (e.g., career advancement) to their organization's performance, and studies find that accountable executives are more likely to set clear objectives, monitor performance, provide constructive feedback, and use rewards and sanctions for their subordinates (O'Reilly & Weitz, 1980;Randma-Liiv, 2005). ...
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... Hence, the concept of the MAC role raises interesting challenges for the manager because of issues of span of control (Graham et al., 1994) and may explain the reluctance of its adoption by some managers. Despite all the literature and information on developing human resources, the practice of performance appraisal continues to present with dissatisfaction and problems (Marshall and Wood, 2000). These researchers posit that this is due to the fact that performance appraisal does not adequately deal with the practical problems most managers have to deal with in the work environment. ...
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