Due process in performance appraisal: a quasi-experiment in procedural justice

Administrative Science Quarterly, Sept, 1995 by M. Susan Taylor, Kay B. Tracy, Monika K. Renard, J. Kline Harrison, Stephen J. Carroll

In many organizations performance appraisal systems remain one of the great paradoxes of effective human resource management. On one hand, appraisal systems can provide valuable performance information to a number of critical human resource activities, such as the allocation of rewards, e.g., merit pay, promotions; feedback on the development and assessment of training needs; other human resource systems evaluation, e.g., selection predictors; and performance documentation for legal purposes (Cleveland, Murphy, and Williams, 1989). In the abstract, appraisal systems seem to offer much potential for enhancing the effectiveness of human resource decisions and for satisfying employees' need for performance feedback (Ilgen, Fisher, and Taylor, 1979). On the other hand, there is evidence that appraisal systems are a practical challenge to the academics who often design them and to the managers and employees who must use them. As Banks and Murphy (1985: 335) noted: "Organizations continue to express disappointment in performance appraisal systems despite advances in appraisal technology. Appraisal reliability and validity still remain major problems in most appraisal systems, and new (and presumably improved) appraisal systems are often met with substantial resistance. In essence, effective performance appraisal in organizations continues to be a compelling but unrealized goal." This negativity is echoed by practitioners in the private and public sectors (George, 1986; Meyer, 1991). It seems fair to conclude that many organizational appraisal systems have failed to realize their full potential contribution to organizational effectiveness.

Such a conclusion raises questions about why appraisal system effectiveness remains an elusive goal. One explanation has been offered by Folger, Konovsky, and Cropanzano (1992), who observed that appraisal systems have traditionally been designed and implemented around a "test" metaphor that treats performance disagreements between managers and employees as disputes over the most accurate view of reality, in which truth c.an be measured against some precise, consistent standard. Appraisers become "truth seekers who record objective reality using reliable and valid measures" (p. 3). The underlying assumptions of the test metaphor become questionable, however, when applied to performance appraisal. For example, work settings are assumed to permit the reliable and valid measurement of objective performance, but increasing numbers of employees now work in service jobs, where objective results are unavailable, or in groups, where individual performance results are difficult to measure. Further, rather than assessing performance objectively and accurately, raters' evaluations are often subjectively biased by cognitive and motivational factors (Longenecker, Gioia, and Sims, 1987; DeNisi and Williams, 1988). Finally, supervisors often apply very different standards to employee performance, resulting in inconsistent, unreliable, invalid evaluations across the organization (Folger, Konovsky, and Cropanzano, 1992). In light of these questionable assumptions, Folger, Konovsky, and Cropanzano (1992) suggested that performance appraisals may be viewed more appropriately as disputes over the allocation of outcomes such as merit pay, promotion, or status. They argued that a due-process metaphor, consistent with theories of procedural justice, may better address the appraisal situation than does the test metaphor.

Applying the Due-process Metaphor to Performance Appraisal

Due process of law, a right guaranteed under the Fifth and Fourteenth Amendments of the United States Constitution, is intended to ensure individuals fair treatment when charged with legal violations. There are three essential features of due process: (1) adequate notice - that individuals be held responsible for obeying laws only when they have been published or otherwise communicated and for satisfying only those charges explicitly presented; (2) a fair hearing - that all relevant evidence to a proposed violation be presented and considered and that charged parties be given the opportunity to provide commentary; and (3) judgment based on evidence - that judicial decisions be free from external pressures, personal corruption, and more evident sources of bias (Folger, Konovsky, and Cropanzano, 1992).

Folger, Konovsky, and Cropanzano (1992) have developed three characteristics of a due-process appraisal system. Adequate notice in the context of performance appraisal requires organizations and their agents to publish, distribute, and explain performance standards to employees, to discuss how and why such standards must be met, and to provide for regular and timely feedback on performance. Fair hearing requires a formal review meeting in which an employee is informed of a tentative assessment of his or her performance and how it was derived by his or her manager, who should have a familiarity with the employee's performance based on sufficiently frequent observation of the individual's work or work product. Employees are also permitted to challenge this assessment and to provide their own commentary by conducting and presenting a self-appraisal. Finally, fair hearing requires that employees receive training in the appraisal process to ensure that they possess the knowledge needed to challenge assessments perceived to be unfair. Judgment based on evidence requires the organization and its agents to apply performance standards consistently across employees, without yielding to external pressure, corruption, or personal prejudice. Evaluations should reflect the organization's efforts to use principles of honesty and fairness, and employees should be given an explanation of performance ratings and of reward allocations and be provided with an opportunity for discussion. Further, the appraisal system should be based on the best technology available in form content, format, and appraiser training to minimize bias. Thus the due-process appraisal system provides employees with substantial input into the appraisal process.