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Abstract
This article presents a pedagogical exercise where students can experience bias and chance in a performance appraisal process. Students in the role of Vice-presidents interview and make decisions regarding employment and pay for analysts. Student analysts are interviewed and either fired, promoted, or given pay increases based on the interview and the Vice-president's information. Ultimately, it is revealed that there is no difference in true performance among analysts and that all decisions were based on bias and chance. The article provides an extensive literature review and teaching notes to support the problems with the administrative use of performance appraisals.
Keywords: Performance appraisals, critical thinking, pedagogical exercise
Introduction
Performance appraisals (PA) present management scholars with a dilemma: they are ubiquitous in management practice yet they are routinely criticized in the management literature. The purpose of this article is to help students come to grips with this dilemma by providing an exercise where they can directly experience some of the issues. The focus will be on the administrative application of performance appraisals, where they are used in decisions related to pay, promotions, and terminations, and where it is essential that the appraisal be unbiased, fair, and accurate.
In this light, consider the following quote from W. E. Deming (1982/2000) regarding the PA:
It nourishes short-term performance, annihilates long-term planning, builds fear, demolishes team-work, nourishes rivalry and politics. It leaves people bitter, crushed, bruised, battered, desolate, despondent, dejected, feeling inferior, some even depressed, unfit for work for weeks after receipt of rating, unable to comprehend why they are inferior. (p. 102)
Deming was a recognized guru in the quality movement and famous for his critique of performance ratings, identifying them as one of management's deadly diseases. And he was not alone. Douglas McGregor (1957) was also critical of PAs when used for administration. He identified two deep roots to the problem. First, there is a "violation of the integrity of the personality," wherein managers are uncomfortable "playing God" and having to "judge the personal worth of a fellow man" (p.90). Second, there is a dehumanizing aspect; employees are objectified as products in an inspection process. Here, the manager's resistance to PAs stems from "an unwillingness to treat human beings like physical objects" (p. 90). Later,...