Performance Appraisals: Implications of Legal, Career, and Cultural Factors

Performance Appraisals: Implications of Legal, Career, and Cultural Factors

It is extremely important for companies and employers to consider the implications of performance appraisals, particularly within the realm of organizational culture, career development, and cross-cultural relations. In addition to objective performance measures and the vast majority of dimensions explored within judgment evaluations, an employee typically needs to be reviewed not only in accordance with their job description, but also their role within a larger context. Likewise, employers need to protect themselves legally and socially from lawsuits and bad press; this is where legal ramifications and cross-cultural implications come into play.

Organizational culture is the overall type of attitude and characteristics desired by the company. This means that it is usually outside of an individual's work or job performance. Rather, it captures to what degree an employee fits within that organizational culture.

If an individual's ability to fit into the company culture does not typically play a tremendous role in employee evaluations; it does play a more extensive role in hiring individuals who will fit the company's organizational culture. Nevertheless, because it can sometimes become a roadblock between two or more individuals within a company, an employee's fit within the organizational culture may need to be examined during a performance appraisal. Those individuals who contribute to the welfare of the organization beyond their job description are considered to have a high level of organizational citizenship behavior. Organizational psychology research has identified five dimensions of organizational citizenship behavior that can impact a manager's judgment evaluation just as much as the employee's objective productivity. Altruism, courtesy, conscientiousness, civic virtue, and sportsmanship are the five dimensions of organizational citizenship behavior that can make such a profound difference during a performance appraisal.

Nevertheless, there is controversy as to whether organizational citizenship, along with the ability for an individual to fit within organizational culture, is a legitimate area of concern to consider when conducting a performance appraisal. By utilizing this information, employers may put themselves at risk of a wrongful termination lawsuit, particularly when the employee in question performs their job duties excellently, but may not fit into the organizational culture, or practice ideal organizational citizenship. Again, the best protection you can offer yourself is to document everything and be consistent in how you address such matters.

But organizational culture is not the only type of culture that affects performance appraisals, nor is it the only type of culture that is impacted by the performance appraisal itself. There are numerous cross-cultural implications and limitations. In many countries and cultures, employee appraisals focus less on specific job performance, and more on the employees' organizational citizenship and ability to fit within the company's culture.

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Moreover, with advanced technology providing businesses with workers throughout the world, it's important when conducting performance reviews to appreciate the cultural norms, beliefs, and values that exist where your employee lives, even if they work for you in an entirely different country. When a company insists upon evaluating employees in one culture the same as employees that live in a completely different culture, the performance appraisals can be tremendously ineffectual, and possibly inappropriate. Employees who live within other cultures, but who work for your company, may be excellent employees at performing at their job, yet may have entirely different standards and values within their culture. Rather than penalizing these individuals for coming from a different culture, simply recognize how best to communicate what you need -- need, not want -- from them in order to do their job effectively, and let the rest of the cultural differences rest.

It's also important for managers and supervisors to recognize the cultural background of their employees in regard to any evaluations that take place by the employee, the supervisor, or the company as a whole. Some cultures value assertiveness and personal accomplishment, while others put a greater focus on interpersonal connection and a sense of community within the business. These types of cultures are going to clash to some degree; as an employer, it is important that you understand what works for your employees, including what type of motivation is most likely to be successful, as well as ensuring that your performance appraisal makes sense to the individual receiving it.

Culture is not the only issue when it comes to large-scale complications arising from performance appraisals. As mentioned several times throughout this course, there can be legal ramifications of the choices made by companies and managers when it comes to performance appraisals. There are numerous federal laws that protect individuals against various types of discrimination, as well as any misrepresentation or defamation. This is particularly important when it comes to performance appraisals, because as employees continue throughout their career, they may require references, some of which are expected to be in-depth (which may not be legally required, but in practical terms may connote that a potential employee has nothing to hide). In this way, legal implications apply to performance appraisals when the appraisal is first completed and provided to the employee, when an appraisal is used to measure an employee's progress or success in future years, and when an employee requires references for future employment elsewhere. Any illegal or questionable decisions made during these performance evaluations have the potential to be highly problematic when not completed correctly.

In order to prevent lawsuits, and to ensure that a company is practicing fair employment policies, there are a few things the company can do to minimize any potential pitfalls. The appraisals need to be job-related, based on behaviors, rather than traits, as objective as possible, related to specific functions of a job, rather than only an overall assessment, and only apply to actions or behaviors that are within the control of the individual being rated. For example, imagine a professional grant writer who works for a nonprofit organization. In response to a particular funding opportunity, it is decided by upper management that the company needs to design a program in order to submit a proposal for funding. As a grant writer would typically be considered administrative, designing a program to provide services would usually fall to direct service management. Now, imagine that after the direct service workers design a program, the grant writer composes an excellently written proposal and submits it to the potential funder. If the proposal is rejected, the initial response may be to criticize the grant writer. However, particularly when documenting a performance appraisal, or even a response to an immediate issue such as this, it is critical for management to examine whether the grant writing was substandard, or if the proposal was rejected due to poor planning on behalf of the direct services staff.

If you own or manage a company and wish to further minimize any risk of illegal actions when it comes to employment and performance reviews, visit the Employment Opportunity Commission (EEOC), which provides guidelines for any selection procedure that may be used when making decisions regarding employment. Such decisions may include hiring, promotion, demotion, layoff, transfer, early retirement, and discharge. Employers who operate with a standard procedure for performance appraisals, and who clearly document all employment issues, are more likely to avoid lawsuits or claims of discrimination; they are also far more likely to successfully defend themselves if such a claim arises.

Of course, performance appraisals also have significant implications for the individual being evaluated. Both immediate and long-term career aspirations can be tremendously impacted by the type of evaluation given to the employee. Reports have indicated that as many as half of all employees perceive bias on the part of the appraiser or rater that reflects unfairly on their performance appraisal. The inherent subjectivity of most performance appraisals is a valid concern for employees, particularly those who receive only a judgmental evaluation and are not given the opportunity to perform a self-evaluation, or discuss ratings before the appraisal becomes formal and is submitted to human resources. Some companies have less of an issue than others; employees of very large companies report less perceived bias than those who work in small businesses, government agencies, and public sector organizations, such as nonprofits. Nevertheless, most employees across the board want to improve the feedback process, increase the frequency of evaluations, and make the system more objective.

Obviously those being evaluated are going to have an impressive variation of responses, largely dependent upon the type of performance review given, as well as the results of the evaluation. As we discussed challenges and problems with various performance measurement methods, there were several mentions of particular types of reviews creating certain reactions within an employee, or within an entire department. Performance evaluations typically include some criticism and even the most successful employee tends to be apprehensive about the performance appraisal process and responds much more passionately to even a single criticism, rather than an abundance of praise. Because of this, conflicts may arise between an employee and their supervisor, between an employee and their team of peers, between an employee and their clients or customers, and so on. The combination of apprehension and anxiety along with criticism has the potential to be very damaging to, not only the employee, but the organization as a whole.

Moreover, once the employee leaves their job, they may have need in the future of some amount of information from their performance appraisals. This is especially true if the employee was terminated after a review, or from a company or agency that is part of a connection with the employee's old position. For example, an individual who worked as a Child Protective Services investigator for the State of Missouri may not need to worry about their past evaluations if they take a position in a completely unrelated field. However, if they apply for a position, such as a parole officer, that is still with the State of Missouri, all of their former performance appraisals might be reviewed prior to hiring. Thus, many employees have a legitimate concern about any negative or inaccurate performance reviews, as they may seriously impact the individuals future plans -- not only with the company, but with their entire career.