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Articulating appraisal system effectiveness based on managerial cognitions

Robert P. Wright and Frenda K.K. Cheung
Department of Management and Marketing, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong
Abstract
Purpose The aim of this article is to investigate how managers see, interpret and make sense of their performance management system experiences and recommend the way forward for both policy and practice, in what makes effective appraisal systems. Design/methodology/approach The study applied the repertory grid to elicit the personal constructs of how managers make sense of their appraisal experiences. The cognitive mapping methodology allows the researcher to go deep into the respondents theories in use to provide new insights on how they think. This, in turn, allows a better understanding of the language managers use to make sense of the experiences. Findings Core conceptual dimensions, cognitive maps and cluster diagrams were generated, providing implications for research, practice and new directions for future research. Research limitations/implications Although the application of the grid technique was time-consuming, the ner grain level of analysis provided a deeper appreciation of managers theories in use. The study provides a cross-sectional view of the current state of managerial cognitions. Findings open up new ways of thinking and new way of doing in appraisal research and practice. Practical implications The ndings provided very meaningful insights on what managers look for in appraisal system effectiveness, along with the documentation of how they make connections between their own elicited personal constructs on system effectiveness. Originality/value The paper makes a modest contribution to both theory and practice from the perspective of managerial cognitions about the entire appraisal systems using a method originating from clinical psychology. Keywords Performance management systems, Performance appraisal, Management effectiveness, Cognition, Hong Kong Paper type Research paper

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Received 26 July 2004 Revised 19 July 2005 Accepted 21 September 2005

I will state my belief that cognitive appraisal research will continue to be a viable, vibrant area for research, although I think that the cognitive research in the future will need to be different from the cognitive research in the past (Angelo DeNisi, 1996, p. 173).

Personnel Review Vol. 36 No. 2, 2007 pp. 206-230 q Emerald Group Publishing Limited 0048-3486 DOI 10.1108/00483480710726118

Introduction In the midst of both regional and global economic turbulence, organizations are facing an unprecedented need to downsize, restructure and re-engineer in order to remain competitive and to survive (Grote, 1996; Stivers and Joyce, 2000). With changing paradigms of the way we do business and manage people, issues of productivity and the evaluation of performance have risen to the top of every decision-making agenda. In this respect, performance management systems have come to play an even more

indispensable role in helping organizations reach their goals of productivity. When implemented and managed properly, appraisal systems as a value-added service can give a company a competitive edge by helping it achieve its business strategies (Allan, 1994; DDI, 1994; Kotter and Hesketh, 1992; Martin and Bartol, 1998; Murphy, 1993; Orpen, 1997; Roberts, 1996; Stivers and Joyce, 2000). Yet, in view of their rise to importance, effective and successful appraisal systems in organizations are not common as one might assume given the plethora of research undertaken in this area of human resource management (Bretz et al., 1992; Murphy and Cleveland, 1995). Most appraisal systems fail (Carson et al., 1991; Deming, 1986; DeNisi, 1996; Longnecker and Goff, 1992; Phillips, 1987; Schay, 1993; Schweiger and Sumners, 1994; Wright and THC, 1999). Many studies, though noteworthy in advancing the eld, have been conducted based on a limited focus on the mechanics (or aspects) of the system rather than the system as a whole (Bernardin and Pence, 1980; Ilgen et al., 1979; Latham and Yukl, 1976, Allan, 1994; Malinauskas and Clements, 1987; Meyer et al., 1965; Smith, 1986). Hence, never fully presenting the bigger picture of how the core activities of the appraisal process hang together in relation to each other. Perhaps we have been too preoccupied at the micro level and not enough due diligence on how appraisals and performance management in their entirety impacts upon corporate initiatives and business strategies (DeNisi, 1996; Huselid, 1995). Similarly, relative to the volumes of research on appraisal and appraisal system effectiveness, not much is known about how organizational actors (both raters and ratees), party to the appraisal process, construe and make sense of their appraisal experiences within the bigger framework of the performance management system. Research of this kind in the past, have purely focused on the rater (per se) in their decision making role when making judgements about employee performance. We believe the type of cognitive research advocated in this paper, built on the solid foundation of past works, makes a modest advancement to the eld. Investigating managerial mental frames of reference will allow us to go deeper into better understanding what people look for in appraisal system effectiveness and hence, design. As such, this paper extends the present mainstream research on appraisal cognitions by investigating the following fundamental research questions: RQ1. How do practicing managers see, interpret and make sense of their performance management experiences? RQ2. In what way can these managerial cognitions of appraisal system experience lead to a deeper understanding of the way forward in designing more effective performance management systems? Why managerial cognitions of appraisals? Landy and Farrs (1980) classic review gave birth to the cognitive era in appraisal research. Prior studies purely focused their attention on appraisal rating scales and rater error training as means of increasing the accuracy of performance evaluations. But Landy and Farr (1980) advocated the real important part of the appraisal equation was the rater and how they collected and used performance information to make appraisal decisions. They convincingly argued that raters engaged in cognitive processes closely related to the decision making process and that if we are to fully comprehend how raters make appraisal decisions, we would be able to make appraisals

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more accurate. By redirecting appraisal research towards looking at raters as key decision makers (and in effect encouraging us to think about rater cognitive processes) Landy and Farrs (1980) vision opened up new horizons in providing a deeper understanding of what really happened in appraisals. Feldmans (1981) seminal work on beyond attribution theory throws more light on the importance of advocating a cognitive orientation in appraisal research if we are to better understand the phenomenon (Feldman, 1986; Landy and Farr, 1980; Wherry and Bartlett, 1982). Ilgen and Feldman (1983) further argued that if appraisals are to improve, a better understanding of the perceptions of the whole system needs to be achieved. They proposed that with more understanding from a cognitive perspective, in how actors make sense of and interpret their appraisal experiences, appraisal systems can be better designed, appraisers better trained, and more accurate ratings would be likely (Bernardin et al., 1982; DeNisi et al., 1984). These early pioneers called for a more global approach to the appraisal system and advocated the importance of social cognition principles as a way of creating a more thorough understanding of the appraisal process. DeNisis (1996) program of research in this area also raised the bar even further in how cognitive research can move the eld in bringing new insights on how we see, and how raters make sense of their appraisal experiences. He makes a nice comparison between different cognitive appraisal approaches and how past works had focused on different aspects and variables of the appraisal process to better understand the whole system of appraisals. His studies on the rater as not just a messenger, but as an active (selective) seeker of information (often imposing their own preconceived notions of performance/schematas upon the information collected) and the perceptual shaping power of the purpose of appraisal systems inuences what information raters searched for in making judgements about performance, made it even more important to look at appraisal cognitions. Raters do not just store raw appraisal information; they often use different information acquisition strategies to solicit different information, interpret them, and then store this interpreted representation for decision-making. As this process of construing continues, the rater begins to build an impression of a particular worker, which inevitably results in the employee being categorised/labelled and a schema activated for that worker. Hence, the schema activated for that employee becomes crucial to the appraisal process, since it provides the framework for interpretation. Such endeavours opened up new avenues of understanding about appraisals and the appraisal process (DeNisi et al., 1984). Another reason for researching the importance of appraisal cognitive perceptions was advocated by Longnecker and Nykodym (1996) whom nicely articulated that the cognitive perceptions people have about performance appraisals and performance management systems was a key determinant of a systems long term success or failure (DeNisi, 1996; Wright, 2004a). Hence, if employees were not happy with appraisals, they were subsequently unwilling to take an active part in the process, do not see any value in it, which in turn creates low morale and this inevitably affects productivity. Therefore, if we can have a better understanding of employees cognitive thought-processes, we can nd ways of tailoring appraisal systems in a way that satises the key stakeholders for system effectiveness. Yet, although past appraisal research has also focused on gauging employees satisfaction levels (see Bernardin and Beatty, 1984; Dipboye and de Pontbriand, 1981;

Hind and Baruach, 1997; Laumeyer and Beebe, 1988; Mount, 1983, 1984; and Pooyan and Eberhardt, 1989), they did not examine in any depth the mental frames of reference/cognitive thought-processes of how respondents construed their entire appraisal experiences. Moreover, almost all of these past studies have largely depended on questionnaires to measure employees perceptions of appraisal systems. Whilst there is nothing wrong with this, we believe that researching cognitions requires the use of a methodological technique that is able to capture respondents mental models without the bias of predetermined questions on a questionnaire that may in many ways, inuence and frame their responses. We believe the emphasis of the cognitive orientation towards appraisal research is to go much further beyond the supplied and predetermined questions of a survey instrument to really bring to the surface, the under-the-skin phenomena (Hodgkinson, 2003) of how people see, interpret and make sense of their worlds using their own theories-in-use, in their own working language (with a minimum of researcher bias). Only then, will we truly venture deep into the mental psyche of how and why people think about their life experiences. More recently, several noteworthy works have indicated the need to head in this new research direction if we are to better explain, predict and understand the entire appraisal process (Bretz et al., 1992; Fletcher, 2001; Hodgkinson, 2003; Murphy and Cleveland, 1995; Sadler-Smith, 1998; Wright, 2004a; Wright and Lam, 2002). One such methodology that has received some attention in the cognitive front is that of George Kellys (1955) repertory grid technique, designed to elicit the personal constructs of how real subjects perceive their real life experiences. Thus far, the application of this technique in management/human resources studies has been encouraging and it is this approach that we used to investigate our research questions (Borman, 1987; Dunn et al., 1987; Easterby-Smith et al., 1996; Jankowicz, 1990, 2004; Senior, 1996; Stewart and Stewart, 1981; Swan, 1997; Wright, 2004a). Sample A total of 100 individual repertory grid interviews (each lasting an average of two hours) were administered to practicing managers from various industries (covering the government sector, airlines, telecommunications, manufacturing, services, and property development organizations). Managers had an average of ten years of experience with appraisals and had spent an average of six years in their present organization. All of the managers had gone through at least one appraisal cycle in their present organization in the immediate past 12 months. Males accounted for 36 percent and females 64 percent of the entire sample. Method Repertory grid technique As the present investigation was more concerned with understanding the way people make sense of their worlds using their own language (and not that of the researcher), we found Kellys (1955) repertory grid technique (RGT) to be an appropriate methodology (Easterby-Smith et al., 1996; Fransella and Bannister, 1977; Stewart and Stewart, 1981). Grounded in Personal Construct Theory, this cognitive mapping tool has a high degree of reliability (Adams-Webber, 1989; Slater, 1977; Smith, 2000) and is able to produce levels of analysis that are statistically rigorous while simultaneously producing visual cognitive maps (principal component analysis) and Focus Tree

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Diagrams (cluster analysis) that are easily understandable to practicing managers (Fransella and Bannister, 1977; Jankowicz, 1990, 2004; Stewart and Stewart, 1981; Wright, 2004b). All analyses have been carried out using the RepGrid program (Centre for Person Computer Studies, 1993), which has been specically designed to treat repertory grid data. Grid procedure used to elicit personal constructs of appraisal system effectiveness Three core procedures are central to the successful administration of the grid technique: the choice of appraisal elements, the elicitation of personal constructs, and the rating of the elements given respondents constructions of their appraisal worlds. Each manager was shown nine representative appraisal system elements (activities) on 3 x 4 cards to elicit their personal views about them. These key appraisal system activities were derived from an extensive review of the relevant literature and feedback from practicing managers (throughout numerous pilot tests) on what constituted a typical appraisal system. Though it is clearly acknowledged from the outset that there are many other possible aspects of an appraisal system, we believe that the nine appraisal system activities identied for the purposes of this investigation provided a reasonable reection of the most commonly repeated core activities found in most performance management systems. As such, by eliciting the cognitive perceptions of the way managers make sense of their appraisal system experiences using these nine core elements, we were condent of tapping into all four corners of managerial cognitions of appraisal system effectiveness (Wright, 2004a; Wright and Lam, 2002). Crosschecks from real managers and the literature conrmed these appraisal system elements. More specically, all appraisal systems have some form of appraisal training in place to equip staff with the necessary skills and knowledge on how to carry out their roles (Bernardin and Pence, 1980; Feldman, 1986). Both the annual formal appraisal interview (Clement and Stevens, 1986; Pearce and Porter, 1986), along with on-going progress review feedback (albeit formally or informally) (Fisher, 1979; Meyer, 1991) also constitute a major part of appraisal systems. This is complimented with the ubiquitous existence of self-appraisals (again, whether formally or informally) (Farh et al., 1991; Lane and Herriot, 1990). Another important component of an appraisal system is the guidelines and notes (Industrial Relations Review and Report, 1994a, b) to help employees have a better understanding about the system, its processes and important dates of the appraisal cycle. The performance criteria and standards used to appraise employee performance is another fundamental aspect of any appraisal system (Bobko and Colella, 1994), along with additional work goals and objectives (Erez et al., 1985; Latham and Steele, 1983) set between the appraiser and appraisee on what is to be achieved during the appraisal period (together, performance standards/criteria and the setting of work goals establishes the well known expression: what gets measured, gets done!). Finally, the appraisal form is seen as the backbone of the entire system as it is the ultimate data capturer of performance information without it appraisal information cannot be documented and used for personnel decisions (Industrial Relations Review and Report, 1994b). (Please see Wright, 2004a for a more detailed account of how these appraisal activities were justied). Therefore, the supplied appraisal system elements used in the present study are summarised as: E1: Attending performance appraisal (PA) training; E2: Attending/conducting the annual interview; E3: Reading appraisal guidelines and

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notes; E4: Attending/conducting progress reviews throughout the year; E5: Carrying out the performance criteria /standards used to appraise performance; E6: Designing/thinking about designing the PA system in the way you prefer; E7: Reading/lling in the appraisal form (design of the form); E8: Appraising yourself (formally or informally); and E9: Setting your own work goals. Appraisal element, E6, managers preference for the type of appraisal system they perceived as being highly effective (Grote, 1996; Hartle, 1995; Murphy and Cleveland, 1995) was deliberately included in the list to distinguish the actual from the desired system. Given these representative appraisal system elements, managers were shown each of the nine appraisal activities in groups of threes called a Triad and asked the Kellyian question: In what way are any two of these similar, but different from the third, in terms of how well or how not well they are done in your organization? Using E1, E2 and E3 as an example (E1: Attending appraisal training/E2: Attending the annual interview/E3: Reading appraisal guidelines and notes) a typical response is usually in the form of a construct such as, E1 and E2 are similar because I can contribute and that is why it is done well; whereas E3 is different and not well done because I dont get a chance to have my input. (Hence: I can contribute - I dont get a chance to have my input). According to Kelly (1955), a construct is always bi-polar in nature and reects a dimension from which an individual formulates perceptions to make sense of the world. Each appraisal system element was triadically compared twice, using different combinations to elicit as many personal constructs as possible. Once the constructs were elicited, the manager was then asked to rate each of the nine appraisal activities using a ve-point scale based on their own generated bi-polar constructs (used as semantic differentials); A rating of 1 represented elements that were closest to the left-hand side of the bi-polar construct elicited; and a rating of 5 represented elements that were best explained by the bi-polar construct pole on the right of the grid (Please see Figure 1 which shows an example of an aggregated repertory grid). After all of the elements were rated, the respondents were asked to choose the side of the bi-polar constructs that in their view, represents a key attribute of an effective appraisal system. These preferred construct poles are indicated with a check mark in Figure 1. Upon the completion of this exercise, all grid respondents constructs and ratings were aggregated (Bougon, 1992) to generate one aggregate repertory grid as shown in Figure 1. The data was then inputted into the RepGrid programme to generate a principal component analysis, collective cognitive maps, and cluster analysis for discussion. It is important to note that the present investigation supplied the nine appraisal system elements to each of our 100 in-depth repertory grid interviews because we were interested in (eliciting and) comparing managerial cognitions across the board. According to the repertory grid methodology literature, you need to keep either the elements constant or the constructs constant to make any meaningful comparison between elicited cognitions of individuals (Fransella and Bannister, 1977; Jankowicz, 1990, 2004; Stewart and Stewart, 1981; Wright, 2004b). As the present study was designed to elicit the personal constructs of the way managers see, make sense of and interpret their appraisal worlds, we believed it to be appropriate and reasonable to supply the elements to our respondents. Although we acknowledge the presence of some degree of researcher bias here, our results below do show that the constructs

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Figure 1. Sample of aggregated collective grid of all 100 managers

elicited are entirely based on respondents own words, displaying their own theories in use, based on their own real-life appraisal system experiences. Results Most frequently elicited super-ordinate constructs of appraisal system effectiveness The 100 face-to-face in-depth repertory grid interviews produced 496 useable bi-polar personal constructs of how managers perceive their organizations performance appraisal systems. We employed a data reduction method to cluster (group) similar constructs together using two experts for inter-rater reliability. The exercise allowed us to aggregate and reduce the original 496 elicited constructs into 19 major collective bi-polar construct groupings (with a 98 percent reliability between the two experts). Table I provides a sample of how one collective construct was generated from 33 individually elicited constructs from respondents. The coded numbers on the left of the table signies the corresponding respective construct elicited from different respondents for cross-reference purposes. Table II shows these major collective appraisal system constructs with their frequency count in the respondents own language. For example, if you take the sixth most frequently occurring construct in the table (tailored to help individual development and learn not tailored to help individual development and learn), you will notice that this cognitive perception was repeated 33 times from a total of 496 elicited constructs. The top ve most frequently occurring constructs, accounting for 50 percent of the total pool of constructs elicited, were concerned with the following issues: standards, guidelines and measurements being clear, the existence of some form of involvement and participation in the process, that appraisals were objective and preference for more control within the system. Other key concerns for system effectiveness (highlighted in bold) that appeared prominently among the most frequently occurring themes from the 496 elicited constructs were: tailored to help individuals develop and learn, meaningful, sense of ownership, adds value, linked to business strategy, and the need to make appraisals more challenging. Fundamental core perceptual dimensions based on construct loadings Table III shows the construct loadings on two principal components (namely the x-axis and y-axis on two dimensions in psychological space). Given the constructs with the heaviest loadings, component 1 is labelled, sense of ownership no sense of ownership and component 2, can be measured cannot be measured. Components 1 and 2 accounted for 79 percent of the total variance. Thus, once we can identify the two core perceptual dimensions from which all of the other constructions of appraisals are elicited, we can clearly describe effective appraisal systems by using these core dimensions when plotted on a two dimensional map (see Figures 2 and 3 later). Our ndings indicate that the most preferred/effective appraisal system is one in which employees have a sense of ownership, and which also clearly lays down a measurement system. Construct correlations of key perceptions of system effectiveness Table IV shows the correlation between the major constructs elicited in this investigation. This correlation table is generated by the RepGrid program (Blowers and OConnor, 1996; Centre for Person Computer Studies, 1993; Easterby-Smith et al.,

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Coded elicited constructs

7 11 13 18 24 60 65 R75 107 108 119 144 145 158 178 189 193 215 216 R220 230 243 253 260 R261 264 R275 279 281 294 R300 R305 307

Notes: From a total of 496 bi-polar constructs elicited from 100 repertory grid interviews, two experts (with inter-rater reliability of 98 percent) grouped 33 constructs together due to their fundamental similarities to represent one collective construct. This data reduction method was administered to the remaining constructs to depict any emerging knowledge structures. A total of 19 collective aggregate constructs were generated using this data reduction method. In the above example, six constructs were reversed so that all preferred poles were aligned on the left-hand side to facilitate easier grouping of the constructs a Represents respondents preferred pole when asked in your view, in designing a highly effective appraisal system, which side of the bi-polar constructs do you prefer?

Table I. Sample of data reduction method used to generate one collective construct from 33 individually elicited appraisal constructs from 100 managers
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Not seen as important by rm (out-of-date/not consistently applied) Theoretical Not seen as important priority Does not impact on my people Does not benet me as much Too academic Looking into past a Pretty sure learned something Does not help to understand the process Does not tell you what is expected More constraints/considerations Does not affect staff directly only aid Does not necessarily help improve the performance Not designed by me do not know meaning Short-term done just to entertain management Does not help me improve Out of my direct responsibility May not be joint interest Very mechanical a More thinking Cannot change Do not give reection of true self Do not help staff improve on their own Not fair evaluation a Tailor-made to everyone Not job related a More exible and tailor-made to individual needs Not tailored to my needs Can not learn a lot Can not apply a job nature a Can appraise based on job nature a Encouraged to do better No direction to follow

Collective construct labelled based on individually elicited constructs from different managers Tailored to help individual development and learn $ Not tailored to help individual development and learn (33)

Important aspects of career development Allows individual to know if performance meets expectations to me motivator Very important impact on my people a Done proactively a Part of my job a Forward looking After done, not sure if actually learnt a Helps us to understand the system a Helps what is expected a Clear and good understanding a Meaningful and important a More positively directed really helps job a Standards set by me a Long-term helps me understand my ability a Motivate me because helps me to improve a I have personal responsibility a In the interest of employee a A lot of learning done Results are minimal a Can be creative a Gives reection of true self a Helps staff improve on their own a Helps to improve my performance There is restrictions a Job related Rigid not tailor-made/not exible a Tailored to my situation a Can learn a lot a Can learn a lot Too preliminary/do not appraise staff effectively Doesnt provide any incentive a Clearly laid down and help me achieve

a Important a

Collective grid bi-polar constructs $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Standards/guidelines and measurements are not clear There is not involvement There is no feedback and participation Subjective Do not have control Not tailored to help individual development and learn Not well prepared Not seen as important Not easy to understand Inadequate guidelines Not meaningful Time consuming Can not be measured No sense of ownership Does not add value Not useful General and not focused Not linked to business strategy Not challenging Total number of individual constructs 63 50 45 44 39 33 32 30 29 26 19 14 13 12 11 10 9 9 8 496

Number of individual constructsa

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Standards/guidelines and measurements are clear There is involvement b There is feedback and participation b Objective b Have control b Tailored to help individual development and learn b Well prepared b Seen as important b Easy to understand b Adequate guidelines b Meaningful b Not time consuming b Can be measured b Sense of ownership b Adds value b Useful b Specic and focused b Linked to business strategy b Challenging

Notes: aThis column shows how many individually elicited constructs from practicing managers represented one collective construct. Each collective grid bi-polar construct is based on similar individual constructs being grouped together to formulate an aggregate construct. Two experts were employed to determine these groupings with an inter-rater reliability of 98 percent; brepresents respondents preferred pole when asked, In your view, in designing a highly effective appraisal system, which side of the bi-polar constructs do you prefer? New emerging constructs (different from the documented literature) are shown in italics

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Table II. 100 practicing managers collective constructs of appraisal system effectiveness

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C1 C2 C C4 C5 C6 C7 C8 C9 C10 C11 C12 C13 C14 C15 C16 C17 C18 C19

Notes: Constructs with the highest loadings are indicated in italics; a Indicates respondents preferred constructs when evaluating performance management systems; bPrincipal component 1 (x-axis) is labelled as sense of ownership no sense of ownership; cPrincipal component 2 (y-axis) is labelled as can be measured can not be measured; Components 1 and 2 accounted for 79 percent of the total variance

Table III. Construct loading on two principal components all 100 managers Collective grid bi 2 polar constructs $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Standards/guidelines and measurements are not clear There is no involvement There is no feedback and participation Subjective Do not have control Not tailored to help individual and learn Not well prepared Not seen as important Not easy to understand Inadequate guidelines Not meaningful Time consuming Can not be measured No sense of ownership Does not add value Not useful General and not focused Not linked to business strategy Not challenging Percentage of variance for each component PrinCom 1 (x 2 axis)b 1.25 2.99 2.21 0.91 1.70 1.50 0.46 0.85 1.21 0.42 1.67 1.89 1.10 3.02 1.26 2.60 3.65 2.78 2.99 68.61 PrinCom 2 (y 2 axis)c 1.36 2 0.15 0.33 1.17 0.49 0.03 0.05 0.99 0.43 1.79 0.22 0.19 1.40 2 0.42 2 0.44 2 0.70 2 1.11 2 0.18 2 0.05 10.53

Standards/guidelines and measurements are clear There is involvement a There is feedback and participation a Objective a Have control a Tailored to help individual develop and learn a Well prepared a Seen as important a Easy to understand a Adequate guidelines a Meaningful a Not time consuming a Can be measured a Sense of ownership a Adds value a Useful a Specic and focused a Linked to business strategy a Challenging

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Figure 2. Collective cognitive map of all 100 managers in psychological space

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Figure 3. Strategies for manoeuvre for each appraisal system element to effectiveness (location of E6)

Abbreviated constructs 0.49 0.63 0.57 0.57 0.79 0.43 0.92 0.47 0.67 0.50 0.49 0.76 0.83 0.35 0.62 0.23 0.65 0.30 0.38 0.19 0.33 0.35 0.50 0.35 0.50 0.25 20.09 0.00 0.75 0.59 0.40 0.35 0.62 0.44 0.62 0.44 0.66 0.14 0.35 0.41 0.41 0.29 0.11 0.32 0.29 0.53 0.80 0.63 0.32 0.81 0.75 0.57 0.16 0.75 0.42 0.66 0.93 0.74 0.41 0.89 0.80 0.46 0.32 0.80 0.29 0.89 0.81 0.43 0.67 0.75 0.50 0.35 0.00 0.75 0.35 0.65 0.32 0.41

C1 C2 C3 C4 C5 Std Inv Fed Obj Con

C6 Tai

C7 Pre

C8 Imp

C9 C10 C11 C12 C13 C14 Und Gdl Mnf Tim Mea Own

C15 Add

C16 Use

C17 Spe

C18 Lin

C19 Cha

C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11 C12 C13 C14 C15 C16 C17 C18

Clear standards Involvement a Feedback a Objective a Control a Tailored a Prepared a Important a Understandable a Guidelines a Meaningful a Not time consuming a Measurable a Ownership a Adds value a Useful a Specic a Linked to business

0.41 0.49 0.40 0.45 0.55 0.45 0.95 0.59 0.88 0.84 0.92 0.91 0.85 0.61 0.76 0.77 0.87 0.84 0.47 0.09 0.35 0.25 0.41 0.25 0.79 0.35 0.71 0.62 0.76 0.83 0.78 0.44 0.63 0.62 0.72 0.85 0.22 20.13 0.50 0.35 0.16 0.07 0.32 0.44 0.35 0.37 0.46 0.20 0.45 0.44 0.63 0.62 0.53 0.38 0.05 20.23 20.06 2 0.08 0.13 0.27 0.72 0.23 0.75 0.69 0.72 0.73 0.82 0.54 0.80 0.77 0.81 0.84 0.47 0.35 0.35 0.37 0.58 0.39 0.61 0.89 0.87 0.96 0.87 0.63 0.75 0.72 0.54 0.97 0.90 0.69 0.93 0.69 0.83

Notes: Constructs with the highest correlations are indicated in italics. aindicates respodnents preferred construct poles when evaluating performance management systems (please refer to Table II for full listing of the elicited constructs). The RepGrid program calculated construct correlation given respondents ratings of the system elements based on their collective constructs. The RepGrid program is specically designed to analyze grid data generated from small samples and, as such, the correlations are higher than more conventional large questionnaire samples. Given past grid studies, the correlations in this table are in the direction expected

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Table IV. Construct correlation using RepGrid program All 100 managers

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1996) based on the collective aggregated grid incorporating the average ratings and elicited collective constructs of our sample group as shown in Figure 1 earlier. Of particular interest is the involvement construct, (C2), which correlated highly with eight other constructs signifying its importance in how managers construe and interpret their appraisal experiences. Specically, when there was involvement in the system, there was a sense of ownership (C14), control (C5), higher chance that appraisals would be linked to strategy (C18), challenging (C19), useful (C16), specic (C17), considered to be more meaningful (C11), and that time would be better utilized (C12). Construct 18, (C18), linked to strategy also appeared prominently correlating with issues of ownership (C14), that appraisals would be more specic and focused (C17), more useful (C16), involvement (C2), existence of feedback and participation (C3), and not time consuming (C12). Appraisals being challenging (C19), meaningful (C11), not time consuming (C12), existence of feedback and participation (C3) and ownership (C14) also placed a lot of importance in the way managers evaluated their appraisal experiences. Cluster analysis (focus tree diagram) of appraisal constructions The RepGrid programme can also produce a Focus Tree Diagram (or cluster analysis) of the elicited data. This can be seen in Figure 4. You may recall that the power of the grid technique is to elicit the constructs from the respondents own language, and later required the subjects to rate the elements of the appraisal system (E1, E2, E3, . . .E9) using their own generated constructs. The grid technique in effect ensures that the potential impact of researcher bias is minimized. It can be seen from this cluster analysis that the smaller the clusters, the higher the signicant matches between the ratings and, hence, the stronger the matching. In Figure 4, several noteworthy ndings

Figure 4. Collective focus tree diagram of all 100 managers

are evident: according to the ve constructs clustered at the top right-hand side of the diagram, when standards/guidelines and measurement systems are clear, appraisals are more objective and can be measured, and as such, are seen as important to the systems success. Another tight clustering reveals that when appraisals are linked to business strategy there is more involvement and sense of ownership, and all this makes appraisals challenging. (Note that the opposite poles of these tight clustering also reveals some interesting insights on what managers do not want: when appraisals are not linked to strategy, there is no ownership, no involvement and that appraisals are not challenging). When this cluster is extended, we get a wider picture of what managers want and look for in their view of an effective appraisal system. Appraisals become more meaningful when they have more control within it, and when they are not time-consuming. Another distinct cluster can be seen between constructs C16 and C17, where appraisals are seen to be useful when they are specic and focused further conrming the results generated from the construct correlations. Collective cognitive map of all managers perceptions of appraisal effectiveness Figure 2 shows the collective aggregate cognitive map (Bougon, 1992) of all 100 managers. The cognitive map shows the relationship of the appraisal elements with each other, the elicited constructs with other constructs, and how the elements relate to the appraisal constructs in psychological space (on two core perceptual dimensions). Of particular interest is the location of the entire range of appraisal activities (E1, E2, E3 . . . E9) used to elicit personal constructs of the effectiveness of appraisal systems. The appraisal activities of interest for our purpose is element, E6, Designing or thinking about designing the appraisal system in the way you prefer. According to the cognitive map, this element is located in the bottom left-hand quadrant (encircled). Respondents described their most preferred appraisal system with constructs (vector lines) which included: the existence of adequate guidelines, can be measured, standards/guidelines and measurements are clear, the system is objective, seen as important, people have control, easy to understand, existence of feedback and participation, meaningful, no time wasted, tailored to help individuals develop and learn, and well prepared, inter alia. These are the construct lines found in the same quadrant as the most preferred element, E6. Furthermore, given the labelling of the two core perceptual dimensions (see Table III) we are also able to describe element E6 in terms of a system that provides its members a sense of ownership (Component 1), and one which can be measured (Component 2). We can perform the same analysis with the other appraisal activities using these two core perceptual dimensions as well as using the construct lines to describe how well or how not well each appraisal activity is carried out in the respondents organizations. Recommended strategies for manoeuvring for each appraisal system element Figure 3 shows the aggregate cognitive map without the vector lines (construct lines) so that we can easily distinguish the location of each actual element from the preferred (E6). Given the labelling of the two core perceptual dimensions, we can systematically and analytically make recommendations for each appraisal activity to move in a specic direction in order for each one to be perceived, in the eyes of the managers, as effective. For example, element E5 (Carrying out the criteria and standards used to

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appraise performance, which incidentally have been described as not useful, too general and not focused, and does not add value), needs to move to the left of the map and lower down the y-axis if it is to gain a higher degree of effectiveness. In other words, we want to move this core appraisal activity to the same location as element E6. In that respect, E5 needs to provide employees with more ownership let them have a say in the design, development, implementation, and evaluation of such performance standards/criteria used to appraise performance. At the same time, E5 can become more focused and measurable so that employees will nd the system useful. Discussion Past cognitive research in performance appraisals has laid a solid foundation in allowing us to see what we have not been able to understand before about the raters cognitive perceptions on different aspects of the appraisal process (DeNisi, 1996; Feldman, 1981; Ilgen and Feldman, 1983; Landy and Farr, 1980). However, if cognitive research in appraisal is to remain a vital force, it may need to look into more macro issues such as relating human resources practices and systems to bigger issues of rm performance (DeNisi, 1996, p. 186). The present study extends these past works by investigating managerial cognitions of performance management systems in their entirety to document how practicing managers see, interpret and make sense of their appraisal experiences, so that more effective appraisal systems are designed and managed in meeting the changing landscapes of the way we do business today. Relative to the volumes of research on the mechanics of appraisals (Bretz et al., 1992; Fletcher, 2001; Murphy and Cleveland, 1995), not a great deal is known about what makes performance appraisal systems (in their entirety) effective (Wright, 2004a; Wright and Lam, 2002). While it is clear that certain groups of appraisal characteristics remained constant over time (such as more need for objectivity, feedback, participation, involvement, etc.), the present study, using a cognitive mapping methodology, elicited new constructs/perceptions of what constitutes an effective performance appraisal system. Indeed, as expected, results showed that the core issues of feedback and participation, the need for employee involvement (ONeal and Palladino, 1992), the importance of clearly identied standards/guidelines and measurements (Bobko and Colella, 1994), objectivity, sense of ownership (Moravec, 1996), easy to understand (Gellerman and Hodgson, 1988), and links to business strategy (Imrie, 1995; Khatri, 2000), all appeared quite prominently in managers perceptions of appraisal system effectiveness. These ndings are very consistent with the documented literature (Bretz et al., 1992; Evans, 1991; Greenberg, 1986). However, new constructs expressed concern about having more control within the appraisal system; a construct that had not been fully introduced in past ndings. This concern for control was ranked in the top ve most frequently cited constructs in the present study and reveals a deep-seated cognition of all the managers interviewed in this research. Some of the individually elicited personal constructs (representing this collective construct) revealed a desire to be able to set things in advance, under my control, more manageable, can inuence, in command, freedom to choose and to be able to do things according to ones own preferences within the appraisal system. Similarly, tailored to help individual develop and learn also ranked within the top ten frequently occurring collective constructs of appraisal system effectiveness.

Managers, in particular, described this super-ordinate construct as one which constituted issues of career development, is more forward-looking, job-related, tailored to individual situations, clearly lays down expectations to help individuals achieve and learn, and inevitably helps staff improve performance. Though development issues are not new in appraisal system design, the elicited constructs in the present study present a more articulated cognition of the way managers see their appraisal experience. Also, managers core super-ordinate constructs revealed a preference for appraisal systems to be more challenging (that is, when appraisals are inter-related, stimulating and fun, and when they are carried out by the employees themselves); meaningful (initiated by themselves, with some element of learning, involving feelings of being responsible for ones own performance, clear on what is expected and offering the opportunity to have ones own say); and to inevitably add value (has strategic importance, is taken seriously, ts well into the company, is aligned to strategy and realistic, and is related to the business). Furthermore, a closer analysis of the elicited constructs through both the cluster analysis and construct correlations generated from the grid technique provided a deeper level of understanding about how managers frame their theories-in-use about performance management system effectiveness. The clusters and correlations provide for the very rst time, the content and structure of appraisal sense making (Weick, 2001) used by practicing managers about the entire appraisal system. These ndings provide new insights on how managers make cognitive connections between their own elicited constructs when making assessment of system effectiveness. The current research also went beyond identifying new constructs of appraisal system effectiveness. For the very rst time, practicing managers core perceptual dimensions were identied (in psychological space) regarding how they fundamentally perceive and make sense of the effectiveness of performance management systems as they experience them in organizational life. The Principal Component dimensions of sense of ownership (x-axis) and can be measured (y-axis) tell us a great deal more about the way respondents make sense of and make judgements about their appraisal experiences; which in turn dictates their selective personal constructions of how they perceive individual appraisal system activities. Similarly, the elicited constructs also allowed the investigation to dene (in a very systematic and rigorous way), how respondents see effective performance management systems, using their own language (uncontaminated by researcher intrusion) (Wright, 2004a). Implications for theory and practice The application of the repertory grid technique proved to be a very powerful investigative tool (Jankowicz, 1990, 2004; Marsden and Littler, 2000; Swan, 1997). The method allowed us to go deep into the mental psyche of real managers in real settings in a highly systematic and rigorous way, while simultaneously maintaining a strict adherence to codes that minimise researcher intrusion. By venturing deep into managers construct systems of the way they see their appraisal worlds, the present investigation was able to establish a better understanding of their current experiences with appraisals in their entirety. This in turn opens up new insights into how effectively or ineffectively elements of appraisal systems are being carried out in organizational life. This nding, in and of itself, has wider implications in the study, practice and research of this phenomenon. Also for the very rst time, the identication

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of the core perceptual dimensions of appraisal system effectiveness sheds new light on what is at the heart of employees desires in an effective system. Furthermore, the mere identication of the perceptual dimensions raises the questions of whether such dimensions change over time and whether it may be possible to compare the perceptual dimensions of different groups of people, organizations, and national cultures on the effectiveness of performance management systems. Another theoretical implication of the present study is the possibility of generating a tailor-made appraisal system questionnaire using (some of the 496) elicited bi-polar constructs as semantic differentials. Indeed, a databank with a wide repertory of questionnaire items can be used to formulate a survey using the language of the intended respondents, rather than from measures tried and test from different time periods, contextual settings and purposes (Borman and Vallon, 1974; Spector, 1994). When the results of the study were fed back to managers, one common theme stood out. The visual cognitive map and cluster diagrams were easy to understand and explain. Managers were most impressed with the simplicity of the visual results. At the same time, the diagrams provided valuable and insightful data on how organizational members perceived their appraisal experiences in relation to their desired system (E6). The presentation of results also opened up further discussion with the respondents on what needs to be done to each appraisal activity (element) in order for it to be perceived by its users as effective (Bretz et al., 1992; Longnecker and Nykodym, 1996; Murphy and Cleveland, 1995). Limitations of the study The focus of our study centred round managerial cognitions of performance management systems. In particular we were especially interested to elicit how organizational members see, make sense of and interpret their everyday appraisal system experiences. A such, our decision to narrow down (and supply) the range of appraisal activities to nine core elements may appear to be inuencing respondents own construing about appraisals and appraisal systems. Appraisal researchers may argue that there are more issues about performance management system that could have been included in our study to provide a more encompassing coverage of the subject matter. Whilst we are fully aware of this view, we stand rmly based upon our review of the literature and feedback from practicing managers that the nine appraisal system elements used in the present investigation represented a true and fair view of the four-corners of a typical appraisal system. And as the aim of our investigation was to gauge (for the rst time) the managerial cognitions of appraisal system effectiveness, we believe this has been achieved with both rigor and relevance (Anderson et al., 2001). Furthermore, although the supplying of appraisal system elements for construct elicitation does impose a degree of researcher intrusion into the study (see Wright and Lam, 2002), we needed to do this as part of the guiding principle when one grid interview is to be compared to another (Stewart and Stewart, 1981, called for either the elements or the constructs to be kept constant across interviews). Administering the repertory grid technique (an average of two hours for each grid participant) resulted in a huge investment in time. This may pose a burden to practicing managers, given time constraints and budget deadlines. Also, only one hundred managers were interviewed to elicit their cognitive perceptions of appraisal system effectiveness. Although the sample size may be considered small in comparison

to more traditional questionnaire sample pools, the data elicited from the grid interviews were indeed rich and insightful (Gephart, 2004). In fact, in grid terms, a sample size of one hundred is considered quite a signicantly large number already! Nevertheless, we caution researchers against generalizing the results of the study to other settings and sample categories. The present studys interview respondents came from different industries to gauge an across-the-board general state of appraisal system perceptions. As such, generalizing the ndings into any particular industry or group of employees may be left until more in-depth studies have been carried out/replicated inside a particular industry, company or country (Entrekin and Chung, 2001; Fraser and Zarkada-Fraser, 2001; Paik et al., 2000; Snape et al., 1998). Where to from here? The unique application of a clinical cognitive methodology (repertory grid technique) allowed the present study to systematically and rigorously venture deep into the knowledge structures of how practicing managers construed their appraisal worlds, and hence their perceptions of what constituted effective performance management systems. Several noteworthy ndings were revealed through the richness of data collected and analysed. Of particular concern for both research and practice is that appraisals and appraisal systems keep abreast of changing paradigms of the way organizations function, and more importantly, that the success of appraisal systems be gauged through the cognitive perceptions held by the very people who carry them out (Feldman, 1986; Fletcher, 2001; Hodgkinson, 2003; Ilgen and Feldman, 1983; Murphy and Cleveland, 1995; Sadler-Smith, 1998). In this respect, we hope this study also opens up new questions for future research in this direction.
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Further reading Latham, G.P. and Yukl, G.A. (1975), Assigned versus participative goal setting with educated and uneducated woods workers, Journal of Applied Psychology, Vol. 60, pp. 299-302. About the authors Robert P. Wright is Assistant Professor of Human Resources and Strategic Management at the Department of Management & Marketing of The Hong Kong Polytechnic University, Hong Kong. His research interest investigates mapping managerial and organizational cognitions in the areas of strategy and human resource management. He is the corresponding author and can be contacted at: msrobert@polyu.edu.hk Frenda K.K. Cheung is Assistant Professor of Organizational Behaviour and Human Resource Management in the same department. Her major research interests are in strategic human resources management and cross cultural conict management.

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