Have you ever prepared for a performance review with an
employee and paused to ask yourself
"Why am I doing this?" "Is this really doing any good?"
and
"How does it turn out when other people do this?"
These are pretty common questions, and now, thanks to a
research project led by John Milliman, of the University of
Colorado at Colorado Springs, we have some hard data to
answer them.
Milliman enlisted the help of a multinational team of
Pacific rim professors who gave his survey to samples of
managers and employees in Korea, Taiwan, Japan, and the U.S.
The goal was to find connections between current performance
review practices and perceptions of the outcomes of these
practices on the appraisal process, employees' job
satisfaction, and the organization as a whole.
Milliman's survey asked people to identify the purposes of
their performance appraisal system as they practiced it, and
it offered 5 choices: 1) to develop employees, 2) to document
their performance, 3) to allow employees to express their
views, 4) to determine their rates of pay, and 5) to
determine promotions. Next, it asked them to rate the
effectiveness of these practices and the company as a whole.
And finally, it asked about job satisfaction.
When Milliman analyzed the data, he began by examining the
factors that led people in the different countries to believe
their performance review practices were effective. Then he
compared the findings across the four countries.
He found people in Japan relying upon all five purposes, and
this was a surprise. Press reports from Japan suggest little
reliance upon performance review as a management tool. But
Milliman's analysis revealed that the Japanese view their
performance review practices as leading to more satisfied
employees and more effective organizations.
The U.S. results stand in stark contrast. Here, only three of
the purposes were judged to lead to effective performance
review practices: documenting performance, allowing employee
expression of views, and determining promotions. And in the
U.S., while these practices stimulated job satisfaction,
these same people viewed their performance review practices
as leading to
less
effective organizations -- much less!
How could an effective performance review process that
leads to more satisfied employees harm their organizations?
Milliman turned to previous critics of traditional
performance review practices and suggested these critics may
be right. Perhaps performance review practices in this
country lead to self satisfaction yet also stir emotions that
cause some employees to turn against their employers. A
chilling prospect!
Curiously, the analysis did not reveal employee
development as a purpose of performance reviews in the U.S.
In Japan, Korea, and Taiwan it was significantly related to
effective reviews and to effective organizations.
Apparently, the much-promoted purpose of performance reviews
in this country to help develop employees is just hype. And
we probably have only ourselves to blame.
Finally, survey results from Korea and Taiwan show many
similarities; however, Korean organizations place greater
emphasis on using performance reviews to discuss promotions,
while Taiwanese firms emphasize pay. In both countries,
effective performance review procedures lead to satisfied
employees and effective organizations.
One implication of Milliman's research will strike you as
you look around your workplace. Employees of Asian descent
may react differently than people of other backgrounds to
what you say. One thing is clear, you should chose your
words carefully when conducting performance reviews.
Reference:
Milliman, John F., Stephen Nason, Kevin Lowe, Nam-Hyeon Kim,
and Paul Huo (1995). An Empirical Study of Performance
Appraisal Practices in Japan, Korea, Taiwan, and the U.S.
Best Papers Proceedings,
Fifty-fifth annual meeting of the Academy of Management,
Vancouver, British Columbia, Canada, August 6-9, 1995,
182-186.
Supervision Findings, by James Larsen, Ph.D.
Performance Review Effectiveness
Researchers find surprising results when comparing survey results across several cultures.