Employee Satisfaction with Performance Appraisals and Appraisers: The Role of Perceived Appraisal Use

Wendy R. Boswelljohn W. Boudreau

This siitdy investigates how perceptions of performance appraisal use relate to employee satisfaction with both appraisal and appraiser. The research brings renewed support for the importance of individual development in (he performance appraisal process.

Research has been conducted on numerous facets of performance appraisals (PA), including psychometric issues, raier-ratee characteristics, cognitive processes, rater training, and appraisal fairness (Bretz, Milkovich, and Read, 1992). This study mvestigates one issue in particular: the uses of PAs. How PAs are used has been shown to influence rating behavior and outcomes (for example, Bernardin and Orban. 1990; Jawahar and Williams, 1997; Oslroff, 1993; Shore, Adams, and Tashchian, 1998; Williams, DeNisi, Blencoe. and Cafferty 1985; Zedeck and Cascio, 1982) and to be an important predictor of employee attitudes toward their supervisor, the job, and the appraisal process (Jordan and Nasis, 1992; Meyer, Kay, and French, 1965; Prince and Lawler, 1986). In the Meyer, Kay, and French (1965) study, for example, researchers proposed that conducting salary discussions during the annual performance review interfered with the constructive discussion of plans for future performance improvement and could lead to negative reactions. However, in the first empirical test of the Meyer, Kay, and French study, salary discussion was found to have either no impact or a slightly positive impact on employee attitudes (Prince and Lawler, 1986). Thus, how PAs are used has developed as an area of interest, yielding mbted results and conclusions.

Nolf: The Center for Advanced Human Resource Studies (CAHRS) provided partial support lor this research. An earlier version of thi5 article was presented at the 1999 meeting ot the Academy of Management. Human Resources Division, Chicago, Illinois.
N RESOURCE DEVEU>ENT QUARrEHLV, vol. 11. no. 3. Fall 2000 Jossey-Bass. a Wilty company 283

Boswell, Boudreau Previous research has shown that appraisals are used in organizations for multiple purposes (Cleveland, Murphy, and Williams. 1989; Oslroff, 1993), and il has been suggested that these purposes often conflict (Cleveland, Murphy, and Williams, 1989; Meyer, Kay, and French, 1965; Ostroff, 1993). This conflict may prevent the appraisal process from attaining its full usefulness 10 the organization, perhaps even contributing negatively to individual behavior and organizational performance. Other research has found that employees prefer appraisal ratings to be used for certain purposes rather than others {Jordan and Nasis, 1992). The objective of the present study was to determine how employee perceptions of different PA use relate to their attitudes. Because previous research has shown that PA purpose affects rating processes and outcomes Qawahar and Williams, 1997; Murphy, Garcia, Kerkar, Martin, and Baher, 1982; Shore, Adams, and Tashchian. 1998; Williams! DeNisi. Blencoe, and Cafferty. 1985) and employees indicate a preference for certain PA uses (Jordan and Nasis, 1992), it is conceivable that employee attitudes may vary depending on perceptions of how the PA is used. Previous research has relied on PA administrators (human resource managers, for example) to provide information on how the appraisal is used (Cleveland. Murphy, and Williams. 1989; Ostroff, 1993). As suggested by Bretz, Milkovich, and Read (1992), these respondents may be describing the PA system as intended instead of actual practice. An alternative approach is to investigate the appraised individuals* perceived PA use. If people perceive PA purposes differently, as has been suggested (Balzer and Sulsky, 1990; Osiroff, 1993), then attitudes may vary depending on that perception. For example, how a PA is used may signal to employees their value to and future in the organization. In addition, appraisal outcomes and behaviors such as accuracy, strategy, or information utilization are often the focus when PA use is investigated (for example, Ostroff, 1983; Williams, DeNisi, Blencoe, and CafTerty. 1985; Zedeck and Cascio, 1982), but only limited research has looked at employee reactions (Dipboye and de Pontbriand, 1981; Jordan and Nasis, 1992; Prince and Lawler, 1986). The present research will add to our understanding of the influence of PA use by investigating the relationship between employee perceptions of PA use, specifically evaluative and developmental use, and employee attitudes toward both the appraisal and the appraiser. Funher, we investigate PA use through more general perceptions, beyond the effect of salary discussion.

Theory and Hypotheses

In the present study, two typical PA uses were examinedevaluative and developmental. The evaluative function includes the use of PA for salary administration, promotion decisions, retention-termination decisions, recognition of individual performance, layoffs, and the identification of poor performance. This is similar to Ostroffs (1993) conceptualization of the

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administrative PA purpose. Cleveland, Murphy, and Williams (1989) contend that evaluative functions all involve between-person decisions. Developmental functions include the identification of individual training needs, providing performance feedback, determining transfers and assignments, and the identification of individual strengths and weaknesses. These are all proposed to encompass within-person decisions. Perceived Evaluative Use and Appraisal-Appraiser Satisfaction. Previous research has found that the evaluative component of PA is an important aspect of the appraisal process and a positive factor, particularly if it strengthens appraisal-reward contingencies (Cleveland, Murphy, and Williams, 1989; Prince and Lawler, 1986). Specifically, in the Prince and Lawler study, discussion of salary during the PA (an aspect of evaluative use) showed a positive effect on employee saiisfaction with the PA. Another study found that although employees did not indicate a preference for administrative (that is, evaluative) or developmental PA use, 29 percent of the respondents ranked using appraisals for promotion decisions their preferred PA use (Gosselin, Werner, and Halle, 1997). That same study, however, found that only 11 percent of respondents ranked appraisals used for salary administration (another evaluative PA use) as a "favored" choice of appraisal use. U has also been proposed that evaluation is often of a negative nature (Blau, 1964; Meyer, Kay, and French, 1965), whereas development is more likely to be viewed positively because of its futuristic and helpful focus (Milkovich and Boudreau, 1997). For the present study, evaluative PA use is conceptualized as going beyond mere salary discussion and instead defined to include detennination of poor performers, layoff and termination decisions, and promotion decisions. This is consistent with Cleveland, Murphy, and Williams's (1989) representation of between-person uses and Ostroff's (1993) administrative PA use category. Many researchers believe that criticizing employees, as is often done in evaluations, fosters defensiveness and rationalization, which usually results in nonconstructive responses (Blau, 1964; Meyer, Kay, and French, 1965). As suggested by Drenth (1984), evaluation is a sensitive matter, often eliciting negative psychological responses such as resistance, denial, aggression, or discouragement, particularly if the assessment is negative. Thus high perceptions of evaluative PA use may result in negative feelings about the appraisal. Previous research on 360-degree feedback has found that ratees approve of these appraisals when they are used for developmental purposes but are not as accepting when they are used for evaluation (for example, Antonioni, 1996; Ash, 1994; McEvoy, 1990; McEvoy, Buller, and Roghaar, 1988). For example, although subordinate raters in one study supported an upward feedback appraisal system for both developmental and evaluative use. the managers (that is. ratees) reacted unfavorably to implementing the appraisal system for evaluation (Ash, 1994). This lends further support to the contention that ratee reactions may vary depending on the perceived PA use and also suggests that evaluation may be viewed negatively by those being,appraised.

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Research on 360-degree reviews as well as the often-negative nature of evaluation suggest that perceived evaluative PA use may associate with negative reactions to the appraisal. In contrast, salary increases are also evaluative, though an increase is arguably a positive outcome. However, over half the respondents in one study (Gosselin, Werner, and Halle, 1997) ranked salary increases as their last or second to last (out of five) preferred use of appraisal. Salary increases may even lead to negative feelings if the increase is perceived as inequitable or minimal. For example, literature on pay satisfaction indicates that perceived pay relative to others relates to employee attitudes regarding pay systems, appraisal systems, and jobs (for example, Lowery, Petty, and Thompson, 1995; Miceli, Jung, Near, and Greenberger. 1991). Indeed, the influence of perceived evaluation on employee reactions may depend on the perceived fairness of the PA process (that is. procedural justice) and the outcome (distributive justice) so that there is a positive reaction when justice is perceived and a negative reaction when there is perceived injustice. Related appraisal outcomes, such as PA rating, may moderate the relationship between perceived evaluative use and feelings about the appraisal so that those etnployees who receive positive outcomes will be pleased with evaluative PA use and those thai receive negative ouicomes will not. We therefore hypothesize that the relation between perceived evaluative PA use and appraisal satisfaction will be moderated by the appraisal rating and perceived justice. Specifically,
HYPOTHESIS I: The relationship between employee perceptions that PA is used for evaluaiion and PA satisfaction will be moderated by the appraisal rating and justice perceptions.

Attitudes toward the appraiser are also important, particularly because the person providing the PA is often the employee's supervisor (Milkovich and Boudreau, 1997). The feelings created during the PA may endure and affect the employee-supervisor relationship in general. If evaluation causes the employee to feel defensive, criticized, or discouraged, as previous research suggests (for example, Meyer, Kay, and French, 1965), this may spill over to the person providing that evaluation. Evaluation may thus create negative feelings toward the appraiser (the immediate supervisor) and could arguably be detrimental to the relationship. This may be particularly true if the employee receives a low PA rating or perceives injustice. Although negative feelings may upset the relationship between the evaluatorand the individual being evaluated (Blau, 1964; Drenth. 1984), evaluation may lead to positive outcomes, such as pay increases or promotions, and ultimately a positive reaction toward the person providing the feedback. The influence of perceived evaluative PA use is again proposed to depend on the appraisal outcome (PA rating, distributive justice) and process (procedural justice).

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HYPOTHESIS

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2: The relationship between employee perceptions thai PA is used for evaluation and satisfaction with the appraiser will be moderated by appraisal rating and justice perceptions.

Perceived Developmental Use and Appraisal-Appraiser Satisfaction. Development provided by the immediate supervisor has been shown to be an important and common use of PA (Cleveland, Murphy, and Williams, 1989; Meyer, Kay, and French, 1965). Nearly 70 percent of the respondents in tbe Cleveland and colleagues' sludy reported ihat appraisals at least moderately affected within-person comparisons (that is, developmental use). Prince and Lawler (1986) found that the constructs "work planning and goal setting" and "discuss performance attributes" exerted a positive influence on employees' satisfaction with and perceived utility of the PA. In contrast, the construct "career development" showed little influence on PA satisfaction. However, Prince and Lawler (1986) predated Cleveland, Murphy, and Williams (1989) and so did not include other, more specific aspects of development included by Cleveland, Murphy, and Williams, such as identification of individual training needs and determination of transfers and assignments. In the present study, the developmental PA component includes dimensions proposed by Cleveland, Murphy, and Williams's delineation of withinperson decisions (or Osiroff's feedback and development category). Practitioner articles have argued for the importance of developmental feedback in order for employees to understand better how they can improve in ihe organization and thai employees are generally more committed to an organization that provides development (Dessler, 1999; Gaines, 1994; Martin, 1992; Stein, 1996; Yaney, 1988), Employees who perceive development in the PA may see this as a signal of their value to the company or future in it. resulting in positive affect associated with this feedback. Moreover, although Gosselin and colleagues (1997) hypothesized that employees would prefer administrative PA uses over developmental use, no clear preference for one use over the other was found in their study In fact, many respondents actually preferred developmental uses such as career planning and training and developmeni (36 percent and 25 percent, respectively). Dipboye and de Pontbriand (1981) similarly showed that employees were more satisfied and had greater acceptance of the PA when employee deveiopment and performance improvement were emphasized in it. Related research on PA objectivity, fairness, and accuracy has shown that perfonnance improvement discussions has a positive effect on these variables (for example, Fulk. Brief, and Barr. 1985; Goodson and McGee, 1991). This indicates thai, in general, employee feelings toward the PA should be enhanced when development is a component. The research mentioned regarding 360-degree reviews further suggests that PAs used for developmeni purposes are generally viewed positively by those being appraised (for example, Ash, 1994). Based on previous theory and research on the importance of development to the PA process

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(Cleveland, Murphy, and Williams, 1989) as well as Prince and Lawler's (1986) finding of partial support for the development component of appraisal as a positive predictor of PA satisfaction, we hypothesize:
HYPOTHESIS 3: Employee perceptions that PA is used for development will positively associate with employee satisfaction with the PA.

As discussed earlier, employees' feelings about the PA seem likely to extend to their feelings toward the person appraising them. Russell and Goode (1988), for example, found that satisfaction with the appraisal positively associated with satisfaction with the appraisal source: the supervisor. This research also found that satisfaction with the appraiser-supervisor significantly and positively related to an improvement value measure consisting of items very similar to the idea of employee development (for example, "helped me leam to do a better job"; Russell and Goode, 1988), This suggests that perceived development should positively relate to satisfaction with the appraiser. The Gosselin and colleagues (1997) research mentioned earlier suggests that many employees not only prefer developmental PA uses such as career planning but also prefer that their immediate supervisor provide the PA feedback. It is proposed here that those employees given development in the PA will feel better about the appraiser. In effect, the positive, helping aspects of developmental feedback may enhance how employees view the person providing the development. Thus,
HYPOTHESIS 4: Employee perceptions that PA is used for development will positively associate with employee satisfaction with the appraiser.

Other variables may influence employee attitudes toward the appraiser and the appraisal and may also be related to perceptions of PA use. First, previous research has shown thai performance level may affect the variables assessed in this study (Bernardin and Abbott, 1985; Burke, Deszca, and Weitzel, 1982), The relationship between PA use and PA satisfaction has been found to be strongest for low performers, where low performers were more satisfied when salary discussion was included in the PA than when it was not (Prince and Lawler, 1986). In contrast, it is conceivable that better performers are happier with the appraisal and are also the employees who were provided development. It may be more pleasant to discuss development viith those whose performance is "on track," Likewise, those employees al the lower performance level may be unhappy with the PA and also be provided evaluation because it is unpleasant to discuss remedial development. In effect, performance may drive both PA use and attitudes and should be included in the analyses. As already discussed, outcomes of the appraisal such as PA rating and feelings of justice may moderate the relationship between perceived evaluative PA use and reactions. Specifically, perceived evaluation coupled with positive

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outcomes (for example, high rating) may be viewed favorahly whereas perceived evaluation with negative outcomes or perceived injustice may be less accepted. This may be particularly true in the present study, because the organization makes salary and related decisions (for example, promotion) based on performance ratings. Thus, investigating the possible moderating effect of PA rating and procedural and distributive justice may help clarify the relationships between appraisal use and attitudes. The relationships between demographic characteristics such as age, tenure, race, and gender and employee attitudes have been noted in previous research (for example, Herzberg, Mausner, Peterson, and Capwell, 1955; Jones, Bruni, and Sells, 1977; Sheppard and Herrick. 1972). It has also been suggested that individual characteristics may influence the appraisal process (Klein. Snell, and Wexley, 1987; McEvoy. Buller, and Roghaar, 1988). Therefore, demographic variables will be used as controls to better ascertain the incremental relationship between perceptions of PA use and the attitudinal variables of interest.

Method
The following paragraphs discuss the sample, study design, and measures. Sample. One hundred and thirty-seven employees at a production equipment facility in the South were administered surveys at two points in time. A total of 128 employees completed both surveys (93 percent response rate). Any employee directly familiar with the research or the hypothesessuch as the human resource assistantwas excluded from the study Respondents represented a mix of production-distribution workers, customer service representatives, and staff-level personnel (for example, administrative assistanLs, computer operators). The mean organizational tenure was 8.8 years, 73 percent of the respondents were female, and the average age was thirty-nine. All respondents were either three or four levels below the facility vice president. Because ot missing data, 103 respondents were used in the analysis after listwise deletion. Study Design. The PA occurred naturally in this organization. All employees were given a formal PA by their immediate supervisor once a year on the anniversary of their hire date. A graphic rating scale format was used for the written appraisal. The employees were rated on multiple job dimensions and provided an overall performance rating (1 = below standard, 4 = distinguished) by their immediate supervisor. During the PA, employees were provided past perfonnance feedback, information on future areas for improvement, training needs assessment, and any merit increase. In elfect, the PAs were intended by the organization to be both developmental and evaluative. Alihough actual merit increases were not available for this research, pay and other rewards (for example, promotions) were tied to performance ratings. Therefore, investigating the role of perfonnance ratings should provide an indication as to whether the relationship between perceived evaluative PA use and attitudinal reactions depends on the outcome of the appraisal.

Boswell, Boudreau In order to reduce problems associated with common-method bias, perceptions of PA use and attitudinal data were collected at separate times (two months apart). Employees were administered surveys to assess perceived appraisal use, justice, and demographic information at time one. The surveys were administered during small group meetings (fifteen to twenty employees) at the company site. On completion, respondents returned the suweys directly to the researcher. A code number matched surveys to individuals, but complete confidentiality was promised. There was no indication that the employees felt uncomfortable or concerned about providing honest feedback. In fact, many wrote comments directly on the survey Indicating their dislike or support for the appraisal process, the organization, and their supervisor. Two months later the altitudinal measures (that is, satisfaction with the appraisal and the appraiser) were assessed through surveys, again in small group meetings at the company site. The same PA system was in effect at both measurement times so there is no question that a change in the appraisal process occurred during the two-month interval to influence the variable relationships. Measures. The survey was pilot-tested with ihe facility's human resource manager to ensure that it was complete and easy to follow and ihal the items were not ambiguous. A Ukert scale (1 = strongly disagree, 7 = strongly agree) was used for survey items on PA use and employee attitudes. Satisfaclion. Greliers (1978) ftfteen-item PA satisfaction scale was used to measure PA satisfaction. This scale is made up of four constructs; Utility (for example, "1 learned a lot from the appraisal"), satisfaction (for example, "I was satisfied with the review"), anxiety (for example, "1 was tense during the review"), and derogation (for example, "The appraisal seemed arbitrary"). Anxiety and derogation were reverse-scored. An overall scale was then created using the four subscales (coefficient alpha, a = .90). This was necessary so that an overall measure of PA satisfaction could be used for the analysis. The Job Descriptive Index (Smith, Kendall, and Hulin, 1969) was used to measure employee satisfaction with the appraiser (supen-isor), and one composite of the eighteen-item measure was created for the construct (a = .81). Performance Appraisal Use. Cleveland, Murphy, and Williams's (1989) factor structure for multiple PA uses was used. As previously stated, examples of developmental use are performance feedback, identification of individual training needs, and determination of transfers and assignments. Evaluative uses include salary administration, promotion decisions, and determining which employees are not performing well. The various PA uses were listed on the survey and employees were asked to what extent they agreed (or disagreed) that their PA was used for each paiiicular purpose (on the 1 to 7 Likert scale). Consistent with previous research (for example, Ostroff, 1993), item responses were averaged to obtain the scale scores for evaluative (four items) and developmental (Eve items) PA use (a = ,70 and .77, respectively). Justice Variables. Procedural and distributive justice were assessed with Smither. Reilly, Millsap, Pearlman. and Stoffey's (1993) measure. Because the

Employee Saiisfaction with Performance Appraisals and Appraisers measure was originally used to assess selection test fairness, the items were adapted to reflect a measure of FA fairness. The three items measuring distributive justice and the two items measuring procedural justice were each combined to create the respective scales (a = .82 and 88, respectively). Control Variables. Demographic information including gender (1 = male, 0 = female), race (1 = white, 0 = other), organizational tenure (in years), age (in years), and number of promotions, as well as perfonnance rating, were also collected and used as covariates. This information, with the exception of performance rating, was provided by the respondent at the time the first survey was administered. Employees' most recent performance ratings were obtained through organizational records. Employees were given an overall rating by their immediate supervisor in one of four categories: (1) below standards, (2) meets standards, (3) exceeds standards, or (4) distinguished.

Results
Descriptive statistics and bivariate correlations are shown in Table 1. As shown, perceived developmental PA use positively associated with both PA satisfaction and satisfaction with the appraiser Perceived evaluative use indicated a positive, although nonsignificant, bivariate relationship with the attitudinal variables. Hierarchical multiple regression analysis was used to discern the relationship between perceived PA use and PA satisfaction. The control (that is, demographics), PA rating, and justice variables were entered inlo the equation first followed by the developmental PA use variable and then the evaluative PA use variable in order to discern the incremental variance in PA satisfaction explained by each PA use variable. The evaluative PA use variable was also entered before the developmental use variable to be sure order did not affect the results, and no significant differences were found. The results are shown in Table 2. There was a significant positive effect of perceiving PA use for development on PA satisfaction (p = .21, p < .01). There was an improvement in model fit when perceived developmental use was included in the model (A R- = .03, p < .01) supporting Hypothesis 3. The effect of perceived PA use for evaluation was nonsignificant O = .02, n.s.). The numbers reported here are for the full model. As already discussed, the outcome of the appraisal (that is, perfonnance rating or perceived justice) may moderate the relationship between perceived evaluative use and employee attitudes. This possibility was explored by including the interaction between PA rating and evaluative PA use in the model. After controlling for the other variables, the interaction term was not significant in predicting PA satisfaction (p = .24, n.s.) providing no support for Hypothesis 1. The nonsignificance may be the result of lack of variance in the performance ratings: 92 percent of the respondents either met or exceeded standards. The interaction between evaluative use and procedural justice and between

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Employee Satisfaction with Performance Appraisals and Appraisers Table 2. Results of Regression Analysis
PA Saiisfaction
Variable Appraiser 5ti(is/i:it tion Step 1

293

Step 1 .02 -,02

Step 2 .03 -,02 .03 ,16* -,05 ,15 .11 ,56** .21**

Step 3 .03 -.02 .03 ,16* -,06 ,15 .11 ,56** .21** .02 .00 .59 .55 13,32**

.Step 2 .21* .17 .16 .09 -14 -,06 .19 ,16 .33**

Step 3 .21* .16

Age Number of promotions Gender Race Organizational tenure PA rating Distributive justice Procedural justice Developmental use Evaluative use Change in R^ R^ Adjusted R^ F

.19

.04
,17* -06 .13 .13 .61**

.18 .22* ,11

-,16 -.10

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.09 -,14 -.06 ,19 ,16 ,33*" -.01 .00

.24 32*

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.56 .52 14,54** .59 .55 14,95*'

.31 .25
5,23"*

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.32 6.3,3**

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.31 5,64*-

Note: Standardized coefficients arc shown p<,05 " p < ,01

evaluative use and distributive justice were also not significant (p = -.41, n.s. and p = .72, n.s., respeclively) ihus failing to suppon lhe proposition that perceived justice may moderate the evaluative use-PA saiisFaction relation. Further, lhere was no significant correlaiion between perceptions of appraisal use and performance rating. Therefore, there was no evidence that higher performers were provided more developmental feedback, that low performers were merely evaluated, or vice versa. The same analyses were conducted for the satisfaction-with-the-appraiser variable. As shown in Table 2, perceived developmental PA use positively associated viath appraiser satisfaction (3 = .33, p < .01) and significantly improved model fit (AR^ = .07, p < .01), supporting Hypothesis 4, However, there was no significant effect for perceived evaluative PA use (3 = .01. n,s.), Again, these numbers are for the full model. The interaction between PA rating and perceived evaluative use was examined. The results are similar to those reported for PA satisfaction. The interaction term was not significant in predicting satisfaction with the appraiser (3 = .26, n.s.), providing no support for Hypothesis 2, The justice interactions were also nonsignificant (procedural P = - 5 8 , n.s, and distributive 3 = .47. n.s.). There was, therefore, no evidence that the relation between evaluative use and satisfaction with the appraiser depends on the perceived fairness of the PA outcome or process nor on the actual outcome ofthe appraisal (that is. PA rating).

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Discussion
This study explored whether different perceived PA uses have differing relationships with employee reactions to the appraisal and the appraiser. It was hypothesized that perceived PA use for development would be positively associated with the attitudinal variables investigated, and the influence of perceived PA use for evaluation was hypothesized to depend on justice perceptions and PA rating. Perceived PA use for development positively related to both PA satisfaction and satisfaction with the appraiser above the edects of justice, the PA rating, and demographic variables. Thus, Hypotheses 3 and 4 were supported. However, perceived evaluative use was not significantly related to either attitudinal variable. Analysis of the interaction between PA rating and perceived evaluative PA use and between justice (procedural and distributive) and evaluative use also failed to yield any significant effects. There was no indication that performance rating or justice perceptions moderated the relationship between perceived evaluative use and reactions to the appraisal or the appraiser, failing to support Hypotheses 1 and 2. Of course, the low variability in the measured outcome of the appraisal performance ratingmay have reduced this effect: 92 percent of the respondents were rated as either meeting or exceeding standards. However, performance rating was significantly related to other variables in the study (that is, organizational tenure, justice, PA satisfaction; see Table 1) suggesting that there is sufficient variance in this variable to reveal associations. More precise outcomes of the appraisal (for example, percentage oi merit increase, promotion received) may moderate the relationship between evaluative use and attitudes but were not available for this study. Also, degree of "threat" (for example, chance of getting a low PA rating or not receiving a wage increase) could moderate the relationship so that employees who have negative or destructive evaluations may be dissatisfied and those who have a pleasant or constructive experience are satisfied. This is similar to Meyer, Kay, and French's (1965) contention that employees may become defensive when they are criticized during their review. Thus the evaluative context and outcomes may be important drivers of employee attitudes beyond the perceptions of PA use for evaluation investigated here and should be investigated further in future research. However, justice perceptionsfairness of the both the means and the endwere investigated in the present study Although procedural justice positively predicted both attitudinal variables, neither justice variable affected the relation between perceived evaluative use and employee attitudes. In sum, perceived developmental PA use showed a consistent positive association with employee attitudes toward the appraisal and appraiser. Perceptions of evaluative PA use were not related to these attitudinal variables, and ii does not appear that employee reactions to perceived evaluation depends on the outcome of the appraisal or the perceived fairness of that outcome or process.

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Implications for Practice. Developmental activities such as determining individual training needs and identifying individual strengths and weaknesses appear to increase appraisal and appraiser satisfaction. The attitudes investigated are important variables to the organization particularly because of the possible influences of these attitudes on turnover, absenteeism, and organizational performance. This research, therefore, brings renewed support for the importance of individual development in the PA process, not only as a way to support employee development but also as a direcl influence on employee attitudes. This research focused on employee perceptions of PA use; thus the results support the importance of employees perceiving development as part of the PA process. Organizations should perhaps make the developmental aspect of the performance appraisal process clear so employees understand and believe that a primary purpose of their PA is for job and career development. However, organizations should also be careful to match perceptions to reality, so that employees perceive that development is an important component of the appraisal process and react favorably yet also receive important development in order to improve and succeed in the organization. The relationships between perceived evaluative PA use and the attitudinal variables are less clear. There was some indication that perceived evaluative PA use may lead to positive attitudes (thai is, bivariate relations). However, the findings presented here are nonsignificant. This is consistent with Prince and Lawler's (1986) findings for the effect of salary discussion on employee attitudes toward the appraisal. It may be that evaluative use is expected during an appraisal and therelore does noi influence attitudes one way or the other. Indeed, if evaluation is merely expected, development may be viewed as the "extra," therefore producing positive feelings. The findings presented here are somewhat similar to the research on 360-degree performance reviews. Specifically, research has shown positive rater and ratee reactions to 360-degree reviews when they are used for development but moderate disapproval for such reviews when they are used for evaluation (Ash, 1994; McEvoy, Buller, and Roghaar, 1988). This lends further support to the notion that developmental PA use promotes positive attitudes regardless of the type oi appraisal and that evaluative PA use may not always be as well received. Finally, this study's finding of a significant positive relation between employee attitudes and procedurally just PAs underscores the importance employees place on fairness. The bivariate relations (Table 1) between distributive justice and employee attitudes further support this fmding. Neither justice variable moderated the relationship between perceived evaluation and employee attitudes, suggesting that regardless of how fair (or unfair) the PA may be, in this study perceived evaluation did not inOuence employee attitudes one way or the other. Yet given the significant main effects for justice, organizations would be wise to ensure fairness in the PA process as well as in other human resource practices. Indeed, the relationship between procedural

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justice and satisfaction with the appraisal was significant with perceived development included in the model, suggesting the imponance of perceiving both that the PA is used for development and that the PA process is fair. Limitations and Future Research. This research suggests some interesting links between perceived PA use and employee reactions to the appraisal and the appraiser. There are, however, some limitations to this study Future research might involve less reliance on perceptual measures. A more objective method for collecting the PA purpose, such as the intended appraisal use, would also be of interest to see if perceptions are driven by PA design factors and how the interaction between espoused and perceived PA use affects attitudes. An important question is whether employees perceive a difference in use when the organization makes design changes. Also, if an organization states that the PA is used for a certain purpose (for example, individual development) but the employees do not feel it is actually for that purpose, attitudes may be more negative in comparison to when an organization succeeds in matching perceptions of use to stated use. Although this study used a diverse sample of employees in terms of occupations and demographics, the generalizability is questionable. Future research should investigate variations in organizational hierarchy as well as multiple organizations and industries. As suggested by Ostroff (1993), looking across organizations where espoused PA use varies, stronger relationships between use and attitudes may emerge. In the present study, although the organization's espoused PA purpose did not vary, employees' perceptions of PA use varied and perceived developmental use influenced their attitudes. Ostroff found similar results when rater perceptions of PA use and rating behaviors and attitudes were investigated even though the organizations explicit purpose remained constant. The importance of perceptions of PA use, as they affect both rater and ratee attitudes and behaviors, seems evident. Another limitation to this study is that the research design did not completely eliminate the possibility of common method bias. This can be problematic because of the potential inflation of observed relationships caused by common method variance and questions about causation. However, by collecting appraisal use perceptions and attitudinal data at two separate times with a relatively large time interval between (two months), these problems should have been reduced. Related, the assessment of perceived appraisal use and employee attitudes occurred at the same time across employees, yet PAs occurred on an employee's anniversary date. Thus some employees responded to a very recent performance review whereas others' most recent review could have occurred eleven months earlier. Although this is common in performance appraisal field research because many organizations conduct the PA on an employee's anniversary date, it is possible that survey responses were influenced by most recent experiences. Future research could take a more longitudinal approach to studying PA uses and work outcomes, perhaps investigating employee reactions

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immediately after an appraisal and over time. In addition, lhe role of the organizational context (for example, organizaiional values, culture, or strategy; department power and competition) in shaping the PA process and use could be investigated (Murphy and Cleveland, 1995). The perceived and actual use of PAs as well as employee reactions may be influenced by contextual factors, and gaining a better understanding of these factors may enhance utilization and functioning of the PA system and ultimately employee and organizational performance. Interestingly, calls for changes to the performance appraisal process have included separating employee development from evaluation (for example, McNerney. 1.995; Meyer, Kay, and French, 19651. Arguably, separating the two PA uses may better allow a supervisor to focus on providing employee development as needed, but separate from evaluation and criticism and free from the role of evaluator. Although the present study did not explicitly investigate separating PA uses, our findings do support the importance of ensuring that employees feel that developmentbut not necessarily evaluationis a part of ibe appraisal process. Given the nonsignificanl influence of perceived evaluation found here, it may be expected that actually removing evaluation from the PA process may have little effect on employee attitudes. In contrast, if evaluation is merely expected, as suggested, removing i( completely could actually have detrimental effects. Future research could explore the eflects of completely separating PA uses on employee attitudes, PA accuracy, and employee behaviors. Although Prince and Lawler (1986) investigated [he effects of removing salary discussions from the annual rexiew, a more complete test may be to remove all aspects of evaluation (for example, recognition of individual performance, retention-termination decisions) from the developmental appraisal. Conclusion. This study adds to our understanding of the impact of different PA uses by investigating the relationship between employee attitudes and perceptions of two common PA uses: developmental and evaluative. There appears to be a strong, positive relationship between perceived developmental use and employees' feelings about the appraiser and the appraisal. The relationship between perceived evaluative PA use and these attitudes is less clear. Therefore, how PAs are used in organizations and the perceptions regarding their use are fmitful areas for continued research.

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Wendy R. Boswell is flssis(an( professor of management in the Mays College and Graduate School of Business al Texas A&M University, CoUege Station, Texas. John W. Boudreau is associate professor and director of the Center for Advanced Human Resource Studies in the School of Induslrial & labor Relations at Cornell Univcrsity, Ithaca, New York.