Abstract
Employee well-being is notably influenced by an employee’s work environment and experiences at work. These individual work experiences can be enhanced or ultimately hindered by an organization’s performance management. In this chapter, we provide a comprehensive look at the implementation of performance management systems and the ensuing well-being implications or consequences for individuals and the organization. First, we conceptualize and apply an employee well-being framework to the development of performance management systems in organizations. Then, we provide several workplace scenarios that depict how performance management systems may influence employee well-being in a variety of ways. Each scenario is considered in light of the performance management system, a discussion of possible implications for employee well-being, and practical recommendations for the development of more ethical and effective practices. Finally, we conclude this chapter with suggestions for the consideration of employee well-being in the development and implementation of performance management systems.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Abelson, M. A. (1987). Examination of avoidable and unavoidable turnover. Journal of Applied Psychology, 72(3), 382–386.
Anseel, F., & Lievens, F. (2007). The long-term impact of the feedback environment on job satisfaction: A field study in a Belgian context. Applied Psychology: An International Review, 56, 254–266.
Arthur, W., Edwards, B., Bell, S. T., Villado, A., & Bennett, W. (2005). Team task analysis: Identifying tasks and jobs that are team-based. Human Factors, 47, 654–669.
Ashforth, B. (1997). Petty tyranny in organizations: A preliminary examination of antecedents and consequences. Canadian Journal of Administrative Resources, 14, 126–140.
Baltes, B. B., Bauer, C. B., & Frensch, P. A. (2007). Does a structured free recall intervention reduce the effect of stereotypes on performance ratings and by what cognitive mechanism? Journal of Applied Psychology, 92(1), 151–164.
Blume, B. D., Baldwin, T. T., & Rubin, R. S. (2009). Reactions to different types of forced distribution performance evaluation systems. Journal of Business and Psychology, 24, 77–91.
Brown, K. A., & Huber, V. L. (1992). Lowering floors and raising ceilings: A longitudinal assessment of the effects of an earnings-at-risk plan on pay satisfaction. Personnel Psychology, 45(2), 279–311.
Buchner, T. W. (2007). PM theory: A look from the performer’s perspective with implications for HRD. Human Resource Development International, 10, 59–73.
Burke, R. J., & Wilcox, D. S. (1969). Characteristics of effective employee performance review and development interviews. Personnel Psychology, 22(2), 291–305.
Cardy, R. L., & Dobbins, G. H. (1994). Performance appraisal: Alternative perspectives. Cincinnati, OH: South-Western Publishing.
Carrol, S. J., & Schneier, C. E. (1982). Performance appraisal and review systems: The identification, measurement, and development of performance in organizations. Glenview, IL: Scott, Foresman.
Caverley, N., Cunningham, J. B., & MacGregor, J. N. (2007). Sickness presenteeism, sickness absenteeism, and health following restructuring in a Public Service Organization. Journal of Management Studies, 44(2), 304–319.
Cawley, B. D., Keeping, L. M., & Levy, P. E. (1998). Participation in the performance appraisal process and employee reactions: A meta-analytic review of field investigations. Journal of Applied Psychology, 83(4), 615–633.
Chen, Z., Lam, W., & Zhong, J. A. (2007). Leader-member exchange and member performance: A new look at individual-level negative feedback-seeking behavior and team-level empowerment climate. Journal of Applied Psychology, 92(1), 202–212.
Cohen-Charash, Y., & Spector, P. E. (2001). The role of justice in organizations: A meta-analysis. Organizational Behavior and Human Decision Processes, 86(2), 278–321.
Colquitt, J., Conlon, E., Wesson, M., Porter, C., & Ng, K. (2001). Justice at the millennium: A meta-analytic review of 25 years of organizational justice research. Journal of Applied Psychology, 86, 425–445.
Conrad, D. A., Maynard, C., Cheadle, A., Ramsey, S., Marcus-Smith, M., Kirz, H., et al. (1998). Primary care physician compensation method in medical groups. Journal of the American Medical Association, 11, 853–858.
Coyle-Shapiro, J. A., & Kessler, I. (2000). Consequences of the psychological contract for the employment relationship: A large scale survey. Journal of Management Studies, 37(7), 903–930.
Cropanzano, R., & Mitchell, M. S. (2005). Social exchange theory: An interdisciplinary review. Journal of Management, 31(6), 874–900.
Cropanzano, R., Prehar, C. A., & Chen, P. Y. (2002). Using social exchange theory to distinguish procedural from interactional justice. Group Organization Management, 27(3), 324–351.
Cropanzano, R., & Rupp, D. E. (2008). Social exchange theory and organizational justice: Job performance, citizenship behaviors, multiple foci, and a historical integration of two literatures. In S. W. Gilliland, D. D. Steiner, & D. P. Skarlicki (Eds.), Justice, morality, and social responsibility (pp. 63–99). Charlotte, NC: Information Age Publishing.
Crossley, C. D., Bennett, R. J., Jex, S. M., & Burnfield, J. L. (2007). Development of a global measure of job embeddedness and integration into a traditional model of voluntary turnover. Journal of Applied Psychology, 92, 1031–1042.
Danna, K., & Griffin, R. W. (1999). Health and well-being in the workplace: A review and synthesis of the literature. Journal of Management, 25(3), 357–384.
Den Hartog, D. N., Boselie, P., & Paauwe, J. (2004). Performance management: A model and research agenda. Applied Psychology: An International Review, 53(4), 556–569.
DeNisi, A. S., & Peters, L. H. (1996). Organization of information in memory and the performance appraisal process. Journal of Applied Psychology, 81(6), 717–737.
Dowell, B. E., & Wexley, K. N. (1978). Development of a work behavior taxonomy for first-line supervisors. Journal of Applied Psychology, 63, 563–572.
Dransfield, R. (2000). Human resource management. Oxford, UK: Heinemann Educational Publishers.
Duffy, M. K., Ganster, D. C., & Pagon, M. (2002). Social undermining and social support in the workplace. Academy of Management Journal, 45, 331–351.
Eisenberger, R., Huntington, R., Hutchison, S., & Sowa, D. (1986). Perceived organizational support. Journal of Applied Psychology, 71(3), 500–507.
Elicker, J., Levy, P., & Hall, R. (2006). The role of leader-member exchange in the performance appraisal process. Journal of Management, 32(4), 531–551.
Emerson, R. M. (1976). Social exchange theory. In A. Inkeles (Ed.), Annual review of sociology (pp. 335–362). Palo Alto, CA: Annual Review.
Farh, J. L., & Dobbins, G. H. (1989). Effects of self-esteem on leniency bias in self reports of performance: A structural equation model. Personnel Psychology, 42, 835–850.
Farr, J., & Levy, P. E. (2007). Performance appraisal. In L. Koppes (Ed.), Historical perspectives in industrial and organizational psychology (pp. 311–327). Mahwah, NJ: Lawrence Erlbaum.
Ferris, G. R., Munyon, T. P., Basik, K., & Buckley, R. (2008). The performance evaluation context: Social, emotional, cognitive, political, and relationship components. Human Resource Management Review, 18(3), 146–163.
Findley, H. M., Giles, W. F., & Mossholder, K. W. (2000). Performance appraisal process and system facets: Relationships with contextual performance. Journal of Applied Psychology, 85, 634–640.
Fink, L. S., & Longenecker, C. O. (1998). Training as a performance appraisal improvement strategy. Career Development International, 3(6), 243–251.
Fletcher, C. (2001). Performance appraisal and management: The developing research agenda. Journal of Occupational and Organizational Psychology, 74, 473–487.
Fletcher, C., & Williams, R. (1996). Performance management, job satisfaction, and organizational commitment. British Journal of Management, 7(2), 169–179.
Folger, R., & Konovsky, M. A. (1989). Effects of procedural and distributive justice on reactions to pay raise decisions. Academy of Management Journal, 32(1), 115–130.
Forgas, J. P., & George, J. M. (2001). Affective influences on judgments and behavior in organizations: An information processing perspective. Organizational Behavior and Human Decision Processes, 86, 3–34.
Forret, M., & Love, M. S. (2008). Employee justice perceptions and coworker relationships. Leadership & Organization Development Journal, 29(3), 248–260.
Ganster, D. C., & Schaubroeck, J. (1991). Work stress and employee health. Journal of Management, 17, 235–271.
Gardner, D. G., Van Dyne, L., & Pierce, J. L. (2004). The effects of pay level on organization-based self-esteem and performance: A field study. Journal of Occupational and Organizational Psychology, 77, 307–322.
Gorman, C. A., & Rentsch, J. R. (2009). Evaluating frame-of-reference rater training effectiveness using performance schema accuracy. Journal of Applied Psychology, 94, 1336–1344.
Greenberger, D. B., & Strasser, S. (1986). Development and application of a model of personal control in organizations. Academy of Management Review, 11, 164–177.
Greenberger, E., Goldberg, W. A., Hamill, S., O’Neil, R., & Payne, C. K. (1989). Contributions of a supportive work environment to parents’ well-being and orientation to work. American Journal of Community Psychology, 17(6), 755–783.
Hackman, J. R., & Oldham, G. R. (1976). Motivation through the design of work: Test of a theory. Organizational Behavior and Human Performance, 16(2), 250–279.
Hafer, C. L., & Olson, J. M. (2003). An analysis of empirical research on the scope of justice. Personality and Social Psychology Review, 7(4), 311–323.
Hebert, B. G., & Vorauer, J. D. (2003). Seeing through the screen: Is evaluative feedback communicated more effectively in face-to-face or computer-mediated exchanges? Computers in Human Behavior, 19(1), 25–38.
Hellgren, J., Sverke, M., & Isaksson, K. (1999). A two-dimensional approach to job insecurity: Consequences for employee attitudes and well-being. European Journal of Work and Organizational Psychology, 8(2), 179–195.
Human Resources and Skills Development Canada. (2009). Indicators of well-being in Canada. Retrieved May 15, 2011, from http://www4.hrsdc.gc.ca/.3ndic.1t.4r@-eng.jsp?iid=19
Ivancevich, J. M. (1982). Subordinates’ reactions to performance appraisal interviews: A test of feedback and goal-setting techniques. Journal of Applied Psychology, 67(5), 581–587.
Jassawalla, A. R., & Sashittal, H. C. (1999). Building collaborative cross-functional new product teams. The Academy of Management Executive, 13, 50–63.
Judge, T. A., & Ilies, R. (2004). Affect and job satisfaction: A study of their relationship at work and at home. Journal of Applied Psychology, 89(4), 661–673.
Kacmar, K. M., Witt, L. A., Zivnuska, S., & Gully, S. M. (2003). The interactive effect of leader–member exchange and communication frequency on performance ratings. Journal of Applied Psychology, 88(4), 764–772.
Korsgaard, M. A., & Roberson, L. (1995). Procedural justice in performance evaluation: The role of instrumental and non-instrumental voice in performance appraisal discussions. Journal of Management, 21(4), 657–669.
Kraimer, M. L., Seibert, S. E., Wayne, S. J., Liden, R. C., & Bravo, J. (2011). Antecedents and outcomes of organizational support for development: The critical role of career opportunities. Journal of Applied Psychology, 96(3), 485–500.
Lambert, L. S., Edwards, J. R., & Cable, D. M. (2003). Breach and fulfillment of the psychological contract: A comparison of traditional and expanded views. Personnel Psychology, 56, 895–934.
Landy, F., & Farr, J. (1980). Performance rating. Psychological Bulletin, 87, 72–107.
László, K., Pikhart, H., Kopp, M., Bobak, M., Pajak, A., Malyutina, S., et al. (2009). Job insecurity and health: A study of 16 European countries. Social Science & Medicine, 70(6), 867–874.
Lawler, E. E. (2003). Reward practices and PM system effectiveness. Organizational Dynamics, 32(4), 396–404.
Leiter, M. P., & Durup, M. J. (1996). Work, home, and in-between: A longitudinal study of spillover. The Journal of Applied Behavioral Science, 32, 29–47.
Levy, P. E. (2010). Industrial organizational psychology: Understanding the workplace. New York: Worth Publishers.
Levy, P. E., & Williams, J. (2004). The social context of performance appraisal: A review and framework for the future. Journal of Management, 30, 881–905.
Liden, R. C., Wayne, S. J., Jaworski, R. A., & Bennett, N. (2004). Social loafing: A field investigation. Journal of Management, 30(2), 285–304.
London, M., & Smither, J. W. (1999). Empowered self-development and continuous learning. Human Resource Management, 38(1), 3–15.
London, M., & Smither, J. W. (2002). Feedback orientation, feedback culture, and the longitudinal performance management process. Human Resource Management Review, 12(1), 81–100.
Maertz, C. P., Jr., Griffeth, R. W., Campbell, N. S., & Allen, D. G. (2007). The effects of perceived organizational support and perceived supervisor support on employee turnover. Journal of Organizational Behavior, 28(8), 1059–1075.
Masterson, S. S., Lewis, K., Goldman, B. M., & Taylor, M. S. (2000). Integrating justice and social exchange: The differing effects of fair procedures and treatment on work relationships. Academy of Management Journal, 43(4), 738–748.
McBriarty, M. A. (1988). REFORM 88: A sense of deja vu. The American Review of Public Administration, 18(1), 47–61.
Meltzer, H., Bebbington, P., Brugha, T., Jenkins, R., McManus, S., & Stansfeld, S. (2010). Job insecurity, socio-economic circumstances and depression. Psychological Medicine, 40, 1401–1407.
Mero, N. P., Guidice, R. M., & Anna, A. L. (2006). The interacting effects of accountability and individual differences on rater response to a performance-rating task. Journal of Applied Social Psychology, 36(4), 795–819.
Meyer, H. H. (1991). A solution to the performance appraisal feedback enigma. The Academy of Management Executive, 5(1), 68–76.
Miller, D. T. (2001). Disrespect and the experience of injustice. Annual Review of Psychology, 52, 527–553.
Mitchell, M. S., & Ambrose, M. L. (2007). Abusive supervision in workplace deviance and the moderating effects of negative reciprocity beliefs. Journal of Applied Psychology, 92(4), 1159–1168.
Moorman, R. H., Blakely, G. L., & Niehoff, B. P. (1998). Does perceived organizational support mediate the relationship between procedural justice and organizational citizenship behavior? Academy of Management Journal, 42(3), 351–357.
Murphy, K. R. (2008). Explaining the weak relationship between job performance and ratings of job performance. Industrial and Organizational Psychology: Perspectives on Science and Practice, 1(2), 148–160.
Murphy, K. R., & Cleveland, J. N. (1995). Understanding performance appraisal: Social, organization, and goal-based perspectives. Thousand Oaks, CA: Sage.
National Statistical Institute of Bulgaria. (2011). 2011 population and housing census: 2009–2010 time use survey. Retrieved May 15, 2011, from http://www.nsi.bg/EPDOCS/TUS2009_2010_en.pdf
Nelson, A., Cooper, C. L., & Jackson, P. (1995). Uncertainty amidst change: The impact of privatization on employee job satisfaction and well-being. Journal of Occupational and Organizational Psychology, 68, 57–71.
Nurse, L. (2005). Performance appraisal, employee development and organizational justice: Exploring the linkages. International Journal of Human Resource Management, 16(7), 1176–1194.
O’Neill, O. A., Vandenberg, R. J., DeJoy, D. M., & Wilson, M. G. (2009). Exploring relationships among anger, perceived organizational support, and workplace outcomes. Journal of Occupational Health Psychology, 14(3), 318–333.
Organization for Economic Co-operation and Development. (2010). Average annual hours actually worked per worker. Retrieved May 15, 2011, from http://stats.oecd.org/Index.aspx?DataSetCode=ANHRS
Pulakos, E. D., White, L. A., Oppler, S. H., & Borman, W. C. (1989). Examination of race and sex effects on performance ratings. Journal of Applied Psychology, 74(5), 770–780.
Reb, J., & Greguras, G. J. (2010). Understanding performance ratings. Journal of Applied Psychology, 95(1), 213–220.
Roch, S. G. (2007). Why convene rater teams: An investigation of the benefits of anticipated discussion, consensus, and rater motivation. Organizational Behavior and Human Decision Processes, 104(1), 14–29.
Rosen, C. C., Levy, P. E., & Hall, R. J. (2006). Placing perceptions of politics in the context of the feedback environment, employee attitudes, and job performance. Journal of Applied Psychology, 91(1), 211–220.
Ross, L., & Nisbett, R. E. (1991). The person and the situation. Philadelphia, PA: Temple University Press.
Rousseau, D. M. (1995). Psychological contracts in organizations: Understanding written and unwritten agreements. Newbury Park, CA: Sage.
Rynes, S. L., Gerhart, B., & Parks, L. (2005). Personnel psychology: Performance evaluation and pay for performance. Annual Review of Psychology, 58, 571–600.
Saavedra, R., & Kwun, S. K. (2000). Affective states in job characteristics theory. Journal of Organizational Behavior, 21, 131–146.
Schleicher, D. J., Bull, R. A., & Green, S. G. (2009). Rater reactions to forced distribution rating systems. Journal of Management, 35, 899–927.
Schultz, A. B., & Edington, D. W. (2007). Employee health and presenteeism: A systematic review. Journal of Occupational Rehabilitation, 17, 547–579.
Scullen, S. E., Bergey, P. K., & Aiman-Smith, L. (2005). Forced distribution rating systems and the improvement of workforce potential: A baseline simulation. Personnel Psychology, 58, 1–32.
Silverman, S. B., Pogson, C. E., & Cober, A. B. (2005). When employees at work don’t get it: A model for enhancing individual employee change in response to performance feedback. The Academy of Management Executive, 19, 135–147.
Simons, T., & Roberson, Q. (2003). Why managers should care about fairness: The effects of aggregate justice perceptions on organizational outcomes. Journal of Applied Psychology, 88(3), 432–443.
Smith, H. J., Tyler, T. R., Huo, Y. J., Ortiz, D. J., & Lind, E. A. (1998). The self-relevant implications of the group-value model: Group membership, self-worth, and treatment quality. Journal of Experimental Social Psychology, 34(5), 470–493.
Sparr, J., & Sonnentag, S. (2008). Feedback environment and well-being at work: The mediating role of personal control and feelings of helplessness. European Journal of Work and Organizational Psychology, 17, 388–412.
Stauffer, J. M., & Buckley, M. R. (2005). The existence and nature of racial bias in supervisory ratings. Journal of Applied Psychology, 90(3), 586–591.
Steelman, L., Levy, P., & Snell, A. (2004). The feedback environment scale: Construct definition, measurement, and validation. Educational and Psychological Measurement, 64, 165–184.
Steffy, B. D., & Jones, J. W. (1988). Workplace stress and indicators of coronary-disease risk. Academy of Management Journal, 31(3), 686–698.
Tausig, M., & Fenwick, R. (1999). Recession and well-being. Journal of Health and Social Behavior, 40(1), 1–16.
Taylor, M. S., Tracy, K. B., Renard, M. K., Harrison, J. K., & Carroll, S. J. (1995). Due process in performance appraisal: A quasi-experiment in procedural justice. Administrative Science Quarterly, 40(3), 495–523.
Tekleab, A. G., Takeuchi, R., & Taylor, M. S. (2005). Extending the chain of relationships among organizational justice, social exchange, and employee reactions: The role of contract violations. Academy of Management Journal, 48(1), 146–157.
Tennen, H., & Affleck, G. (1991). The meaning and measurement of explanatory style: Unresolved issues. Psychological Inquiry, 2, 39–43.
Tepper, B. J. (2000). Consequences of abusive supervision. Academy of Management Journal, 43, 178–190.
Tett, R. P., & Meyer, J. P. (1993). Job satisfaction, organizational commitment, turnover intention, and turnover: Path analyses based on meta-analytic findings. Personnel Psychology, 46(2), 259–293.
Townley, B. (2007). Performance appraisal and the emergence of management. Journal of Management Studies, 30(2), 221–238.
Wang, X. M., Wong, K. F. E., & Kwong, J. Y. Y. (2010). The roles of rater goals and ratee performance levels in the distortion of performance ratings. Journal of Applied Psychology, 95(3), 546–561.
Warr, P. (1987). Work, unemployment, and mental health. Oxford, UK: Clarendon Press.
Warr, P. (1990). The measurement of well-being and other aspects of mental health. Journal of Occupational Psychology, 63, 193–210.
Warr, P. (2007). Work, happiness, and unhappiness. Mahwah, NJ: Lawrence Erlbaum.
Wayne, S. J., Shore, L. M., Bommer, W. H., & Tetrick, L. E. (2002). The role of fair treatment and rewards in perceptions of organizational support and leader-member exchange. Journal of Applied Psychology, 87(3), 590–598.
Welch, J. F., & Byrne, J. A. (2001). Jack: Straight from the gut. New York: Warner Books.
Werner, J. M., & Bolino, M. C. (1997). Explaining U.S. courts of appeals decisions involving performance appraisal: Accuracy, fairness, and validation. Personnel Psychology, 50, 1–24.
Whitaker, B. G., Dahling, J. J., & Levy, P. (2007). The development of a feedback environment and role clarity model of job performance. Journal of Management, 33(4), 570–591.
Williams, K. D., & Karau, S. J. (1991). Social loafing and social compensation: The effects of expectations of co-worker performance. Journal of Personality and Social Psychology, 61(4), 570–581.
Woehr, D. J., & Huffcutt, A. I. (1994). Rater training for performance appraisal: A quantitative review. Journal of Occupational and Organizational Psychology, 67, 189–205.
Wrzesniewski, A., Dutton, J. E., & Debebe, G. (2003). Interpersonal sense making and the meaning of work. Research in Organizational Behavior, 25, 93–135.
Zhao, H., Wayne, S. J., Glibkowski, B. C., & Bravo, J. (2007). The impact of psychological contract breach on work-related outcomes: A meta-analysis. Personnel Psychology, 60, 647–680.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2012 Springer Science+Business Media B.V.
About this chapter
Cite this chapter
Levy, P.E., Herb, K., Frantz, N., Carr, A. (2012). Employee Well-Being: Can Performance Management Systems Help? Yes, But They Sure Can Hurt Too!. In: Reilly, N., Sirgy, M., Gorman, C. (eds) Work and Quality of Life. International Handbooks of Quality-of-Life. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-4059-4_8
Download citation
DOI: https://doi.org/10.1007/978-94-007-4059-4_8
Published:
Publisher Name: Springer, Dordrecht
Print ISBN: 978-94-007-4058-7
Online ISBN: 978-94-007-4059-4
eBook Packages: Humanities, Social Sciences and LawSocial Sciences (R0)