Impact of Organizational Signals on Dynamic Performance Appraisal

One employee’s work performance can be hard to predict, partially because it can vary substantially day-to-day. Prior research has suggested that supervisors may incorporate dynamic performance information (e.g., performance variability and extremes) into overall performance judgments of their subordinates, but the extant research has yielded inconclusive results. This research drew on judgment and decision-making research to investigate the impact of performance variability and extremes on holistic performance ratings. The current study also investigated whether ratings of performance profiles were affected by situational information (e.g., observed organizational behaviors, organizational value statements) signaling what the organization values in terms of performance. This study varied the mean, variability, peak, and trough performance using a nomothetic judgment inference design and investigated the impact of experimental manipulations of organizational values. Results demonstrated that the mean was a strong predictor of overall ratings, but performance variability and extremes did not show a main effect on ratings. Results did not support the notion that variability would interact with extremes to predict ratings. Organizational signals communicating a desire for a consistent (i.e., low variability) performance increased rater reliance on variability information. Implications and directions for future research are discussed