Performance Appraisal as a Guide for Training and Development: A Research Note on the Iowa Performance Evaluation System by Dennis

Daley Iowa State University his paper examines one facet of performance appraisalits use as a guide for the drafting of employee training and development plans. The scope is limited in that it excludes any consideration as to whether these plans are actually implemented. Our interest focuses only on the extent to which supervisors endeavor to assist employees in cor-recting or overcoming weaknesses and in enhancing or developing perceived strengths. The findings reported here are based on a 1981 monitoring of the performance appraisal system used by the State of Iowa. As civil service reform has been instituted in one jurisdiction after another in order to further assure objective, performance-based personnel practices, performance appraisal has emerged as one of the key issues in the personnel management of the 1980s. This heightened sense of importance and seriousness has, in turn, led to a renewed interest in the study of the actual workings of performance appraisal systems. The uses to which performance appraisal can be put are myriad. The recent Civil Service Reform Act of 1978 serves as a model in this respect. Here we find enunciated what may be taken as the typical orientation toward the uses of performance appraisal, recommending that personnel managers and supervisors "use the results of performance appraisal as a basis for training, rewarding, reassigning, promoting, reducing in grade, retaining, and removing employees." Performance appraisal systems can also serve to validate personnel testing and selection procedures, although such systems are themselves also subject to affirmative action validation requirements. The economic recessions of the 1970s and 1980s have placed significant restraints on these uses, however. The imposition of hiring freezes, the diminishment of promotional oppor-tunities, the advent of reductions-in-force, and the near abandonment of merit pay provisions by financially strapped governmental entities have contributed to the loss of enthusiasm for performance appraisal in many quarters. Under such circumstances, performance apprai-sallimited in its use to the more negative functions of employee evaluationtakes on the dreaded image ascribed to them by Douglas McGregor (1957). In their search to salvage something positive from amidst these circumstances personnel specialists have alighted upon the use of performance appraisal as a guide for employee training and development. This offers them the opportunity of providing public employees with a service that employees view as beneficial. Although public employees have shown lit-tle confidence in specific performance appraisal systems or in the managerial abilities of those responsible for their implementation (McGregor, 1957; Levinson, 1976; Nalbandian, 1981), they have tended to demonstrate a more favorable attitude when the purpose of per- Public Personnel Management Journal 159 formance appraisal has been perceived to be employee development (Decotiis and Petit, 1978; Cascio, 1982). This, of course, still poses a significant problem to a multipurpose system such as that found in the State of Iowa. Disenchantment or distrust with one aspect of the performance appraisal system may significantly contribute to the weakening of the entire evaluation sys-tem. THE IOWA PERFORMANCE EVALUATION SYSTEM In all public service systems employees are evaluated periodically; most often this is done informally. The introduction of formal systems of performance appraisal, usually in addition to continued informal assessment, is a relatively recent event. Formal systems of perfor-mance appraisal are designed to provide a systematic and objective measure of individual job performance and/or potential for development. Although the use of formal performance appraisal in Iowa can be traced back at least to the early 1950s (limited, for the most part, to such rudimentary methods as the essay or graphic rating scale), these occurred within a fragmented setting. Individual departments and agencies retained descretion over the choice of such personnel practices until well into the 1960s. Under Governor Harold Hughes (1963-1969)

a number of efforts were undertaken to strengthen the executive. Among these reforms was the creation of the State Merit System of Personnel Administration, administered by the Iowa Merit Employment Department, in 1967. Even so, there were numerous exemptions limiting the extent of its coverage, both in terms of separate merit systems outside its jurisdiction and of patronage appointments. The executive reform movement was continued throughout the lengthy service of Governor Robert Ray (1969-1983). Strong executive support was placed behind the development of the personnel system. Governor Ray unsuccessfully advocated expanding the IMED jurisdiction through the elimination of the existing coverage exemptions and by integrating the separate merit systems into an executive personnel department. Notwithstanding the somewhat li-mited success of recent Iowa governors, the basis for a professionalized public service was established during those years. One reflection of this basis is the fact that the use of a statewide appraisal-by-objectives system was inaugurated in 1977.2 The implementation of this system followed the introduc-tion of the management-by-objectives concept among a number of the larger state agencies. Since appraisal-by-objectives is a specific application or extension of the MBO approach, it was felt that by this means executive support for performance appraisal could be more read-ily obtained. It is known, of course, that the lack of managerial support is a significant con-tributing factor in the failure of many performance appraisal systems. The Iowa performance evaluation system is an ideal-typical descriptive example of the ap-praisal-by-objectives technique. The introduction of this approach in 1977 was accompained by a series of training sessions (Burke, 1977) and supported with supervisory and employee handbooks. However, training for new supervisors and periodic "refresher courses" appear to have been given a low priority in Iowa, as is generally the case in public sector personnel systems. Iowa's use of appraisal-by-objectives is designed as a participatory system. Em-ployee participation is a hallmark found among most modern management approaches and has been linked to successful public sector performance appraisal systems (Lovrich, et al.. 1981). The Iowa performance evaluation process is initiated with joint completion of "Section A: Responsibilities and Standards/Results Expected" (also referred to as the "job description") by the supervisor and employee. This is the first of three sections included in the perform-ance appraisal form/process. Section A is completed at the beginning of the annual appraisal period while sections B and C are written up at its conclusion. The employee is to be given prior notice of the conference and supplied copies of previous evaluation for use as guides. Eight to ten major responsibilities (four to five is the norm) are to be selected and written down in a resultsoriented format with specific standards by which the achievement of these results are to be measured. These individual responsibilities are weighted through the use of an additive formula which factors in the time spent on each task and the evaluation of its importance or the consequence of error (a five point Likert-type scale is used for both). The overall employee rating is the weighted average of these individual responsibility ratings (also based on a five point scale). In the event that these responsibilities need to be subject to modification due to changing circumstances, a new Section A would be prepared by the supervisor and employee. During the course of the evaluation period the supervisor is also encouraged to use a "critical inci-dent" approach. Both formal (with written copy inserted into the employee's file) and informal communications between employees and supervisors are encouraged. For negative incidents it is important that a record of corrective action be documented; employees must be notified if they are doing something wrong and the supervision must indicate how they can

correct their behavior. At the end of the evaluation period, again following advanced notice, the employee and supervisor meet to discuss the employee's job performance in light of the responsibilities out-lined in the employee's Section A. Worksheets are used at this meeting with a formal evalu-ation prepared only afterward. At this appraisal interview the supervisor discusses "Section B: Performance Review/Rating" with the employee. Employees are also given the opportu-nity to formally comment on the final evaluation form. Historically only five percent do so, of which under two percent can be classified as negative comments. "Section C: Summary of Total Job Performance and Future Performance Plans" is also completed at this time. Basically, this is an essay evaluation. The supervisor is provided the opportunity to list the employee's "areas of strength and those "areas needing improve-ment." In the latter instances "training and developmental plans" for correcting these are supposed to be filed. DATA COLLECTION In conjunction with its implementation efforts the Iowa Merit Employment Department engaged in a two-year monitoring of its appraisal-by-objectives evaluation system. The re-sults of this monitoring project, involving the sampling of performance appraisals submitted in between July 1978 and December 1979, were reported to state officials in January 1980. The first monitoring project led to a number of minor changes in the performance evaluation system. For most part these modifications represented "word changes;" e.g., instead of listing "employee weaknesses," "areas needing improvement" were prescribed. This study is based on the results of a second monitoring project conducted by the IMED. The questions addressed in this study were, in part, raised by the first monitoring project. While the first monitoring focused primarily on the basic or general implementation of the performance evaluation system (i.e., was there compliance with the mandated requirePublic Personnel Management Journal 161

ments?), the second is more concerned with how well it is working. The format used here is that of "action research" or "troubleshooting" (Starling, 1979, pp. 495-514, Rossi and Freeman, 1982). IMED staff served as judges who assessed the qualitative aspects of per-formance appraisals. A stratified approach to sampling was employed in order to assure that sufficient supervisory, professional and managerial appraisals were included. The resultant data base consisted of 535 performance appraisals submitted between July and December of 1981. 182 Public Personnel Management Journal DATA ANALYSIS The primary results assessing how well Iowa's performance appraisal system is working are reported elsewhere (Daley, 1983). This paper focuses only on those aspects related to the specification of training and development plans. Because Iowa employs a multipurpose approach in the use of performance appraisals it is hardly surprising that there are many instances, 43 percent of those monitored, in which no training and development are specified. This, however, poses the task of somehow separating the cases in which training plans should most definitely be present. A supervisor may choose to list training and development plans for three reasons. First, unrelated to any individual strengths or weaknesses, he may choose to use this performance appraisal section as a memo or reminder

of a training activity which all employees are routinely given. The inclusion of such activities in an "official" performance appraisal may serve to provide added political weight in order to insure their being performed; it is all to easy amidst the pressing, day-to-day concerns of administrative firefighting to let training and development activities slide off the edge. Second, supervisors may choose to promote employee development. They may either pick-up on some strength an individual already possesses or for which he may have an aptitude and attempt to polish, refine, or enhance those skills. While this is not an automatic re-lationship, not all "strengths" would require additional or follow-up training, it is important for both organizational and individual well-being. Obviously, such activities benefit the or-ganization by increasing its administrative or technical capacity. One can also expect that the individual employee benefits through material rewards and/or enhanced self-esteem. As such, this represents one of the positive uses to which performance appraisal can be put. Hence, it has an added importance. Finally, training plans should be specified in those instances in which a supervisor notes that an employee "needs improvement," As such remarks may become the basis for an ad-verse personnel action (reassignment, reduction in grade, removal, etc.) it is legally incum-bent that the state demonstrate that it has made a good faith effort to correct such deficien-cies. Due process demands that public employees not be dealt with a "star chamber" fashion. An employee cannot be expected to correct inadequate work behaviors if he is neither told that they are inadequate nor, it told, not instructed or assisted in how to correct them. In monitoring Iowa's performance appraisals room was allowed to record up to three "strengths" and "areas needing improvement" for each employee. Supervisors tended to list employee strengths twice as often as they detailed areas needing improvement (1223 to 506), and as one would expect there is a pronounced tendency to note both strengths and areas needing improvement vis-a-vis individual employees (58 percent of the monitored appraisals combine both strengths and areas needing improvement). A count of the number of listed strengths and areas needing improvement was made use of (zero to three for each variable) in analyzing this data. While this fails to measure the im- portance or significance of each strength or area needing improvement, it was felt that in some way the number of such instances would be related to or a rough indicator of the over-all seriousness underlying the specification or training plans (i.e., as the number of instances increased so would the need for a training plan to be specified). Furthermore, training plans were judged not only as to their existence but also as to whether they were deemed to represent a "poor" or "good" relationship between the plan and the listed strengths and areas needing improvement. The nature of this relationship may also be interpreted in terms of partial or full compliance. "Good" plans would be seen as fol-lowing-up on the listed strengths and/or areas needing improvement and, hence, as comply-ing with the personnel system's intention to use performance appraisals as a guide for train-ing and development. In addition to the above analysis the count of strengths and areas needing improvement were also compared to the rounded performance ratings given to each individual. It was felt that there should be evidence here, too, albeit tangential in nature, of a relationship; those employees garnering more mentions of strengths and/or of fewer areas needing improvement should possess higher ratings. FINDINGS The specification of training plans for employees for when strengths and areas needing improvement were listed is displayed in Table 13 That training plans have not been detailed for many of those deemed to have strengths is hardly unexpected. In such cases supervisors may approach this as an optional activity rather than as a managerial duty. What is indeed heartening is that there are in fact so many supervisors who endeavor to provide such developmental plans. A substantial percentage of supervisors appear to be taking the effort to

develop employees quite seriously. In the case of those with areas needing improvement Table I is somewhat more clear. In these instances it is incumbent upon supervisors to provide corrective plans; it is no longer something which can be considered to be optional. Here, there is obvious evidence that sub-stantial efforts are being made. In over two-thirds of the cases supervisors are attempting to provide guidance and assistance to their subordinates; furthermore, in nearly half of the applicable cases monitored the specified training plans were judged to provide a good "solu-tion" for the listed areas needing improvement. A note of caution is, however, necessary with respect to these findings. The above, some-what simplified presentation ignores the possible presence of confounding of interactive ef-fects. A significant proportion of those monitored (58 percent) were deemed to have both strengths and areas needing improvement. However, we can address this issue by examing the partial correlations involved; these findings are summarized in Table II. The training plans partial gammas are .15 for strengths and .37 for areas needing im-provement and differ only slightly from their zero-order equivalents (.18 and .37 respec-tively).4 From this we can conclude that a set of independent relationships in which little confounding occurs is present. The magnitude of these associations tends to demonstrate the existence of rather moderate relationships in both instances with that between training plans and areas needing improvement being the stronger. The subsidiary issue with regard to performance ratings evinces a somewhat different pat-tern. While it is clear that the number of strengths and areas needing improvement appear to have a salient impact on performance ratings, there is evidence here of confounding. In fact, we would hardly expect otherwise. Whereas the specification of training plans is ex- Public Personnel Management Journal 163 Training Plans None Listed Partial Compliance Poor Relationship between plans and listed strengths and/or improvements Full Compliance Good Relationship between plans and listed strengths and/or improvements Number of Strengths Number of Areas Needing Improvement aZero-Order gammas in parentheses *v.05 **p- .01 ***p---c.001 164 Public Personnel Management Journal TABLE I The Relationship of Training Plans to Strengths and Areas Needing Improvement Employees for Whom Strengths were Listed 204 (41%) 108 (22%) 185 (37%) n=497 TABLE II Training Plans .15 (.18)* .37 (.37)** .48 ( .44)** Employed for Whom Areas Needing Improvement Were Listed 100 (32%) 64 (21%) 146 (47%) n=310 The Relationship of Training Plans and Performance Ratings to Strengths and Areas Needing Improvement: Partial and Zero-Order Gammasa Performance Rating .39 (.29)** pected to be independently tailored to an individual's strengths and areas needing improve-ment, the performance rating, is, on the other hand, a summary measure in which the bal-ance of strengths and areas needing improvement is judged. That they should confound one another is as it should be. Areas needing improvement should militate against what would otherwise be high ratings, and conversely, strengths should act to retard the decline of a performance rating. That this is indeed the case is demonstrated in that the magnitude of the partial gammas is in both instances larger than the uncontrolled, zero-order relations.

CONCLUSION Performance appraisal is a multipurpose personnel instrument. While this most certainly complicates its use, it does not necessarily have to lead to a stalemated situation. Within the framework of a multipurpose instrument. The Iowa appraisal-by-objectives system appears to be relatively successful in serving the purpose of providing a guide to employee training and development. Supervisors draw upon the perceived strengths and areas needing improvement of their employees not only in determining the employee's performance ratings but also for purposes of training and development. This is especially important vis-a-vis the employee who is seen to be in need of improvement. This implies a healthy orientation towards helping the individual overcome his difficulties. Inasmuch as these recommendations are implemented (i.e., the suggested training is, in fact, provided), employee performance and organizational pro-ductivity should be enhanced. The development plans which build upon employee strengths should also result in such improvements. NOTES would like to thank Pat Meny and the staff at IMED as well as Dr. Nicholas Lovrich for their assistance. This research was partially funded by the ISU Research Foundation. None of these indi-viduals or institutions, of course, is responsible for the opinions expressed in this paper. 2The appraisal-by-objectives or perfonnance standards approach has been identified by Tyer (1982) as being used, in some form, by 40 percent of the American states and as being that approach showing the most promise of growth. 3Because those employees for whom neither strengths nor areas needing improvement were listed can be legitimately expected not to require training plans, although there is also no reason which would preclude them for having one, they are excluded in the analysis presented in Table 1. Their exclusion is justified in terms of their failure to meet the criteria set within the performance appraisal instrument which substantiates the filing of training and development plans. 4Because Blalock (1972) warns that partial gammas may be distorted due to the uneven distribution of marginals, partial Pearson correlations were also examined. While the statistics recorded mag-nitudes are smaller, the same pattern is evident. The zero-order Pearson correlations between training plans and the number of strengths and areas needing improvment are .15 and .27 respectively. Their corresponding partial correlations controlling for the other are .12 and .25. REFERENCES Blalock, Hubert (1972) Social Statistics. New York: McGraw-Hill. Burke, Zona (1977) Performance Evaluation: Participant's Training Manual, Iowa City, IA: Institute of Public Affairs Cascio, Wayne (1982) "Scientific, Legal, and Operational Imperatives of Workable Performance Apprai-sal Systems," Public Personnel Management 11, 4 (Winter): 367-375. Daley, Dennis (1983) "Monitoring the Use of Appraisal-by-Objectives in Iowa," Review of Public Per-sonnel Administration Decotiis, Thomas and Andre Petit (1978) "The Performance Appraisal Process: A Model and Some Test-able Propositions," Academy of Management Review (July): 635-646. Levinson, Harry (1976) "Appraisal of What Performance?" Harvard Business Review 54, 4 (July Au-gust): 30-36. Lovrich, Nicholas, Paul Shaffer, Ronald Hopkins, and Donald Yale (1980) "Public Employees and Per-formance Appraisal: Do Public Servants Welcome or Fear Merit Evaluation of Their Performance?" Public Administration Review 40, 3 (MayJune): 214-111. Public Personnel Management Journal 165