The Impact of Merit Raise Scores on Employee Attitudes: The Matthew Effect of Performance Appraisal

Abstract

This article attempts to demonstrate that the score an employee receives on his or her performance appraisal can influence attitudes toward general management, organization change, and fairness of evaluation instruments. Employees who score well tend to be positive toward management and supportive of the evaluation process, whereas average to low scorers are more cynical toward management and feel the evaluation process is unfair. Thus, performance appraisal scores can alienate exactly those employees who most need to improve. Instead of trying harder, average to low scorers rationalize why they are right and the raters wrong. This hardens their attitude toward the organization and can lead to lower performance. Hence, good employees tend to continue doing well and average to poor employees can become worse. For this reason, performance appraisal, even though it is handled objectively, can lead to a Matthew Effect. In general, employees don't like hearing bad news, even if it is correct.