Can Merit Pay Systems Avoid Creating Discord Between Supervisors and Subordinates?: Another Uneasy Look At Performance Appraisal

Abstract

Douglas McGregor was one of the early critics of performance appraisal. In his uneasy look at performance appraisal, it was suggested that managers intensely dislike this responsibility and often feel incapable of evaluating subordinates. His recommendation was for managers to jettison this responsibility by having subordinates evaluate themselves through an MBO format. This arti cle contends that while McGregor was correct in describing performance appraisal as an uneasy relationship between supervisors and subordinates, he was off target in terms of why this is the case. Instead of disliking the evaluation function, this article reports results of a study which sug gest managers like performance appraisal because it gives them greater control over their subor dinates. Supervisors as a group tend to reflect attitudinal characteristics suggestive of greater dominance, control, aggressiveness, and competitiveness in contrast to non-supervisory employees. Hence, supervisors often support merit pay plans for "power" as opposed to productivity reasons, and are frequently willing to tolerate considerable problems in such evaluation systems. Rank and file employees tend to view merit pay plans as biased, unfair, and unrelated to individual produc tivity. As a consequence, managenal support for performance appraisal — for reasons of super visory control, is likely to exacerbate discord between supervisors and subordinates. Even though it has been found that many performance appraisal systems do not work, managers simply dislike giving up a source of control. These opposing tendencies are likely to lead to continued problems in the implementation of merit pay in the public sector.