“Good” and “Bad” Control in Public Administration: The Impact of Performance Evaluation Systems on Employees’ Trust in the Employer

Abstract

In the course of the New Public Management reform movement, public administrations have increasingly implemented output-oriented control schemes, including systems to evaluate employees’ performance. However, contradictory evidence exists about how such output control that fundamentally differs from traditional bureaucratic control affects performance-relevant employee attitudes and behaviors. In this article, we present evidence that performance evaluations have positive or negative consequences depending on the specific design of the system. Analyzing survey data from 184 employees and 60 supervisors from the German municipal administration by structural equation modeling, we find performance evaluations employed as Management by Objectives (MbO) have a positive impact on trust in the employer and that those designed as Systematic Performance Appraisal (SPA) affect trust negatively. Both relationships are mediated by perceived cooperative climate. These findings advocate employing performance evaluations that are participative, adaptive, learning-oriented, and transparent and thus enable fair cooperation between organizational members.

Critical realism and attribution theory in qualitative research

“…Managers should be trained in involving their subordinates in the performance appraisal process, particularly those who are at the lower levels of the organisational hierarchy and might not have the confidence to share their opinions. Not only would performance systems based on participation, adequate notice, evaluation and feedback improve perceptions of justice, but these systems can also build trust in the organisation as a whole (Chory and Hubbell, 2008;Ert€ urk, 2007;Wiemann et al, 2018).…”

How do the unintended consequences of performance evaluation systems manifest themselves?

“…Although the effects of PE are described in terms of stress and anxiety, the term “tension”, related to work, could also be used (Ross, 1994). This tension is verified in the presence of more coercive PESs, as they end up generating fear and competition among employees (Wiemann et al , 2019), as well as reward system practices that can cause a feeling of exclusion in employees who did not reach the goal and were consequently not rewarded (Pavlov et al , 2017). These issues of stress, anxiety, fear, competition and exclusion are directly related to the trust perceived by employees, and a lack of trust can increase these forms of tension.…”

Agency Theory, Accounting Based Performance Evaluation Systems and IFRS: A Brief Relational Overview

“…Yet another method is to use a fuzzy AHP in which the calculation of the weight of the evaluation criteria done ( (Rahmati & Noorbehbahani, 2017). Performance evaluations based on Management by Objectives (MBO) can have a positive effect (Wiemann et al, 2019).…”

“…Enter the results based, process consolidated; economic theory focused on a new way of evaluation. The anchoring of this approach is the fact that goal setting and employee salary is at the center of an employee's performance; this means less bureaucratic behavior is needed from managers to increase firm effectiveness (Wiemann et al, 2019).…”