PSY 3630 Module 6 Performance Appraisal Paper: Feedback That Helps and Feedback That Harms Example

One in Three Makes It Worse: Redesigning Feedback for Member Service Representatives

Student Name

B.S.B.A. in Human Resources/Organizational Management, Thomas Edison State University

PSY-3630: Industrial Psychology

Mentor Name

Month Day, Year

One in Three Makes It Worse: Redesigning Feedback for Member Service Representatives

Introduction

Each December, branch managers at the credit union rate every member service representative from 1 to 5 on eight general traits, such as initiative and attitude, and hold a short meeting to discuss the form. Raises depend on the rating. Representatives describe the meetings as tense and the ratings as arbitrary, and managers rate nearly everyone a 4. The human resources director asked for a redesign grounded in research.

What Feedback Does

Kluger and DeNisi (1996) pooled several hundred effect sizes on feedback interventions. The average result was a moderate gain in performance, with an effect size of about .41. Yet over one third of the comparisons showed feedback pulling performance down. Their feedback intervention theory explained why: feedback aimed at the task and at concrete ways to improve it usually helps, while feedback that turns attention to the self, for instance personal praise, criticism of the person or ranking against others, tends to hurt, because it shifts attention away from the task to protecting self-image. Feedback that is specific, related to clear goals and focused on changes the person can make works best.

A Century of Appraisal Research

DeNisi and Murphy (2017) looked back over a century of appraisal studies in the field's flagship applied journal. The earliest work focused on rating scale formats and rater errors, such as leniency and halo, in the hope that a better form would produce accurate ratings. Later research recognized that ratings are shaped by the social context, including managers' goals, relationships and the consequences of ratings, such as pay. More recently, attention has shifted from appraisal, the once-a-year rating, to performance management, the ongoing process of setting goals, giving feedback and developing employees. They noted that despite a century of research, there is still limited evidence that appraisal itself improves performance, and they called for research that tests this directly.

Multisource Feedback

Smither et al. (2005) meta-analyzed studies of multisource or 360-degree feedback, in which employees receive ratings from supervisors, peers, subordinates and sometimes customers. Performance improved after multisource feedback, but the average improvement was small. Improvement was larger for people who received unfavorable feedback and believed change was necessary, who had a positive orientation toward feedback, who set goals and who took action, such as discussing feedback with others or attending development activities.

Problems With the Current System

The current form rates general traits, which, by Kluger and DeNisi's theory, pulls attention toward self-image and away from the work. Ratings tied to raises invite leniency, which DeNisi and Murphy's context view explains: managers avoid conflict and protect their teams. One annual meeting gives too little feedback, too late, to guide improvement.

The Redesigned System

Four linked parts replace the annual form. First, the rating dimensions come from the job analysis clusters: problem resolution, account and loan accuracy, digital support, cash handling and referral. Each has behavioral anchors written with experienced representatives, like those in the interview. Second, managers hold 15-minute check-ins every month, focused on one or two specific tasks, using data such as paperwork audits and member comments, and ending with one goal for the next month. Third, member feedback from short surveys after transactions provides a customer source, and peer input on teamwork is collected twice a year, with results discussed in a development meeting that sets goals, following Smither and colleagues. Fourth, the annual pay decision is separated from development conversations, held in a different meeting and based on documented results across the year.

Rater Errors

Even with a better form, ratings can be distorted. Leniency, giving everyone high ratings, is the credit union's main problem. Halo, letting one impression color all dimensions, and recency, weighting the last few weeks most, are also common. Monthly check-ins with notes reduce recency, behavioral anchors reduce halo and separating pay decisions from development reduces the pressure behind leniency.

Handling Poor Performance

Ongoing feedback also changes how poor performance is handled. Instead of discovering a problem at year end, managers raise it in a monthly check-in with specific examples, set a clear goal and offer support, such as a refresher with a peer coach. If performance does not improve after three months, a documented improvement plan follows, which is fairer to the employee and more defensible for the credit union.

Training Managers

Managers will be trained to give task-focused feedback, avoiding statements about personality or comparisons with coworkers, and to ask representatives to describe their own view first. A short guide will include examples of helpful and unhelpful feedback.

Evaluation

The credit union will track rating distributions to check that leniency has decreased, survey representatives on the usefulness of feedback, compare paperwork error rates and member satisfaction before and after and monitor whether turnover among strong performers falls.

Rollout

The new system will start with a pilot in three branches whose managers volunteered, with a review after six months. Lessons from the pilot, including how long check-ins actually take, will shape the version rolled out to all branches.

Limits

Evidence that appraisal improves performance remains limited, as DeNisi and Murphy note. Multisource feedback effects were small. The credit union is invented.

Conclusion

Kluger and DeNisi showed that feedback can harm when it targets the person rather than the task, DeNisi and Murphy showed that appraisal is shaped by its social context and has moved toward ongoing management and Smither and colleagues showed that multisource feedback helps when followed by goals and action. For member service representatives, monthly task-focused check-ins, job-based anchored dimensions, member feedback with goals and a separate pay process put this research to work.

References

DeNisi, A. S., & Murphy, K. R. (2017). Performance appraisal and performance management: 100 years of progress? Journal of Applied Psychology, 102(3), 421-433. https://doi.org/10.1037/apl0000085

Kluger, A. N., & DeNisi, A. (1996). The effects of feedback interventions on performance: A historical review, a meta-analysis, and a preliminary feedback intervention theory. Psychological Bulletin, 119(2), 254-284. https://doi.org/10.1037/0033-2909.119.2.254

Smither, J. W., London, M., & Reilly, R. R. (2005). Does performance improve following multisource feedback? A theoretical model, meta-analysis, and review of empirical findings. Personnel Psychology, 58(1), 33-66. https://doi.org/10.1111/j.1744-6570.2005.514_1.x