A participatory, goal-oriented performance appraisal (PGPA) program was implemented in six departments of a state government. In a departure from the standard but questionable practice in the field, we examined the perceptual, rather than attitudinal or behavioral, impact of the program. We found that public employee perceptions were not responsive to PGPA. Consistent with the social cognition perspective of the article, the results suggest that perceptual effectiveness of a performance appraisal program should be established before its attitudinal or behavioral impact is examined. The results also underscore the difficulties of moving participatory, goal-oriented programs from laboratory settings to the field. Performance appraisal has been the subject of considerable research for many years. Performance appraisal serves the two major functions of evaluation and development (Meyer, Kay, and French 1965; Cummings and Schwab 1978; Wexley 1979). As evaluators, managers assess the performance of their employees for the purpose of determining pay increases, promotions, transfers, termination, and other employment-related decisions. The developmental function of performance appraisals focuses on providing feedback for the purpose of counseling and developing productive employees. Deficiencies of the traditional, traits-based performance appraisal have long been recognized (Haynes 1978; Reinhart 1985). In response to the failure of the traditional approaches, participative, goal-oriented performance appraisal alternatives have been recommended (Brown 1987; Edwards 1983; McConkie 1979). A rich literature examines employee responsiveness to participation in decision making and to goal setting (Casio 1987; An earlier version of this article was presented at the 1991 meeting of the Academy of Management, Miami Beach. J-PART, 5(1995):3:331-343 33 1IJournal of Public Administration Research and Theory This content downloaded from 157.55.39.157 on Mon, 01 Aug 2016 04:03:51 UTC All use subject to http://about.jstor.org/terms Perceptual Effects of Performance Appraisal Chang and Lorenzi 1983; Earley and Kanfer 1985; Erez, Earley, and Hulin 1985; Erez 1986; Herrick 1990; Larson 1984; Latham and Steele 1983; Locke and Schweiger 1979; Pritchard, Roth, and Jones 1988; Wagner 1994; and Wooten 1981). Very little of that literature, however, is in the context of performance appraisal. In addition to fulfilling its developmental and evaluative functions, we do not know if participative, goal-oriented performance appraisal (PGPA) generates positive employee responses. The purpose of our study is to examine the impact of a particular PGPA program in public agencies. The literature has been almost exclusively concerned with the impact of performance appraisal on employee attitudes and behavior (Wagner 1994). The implicit assumption is that external stimuli such as performance appraisal are linked directly to employee attitudes (e.g., satisfaction) and behaviors (e.g., performance). Exhibit 1A presents the operative model of this popular line of research. Yet, there is growing evidence of an intermediate, cognitive linkage between external stimuli and employee responses (Moussavi and Evans 1993), shown in exhibit 1B. As Daft and Weick (1984) argue, response is contingent upon interpretation. From a social cognition perspective, the individual's interpretation or perception of the external stimuli shapes his/her attitudinal responses (Ilgen and Knowlton 1983) as well as behavioral responses (Thomas and McDaniel 1991). Within the performance appraisal context, therefore, a revised stimuli-response model emerges (see exhibit 1C). We contend that in order to understand the impact of performance appraisal on such response variables as satisfaction or performance one first must examine the intermediate linkage between performance appraisal and employee interpretation. Our interest here goes beyond performance appraisal in general. We are interested specifically in participative, goal oriented performance appraisal. Our intent is to examine the impact of such programs in public agencies. In line with our social cognition foundation, laid out in exhibit 1C, we examine the appraisal-interpretation relationship. Sufficient evidence, both conceptual (Daft and Weick 1984; Moussavi and Evans 1993) and empirical (Ilgen and Knowlton 1983; Thomas and McDaniel 1991), suggests that questions about the effectiveness a performance appraisal program has on employee responses should be asked only after a significant linkage has been established between the features of such a program and the employees' interpretations of their work environment. 3321J-PART, July 1995 This content downloaded from 157.55.39.157 on Mon, 01 Aug 2016 04:03:51 UTC All use subject to http://about.jstor.org/terms Perceptual Effects of Performance Appraisal Exhibit 1 Stimuli-Response Linkage A. THE OPERATIVE PERFORMANCE APPRAiSAL MODEL Performance Employee appraisal ~attitudes and behavior B. GENERAL SOCIAL COGNITION MODEL tEximlal Interpretation Response C. THE REViSED PERFORMANCE APPRAiSAL MODEL External Interpretation Response Stimuli Performance Employee Employee appraisal perceptions attitudes intervention (satisfaction) and behavior