McClain, Patrick (Capstone) 2015-12-22

Running head: PRISM OF ATTRIBUTIONS
Prism of Attributions:
An Analysis of Managerial Attributional Bias in Performance Appraisals
Capstone Paper Submitted for the Master of Professional Studies Degree in
Human Resources Management
Georgetown University
By
Patrick A. McClain
Fall 2015

PRISM OF ATTRIBUTIONS
Master of Professional Studies in Human Resources Management
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PRISM OF ATTRIBUTIONS i
Acknowledgement
I am using this opportunity to express my deepest gratitude to everyone who supported me
throughout the course of this master’s program. I am especially grateful to Robin Conley, Faith
Hassel, Nat Saethia, Donna Scarola, and Christina Theriaque. I will always remember and
cherish the countless hours of studying, talking, and supporting each other. We will always have
the best study group. Finally, I would like to thank my amazing mother, Jeanne McClain. She
was always so passionate about education and always pushed me to go one step further. I am
proud that she can share this moment with me and will continue to watch over me.
Soli Deo Gloria.

PRISM OF ATTRIBUTIONS ii
Prism of Attributions:
An Analysis of Managerial Attributional Bias in Performance Appraisals
Patrick A. McClain
Master of Professional Studies Degree in Human Resources Management
Fall 2015
Abstract
Managers make attributions about subordinates everyday which impact the fairness and
effectiveness of performance appraisals. The comprehensive literature review addresses the
components of the performance appraisal process, summarizes the history of attribution theory,
describes how attributions impact performance appraisals, and describes major biases inherent
with attributions. After context is provided, this paper addresses the question of how front-line
managers can limit attributional bias to ensure a fair and effective performance appraisal. Using
an exploratory approach, the chapters will cover the effects of attributional bias, how
performance appraisals are conducted today, and the problems associated with manager bias. An
examination and adaptation of the Performance Prism Model will shed light on the complexity of
the performance appraisal process, which will create a framework to provide actionable
recommendations for human resources professionals to implement in their own organization.
Specifically, organizations can conduct attribution training for managers, conduct a thorough
performance appraisal process and increase psychological closeness between managers and
subordinates. By utilizing the performance prism framework, each of these recommendations
will help front-line managers to limit attributional bias during the performance appraisal process.
Keywords: performance appraisals, attribution theory, fundamental attribution theory,
performance management

PRISM OF ATTRIBUTIONS iii
Table of Contents
Acknowledgement ........................................................................................................................... i

Abstract........................................................................................................................................... ii

Introduction..................................................................................................................................... 1

Scope............................................................................................................................................... 2

Aims................................................................................................................................................ 3

Objectives ....................................................................................................................................... 3

Justification..................................................................................................................................... 3

Limitations...................................................................................................................................... 4

Literature Review............................................................................................................................ 4

What Are Performance Appraisals?.......................................................................................... 5

Attribution Theory: An Overview ............................................................................................ 7

Components of causal attribution. ...................................................................................... 8

Types of attributions. .......................................................................................................... 9

Internal factors. ............................................................................................................. 9

External factors........................................................................................................... 10

Attribution styles............................................................................................................... 10

Performance Appraisals and Attributions............................................................................... 11

Decision making process. ................................................................................................. 12

Performance appraisal outcomes. ..................................................................................... 12

Communication with subordinates. .................................................................................. 13

Attributional Biases ................................................................................................................ 13

Cognitive Biases ..................................................................................................................... 14

Conclusion .............................................................................................................................. 14

Methodology................................................................................................................................. 15

Results........................................................................................................................................... 16

Chapter One: The Effects of Attributional Bias ........................................................................... 19

How is an Attribution Made?.................................................................................................. 20

Kelley Cube model. .......................................................................................................... 20

Green and Mitchell model. ............................................................................................... 21

Martinko and Gardner model............................................................................................ 22

Understanding Attributional Bias ........................................................................................... 23

Types of Attributional Bias..................................................................................................... 24

Self-serving bias................................................................................................................ 24

PRISM OF ATTRIBUTIONS iv
Actor-observer bias........................................................................................................... 25

Fundamental attribution error. .......................................................................................... 26

Management’s Role in Attributional Bias .............................................................................. 27

Manager’s leadership style. .............................................................................................. 27

Optimistic attribution style. ........................................................................................ 28

Pessimistic attribution style. ....................................................................................... 28

Hostile attribution style............................................................................................... 28

Manager’s expectations. ................................................................................................... 29

Manager’s communication................................................................................................ 30

Attributional Impact on Manager and Subordinate Relationship ........................................... 31

In-group behavior vs. out-group behavior. ....................................................................... 31

Empowerment vs. learned helplessness............................................................................ 32

Punishment vs. reward...................................................................................................... 33

Chapter Conclusion................................................................................................................. 34

Chapter Two: Evaluating Performance Appraisals....................................................................... 35

Methods of Performance Appraisals....................................................................................... 36

Trait-based performance appraisals.................................................................................. 36

Trait ranking scale............................................................................................................. 37

Behaviorally based performance appraisals...................................................................... 37

Behaviorally anchored rating scale (BARS)............................................................... 37

Mixed standard scale................................................................................................... 38

Results-based performance appraisals.............................................................................. 38

Management by objectives (MBO)................................................................................... 39

Other formats. ................................................................................................................... 39

Critical incident........................................................................................................... 40

Ranking method.......................................................................................................... 40

Graphic rating scales................................................................................................... 40

Why Do Organizations Use Performance Appraisals?........................................................... 41

Types of Raters or Evaluators................................................................................................. 41

Supervisor. ........................................................................................................................ 42

Self.................................................................................................................................... 42

PRISM OF ATTRIBUTIONS v
Peer(s). .............................................................................................................................. 43

Subordinate(s)................................................................................................................... 43

Customers. ........................................................................................................................ 44

Performance Appraisal Effectiveness..................................................................................... 45

Rater Errors and Biases........................................................................................................... 45

Contrast bias...................................................................................................................... 45

Halo/horn effect. ............................................................................................................... 45

Leniency effect.................................................................................................................. 46

Recency effect................................................................................................................... 46

Appraisal Reactions ................................................................................................................ 47

Satisfaction with the performance system. ....................................................................... 47

Satisfaction with the performance appraisal session. ....................................................... 47

Perceived utility. ............................................................................................................... 48

Perceived accuracy............................................................................................................ 48

Perceived justice. .............................................................................................................. 48

Chapter Conclusion................................................................................................................. 49

Chapter Three: Performance Prism Framework ........................................................................... 50

Origins of the Performance Prism Framework....................................................................... 50

Components of the Performance Prism Framework............................................................... 52

Stakeholder satisfaction. ................................................................................................... 53

Stakeholder contribution................................................................................................... 54

Strategies........................................................................................................................... 55

Processes........................................................................................................................... 55

Capabilities. ...................................................................................................................... 56

Prism of Attributions Framework........................................................................................... 56

Recommendations......................................................................................................................... 58

Attribution Training................................................................................................................ 59

Conduct a Thorough Performance Appraisal Process ............................................................ 60

Increase Psychological Closeness........................................................................................... 61

Conclusion .................................................................................................................................... 63

References..................................................................................................................................... 67

PRISM OF ATTRIBUTIONS vi
List of Figures
Figure 1. Components of a performance rating.............................................................................. 6

Figure 2. Performance rating process model.................................................................................. 6

Figure 3. Kelley Cube model........................................................................................................ 21

Figure 4. Green and Mitchell attribution model........................................................................... 21

Figure 5. Attribution model.......................................................................................................... 23

Figure 6. Performance Prism Framework. ................................................................................... 52

Figure 7. Prism of attributions framework. .................................................................................. 57

Figure 8. Performance appraisal process model........................................................................... 61

PRISM OF ATTRIBUTIONS vii
Research Overview
Research Problem: A manager’s attribution of poor employee performance influences the
fairness and effectiveness of a performance appraisal.
Research Question: How can front-line managers limit attributional bias to ensure a fair and
effective performance appraisal?
Thesis Statement: Front-line managers can limit attributional bias during the performance
appraisal process by utilizing the Performance Prism Framework.

PRISM OF ATTRIBUTIONS 1
Introduction
Organizations can spend up to half of its operating expenses on employee pay and
benefits, yet most organizations have ineffective ways to evaluate the performance of its
employees (U.S. Bureau of Labor Statistics, 2015a; Grote, 1996). For decades, researchers and
managers have explored various performance appraisal methods and rater bias or errors
associated with each method. Simultaneously, researchers have studied how and why people
make causal judgements (i.e., attributions) and its effects on outcomes. Yet, there is a marked
absence of literature on how attributions impact the performance appraisal process and, more
specifically, ways organizations can limit attribution bias in the appraisal process.
Every day, managers develop and act upon attributions they develop about their
subordinates. Jones et al. (1972) identified that people have a strong propensity towards
accepting and reacting to negative information than to positive information. In addition, Ross
(1977) showed that people tend to overestimate internal attributes of behavior (ability and effort)
and underestimate the impact of external attributes of behavior (task difficulty and luck). When
combined together, these findings suggest that managers have a natural tendency to
overemphasize the control an employee actually has over any given situation. As a result, a
manager’s attribution of poor employee performance can severely impact the fairness and
effectiveness of the performance appraisal process.
According to Green and Mitchell (1979), the attribution process entails a manager
gathering information cues, developing a causal attribution, resulting in a specific behavior made
by the manager. Therefore, the attribution process requires a large degree of interpretation and
acuity which exposes an individual to a number of biases. Researchers have identified a number

of these biases (Bernardin, 1989; Feldman, 1981; Ross, 1977), however the research does not
provide significant methods or resources for managers to overcome attribution bias.
Attribution bias is then compounded with rater error and bias, such as contrast bias (Lussier &
Hendon, 2012) or halo effect (Grote, 1996), inherent to the performance appraisal process. While
significant research has been conducted on rater error and bias, there is limited research on the
combined effects of attribution bias and rater bias in the performance appraisal process.
Consequently, the following question impels further research: How can front-line managers limit
attributional bias to ensure a fair and effective performance appraisal?
The goal of this research would be to take an exploratory approach in understanding the
effects of attributional bias, how performance appraisals are conducted today, and the problems
associated with manager bias. After gaining an understanding of the Performance Prism Model,
an analytical approach will be employed to assess the complexity of the performance appraisal
process and to provide a framework and recommendations for organizations to implement in the
future. Ultimately, front-line managers can limit attributional bias during the performance
appraisal process by utilizing the Performance Prism Framework.
Scope
The scope of this paper is to analyze attributional bias in the performance appraisal
process. This paper uses as resources the available surveys, interviews, and other quantitative
data regarding attributions and performance appraisals. While it recommends that organizations
utilize the Performance Prism Framework, it acknowledges that organizations will not
completely eliminate attributional bias by doing so, but will instead minimize the impact of bias
in a performance appraisal. The primary units of analysis are front-line managers who are

responsible for administering performance appraisals. The region of focus for this study is
limited to the United States.
Aims
The aim of this paper is to analyze existing literature on attributional bias in relationship
to performance appraisals. Relevant secondary data are referenced to illustrate the prevalence
and impact of attributional bias in performance appraisals. This research provides a better
understanding of how attribution bias applies to performance appraisals and how current
organizations lack a systematic way to limit attributional bias. This paper focuses on scholarly
disciplines for its theoretical foundation, which includes attribution theory, performance
appraisals, and the Performance Prism Framework.
Objectives
This paper addresses three main research objectives. First, it intends to produce an
overview of how attributions are made and explores the various types of attribution biases.
Second, it aims to examine the performance appraisal process and the current methods in use. In
addition it will explore the ways these methods facilitate attributional bias. Last, through an
analysis of the Performance Prism Framework, this paper intends to discuss solutions and offer
actionable recommendations that organizations can implement to minimize the impact of
attributional bias on performance appraisals.
Justification
According to the U.S. Bureau of Labor Statistics (2015a) employers spend on average
$33.19 per employee, per hour worked. In addition, employers can spend up to 52% of operating
expenses on pay and benefits (U.S. Bureau of Labor Statistics, 2015b). Since companies invest a
significant amount of time and money hiring, training, and retaining employees, it can be critical

to long-term business success to identify ways to improve the performance of employees.
The most common way organizations try and improve employee performance is through the use
of performance appraisals. However, research has shown that once a manager views an
employee as a problem performer that employee can become trapped in a negative reinforcing
cycle of performance management (Jones et al., 1972). In addition, according to the Society for
Human Resource Management Engagement Survey (2015) only 28% of employees are satisfied
with the level of trust between management and employees and only 24% of employees are
satisfied with the level of management’s recognition of employee performance. Therefore, it is
imperative for organizations to understand how to mitigate manager bias in performance
appraisals.
Limitations
The most significant limitation for this research paper is the time constraint, which limits
the researcher’s ability to collect primary data. The scope of this research paper also presents
several limitations for the study. This paper focuses on managers in the United States and does
not address managers in other countries. Therefore, the generalizability of this study should be
limited to the United States. In addition, this study only looks at the effects of attributional bias
in front-line managers. It is unclear whether the same or different patterns would emerge with
more separation between the rater and ratee.
Literature Review
A manager’s perception of an employee impacts how the manager evaluates the
employee’s performance. Once a manager views an employee as a problem performer that
employee can become trapped in a negative reinforcing cycle of performance management
(Jones et al., 1972). Since companies invest a significant amount of time and money hiring,

training, and retaining employees, it can be useful to identify ways to improve the method in
which employees are evaluated.
If managers are able to overcome common biases and implement fairer and more
effective performance appraisals, companies will be able to better manage their most valuable
asset—their human resources. Therefore, this literature review presents an overview of how
managers develop attributions and how those attributions can negatively impact performance
appraisals. Specifically, the literature review discusses the performance appraisal process,
attribution theory and how an attribution is made, an overview of how attributions impact
appraisals, and major biases inherent within attributions. The literature review concludes by
suggesting that managers can ensure a fair and effective performance appraisal by using the
Performance Prism Framework.
What Are Performance Appraisals?
Generally, a performance appraisal can be described as an organizational process where
feedback is delivered to an employee. Some authors restrict the appraisal process to managers
and subordinates (Spence & Keeping, 2011) while others specify the type of feedback provided,
usually based on performance (Levy & Williams, 2004). However, broadly speaking,
performance appraisals are delivered by multiple sources (e.g., manager, peer, and subordinate)
and are used for many reasons (e.g., performance, development, and legal documentation).
Landy and Farr (1980) developed a simple framework to describe the components of a
performance rating (see Figure 1). This model emphasizes that a performance appraisal is a
process composed of several key elements. These elements include (a) roles—which includes
both the rater(s) and ratee; (b) context—the context surrounding the rating such as the
organizational culture, industry, and purpose of rating; (c) vehicle—the rating instrument itself;

(d) rating process—how the rating is administered; and (e) results of rating—actions based on
the information (Landy & Farr, 1980).
Figure 1. Components of a performance rating. Adapted from “Performance Rating,” by F. J.
Landy and J. L. Farr, 1980, Psychological Bulletin, 87(1), p. 73.
In their landmark paper, Landy and Farr (1980) first explored the concept and influence
of cognitive processes in performance appraisals. As seen in Figure 2, the performance appraisal
process is a complex web of organizational factors, individual dispositions, tools, and cognitive
processes such as observation/storage and retrieval/judgment.
Figure 2. Performance rating process model. Adapted from “Performance Rating,” by F. J.
Landy and J. L. Farr, 1980, Psychological Bulletin, 87(1), p. 94.

Over the next decade, research on performance appraisals centered on cognitive
processes, particularly around some of the biases inherent in the appraisal context. Then, Bretz,
Milkovich, and Read (1992) identified another gap in the research; namely, understanding how
organizational context influences the rater/ratee relationships. From the early 1990s to the
present day, Levy and Williams (2004) found that the vast majority of research on performance
appraisals was focused on the social context of performance appraisals. The role of attributions
in performance appraisals has emerged out of the focus on social context (Levy & Williams,
2004). The attribution process influences how managers make performance decisions (Struthers,
Weiner, & Allred, 1998) as well as how managers interact with and respond to subordinates
(Johnson, Erez, Kiker, & Motowidlo, 2002).
Attribution Theory: An Overview
Attribution theory was first developed by Fritz Heider (1958) in his book The Psychology
of Interpersonal Relations. Heider used a combination of empirical observation and linguistic
analysis to explore human behavior and how people make observations about themselves and
those around them. An attribution is made when an observer makes a causal interpretation using
three pieces of information: an observed behavior, the consequences of the behavior, and the
circumstances surrounding the behavior (Jones et al., 1972; Kelley, 1967). Therefore, attribution
theory is the process by which an individual interprets the causation of events as a result of
internal or external factors in the environment (Heider, 1958; Jones et al., 1972; Kelley, 1967).
As a broad field of research, attribution theory examines three major areas: (a) factors
that motivate people to learn why something happens, (b) factors that impact how people ascribe
a specific cause to an event, and (c) consequences of making one attribution instead of another

(Jones et al., 1972). Each of these areas explores a different stage of the attribution process and
provides a unique perspective for understanding human behavior.
Over time, attribution theory was further developed by the collaborative efforts of Kelley
(1967) and Jones et al. (1972). They each developed models to examine the perceived
determinants for achievement based upon stability and locus of control. Unlike Heider (1958),
these authors focus more upon the outcome of an attribution instead of on the motive of an
attribution. Kelley (1967) shifted Heider’s more nuanced view of attributions towards a
dichotomy between internal or external attributions. In addition, Kelley (1967) developed the
Kelley Cube as a way to measure three dimensions of information—persons, entities, and time—
that people use to make attributions.
Components of causal attribution. According to Kelley (1967) there are three
components an observer uses to evaluate information and thus develop an attribution: (1)
distinctiveness, (2) consistency, and (3) consensus. Distinctiveness refers to whether or not the
behavior was unique (Kelley, 1967). For example, does Fred yell only at his co-worker Janet
(high distinctiveness) or does Fred yell at all of his co-workers (low distinctiveness). Consistency
refers to whether the behavior is consistent with other behaviors (Kelley, 1967). For example,
does Sam always complete a sale when he has a partner (high consistency) or does Sam only
sometimes complete a sale when he has a partner (low consistency). Lastly, consensus refers to
whether or not the behavior is unique to this individual or similar to others in the group (Kelley,
1967). For example, does everyone yell at Janet (high consensus) or does only Fred yell at Janet
(low consensus).
Subsequent research proved the predictive capability of these three components. When
there are high levels of distinctiveness, consensus, and consistency, individuals are more likely to

make an external attribution (Ashkanasy, 1989). On the other hand, when there are low levels of
distinctiveness, consensus, and consistency, individuals are more likely to make an internal
attribution (Martinko & Thomson, 1998). In order to understand why an attribution is made,
researchers explored the difference between internal and external attributions.
Types of attributions. Building upon research in the areas of attribution and locus of
control, Jones et al. (1972) define two broad explanation categories for an outcome: internal
factors and external factors. Thus any behavior can be caused by internal factors, external
factors, or some combination.
Internal factors. Internal factors are specific to a person and can be controlled or
influenced by that individual (Jones et al., 1972). There are two main types of internal factors:
ability and effort. Ability can be defined simply as whether an individual can do something, or
believes that there is a possibility of change or an action being performed (Heider, 1958). Jones
et al. (1972) found that perceived ability is a function of past successes at the specific task at
hand or similar tasks in the past. Ability is often viewed as a stable factor, which means that it
cannot be changed easily.
The second internal factor is effort. Effort can be defined as the amount which an
individual tries to cause a change (Heider, 1958). Jones et al. (1972) found that effort is much
more difficult to measure than ability and usually involves a moralistic determination on the part
of the observer. In addition, effort is generally assessed after an outcome has occurred, meaning
that an individual infers effort based upon outcome (Jones et al., 1972). As a result, effort is
generally a much more unstable measure to use.

External factors. External factors are specific to the environment of a person and cannot
be controlled or influenced by that individual (Jones et al., 1972). There are two main types of
external factors: nature of the task and luck. Nature of the task, also called task difficulty, can be
defined as the level of difficulty involved with completing a task (Heider, 1958). Jones et al.
(1972) found that task difficulty is often derived from social norms such as characteristics of the
task, time to complete the task, and complexity of the task. If performance is directly related to
the social norms—that is, success when others succeed—the outcome can be attributed to the
external factor nature of the task (Jones et al., 1972). Conversely, if performance is inversely
related to the social norms—that is, success when others fail—the outcome can be attributed to
an internal factor, either ability or effort (Jones et al., 1972). Nature of the task is often viewed as
a stable factor, which means that it cannot be changed easily.
The second external factor is luck. Luck can be defined as a highly unstable
environmental element that occurs by chance, unrelated to any specific factor (Heider, 1958).
Jones et al. (1972) found that luck is usually derived from analyzing the pattern of prior
outcomes, where high levels of variability indicate the likelihood of luck as the primary factor.
Overtime, individuals tend to develop a preference or tendency to make similar attributions
across similar situations. Consequently, managers can develop attribution styles.
Attribution styles. Abramson, Seligman, and Teasdale (1978) first developed the
concept of attribution styles. Attributions provide causal information about a specific event,
whereas attribution styles depict an individual’s preference towards making similar attributions
across situations (Abramson et al., 1978). Significant research has validated both the concept and
the predictive capability of attribution styles (Abramson et al., 1978; Kent & Martinko, 1995;
Russell, 1991). While as many as 14 different attribution styles have been identified, the two

most established styles are optimistic and pessimistic attribution styles (Martinko, Gundlach, &
Douglas, 2002). An optimistic attributional style tends to attribute success to internal factors and
attribute failure to external factors (Abramson et al., 1978). A pessimistic attributional style takes
the opposite approach, which attributes success to external factors and failure to internal factors.
While it is natural for managers to develop attribution styles, overtime these tendencies
can engender certain biases that can limit the manager’s ability to effectively evaluate their
subordinates.
Performance Appraisals and Attributions
With that context, it is easy to see the connection between attributions and performance
appraisals. Heider (1958) explains that when people interact with one another they make
assumptions about underlying behaviors and motivations. People derive these assumptions
through several key steps: (1) knowing the physical situation and its environment, (2)
understanding what changes can be made to the environment, (3) evaluating what is desired from
the environment, and (4) seeing what is required from the environment (Heider, 1958). Every
day managers interact with employees and develop perceptions about an employee. These
interactions provide rich sources of information for managers to develop and strengthen both
positive and negative perceptions about an employee. A manager’s perception of an employee
depends then upon how a manager interprets and evaluates an employee’s words and actions.
There are three major areas where attributions influence the performance appraisal process: (a)
the manager’s decision making process, (b) the performance appraisal outcome, and (c) the
communication between a manager and subordinate.

Decision making process. Attributions impact decision making in a number of
influential ways. First, managers are more likely to explain an employee’s performance based
upon internal causes (ability or effort) versus external causes (task difficulty or luck) (Green &
Mitchell, 1979). When managers largely discount external factors it can have a detrimental
impact upon the accuracy and effectiveness of decision making. Second, Jones et al. (1972)
identified the importance of locus of control and the impact this has upon the perception of
cause. When people are seen to have control over the situation, their actions would be considered
to be caused by the person not the situation. Conversely, if a person did not have control over the
situation (for example, a hostage situation), the person would not be considered responsible for
their actions. Therefore, in order to provide fair and effective feedback, managers need to
identify as much information as possible about a situation rather than just simply observing the
employee’s behavior or outcome.
Performance appraisal outcomes. Jones et al. (1972) identified that people have a
stronger propensity towards accepting and reacting to negative information than to positive
information. If, given the same amount of information, managers are more willing to form an
overall negative opinion of an employee than a positive one, the fairness and effectiveness of the
appraisal is diminished.
Green and Liden (1980) examined the relationship between attributions and disciplinary
actions. The study was composed of 112 graduate students and 28 undergraduate students who
engaged in role playing situations as supervisors and subordinates and manipulated attributional
causes between internal and external (Green & Linden, 1980). There are several key findings in
this study. First, supervisors overwhelmingly attributed cause to internal factors of the
subordinate. Second, when the cause was internal supervisors ascribed more punitive

disciplinary actions than when the cause was external. Lastly, supervisors complied with policy
least when it was contradictory to the supervisor’s belief about the situation (Green & Linden,
1980).
Communication with subordinates. Tjosvold (1985) studied 90 undergraduate students
to examine the relationship between attributions and supervisor communication. The findings
validated Tjosvold’s hypothesis that subjects in a cooperative and low ability group were more
supportive in their communication than the subjects in a competitive and low effort group.
A study conducted by Moss and Martinko (1998) further confirmed that effort and ability
influenced the type of communication and feedback supervisors had with their subordinates.
Using a 2 x 2 factorial design, they examined effort and ability along with high and low outcome
dependence. The study provides several key outcomes. First, supervisors are more likely to
provide feedback that is more frequent, directive, and immediate when there is high
interdependence between supervisors and subordinates (Moss & Martinko, 1998). Second, effort
and ability have a direct relationship with the frequency and timing of feedback as well as the
content of the feedback (Moss & Martinko, 1998).
Attributional Biases
Ross (1977) identified two primary tasks of a social observer (a) causal judgment and (b)
social inference. Both of these tasks require a large degree of interpretation and acuity, which
exposes attributions to a number of biases.
As previously discussed, attribution theory is the process by which an individual
interprets the causation of events as a result of internal or external factors in the environment.
Attribution bias, therefore, occurs when an individual has any preconceived or unreasoned
tendencies that negatively impact the process of developing or interpreting an attribution.

Cognitive Biases
When an individual tries to simplify information processing he or she can make short cuts
that can create a type of error known as cognitive bias (Busenitz & Barney, 1997). Therefore, as
previously discussed, since attributions are a cognitive process, they are susceptible to any type
of cognitive bias. However, it is important to note that cognitive biases are not always negative.
Busenitz and Barney (1997) studied responses from 124 entrepreneurs and concluded
there was a significant difference between the way entrepreneurs and managers of large
organizations make decisions. Further, the researchers identified several cognitive biases that
were employed by the entrepreneurs that, if not used, would have led to the demise of the
business.
Since attributions require high levels of cognitive processes (Jones et al., 1972) managers
are susceptible to many kinds of biases when making attributions. As a result, attributional bias
can influence the effectiveness of performance appraisals.
Conclusion
After reviewing the literature on attributions, it is clear that attributions impact
managerial decisions, particularly in the area of performance appraisals. However, there is a
dearth of research that effectively provides a method or model to improve the quality and
consistency of attributions.
Kelley (1967) summarizes the attributional tasks of a manager into three categories:
person, entity, and context. Any outcome of a situation can be ascribed to an issue with the
employee (person), the task itself (entity), or the circumstances surrounding the event (context)
(Kelley, 1967). The manager can then use a principle of covariation to evaluate the potential
causes and effects (Green & Mitchell, 1979). In order for managers to fairly evaluate

subordinates, they must ensure these three pieces of information accurately represent the
subordinate in question.
Jones et al. (1972) developed four possible causes of an attribution, including (a) ability,
(b) effort, (c) nature of the task, and (d) luck. In order for managers to effectively evaluate
subordinates, the manager must correctly identify the cause of their attribution.
Ross (1977) identified the fundamental attribution error as the tendency of people to
overestimate the internal attributes of behavior and to underestimate the impact of external
attributes of behavior. In order for managers to fairly and effectively evaluate subordinates they
must be conscious of the biases involved in the attribution process.
This paper will propose an integrated and holistic approach that will address many of the
concerns, biases, and limitations evident in attribution theory. Thus, front-line managers can
ensure a fair and effective performance appraisal by limiting their use of attribution bias.
Methodology
From a meta-qualitative standpoint, the research design is applied, descriptive, and
explanatory. A descriptive approach is used to discuss the background of attribution theory,
explain the elements of an attribution, and the effects of attributional bias. A review of secondary
data is used to conduct an in-depth examination of attribution theory within academic literature
used across three major themes: attribution theory, attribution bias, and performance appraisals.
A meta-analysis is used to determine various performance appraisal methods and how attribution
biases compound biases already present in the appraisal process. The paper analyzes qualitative
and quantitative survey, survey, and questionnaire results from the research of Campbell and
Swift (2006), Dugan (1989), and Hogan (1987). Only secondary data is analyzed for this paper.

This paper aims to examine how managers can limit attribution bias in performance appraisals
using the performance prism framework.
Results
In this paper, the analysis regarding the effects of attributional bias and its effects on the
manager and subordinate relationship relies heavily upon research conducted by Constance
Campbell and Cathy Swift (2006) in their study “Attributional Comparisons Across Biases and
Leader-Member Exchange Status.” They mailed surveys to 868 employees of an international
retail organization, of which 280 surveys were returned (Campbell & Swift, 2006). The sample
included responses from 229 subordinates and 51 supervisors; however, since supervisors rated
multiple subordinates there was a total of 135 supervisor responses included in the study
(Campbell & Swift, 2006). Subordinates completed a widely-used scale, LMX-7, measuring
subordinates’ perception of the leader-member exchange quality, while managers took a parallel
survey, the LMX-7 (Campbell & Swift, 2006). Respondents were given a positive and negative
incident of subordinate performance to evaluate and determine whether the performance was due
to ability, effort, task difficulty, or luck (Campbell & Swift, 2006). This research proved several
important aspects of attributions. First, supervisors were more likely to attribute positive
performance from in-group members to internal attributions instead of external attributions (t =
10.48, p < .001) (Campbell & Swift, 2006). Second, were more likely to attribute negative
performance from in-group members to external attributions (t = 3.37, p < .01) (Campbell &
Swift, 2006). When combined, these two findings support the self-serving bias. Third,
supervisors were more likely to attribute negative performance from out-group members to
internal attributions (t = -2.01, p < .05) which supports the actor-observer bias (Campbell &
Swift, 2006).

Similarly, Dugan (1989) studied the relationship between performance feedback and
attributions using laboratory simulations. The sample included 52 M.B.A. students enrolled in a
graduate-level organizational behavior course (Dugan, 1989). Half of the students had a
minimum of one-year full-time work experience and had given at least two performance
feedback sessions, these students were assigned the role of manager in the simulation (Dugan,
1989). The remaining students were paired to create a manager-subordinate dyad and were
provided scenarios with background information on the manager and subordinate role (Dugan,
1989). All of the subordinates were given scenarios attributing poor performance to task
difficulty (external factor), while managers were randomly assigned lack or effort or lack of
ability (internal factors) as the source of the subordinate’s poor performance (Dugan, 1989). The
dyads then met individually to conduct a performance feedback session where at the end of
session, the manager has to make a salary decision. This research demonstrated two important
implications for the relationship between attributions and performance appraisals. First, when
managers attributed poor performance to a subordinate’s lack of effort, the decisions were more
punitive (t = 1.64, df = 24, p = .056) (Dugan, 1989). Second, when managers attributed poor
performance to a subordinate’s lack of ability, managers change their communication style with
subordinates. Managers become increasingly resistant to requests by subordinates and employ a
command and control leadership style (Dugan, 1989).
The analysis regarding managers’ perceptions and performance appraisals relies heavily
upon research conducted by Eileen Hogan (1987) in her study “Effects of Prior Expectations on
Performance Ratings: A Longitudinal Study.” The sample included 29 first-level supervisors of
tellers in a large West Coast bank (Hogan, 1987). The managers provided ratings on 49 tellers
within a longitudinal design. The supervisors were asked to rate their subordinates via two

questionnaires four months apart (Hogan, 1987). Simultaneously, Hogan (1987) used objective
job performance data already collected by the bank to compare and contrast how manager’s
perceptions of performance influence performance ratings. The research found that the greater
the difference between manager expectations and actual performance the greater the discrepancy
between rating score and actual performance (correlation coefficient = -0.31, p < 0.05) (Hogan,
1987). In addition, the greater the strength of internal attributions the manager attributes, the
higher the performance rating (correlation coefficient = 0.54, p < 0.01) (Hogan, 1987).
Consequently, Hogan (1987) proved a strong connection between managers’ perceptions and
performance appraisal ratings.

Chapter One: The Effects of Attributional Bias
“All of us show bias when it comes to what information we take in. We typically focus on
anything that agrees with the outcome we want.”
-Noreena Hertz (Hertz, 2013)
Jones et al. (1972) identified that people have a stronger propensity for accepting and
reacting to negative information than to positive information. This has a significant impact on
managerial decision making, particularly with performance appraisals. If, given the same amount
of information, managers are more willing to form an overall negative opinion of an employee
than a positive one, the fairness and effectiveness of the appraisal is diminished. Similarly, Ross
(1977) identified the fundamental attribution error as the tendency of people to overestimate the
internal attributes of behavior (ability and effort) and to underestimate the impact of external
attributes of behavior (task difficulty and luck). Therefore, any perception a manager makes
about an employee will tend to overemphasize the control an employee actually has over any
given situation.
The aims of this chapter are to educate the reader on (a) how an attribution is made, (b)
the concept and types of attributional bias, (c) the manager’s role in attributional bias, and (d)
how attributions impact the manager and subordinate relationship. These aims will help the
reader understand how attributional bias impacts managers, which in turn negatively influences
the performance appraisal process.

How is an Attribution Made?
In Heider’s (1958) seminal work on attribution theory, he posits that it is only through
our perception that we understand the world around us. Heider explains that when people interact
with one another they make assumptions about underlying behaviors and motivations. People
derive these assumptions through several key steps: (1) knowing the physical situation and its
environment, (2) understanding what changes can be made to the environment, (3) evaluating
what is desired from the environment, and (4) seeing what is required from the environment
(Heider, 1958).
Over the years, researchers have developed models to help depict how an attribution is
made (Green & Mitchell, 1979; Kelley, 1967; Martinko & Gardner, 1987). Since attributions are
made internally, these models provide researchers with a methodological approach to study
attributions.
Kelley Cube model. Kelley (1967) developed the Kelley Cube model in order to
understand how an attribution is made (see Figure 1). According to Kelley, an attribution is made
using the three pieces of information previously discussed: distinctiveness, consistency, and
consensus. The information is then analyzed on three dimensions: entities, persons, time/
modality. This type of analysis is akin to John Stuart Mill’s method of difference, which uses
covariation of cause effect. Using this method, an individual makes an attribution based upon his
or her analysis of the components in the Kelley Cube. As a consequence, the attribution process
can become a highly subjective and biased endeavor.

Figure 3. Kelley Cube model. Adapted from Attribution Theory in Social Psychology by H. H.
Kelley, 1967, p. 195.
Green and Mitchell model. Building upon the Kelley Cube model, Green and Mitchell
(1979) developed their own model in an attempt to build a more comprehensive framework of
how attributions are made. The Green and Mitchell Model specifically focuses on factors that
influence the leader and subordinate relationship (see Figure 2). Unlike the Kelley model, Green
and Mitchell acknowledge and identify numerous factors that influence the leader attribution
process.
Figure 4. Green and Mitchell attribution model. Adapted from “Attributional Processes of
Leaders in Leader-Member Interactions” by S. G. Green and T. R. Mitchell, 1979,
Organizational Behavior & Human Performance, 23(3), p. 450.

These factors include the relationship between the manager and subordinate, the personal
characteristics of the manager, the manager’s expectations, the manager’s perception of
responsibility, and more (Green & Mitchell, 1979).
According to this model, the attribution process begins with the manager trying to
understand or explain a subordinate’s behavior. The manager gathers information cues (such as
the previously discussed consistency, distinctiveness, and consensus) and then develops a causal
attribution. Finally, the attribution leads to a manager’s behavior. All the while, factors such as
organizational policy, attributional moderators, and contextual constraint influence how the
attribution process progresses.
Martinko and Gardner model. Finally, a third and even more comprehensive model
was developed by Martinko and Gardner (1987). This model is built upon the interaction among
manager attribution, manager behavior, subordinate attribution, and subordinate behavior (see
Figure 3). These interactions are then moderated by a number of variables, such as attributional
biases, individual differences, and performance expectations (Martinko & Gardner, 1987).
Needless to say, the increased number of variables and interactions analyzed creates a
more complex model. However, the Martinko and Gardner (1987) model provides a more
holistic process to understand how attributions are developed and to show their effects on the
manager/subordinate relationship.
Ultimately developing an attribution requires an individual to observe behavior (or
outcomes) and use judgment to specify the perceived causation. Therefore, the cognitive schema
involved with the attribution process exposes individuals to a number of biases.

Figure 5. Attribution model. Adapted from “The Leader-Member Attribution Process” by M. J.
Martinko and W. L. Gardner, 1987, Academy of Management Review, 12(3), p. 237.
Understanding Attributional Bias
As previously discussed, attribution theory is the process by which an individual
interprets the causation of events as a result of internal or external factors in the environment.
Attribution bias, therefore, occurs when an individual has any preconceived or unreasoned
tendencies that negatively impact the process of developing or interpreting an attribution.
Researchers have spent considerable time examining attributional biases. While some have
focused on biases in particular models (Green & Mitchell, 1979), others have focused on how
these biases influence manager and subordinate interactions (Martinko & Gardner, 1987).
Regardless of the focus, researchers have consistently acknowledged the existence of
attributional bias and its impact on the attribution process.

Types of Attributional Bias
Self-serving bias. In social psychology, it is widely accepted that people are prone to
modify their understanding of causality to protect or enhance their own egos (Miller & Ross,
1975). According to Heider (1958), an individual selects an attribution based on how well the
reason satisfies the wishes of the individual and how well the data supports the attribution
selected. Therefore, individuals seek to explain their own behavior in ways that flatter or enhance
their self-esteem. The self-serving bias, then, is the tendency of individuals to take credit for their
success and blame external factors for failure (Zuckerman, 1979).
In an organizational context, the self-serving bias impacts individuals in several ways.
First, individuals could improperly attribute their success. Arkin, Appelman, and Burger (1980)
studied 80 undergraduate students to provide evidence of the self-serving bias in causal
attributions. Their findings confirm the existence of the self-serving bias regardless of an
individual’s social anxiety levels, albeit people with high social anxiety had different motivations
from that of people with low social anxiety (Arkin et al., 1980). Consequently, regardless of the
underlying motivation, self-serving bias can impact anyone in an organization, including both
managers and subordinates.
Second, the self-serving bias can enhance the conflict between a manager and a
subordinate. Dobbins and Russell (1986) studied 144 undergraduate students to identify how
managers and subordinates rate each other’s performance. Their findings confirm the existence
of the self-serving bias and found that while managers blame subordinates for failure,
subordinates blame organizational failure on managers (Dobbins & Russell, 1986). The
juxtaposition between managers and subordinates regarding the cause of success or failure can

therefore increase the level of frustration and reduce the amount of understanding between
managers and subordinates.
Actor-observer bias. Another common bias is the actor-observer bias, which is the
tendency of observers to attribute internal factors as the reason for the success or failure of
actors, while actors attribute external factors as the reason for their success (Jones et al., 1972;
Martinko, Moss, Douglas, & Borkowski, 2007).
Bernardin (1989) surveyed 48 middle managers from a large computer manufacturer and
59 police sergeants in order to measure the difference in attributions as a function of the
perspective of the evaluator. Bernardin found that only 20 percent of managers attributed their
own failure to internal factors, while 50 percent of managers attributed subordinate failure to
internal factors. Similarly, Bernardin found that only 17 percent of the police sergeants attributed
their own failure to internal factors, while 59 percent of the police sergeants attributed
subordinate failure to internal factors. These results confirm the existence of the actor-observer
bias, specifically in the context of performance evaluation.
In an organizational context, the actor-observer bias is mediated in several ways. First,
the bias is less evident when the manager understands the work the subordinates are performing.
Mitchell and Kalb (1982) studied 64 undergraduate students to determine the influence of work
experience on managers when evaluating subordinates. The study found that managers who had
previously performed the same work as their subordinates were significantly more likely to
blame the environment for poor performance. Meanwhile the managers who had not previously
performed the same work as their subordinates were significantly more likely to blame the
subordinates lack of effort or ability.

Second, the actor-observer bias is influenced by the tenure of the manager. Fedor and
Rowland (1989) conducted a field study of 84 managers employed by two hospitals with tenure
ranging from .9 to 25 years. The study found that the longer managers are in a supervisory
capacity (i.e., length of tenure), the more likely it is that the manager will blame subordinates
lack of ability or effort for their performance instead of blaming external factors.
Fundamental attribution error. Building upon the work of Heider (1958) and Kelley
(1967), Ross (1977) explored attributional biases and coined the phrase fundamental attribution
error, which is defined as the consistent tendency of individuals to dramatically underestimate
situational (or external) factors that influence the success of others and overestimate dispositional
(or internal) factors that influence the failure of others.
Bem and Funder (1978) proved, and Feldman (1981) later confirmed, a fundamental
attribution error in several observational experiments conducted on children in controlled
situations. The study indicates that an observer will predictably rate the actor according to
personality descriptions previously read by the observer over the situational information present
during the observation (Bem & Funder, 1978).
Jellison and Green (1981) studied 117 undergraduate students to examine the relationship
between internal attributions and social approval. The study found that the effect level of internal
attributions was highly significant, proving that social approval increased linearly with expressed
internal attributions (Jellison & Green, 1981). In addition, the study found that individuals who
expressed low levels of internal attributions were liked significantly less than the individuals
who expressed high levels of internal attributions (Jellison & Green, 1981). These findings have
a compounding effect upon the fundamental attribution error. Since observers have the tendency
to overestimate external factors, if the actor expresses low levels of internal attributions the

observer is significantly less likely to like the actor and thus look for even less external attributes
for a cause.
Bowler, Woehr, Bowler, Wuensch, and McIntyre (2011) studied 407 participants and
measured each of Kelley’s (1967) four components of causal attribution. The study isolated
aggression as a variable to differentiate the participants to explore whether the aggressive
participants’ attributions would differ from the nonaggressive participants. When evaluating
success, the aggressive and nonaggressive participants made very similar attributions (Bowler et
al., 2011). However, when evaluating failure, the aggressive participants made significantly more
internal attributions as to the cause for failure. These findings continue to validate the
fundamental attribution error over time and across experimental methods.
While everyone is susceptible to attributional bias, managers are routinely placed in
situations where such bias can be exacerbated. Understanding these situational factors is
important to help managers limit attributional bias.
Management’s Role in Attributional Bias
Managers often interact with employees on a daily basis. Anytime a manager observes a
subordinate’s behavior they are likely to make an attribution. Accordingly, it is important to
understand a manager’s role in attributional bias. There are three major areas that influence a
manager’s propensity towards attributional bias: a manager’s leadership style, expectations, and
communication with subordinates.
Manager’s leadership style. As previously discussed, attribution styles depict an
individual’s preference towards making similar attributions across situations (Abramson et al.,
1978). While some authors (e.g., Lord & Smith, 1983) suggest that individuals do not make
attributions for everyday interactions, only during unique situations, others (e.g., Martinko &

Gardner, 1987) have argued that attributional styles offer a more stable prediction of an
individual’s attributions, which lay the foundation for how individuals interpret the common day
to day events.
Optimistic attribution style. An optimistic attribution style is the tendency to consistently
attribute negative outcomes to external, often unstable, factors and attribute positive outcomes to
internal, often stable, factors (Harvey, Martinko, & Gardner, 2006). An example of this might be
that a manager attributes successful sale closes to personal ability and failed sale closes to poor
economic conditions.
Pessimistic attribution style. A pessimistic attribution style is the tendency to
consistently attribute negative outcomes to internal, often stable factors, and attribute positive
outcomes to external, often unstable, factors (Harvey et al., 2006). An example of this might be
when a salesperson meets a sales goal, a manager attributes the success to good luck, while when
a salesperson doesn’t meet a sales goal, a manager attributes the failure to incompetence and
inability to sell. Research has found that the pessimistic attribution style is linked to depression
and learned helplessness (Abramson et al., 1978).
Hostile attribution style. A hostile attribution style is the tendency to consistently
attribute negative outcomes to external, often stable, factors (Harvey et al., 2006). While similar
to an optimistic attributional style, a hostile attribution style differs from a person attributing
negative outcomes to stable factors, which over time can engender anger towards the external
factor. An example of this might be that a manager attributes any failure in the group to one
individual; over time the manager would become angry towards that individual, which would
impact their ability to manage, or even create, a hostile work environment.

Manager’s expectations. A manager’s expectations of a subordinate influences the
manager’s attribution process in several ways. Hogan (1987) studied responses from 29 first-
level managers of a large West Coast bank in order to evaluate any connection between prior
expectations and performance ratings. When a subordinate’s actual performance disappointed a
manager’s expectations, the manager was more likely to score the subordinate lower on the
performance appraisal (Hogan, 1987). This effect was intensified when a manager’s expectation
attributed the subordinate’s performance to internal attributions (Hogan, 1987).
Second, Hogan (1987) found that when a subordinate’s performance was higher than the
manager’s expectations, the manager would attribute the difference to external factors. It appears
that managers needed to account for their own failure in assessment of external factors.
Third, Hogan (1987) found that when a subordinate’s performance was the same as the
manager’s expectations, the managers would rate the subordinate higher than warranted.
Presumably there is an element of egoism present in these findings, whereby the manager feels
justified in a higher performance rating because the manager was correct in their own
assessment.
Finally, Green and Mitchell (1979) found that when a manager attributes cause with
stable factors, it strengthens the manager’s expectation of the subordinate performing the same
way in the future. This can have a huge impact on the performance management process. If a
manager incorrectly attributes failure to a stable factor, such as ability, when the real cause was
an unstable factor, such as bad luck, the manager could recommend a subordinate be placed on a
performance improvement plan or refuse to support a promotional opportunity.

Manager’s communication. Communication is a third area that is influenced by a
manager’s attributions and attributional process. First, researchers have found that when manager
and subordinate conflict occurs, it is often a result of differences in attributions (Martinko &
Gardner, 1987). For example, if a manager attributes effort (an internal factor) to a subordinate’s
failure, while the subordinate attributes bad luck (an external factor), conflict is likely to ensue.
This makes it important for a manager to communicate with the subordinate to understand the
full context of the situation.
Second, attributions impact the type of communication a manager provides to a
subordinate. Using a laboratory simulation, Dugan (1989) found that managers who attributed
poor performance to lack of ability (a stable factor) communicated with subordinates using a
controlling communication style, while managers who attributed poor performance to lack of
effort (an unstable factor) communicated with subordinates using an open and problem-solving
approach communication style. It can be inferred that managers believe effort, an unstable factor,
can be changed or modified by the subordinate, while ability, a stable factor, cannot be changed.
Finally, attributions impact the way managers respond to subordinates in conversations.
Research has shown that when managers attribute poor performance to lack of ability, the
manager will reject any argument from the subordinate and will redirect the conversation
towards improving the subordinate’s ability (Dugan, 1989). However, if managers attribute poor
performance to lack of effort, the manager will allow the subordinate to have more control of the
conversation (Dugan, 1989). While this study was limited to a laboratory setting, this finding has
some important practical implications. Namely, since a manager can never be completely certain
that an attribution is correct (e.g., effort vs. ability), managers should allow subordinates some
leeway in communication in order to better understand the context of the situation.

Managers play an important role in the attributional process, through a manager’s
leadership style, expectations, and communication with subordinates. However, a manager’s role
is not one-sided. Attributions impact managers and subordinates in a bilateral fashion, which
impacts the manager and subordinate relationship.
Attributional Impact on Manager and Subordinate Relationship
Attributions impact the manager and subordinate relationship in a number of ways.
Researchers have found that the attributional process can impact how managers categorize and
treat employees (Campbell & Swift, 2006), engender empowerment or learned helplessness
among subordinates (Campbell & Martinko, 1998), and influence how managers reward or
punish subordinates (Green & Mitchell, 1979).
In-group behavior vs. out-group behavior. The leader-member exchange (LMX)
theory suggests that leaders create two groups based upon the quality of exchange with the
members (Dansereau, Graen, & Haga, 1975). The group that has high quality exchanges with the
leader is known as the “in-group” while the group that has poor quality exchanges with the
leader is known as the “out-group.” In order to test this theory, Campbell and Swift (2006)
conducted a survey of 229 subordinates and 51 managers to compare how attributions and
attributional bias influenced managers’ ratings of in-group members versus out-group members.
They found that, as suspected, managers made more favorable attributions towards in-group
members and were more likely to ascribe external factors as the source of failure (Campbell &
Swift, 2006). In addition, they found that the negative effect towards out-group members was
even more pronounced than anticipated. Managers not only attributed internal factors for cause
of failure with out-group members, they were also unlikely to attribute success to internal factors
with out-group members (Campbell & Swift, 2006). These findings present a stark picture for

managers. According to the theory of LMX, it is a natural tendency for managers to create in-
groups and out-groups. However, when combined with attribution theory, managers create a no-
win situation for out-group members. Managers are likely to isolate out-group members and
disregard contextual situations regarding subordinate performance. Subordinates become trapped
in a negative cycle, which can create a host of issues for the organization, including legal,
cultural, and efficiency problems.
Empowerment vs. learned helplessness. Another way attributions impact the manager
and subordinate relationship is by engendering empowerment or learned helplessness among
employees. Empowerment is a means of encouraging productive behaviors and organizational
citizenship, which can inspire intrinsic motivation (Conger & Kanungo, 1988; Thomas &
Velthouse, 1990). Contrastingly, learned helplessness is a deleterious situation where an
individual possesses the skills and has the ability to perform a job, but performs suboptimal
because they believe external situations have caused failure in the past and will continue to cause
failure in the future (Campbell & Martinko, 1998; Martinko & Gardner, 1982). Both
empowerment and learned helplessness are built upon the foundation that in order to explain
behavior, both objective and subjective realities must be assessed. This makes attribution theory
highly applicable to both of these theories.
Campbell and Martinko (1998) constructed a questionnaire, selected participants based
upon their responses to the questionnaire, and conducted semi-structured interviews to examine
the impact of attributions on empowerment and learned helplessness. They made several
important contributions to attribution research. First, there was a strong correlation between
individuals who attribute negative events to external and uncontrollable causes with learned
helplessness (Campbell & Martinko, 1998). Second, they found that of the 36 behaviors

responding to negative situations, empowered individuals never chose transferring ownership of
the problem to a higher authority (Campbell & Martinko, 1998). Finally, they found that
individuals experiencing learned helplessness were three times more likely to make a negative
statement about a situation than an empowered individual (Campbell & Martinko, 1998).
Together, these three findings have a significant impact on the manager and subordinate
relationship. If managers induce learned helplessness among subordinates, then the subordinates
are less likely to try and fix problems, are more likely to complain about it, and are more likely
to pass it off to the manager to fix. All of these conditions will create further tension between a
manager and subordinate.
Punishment vs. reward. Similar to how attributions impact a manager’s communication
with subordinates, it also impacts how managers reward or punish subordinates. Green and
Mitchell (1979) were among the first to argue that causal attributions have a direct link to
punishment and reward. They showed that regardless of a subordinate’s ability, if a manager
views the subordinate’s success as a result of effort, the manager will overwhelmingly reward
the subordinate (Green & Mitchell, 1979). In addition, Green and Mitchell (1979) identified an
interesting result when a manager attributed external causes to a subordinate’s performance
outcome. In this case, good performance by a subordinate was not likely to result in rewards and
poor performance was likely to garner sympathy and support from the manager (Green &
Mitchell, 1979).
Later, Dugan (1989) found that managers are more likely to reward subordinates when
the manager attributes success to an internal and unstable factor, such as effort. On the other
hand, managers are more likely to punish subordinates when the manager attributes failure to an

internal and stable factor, such as ability (Dugan, 1989). This research highlights the importance
of managers attributing the correct factors to success or failure.
Chapter Conclusion
Managers are required to make causal judgments (i.e., attributions) about subordinate
behaviors almost every day at work. Attribution bias occurs when managers use any
preconceived or unreasoned tendencies that negatively impact the process of developing or
interpreting an attribution. Researchers have consistently acknowledged the existence of
attributional bias and its impact on the attribution process (Martinko & Gardner, 1987). There are
three major areas that influence a manager’s propensity towards attributional bias: a manager’s
leadership style, expectations, and communication with subordinates. Each of these factors
influence managers in different ways; however, they have a similar impact on the manager and
subordinate relationship. Researchers have found that the attributional process can impact how
managers categorize and treat employees (Campbell & Swift, 2006), engender empowerment or
learned helplessness among subordinates (Campbell & Martinko, 1998), and influence how
managers reward or punish subordinates (Green & Mitchell, 1979). Ultimately, attributional bias
heavily influences the way managers and subordinates interact and evaluate each other. It is
important therefore to explore the ways attributional bias impacts the effectiveness of the
performance appraisal process.

Chapter Two: Evaluating Performance Appraisals
“Performance appraisal systems are a lot like seat belts. Most people believe they are
necessary, but they don’t like to use them.”
-Gary P. Latham (Latham & Wexley, 1993)
Whether an appraisal is highly complex, with multiple types of raters, using multiple
appraisal methods, or a just simple conversation between a manager and subordinate discussing
the previous month’s performance, almost every organization has some kind of performance
appraisal. According to the United States Bureau of Labor Statistics (2015a) employers spend on
average $33.19 per employee, per hour worked. In addition, employers can spend up to 52% of
operating expenses on pay and benefits (U.S. Bureau of Labor Statistics, 2015b). Since
organizations spend such a staggering amount of time and money, it’s no wonder performance
appraisals are unambiguous. Generally, organizations and managers want to maximize
productivity and demand results or return on investment on money spent. When up to half of an
organization’s expenses are people, appraisals are a natural outcome.
The aims of this chapter are to educate the reader on (a) the major types of appraisal
methods, (b) why organizations use performance appraisals, (c) the different types of appraisal
raters, and (d) how rater errors and the ratee reaction to the appraisal impact the effectiveness of
performance appraisals. These aims will help the reader understand how organizations are
currently using performance appraisals, the problems managers encounter with appraisals, and
the influence of attributional bias on the performance appraisal process.

Methods of Performance Appraisals
Currently, there are no laws that require organizations to conduct performance appraisals,
nor are there any laws that specify a format that organizations must use (Grote, 1996). Therefore,
theoretically there could be as many types of performance appraisals as there are industries,
organizations, or even managers. Historically, however, there are certain types of appraisals most
organizations have used. Grote (1996) described a basic job performance model as including four
components: (a) a performer, in a given (b) situation, engages in certain (c) behaviors, that
produces various (d) results. These four components form the basis for the differences among the
different types of performance appraisals. Some appraisals focus on the characteristics of the
performer, while others focus on the behaviors, and still others focus on the results.
On the whole, there are three methods of performance appraisal: (a) trait or characteristic
method, (b) behavioral method, and (c) results method (Aggarwal & Thakur, 2013). Within these
methods there are two main facets: criteria that are the specific aspects the individual is being
evaluated on and rating which is the type of scale that will be used to measure the criteria (Grote,
1996).
Trait-based performance appraisals. Using the job performance model, trait-based
performance appraisals focus on the performer (Grote, 1996). Traits refer to physical or
psychological characteristics of a person, such as cheerfulness, work ethic, or enthusiasm (Bretz
et al., 1992). Trait-based appraisals are very common and are usually designed so that a manager
rates subordinates on how well the subordinate embodies a specific trait (Harris, 1988). While
traits such as work ethic or enthusiasm might seem easy to measure or apply to a job, trait-based
appraisals are generally highly subjective and lack the empirical evidence linking a trait to
successful job performance.

Trait ranking scale. One example of a trait-based appraisal is a trait ranking scale. This
type of appraisal is composed of a list of traits (e.g., relationship with customers, problem-
solving ability, oral and written skills, etc.), which a manager then uses to rate the subordinate on
a scale (e.g., 1 thru 5 or high to low, etc.) for each trait listed (Grote, 1996). The advantages of
this method include ease of use, cost effectiveness, and small time commitment on the part of the
manager (Aggarwal & Thakur, 2013). The disadvantages of this method include high
subjectivity and inability to accurately assess strengths and weaknesses (Aggarwal & Thakur,
2013). In addition, this type of performance appraisal is highly susceptible to the actor-observer
bias previously discussed. When a manager is given a list of traits to evaluate an ineffective
subordinate, the manager is more likely to rate the subordinate poorly on traits representing
internal factors. It is even likely that external factors would not appear on an appraisal form since
the organization develops the forms and would not generally rate employees on things like poor
economic conditions or unusual weather patterns.
Behaviorally based performance appraisals. Using the job performance model,
behaviorally based performance appraisals focus on what is done, or the behavior itself (Grote,
1996). Behaviors refer to any action taken by an individual, such as things the individual does or
says (Bretz et al., 1992). On the whole, behaviorally based performance appraisals are more
objective and are easier than trait-based appraisals to legally justify. In addition, researchers have
found that individuals are much more comfortable with their performance based on behaviors
compared to traits (Bretz et al., 1992).
Behaviorally anchored rating scale (BARS). BARS is a specialized performance
appraisal method that is designed to measure the job behaviors of an individual in a specific job
(Grote, 1996). The appraisal contains a list of job behaviors. For each behavior there is a rating

scale, and for each rating there is a specific behavioral description. Unlike a rating scale, BARS
contains concrete examples of performance for each rating level. The advantages of this method
include specific and objective measures of performance, higher acceptance of managers and
subordinates, and high reliability and validity. The disadvantages of this method include its
highly specialized nature, that it requires a different form for each job, and that behaviors are
generally geared towards actions instead of results (Aggarwal & Thakur, 2013).
Mixed standard scale. Blanz and Ghiselli (1972) first developed the mixed standard scale
rating format. This format uses three related performance behavior statements that represent a
scale (high, medium, low) of a given performance dimension. The order in which the statements
are presented (high, medium, low) are randomized, which leaves the rater generally unaware of
which statement corresponds to the rating level (high, medium, low) (Blanz & Ghiselli, 1972).
Blanz and Ghiselli (1972) developed this format to help reduce halo and leniency errors and
subsequent researchers (e.g., Finley, Osburn, Durbin, & Jeanneret, 1977; Saal, Downey, &
Lahey, 1980) have validated the ability of mixed standard scales to reduce these biases.
Results-based performance appraisals. Finally, using the job performance model,
results-based performance appraisals focus on outcomes and results (Grote, 1996). Results refer
to a measure of the goals achieved, or the outcome of work process (Bretz et al., 1992). Out of
the three methods, results-based performance appraisals are the most preferred by employees and
are the easiest to defend in a court of law (Grote, 1996). This is primarily due to the strong
connection with actual job performance. For example, if a salesperson sold 10 widgets on a goal
of 50 widgets, the sales person would most likely receive a poor performance appraisal.
However, the manager would be able to say that the sales person only met 20% of their sales

goal, which would presumably would be easier for the salesperson to accept than if the manager
said the salesperson was lazy or had a bad work ethic.
Some of the advantages of results-based performance appraisals include (a) improved
long- and short-term planning, (b) increased communication and focus on results and
achievement, (c) increased commitment to the organization, (d) perceived as fair by both
managers and subordinates, and (e) provides clarity of role and focus for all members of the
organization (Grote, 1996). Some of the disadvantages of results-based performance appraisals
include (a) potential to be too results oriented; (b) difficult to create and use, which requires a lot
of support from all levels of the organization; and (c) may be too inflexible and not allow
adjustments based on changing circumstances (Grote, 1996).
Management by objectives (MBO). MBO is the most common results-based
performance appraisal. MBO, developed by Peter Drucker (1954), is a process where managers
and subordinates jointly set and define objectives, periodically evaluate performance, and reward
for results. A survey of more than 3,500 organizations, including the Fortune Industrial 100,
found that MBO was by far the most preferred and prevalent appraisal method (Bretz et al.,
1992). The advantages of this method include that it is easy to implement, subordinates know
exactly what they are expected to do, and it facilitates open communication and dialogue
between manager and subordinate. The disadvantages of this method include that it can be
difficult to agree on objectives; it ignores intangibles such as honesty, quality, etc.; and it can be
time consuming and costly to maintain (Aggarwal & Thakur, 2013).
Other formats. There are several kinds of performance appraisals that can be designed
using some combination of trait, behavioral, or result-based performance appraisals.

Critical incident. The critical incident method was formalized in the work of Fitts and
Jones in 1947 (Flanagan, 1954). This appraisal method consists of the manager directly
observing a subordinate and developing a list of examples where the subordinate performed
uncommonly good or uncommonly poor work performance (Aggarwal & Thakur, 2013). The
advantages of this method include that it allows for direct observations of the work and has
strong empirical support in assessment. The disadvantages of this method include that it is
extremely time consuming, it is difficult to summarize the data collected, and direct observation
by the manager can influence subordinate behavior while the manager is present versus when the
manager is absent (Aggarwal & Thakur, 2013).
Ranking method. The ranking method consists of managers ranking subordinates from
highest to lowest until all are ranked (Grote, 1996). The advantages of this method include that it
is quick, transparent, and cost effective. The disadvantages of this method include that it is
highly subjective and does not provide any meaningful feedback to improve performance
(Aggarwal & Thakur, 2013).
Graphic rating scales. The graphic rating scales method consists of a scale with a range
of performance for each rating whereby the manager evaluates the subordinate on specific traits
or behaviors (Aggarwal & Thakur, 2013). The advantages of this method include its simplicity
and ease of use, a standardized format that allows direct comparison of employees, and a
reduction of personal bias. The disadvantages of this method include that it is somewhat
subjective in nature and it places equal weight or level of importance on each trait or behavior
evaluated (Aggarwal & Thakur, 2013). Similar to the rating method, graphic rating scales are
susceptible to the actor-observer bias.

Each appraisal format has its own advantages and disadvantages. Regardless of which
method an organization uses, it is important to understand why organizations use performance
appraisals.
Why Do Organizations Use Performance Appraisals?
On a basic level, an employee’s value to an organization is based on that employee’s
performance (Arvey & Murphy, 1998). Therefore, the basic purpose of a performance appraisal
is to measure that value. However, in practice, organizations use performance appraisals for a
variety of reasons. One study, conducted by Cleveland, Murphy, and Williams (1989), identified
over 20 different uses of performance appraisals discussed in academic research between the
years of 1980–1986. The researchers found that the majority of organizations use performance
appraisals for three primary reasons: salary administration, performance feedback, and the
identification of employee strengths and weaknesses. In addition, the researchers found that more
than 70% of the organizations sampled used performance appraisals for potentially conflicting
purposes (e.g., salary raise or personal development) (Cleveland, Murphy, & Williams, 1989).
Types of Raters or Evaluators
When performance appraisals were originally developed, the United States was primarily
a manufacturing economy (Karoly & Panis, 2004). Therefore, it’s not surprising that,
historically, an individual’s manager would be the primary, and usually exclusive, source of
feedback and performance evaluation (Bretz et al., 1992). However, over the past two decades
the United States economy has transitioned to emphasize services and technology, which in turn
has created a much more diverse, remote, and technology savvy workforce (Karoly & Panis,
2004). As a result, researchers have conducted numerous studies on the advantages and

disadvantages of different types or sources of raters (Arvey & Murphy, 1998; Facteau & Craig,
2001; Holzbach, 1978; Landy & Farr, 1980).
Supervisor. As previously discussed, the most ubiquitous type of rater for performance
appraisals is a manager. There are many advantages for using a manager as the ratee. Oftentimes,
a manager has the most complete picture of the job requirements and job performance (Facteau
& Craig, 2001). In addition, managers are a key stakeholder in the performance of their
subordinates. Finally, having only one rater tends to create a more simplistic and efficient
appraisal process (Grote, 1996). However, there are some problems with manager-only
appraisals. First, as previously discussed, the shift to more remote employees may limit the direct
observational capacity of a manager (Grote, 1996). In addition, individuals that are in
organizations with a matrix or project-based organizational structure are likely to have multiple
“managers,” such as project leaders or other division managers, who are more familiar with the
individual’s work (Holzbach, 1978). Finally, research has found that employees are more likely
to be distrustful of manager-only performance appraisals (Bretz et al., 1992).
Self. Self-appraisals are frequently used in conjunction with manager appraisals. Grote
(1996) argues that the benefits of a manager asking for a subordinate’s self-appraisal far
outweigh any disadvantages. He suggests that self-appraisals: (a) provide the best source of
information on the quality of the job; (b) increase the perception of fairness in the appraisal
process; (c) allow both the manager and subordinate to see where there are differences of
opinion; and (d) provides a valuable opportunity for self-reflection, which can increase the
preparedness and buy-in of the subordinate (Grote, 1996). On the other hand, the majority of the
research on self-appraisals indicates the tendency of individuals to overestimate their own
abilities. The accuracy of self-appraisals is further diminished as a result of the self-serving bias

(Keeping & Levy, 2000). Individuals are more likely to assign failure to external factors while
claiming success as a result of their own ability and effort.
Peer(s). Peers provide a broader and more inclusive appraisal process. Lussier and
Hendon (2012) argue that peers often know more about an individual’s performance than the
manager since the peers are directly impacted by the positive and negative actions of the ratee. In
addition, research has found that when peers are included in the appraisal process, negative
office politics can be reduced, since everyone is rating everyone else (Keeping & Levy, 2000).
Holzbach (1978) conducted a study on 183 management and professional employees of a
medium-sized manufacturer to identify the effects of rater bias. He found that managers’ ratings
had significant correlations with peer ratings (Holzbach, 1978). Regardless, including peers in
the appraisal process has some significant impediments. First, it takes a lot of skill for managers
to incorporate all of the feedback (Lussier & Hendon, 2012), and it becomes more challenging
for a manager to defend what ratings a subordinate receives if the manager was not the source of
information. Second, individuals in teams will always have some level of conflict or tension
among group members, which can influence how peers might use the appraisal process. Finally,
and perhaps most importantly, including peers in the appraisal process is a very costly,
complicated, and lengthy endeavor (Grote, 1996). The administration burdens and
developmental costs prevent most organizations from using peers in the appraisal process.
Subordinate(s). Subordinates can be used as raters for managerial employees. Grote
(1996) argues that subordinates often provide information that cannot be learned through other
sources. Subordinates can furnish managers with insights on a manager’s strengths and
weaknesses (Lussier & Hendon, 2012). Facteau and Craig (2001) studied employees of a large
utility company and gathered 1,883 self-rating forms, 12,779 peer rating forms, 3,049 manager

rating forms, and 2,773 subordinate rating forms. They found that regardless of the rating source
(e.g., self, peer, manager, or subordinate) everyone used the same conceptualization of what
describes effective performance of a particular job (Facteau & Craig, 2001). Therefore, utilizing
different rating sources, including subordinates, can provide distinct sources of information.
However, similar to using peers in the appraisal process, including subordinates can dramatically
increase the administrative burdens, the cost of development and maintaining the appraisal
system, and can lengthen the time it takes to complete the appraisal process (Grote, 1996).
Customers. Customers are a relatively new source of performance appraisal information.
Customers can include both internal (e.g., employee satisfaction with HR, IT support response
time, etc.) and external (e.g., customer satisfaction surveys) feedback (Lussier & Hendon, 2012).
When an individual’s job consists of frequent facetime and interaction with internal/external
customers, the use of customers in the appraisal process can be valuable. Grote (1996) contends
that customers might be the most important sources of information for performance appraisals. In
addition, utilizing customer feedback increases both the individual’s and the organization’s focus
on the quality of customer service.
However, there are some disadvantages. First, customer data may not always be available
or specific enough to one individual (Grote, 1996). Second, customers are unlikely to provide
objective feedback. Oftentimes a customer will only provide feedback when they are really mad
or really happy, thus providing a skewed sample source. Finally, similar to peer and subordinate
feedback sources, using customers in the appraisal process increases the cost and complexity of
administering appraisals.
While organizations have explored many different types of raters, managers remain the
primary source of feedback in performance appraisals. As a result, it is important for managers to

McClain, Patrick (Capstone) 2015-12-22

McClain, Patrick (Capstone) 2015-12-22

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