When Feedback Interventions Backfire: Why Higher Performance Feedback May Result in Lower Self‐Perceived Competence and Satisfaction with Performance

• Published date: 01 July 2016
• Author: Antonios Stamatogiannakis,Dilney Gonçalves,Jonathan Luffarelli
• DOI: http://doi.org/10.1002/hrm.21739
• Date: 01 July 2016

Human Resource Management, July–August 2016, Vol. 55, No. 4. Pp. 591–614

© 2015 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI:10.1002/hrm.21739

Note: All three authors have contributed equally to this work and should be considered as co-first authors.

The order of authorship was determined randomly.

Corresponding author: Jonathan Luffarelli, Department of Marketing at IE Business School–IE University,

Maria de Molina 12, Planta Baja; Madrid, Spain 28006, Phone: +34 915689733, Fax: +34 915689710,

E-mail: jluffarelli.phd2015@student.ie.edu

WHEN FEEDBACK INTERVENTIONS

BACKFIRE: WHY HIGHER

PERFORMANCE FEEDBACK MAY

RESULT IN LOWER SELF-PERCEIVED

COMPETENCE AND SATISFACTION

WITH PERFORMANCE

JONATHAN LUFFARELLI , DILNEY GONÇALVES,

ANDANTONIOS STAMATOGIANNAKIS

In relative performance evaluation systems, appraisers may choose to adopt

stricter or laxer evaluation criteria. When laxer (vs. stricter) criteria are used, higher

absolute performance evaluations become easier (vs. harder) to achieve. Thus,

each appraisee’s absolute performance feedback and the mean of the distribution

of absolute performance feedback are shifted upward (vs. downward). Yet, relative

performance remains constant. When evaluation outcomes depend solely on rela-

tive performance, can the adoption of laxer (vs. stricter) criteria—leading to higher

absolute performance feedback but no change in relative performance—infl uence

appraisees’ satisfaction with performance? Despite the ubiquity of such systems

in organizations, research has not addressed this question. This article points to

an important gap between practitioners’ beliefs and research fi ndings. We show

that while most appraisers believe that higher absolute performance feedback will

automatically result in more satisfaction with performance, the opposite may also

happen. Specifi cally, we fi nd that appraisees with a stronger (vs. weaker) chronic

or contextual need to engage in social comparison are more satisfi ed with lower

(vs. higher) absolute performance feedback. Overall, we demonstrate why and how

feedback interventions in relative performance evaluation systems may backfi re,

and suggest a set of practical guidelines for maximizing appraisees’ satisfaction

with performance in such systems. ©2015Wiley Periodicals,Inc.

Keywords: feedback, forced rankings, performance assessment, performance

management, satisfaction, social comparison

592 HUMAN RESOURCE MANAGEMENT, JULY–AUGUST 2016

Human Resource Management DOI: 10.1002/hrm

DeNisi, 1996, 1998). It is still unknown whether

individuals use absolute performance information

in settings in which evaluation is strictly relative

(e.g., curve-based evaluations), and whether self-

perceived competence and satisfaction with per-

formance are sensitive to absolute performance

feedback in such settings.

By improving our understanding of the effect

of absolute performance feedback in relative

appraisal systems and by helping practitioners

understand the circumstances under which feed-

back interventions may backfire, our article makes

important contributions to the literature on per-

formance appraisals and feedback delivery (Biron,

Farndale, & Paauwe, 2011; Bracken,Timmreck,

Fleenor, & Summers, 2001; Farndale & Kelliher,

2013; Miller, 2001; Pichler, 2012). We expose a

new and important gap between practitioners’

lay beliefs and research findings (Rynes, Colbert,

& Brown, 2002). We demonstrate how and why,

contrary to the commonly held belief of those

making (i.e., appraisers) and those receiving (i.e.,

appraisees) evaluations, higher (vs. lower) abso-

lute performance feedback can make appraisees

who are evaluated relative to each other feel less

(vs. more) satisfied with performance. Our results

point toward the important moderating role of

social comparison orientation and the mediating

role of self-perceived competence in the relation-

ship between absolute performance evaluation

and satisfaction with performance. Building on

these results, we provide a set of practical guide-

lines for maximizing appraisees’ satisfaction with

performance in relative appraisal systems.

The rest of this article is structured as follows.

First, we discuss the features of performance feed-

back in relative appraisal systems, the relationship

between performance feedback and satisfaction

with performance, and how this relationship may

be moderated by social comparison orientation

and mediated by self-perceived competence. In the

process, we develop of set of three hypotheses. We

then present four studies that establish appraisers’

and appraisees’ lay theories about performance

feedback in relative evaluation settings and that

examine whether and why, contrary to those lay

theories, higher (vs. lower) feedback may result in

employees’ lower (vs. higher) self-perceived com-

petence and satisfaction with performance. We

conclude by discussing the theoretical and mana-

gerial contributions, as well as some limitations

and future research directions.

Performance Feedback in Relative

Performance Appraisal Systems

CEOs and other executives (Gong, Li, & Shin,

2011), lower-level managers (Goffin et al., 2009),

A

manager was reviewing the performance

of her subordinates. In her company—

as in many others—employees were

evaluated only according to the ranking

of their performance ratings compared

to those of the other employees in the department

(i.e., curved performance evaluation system).

Because in such relative evaluation systems the

absolute value of the ratings is inconsequential

to employees, the manager decided to adopt less

stringent evaluation criteria to shift the entire dis-

tribution of performance ratings upward, without

changing the relative ranking—and thus the rela-

tive performance evaluation—of each employee.

Her intuition was that, if anything, higher absolute

performance feedback (keeping relative ranking

constant) should increase employees’ self-percep-

tion of their competence level and so improve

their satisfaction with performance. Little did she

expect that soon after handing out the appraisals,

employees at all performance- rating levels would

start expressing their discontent. Puzzled by the

unexpected outcome of her generous but also

objectively inconsequential evaluation scheme,

the manager started wondering why her feedback

strategy may have backfired.

In this article, we provide an answer to her

question and others like it. Specifically, under what

circumstances can similar, seemingly generous

and inconsequential feedback interventions back-

fire? When evaluation outcomes depend solely on

relative feedback, could absolute feedback have a

tangible effect on self-perceived competence and

satisfaction with performance? And despite the

fact that, in this instance, relative performance did

not change, what factors might explain why and

how higher absolute feedback led to lower satisfac-

tion in a strictly relative evaluation system? The

answers to these questions could have numerous

practical applications for HR managers and impor-

tant implications for a wide array of research areas.

Relative appraisal systems are ubiquitous

in organizations (Backes-Gellner & Pull, 2013),

and companies such as Yahoo!, AIG, Cisco, and

Amazon use curved rankings for employees’ per-

formance assessments (Brustein, 2013; Ovide &

Feintzeig, 2013). Yet research on both absolute

and relative performance feedback has typically

focused on nonrelative evaluation settings (Harris

& Smith, 2005; Klein, 1997; Moore & Klein, 2008).

Therefore, our knowledge of relative performance

appraisals is rather limited (Goffin, Jelley, Powell,

& Johnston, 2009; Schleicher, Bull, & Green,

2009), and the effects of feedback interventions—

similar to those in the anecdote above—are not

well understood (Atwater, Brett, & Charles, 2007;

Atwater, Waldman, & Brett, 2002; Kluger &