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Survey data fi-om Japan, South Korea, Taiwan, and the U.S. are
analyzed with LISREL on the relationship of performance
appraisal practices to performance appraisal effectiveness and
ultimately to job satisfaction and organizational effectiveness.
The results are interpreted in terms of cultural influences.
METHODS
Subjects
INTRODUCTION
Since the surveys were originally developed in English, the
Korean, Taiwanese, and Japanese surveys went through a
translation and back translation process by native bom
professors from each country.
Instruments
Appraisal purposes. The respondents were asked to what
extent the items describe the purposes of appraisal practices as
currently conducted. The employees responded on a Likert
type scale ranging fi-om 1 (Not at all) to 5 (To a very great
extent). Eleven items on the purposes of appraisal were
initially included in the study. Six of the performance appraisal
182
items are from Milliman et al. (1991) and three of the items are
based on Cleveland et al. (1990). Two additional items were
developed specifically for this study. The factor structure of the
eleven items is based on Milliman et al. (1991), but to further
adapt the study from a U.S. to a cross-cultural based study, we
proposed several measures that are combinations of the
Milliman et al. and Cleveland et al. studies which are discussed
below. The five purposes of appraisals studied included pay (2
items), development (3 items), document (2 items), enabling
subordinates to express themselves (2 items), and promotion (1
item).
overall fit. The values for each of the models was less than or
close to .05, once again indicating an adequate fit.
The chi-square goodness of fit statistic is a third measure of the
overall fit of the model. Chi-squares that have a significance
of greater than .05 are considered not to be significantly
different than the actual data (note here we are looking for nonsignificance). However, the chi-square statistic has several
problems. At both large and small sample sizes it is inaccurate
(BoUen, 1990) and it is extremely sensitive to minor variations
in multivariate normality (Hayduk, 1989). One way of
correcting for sample size bias in the chi-square test is to
calculate the ratio of the chi-square/degrees of freedom
(Joreskog & Sorbom, 1989). Models are considered to fit well
when this ratio is less than 5/1 (Hayduk, 1989). Each of these
ratios for the four countries are well under the 5/1 criteria,
indicating an acceptable fit.
RESULTS
Confirmatory Factor Analysis
To test the proposed casual model of the 11 purpose appraisal
purpose items and the three performance appraisal effectiveness
items, a covariance structural model was employed using
LISREL 7 (Joreskog & Sorbom, 1990). The items loaded as
anticipated on the proposed factors in all four countries with
two exceptions. First, one document item did not load cleanly
on the document factor in all four countries and thus was
discarded from the analysis.
Second, in the U.S. one
development item loaded higher on the subordinate express
factor (.59) than the development factor (.26) it was intended
for. To be consistent with the other three countries we placed
this item on the development factor. Finally, it should be noted
that the promotability item was not included in the confirmatory
factor analysis since it is a single item measure.
183
Japan
Japan was the only country in which all five purposes were
found to be significantly related to appraisal effectiveness, with
gammas ranging from . 11 to .22. In addition, the effectiveness
of the appraisal was significantly related to organization
effectiveness (.25) and job satisfaction (.53). These data appear
to indicate that appraisal systems are working effectively in
Japan for both employees and organizations.
Taiwan
The path model results indicate that three of the five purposes.
Pay, (.23), Development (.27), and Document (.24), are
significantly related to appraisal effectiveness.
In turn,
performance evaluation effectiveness is significantly related to
organization effectiveness (.15) and job satisfaction (.12),
although at a much lower level than in Japan and South Korea.
United States
The path model data indicates some surprising results. First,
the Development and Pay measures were not significantly
related to appraisal effectiveness; only Document (.37),
Subordinate Express (.21), and Promotion (.17) had significant
gammas. Second, appraisal effectiveness was significantly and
positively related to job satisfaction (.51) and negatively related
to organization effectiveness (-.52). These results indicate the
perplexing perspective that appraisal effectiveness is positively
related to employee job satisfaction, but has a negative impact
on organizational effectiveness.
The most surprising results were in the U.S. data. First, despite
the suggested widespread emphasis of appraisals on
development (Gomez-Mejia et al. 1995), this purpose was not
found to be related to performance appraisal effectiveness.
Second, in the U.S, appraisal effectiveness was found to be
significantly negatively related to organizational effectiveness,
but positively related to job satisfaction. It is not clear why
employees perceive appraisals to have a positive impact on
themselves, but a negative affect on the organization. Given the
widespread criticism of appraisal in the U.S., it may be possible
that these data support researchers such as Meyer (1991) who
contend that appraisals conducted in their traditional manner
often harm organizations.
DISCUSSION
One of the most important findings is that the same factor
structure surfaced in each of the four countries regarding the
purposes of performance appraisal. Finding a common factor
structure is unusual from a methodological perspective because
factor analyses are notoriously susceptible to cultural infiuences.
Even when a common factor across countries exists, cultural
differences infiuence interpretations to such a degree that
demonstrating such underlying factors is difficult. Given the
cultural diversity among these four countries this is a notable
finding.
184
REFERENCES
Miiliman, J.F., Nason, S., Von Glinow, M.A., Huo, P., Nam,
K.& Lowe, K. (1994). Benchmarking best strategic
pay practices: An exploratory study of Japan, South
Korea, Taiwan, and the U.S. Paper presented at the
International Personnel and Human Resources
Management Conference. Gold Coast, Australia, July.
Hayduck, L. (1987).
Structural equation modeling with
LISREL: Essentials and applications. Baltimore: The
John Hopkins University Press.
185
Japan
Taiwan
U.S.
44/118
,92
,86
.057
44/102
,94
,90
,042
186
US
44/73
,95
,91
,029
43/94
,9 1
.83
.058
Taiwai
,576
11/8 (,21)
,99
,95
,018
US
.443
19/8 (02)
.97
.86
.041