Does performance management have an ethical dimension? If you are involved in this kind of work you quickly discover its potential for good or harm.
For example, a line manager who conducts faulty or biased appraisals can fundamentally damage someone’s life. This may partly explain why so many managers dislike and studiously avoid doing appraisals.
Or the damage may stem from more broad decisions, such as those affecting whole teams and occasionally the entire organisation. These big impact choices can have serious ethical consequences, ranging from unreasonably changing performance targets to treating one group of people differently or unfairly compared to another group.
Despite this uncomfortable reality about performance management, some practitioners retain doubts about their ethical responsibilities, which is often to ask awkward questions rather than just supply answers.
As one observer puts it, “as at most companies, the eyes of our HR people glazed over whenever we used the word ethics. We are a small company, so we don’t have somebody who was an ethics officer per se, so it fell to the board to raise these questions. Some claim it’s beyond their remit.”
HR practitioners also avoid the ethical issues by claiming to be relatively powerless within the general hierarchy. Yet ethics pervades HR. This is particular so in performance management–whether it’s how people are promoted, rewarded, hired, fired, laid off, given feedback or the whole communication process.
The ability of HR to offer an important ethical dimension to the entire landscape of performance management depends on first accepting there is a responsibility to do so.
Yet research evidence suggests performance reviews for example, seldom contain any reference to ethics, or what it means to run a responsible business. In one national survey, only 43 per cent of human resource professionals said their organizations included ethical conduct as part of employees’ performance appraisals. One might well ask—where is HR when it matters? 
The purpose of performance management is to establish a culture—the kind where individuals and groups take responsibility for continuous improvement of business processes, personal skills, behaviour and contributions. Taking a holistic view HR can apply an ethical dimension in various specific ways to performance management:
Ethics should in fact be the cornerstone of performance evaluation. In raising the ethical dimension, HR is not being “holier than thou” or unduly obsessed with ethical concerns. Instead, HR should be able to bring valuable strategic insights to the performance management process to ensure it is not solely driving efforts to extract more from people, but also how this is works in practice.
In this context HR has an ethical responsibility ensure a fair performance management process becomes properly integrated in the organisation’s culture. For example seeing performance management provide an honest assessment of performance, that there is a definite plan to affect behaviour and a way to mutually develop plans for improvement:
To sum up
The performance management scene is full of ethical traps for the unwary. For example, the whole area of rewards, punishments and threats raises ethical issues about how they are used and their impact on individuals. For instance, an appraiser should not be able to reward and employee that he or she likes more than another when the other is more qualified.
Similarly, it will probably be up to HR to ensure the performance appraisal process is on firm ethical grounds by how the process works, the particular forms used, the administrative techniques and rating which should be standardised to affect people equally.
HR is acting in an ethical capacity by making sure appraisers are trained so they can improve their rating performance and become aware of the dangers of making unethical errors during the appraisal. And what happens to the results of appraisals has its own set of ethical issues, for example, keeping such information away from employees is unethical as would be leaking the feedback to people who do not need to know the information.
Let’s assume HR practitioners do some of the things mentioned above and there is legal compliance with the formalised rules imposed by legislation. Does this mean everyone can rest easy there is now a sufficient standard or ethical behaviour in the organisation?
Almost certainly it will not be enough. There will be many more tough questions that HR should be asking of its own practice and what is happening within the organisation before the organisation can claim to be responsible, and ethical.
This is the fifth article in our series on the ethical responsibilities of human resources.
NO HIDING PLACE
is a new White Paper from Maynard Leigh Associates based on this series and available from November 2013.
For a copy of this White Paper simply send an e-mail headed WHITE PAPER to firstname.lastname@example.org.
This is the fifth of six planned articles on the role of HR and Ethical behaviour in organisations.
 Ethical Challenges in Human Resources, A talk by James O’Toole to the Markkula Centre for Applied Ethics Business and Organizational Ethics Partnership: https://www.scu.edu/ethics/practicing/focusareas/business/ethics-human-resources.html
 Performance Reviews Often Skip Ethics, HR Professionals Say Less than half of organizations include ethical conduct in employee appraisals (SHRM » About SHRM » Press Room » Press Releases Performance Reviews Often Skip Ethics, HR Professionals Say 6/12/2008