Much has been written regarding ethical issues that relate to selling, advertising, stock trading, accounting fraud,

and executive compensation. However, little attention has been given to ethical issues related to performance appraisal.

In many work organizations, managers are told to conduct annual performance appraisals with employees and are asked to

be accurate in their appraisals. The importance of being ethical is not addressed. This exercise asks students to examine

$10$ different appraisal situations to determine if they pose any ethical issues. Each student group needs to determine: $1)$ Is

the manager in the case acting in an ethical manner? $2)$ Would their group act in the same manner as did the manager?

In discussing this exercise, it may be helpful to point out that there are two approaches to appraisal in practice.

One of these, the rational perspective, suggests that the goal of performance appraisal should be accuracy. Each manager

must evaluate employees objectively because these appraisals need to be used to make a wide range of administrative

decisions $($e$.$g$.,$ promotions, transfers, raises, bonuses, layoffs, selection, and training$).$ They also need to be used to

develop and motivate employees. Accuracy serves as a foundation for accomplishing these tasks. On the other hand, the

second perspective$-$the political approach$-$suggests that the purpose of performance appraisal may be its utility in

accomplishing either the manager$$s or the organization$$s goals. For example, the manager may want to encourage an

employee who is struggling by giving her$/$him a higher than deserved evaluation. Likewise, a manager may want to punish

an employee for being argumentative by giving him$/$her a lower than deserved evaluation. Thus, under this philosophy,

appraisal is a means to an end and accuracy is not the primarily or only goal. The scenarios that follow all relate to the

issue of whether these political goals are ethical and appropriate.