The role of performance appraisals in workplace attendance
Empirical findings indicate that employees who undergo formal performance assessments are less inclined to work while sick. This behavior is referred to as presenteeism, which involves working despite illness. Presenteeism is prevalent in today's workplaces, with surveys from the US and Europe showing that up to 70% of employees have worked while sick at least once over the past year. While presenteeism may help fulfill urgent orders or prevent workload buildup, it adversely affects health, productivity, and job satisfaction and contributes to increased sickness absences across the workforce due to the spread of illness. Studies have found that the productivity losses from presenteeism can be three to six times greater than those from sickness absences.
Few studies have explored HR practices as factors influencing presenteeism. Our IZA Discussion Paper examines how performance appraisals affect employees' tendency towards presenteeism. Performance appraisals, a key HR tool, are used primarily to ensure employees meet management expectations, often influencing decisions about salaries or promotions. They are considered an essential part of the incentive systems that boost employee motivation and performance.
Our research utilizes linked employer-employee data from Germany, confirming presenteeism as a significant issue. On average, employees reported working while sick for five days last year, nearly matching the six days of reported sick leave. Our findings reveal that performance appraisals correlate with a reduction in presenteeism by up to 20%, or one day annually. This decrease may result from employees feeling less pressure to attend work merely to impress through high attendance, especially when evaluations are based on specific, output-oriented criteria. Performance appraisals tied to performance-related pay particularly contribute to this trend, focusing more on outcomes than on mere presence at work.
Moreover, the involvement of a works council appears to reinforce this negative correlation between performance appraisals and presenteeism. As a body representing employee interests, the works council can advocate for an appraisal system that aligns more closely with worker preferences, promoting a perception of fairness and reducing the compulsion to work while ill.
Future research might focus on countries like the US, where less generous sick pay regulations might encourage presenteeism. Additionally, the impact of specific aspects of performance appraisals on presenteeism warrants further exploration, including the design of objectives and the behavior of evaluators.
© Christian Grund and Anna Nießen
Christian Grund is Professor of Human Resource Management and Personnel Economics at RWTH Aachen University and IZA Research Fellow
Anna Nießen is Research Affiliate at the Chair of HRM and Personnel Economics at RWTH Aachen University
Please note:
We recognize that IZA World of Labor articles may prompt discussion and possibly controversy. Opinion pieces, such as the one above, capture ideas and debates concisely, and anchor them with real-world examples. Opinions stated here do not necessarily reflect those of the IZA.
Related IZA World of Labor content:
Presenteeism at the workplace by Claus Schnabel
How to reduce workplace absenteeism by Wolter Hassink
Privatizing sick pay: Does it work? by Pierre Koning
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