RELATIONSHIP BETWEEN LENGTH OF SERVICE AND EMPLOYEE PERFORMANCE RATINGS IN LARGE INDUSTRIAL CORPORATIONS

HOWARD L GORDON, Pace University

Abstract

Early investigation of the relationship between length of service and employee performance ratings--in three separate studies--indicated a direct, an inverse and no relationship between the variables. As a result of recent legislative changes to mandatory retirement ceilings, the need for a better understanding of this relationship has become extremely important to the corporate personnel function.^ The current study was undertaken to explore what, if any, relationship exists between length of service and employee performance ratings in today's large industrial corporation. An intensive review of related research was undertaken prior to surveying leading U.S. companies. All subjects of this study were professional employees in the occupations of engineers, programmers and salesmen. Participating companies were chosen from the Fortune 500 industrial corporations and each had 40,000 or more employees and gross sales of at least two billion dollars.^ Two instruments were used in the collection of data: an Appraisal Survey Data Sheet and a Background Questionnaire. Actual length of service and performance appraisal data was the primary data source; opinions of staff-head executives in the personnel function provided supplementary information. Both instruments yielded similar results regarding the relationship between the variables. The Statistical Package for the Social Sciences (S.P.S.S.) was used to prepare detailed matrices, scattergrams, Pearson correlations, and related statistical reports.^ Diametrically opposite conclusions were derived from quantitative and qualitative analysis of the data. The first conclusion was that no relationship of practical significance exists between length of service and employee performance ratings--in the companies surveyed--as a total group, by individual company or by occupational group. The second conclusion was that no valid determination of this relationship was possible because of the imprecise measurement of employee performance indicated by participating personnel executives.^ Suggestions for future study include the need for developing valid appraisal systems better tailored to the specific company; focusing upon the relationship between length of service and productivity rather than performance ratings; separating performance appraisal from company compensation plans; and ensuring that current performance evaluation systems ae reviewed to improve objectivity and to enhance employee career development. ^

Subject Area

Economics, Finance

Recommended Citation

HOWARD L GORDON, "RELATIONSHIP BETWEEN LENGTH OF SERVICE AND EMPLOYEE PERFORMANCE RATINGS IN LARGE INDUSTRIAL CORPORATIONS" (January 1, 1981). ETD Collection for Pace University. Paper AAI8205513.
http://digitalcommons.pace.edu/dissertations/AAI8205513

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