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The publication of performance ratings for NHS Trusts (star ratings) is an important part of NHS policy. There are significant benefits to a Trust in being awarded the top rating of three stars. The methodology for awarding stars to acute hospitals is explained. The most significant areas of performance in determining a hospital's star rating are identified. The Department of Health claimed that performance in 2002 was better than in 2001, against standards that are getting tougher. This claim is assessed but no clear evidence is found to substantiate it. An alternative performance rating system using the same data is developed and compared with the official version to illustrate the importance of methodology – this system used only the outcome measures of hospital services included within the star ratings system, and not process measures. Only 41 per cent of hospitals would have received the same number of stars as their official rating. Some implications of the system of performance ratings are discussed.

Jensen and Murphy (1990) and others have found a small but statistically significant relationship between firm performance (as measured by change in shareholder wealth or firm profits) and executive compensation. In this study we investigate the pay‐ performance relationship further by considering the relationship between an outside measure of firm performance (changes in the firm's bond rating) and the contemporaneous change in the compensation of the firm's CEO. We find that when a firm's bond rating is down‐graded, CEO total compensation declines by a relatively small amount ($165,500) and when a firm's bond rating is upgraded, CEO total compensation increases markedly ($3,202,900). Thus, while a positive pay‐performance relationship exists, the relationship is not symmetric. CEO compensation changes (increases) much more when firm performance improves than it changes (decreases) when firm performance declines. Further, most of the change in CEO compensation occurs in the stock gains (profits from the exercise of stock options) category for both firms experiencing bond rating upgrades and down‐grades.

In recent years, practitioners have identified a number of problems with traditional performance management (PM) systems, arguing that PM is broken and needs to be fixed. In this chapter, we review criticisms of traditional PM practices that have been mentioned by journalists and practitioners and we consider the solutions that they have presented for addressing these concerns. We then consider these problems and solutions within the context of extant scholarly research and identify (a) what organizations should do going forward to improve PM practices (i.e., focus on feedback processes, ensure accountability throughout the PM system, and align the PM system with organizational strategy) and (b) what scholars should focus research attention on (i.e., technology, strategic alignment, and peer-to-peer accountability) in order to reduce the science-practice gap in this domain.

The current chapter focuses on environmental and organizational factors that affect the performance appraisal context, performance evaluations, and rating accuracy. Drawing on the extant literature and focusing on current organizational practices, we propose a dynamic multi-level model of performance rating that takes these distal factors into consideration. In doing so, we also provide propositions explicating causal linkages between these distal factors, more proximal performance appraisal factors, and ultimately the accuracy of performance ratings. Furthermore, we identify current and emerging directions in performance appraisal research and practice. The implications of the current and emerging trends are then discussed in the context of our proposed model.

The purpose of this paper is to examine the risk-adjusted performance of rated funds and determine the usefulness of Lipper Leader rating of unit trusts in Malaysia during the period 2000 to 2010.

The paper utilizes the Sharpe ratio, Treynor ratio, Jensen’s alpha and Fama-French three-factor model to measure performance.

During the period of study, the performance of the market index and risk-free rate outperformed that of 68 equity unit trust funds in the 3-year, 5-year and 10-year investment horizons. The ranking, based on four performance measures, corresponds to Lipper rating for the lowest rated and leader funds, but not for the three- and four-key rated funds. Further, there is a significant difference in the performance of the five-key, four-key and three-key rated funds which outperform the lowest rated funds, indicating that Lipper rating is able to distinguish superior and inferior unit trust funds.

Some of the limitations in this study are that the indexes could be self-constructed. The existing index might not represent the asset allocation of the funds concerned. Additional variables might have to be considered when examining fund performance as they should correspond to the characteristics of a fund.

The results indicate that Lipper rating classification could identify the highest and lowest performing funds. Therefore, investors could use this rating to make informed investment decisions without undertaking time-consuming analysis to ascertain the good- and bad-quality funds in the market.

The findings of this study could be used by the academia as another source of reference to enhance their understanding of the applicability of Lipper rating for unit trust funds in an emerging market.

The contribution of this study is that it analyzes the effectiveness and capability of Lipper Leader rating in identifying quality funds in the context of an emerging market. Performance comparison between Lipper Leader rating and methods used in the portfolio theory bridges the theory-practice gap between practitioners and academics. To date, there have been no attempts to study and compare the ratings of advisory firms with theoretical performance measures, particularly in the context of Malaysia.

The purpose of this paper is to examine relationships between a priori‐chosen personality traits and the tendency for a manager to rate his/her job performance more favourably than well‐acquainted superiors, peers, and subordinates do.

The job performance of 204 managers was evaluated using multi‐source (i.e. 360E) ratings (self, subordinates, peers, and superiors). Managers also completed personality measures. Relationships between managers' personality and the tendency for managers to rate their own job performance higher than subordinates, peers, and superiors did were analyzed using advanced regression techniques.

The paper finds that self‐superior and self‐peer disagreement in performance ratings (i.e. self‐rating inflation) was associated with high Achievement and high Self‐Esteem. Additionally, self‐superior disagreement (i.e. self‐rating deflation) was associated with high Anxiety. Self‐subordinate disagreement was not associated with self‐rater personality.

The paper studied a single sample of financial services managers. Generalization requires cross‐validation with other occupational groups and organizations.

Human resources professionals should be informed that self‐superior and self‐peer disagreement (i.e. self‐rating inflation) in multi‐source job performance ratings is potentially beneficial because it is associated with personality traits that can facilitate positive responses to feedback. Peers and superiors should therefore not inflate their ratings of managers in an effort to reduce self‐superior and self‐peer disagreement in ratings.

This study improved upon most previous investigations of this topic by using a field setting, considering a wider range of personality variables, using 360( job performance ratings (self‐, supervisor‐, peer‐, and subordinate‐ratings) rather than just a subset of these rating sources, and employing superior statistical procedures.

This study is an academic attempt to bridge the gap between Western theories and the under-researched non-western contexts by studying the characteristics of traditional and modern performance management systems (PMSs) in the United Arab Emirates (UAE). Drawing on the expectancy theory, this study aims to discuss the significant causal relationship between the implementation of single-rating, multi-rating 360° performance management (PM) and organizational outcomes such as trust, commitment, satisfaction and intention to leave.

Using the self-reported measures and survey method, data were collected from 439 employees from different organizations across the UAE. Explanatory factor analysis, simple linear regression and multi-group were used to test the proposed conceptual model and examine the mediation and moderation impact.

The study explored the best-practices attributes of the traditional single-rating, multi-rating 360° PM within a non-western context. This study also provides empirical evidence on the significant role of uncertainty avoidance and power distance orientation as a mediator between the relationship between these PMSs and trust, commitment, job satisfaction and intention to leave. Finally, this paper examined the effect of many demographic variables (such as gender, age, industry type […]) on the relationship between the independent variables and the dependent variables.

This study extends research on PM theories and models. Another important aspect of this study is that its model has been tested on the UAE’s data, an underrepresented geographic region in the management literature. Given all the PM’s positive characteristics, the way that this feedback is viewed and interpreted by employees may be moderated according to the employee’s management level, age, gender and many other demographics.

The aim of this paper is to assess the validity of the self-enhancement tactician perspective, which proposes that workers inflate their self-ratings regardless of their national culture, while exploring the nature of self-ratings in Mexico.

Structural equation modeling and t tests were applied to data collected from a sample of 300 employees randomly selected from a manufacturing company in Mexico. The data collected include self-performance ratings, employees’ expected evaluations from supervisors, evaluations by supervisors and a pay-per-performance measure.

The results provide general support to the self-enhancement tactician model, showing that self-rating is inflated and that supervisory rating constitutes the best predictor of employees’ performance.

Based on previous research findings, it was presumed that Mexican workers participating in this investigation reflected collectivistic-oriented traits. Future research projects investigating the universality of the self-enhancing tactician model may strengthen the validity of the results by including an independent measure of culture. People living in a predominantly collectivistic society are not necessarily collectivists.

When self-ratings and supervisory ratings were compared to the objective measure of performance, supervisory ratings emerged as the most reliable and reasonable predictor. This finding may assist practitioners as they try to make strategic decisions regarding the evaluation of employees’ performance.

The unique comparison of self-ratings and supervisor ratings with an objective measure of performance constitutes one significant element in this investigation. The findings encourage future research efforts and particular performance evaluation practices.

The purpose of this paper is to apply firm aspiration theory to explore how firms respond to government product ratings.

Longitudinal examination of nine automobile manufacturers during National Highway Traffic and Safety Administration crash tests in the USA.

Firms take specific external actions to influence the political mechanisms that support ranking schemes when product ratings are below those of rivals and when previously highly rated products decline. In addition, firms receiving rankings above those of their competitors are found to be less likely to take such action, even when their overall ratings declined. Similarly, firms seeing improvements in previously low-rated products will take fewer actions aimed at influencing the political mechanisms that support rating schemes.

The primary contribution of this research is in establishing when firm product ratings will result in actions to influence external ratings criteria. Previous research has shown that firms respond to organizational ratings by taking action aimed at improving subsequent performance. The current research builds on such work by applying aspiration theory in an effort to predict and explain when and why certain ratings will attract firm attention to the external mechanisms that support such ratings.

Peer evaluations of performance increasingly are being used to make organizational decisions and to provide individuals with performance related feedback. Using Kenny’s social relations model (SRM), data from 14 teams of undergraduate students who completed performance ratings of themselves and other team members were analyzed. Results indicated a significant target variance effect for the majority of performance dimensions and a significant perceiver variance effect for all performance dimensions. Results further indicated that, in general, how individuals see themselves is not congruent with how others see them, how individuals see themselves is congruent with how they see others, how individuals are seen on a particular dimension is related to how they are seen on other performance dimensions, and, how a person is seen by others does not relate to how that individual sees others. Implications, limitations, and suggestions for future research using the SRM are discussed.