Final answer:
The statement is true; performance reports are used to influence managers' behavior towards top management's goals, even if it affects controllability. The 360-degree performance appraisal is one example where feedback from various sources aims to encourage development and align with strategic objectives. These reports aim to direct behaviors as well as measure performance.
Step-by-step explanation:
The statement is TRUE. Performance reports for responsibility centers can indeed be designed to influence and modify managers' behaviors to align with the goals and desires of top management, even if this means potentially reducing the principle of controllability. This is because performance reports are often utilized as tools to direct managers towards the company's strategic objectives, which might include aspects beyond direct control but are considered valuable for the business's overall success.
For example, a 360-degree performance appraisal system, which derives from a combination of ratings from various sources including supervisors, peers, direct reports, and the employees themselves, is used to provide multiple perspectives on an employee's job performance. Despite its challenges, such as potential biases and the unreliability mentioned in studies like Atkins and Wood (2002), the purpose of a 360-degree system is to encourage employee development and improvements in performance through discourse and training.
The intent behind various assessment methods and reports can go beyond measurement and include influencing behaviors to encourage specific outcomes, aligning with top management's strategic direction. For instance, when a manager is responsible for a particular process and outcomes are in focus, they are held accountable for meeting these expectations, regardless of the method employed to achieve them, which can affect their behavior in performance-related activities.