Abstract: A criticism frequently leveled at interactionism—the theoretical basis of much of qualitative research—is that it neglects social structure and is limited to micro-social analysis. Anselm STRAUSS' concept of "negotiated order" is an attempt to overcome these alleged weaknesses and to address the connection between interaction and structure, and between micro-, meso- and macro-level analysis. In his view, negotiations between units of any potential scale, from small groups to nation states, are at the heart of social order and social change. The concept of "negotiated order" has been particularly influential in organization studies. However, it has also met with criticism. In this paper, we explore the potential of the approach for connecting different levels of analysis in qualitative research. We use the example of negotiations on "performance" in businesses to discuss the relationship between micro-level negotiations and organizations and societal discourse respectively. The empirical data were collected in an ethnographic research project which we conducted in three large businesses in Switzerland.

Key words: negotiated order, symbolic interaction, organization, performance principle

Varieties of interactionism form the theoretical foundation of much of qualitative research in sociology. Indeed, there was a time when the Chicago School's symbolic interactionism was virtually synonymous with qualitative sociology. As Anselm STRAUSS once remarked: "We didn't think symbolic interaction was a perspective in sociology, we thought it was sociology" (GUSFIELD, 1995, p.ix). At the same time, however, interactionist approaches have been and still are harshly criticized for a number of supposedly fundamental flaws. Perhaps the most important criticism leveled at symbolic interactionism and ethnomethodology alike is their alleged neglect of structure. According to this critique, these approaches do not seriously take into account social structure and power relations which constrain actors' options in any given situation. The perspective is said to be voluntaristic and, moreover, to be focused overly on change while neglecting stability. Furthermore, critics assert that interactionist research is too devoted to the micro-level or, worse still, is incapable of reaching beyond micro-social analysis for theoretical reasons. [1]

But just as macrosociology is firmly based in microsociology (COLLINS, 1981), microsociology depends on macrosociological presupposition—if only because "macrosociology is a form of folk belief" (FINE, 1991, p.165). In other words, our research subjects organize their experience in macrosociological terms and tend to reify their life worlds. As interactionists repeatedly point out in their response to charges of being astructural, an interactionist approach in no way precludes the acknowledgement of structure and constraints on action and, thus, of issues of stability and power. Nor does the focus on situated interactions necessarily entail a parochial restriction of the theoretical import of such research to micro—that is "unimportant"—matters (FARBERMAN, 1991; FINE, 1991; HALL, 1987; MAINES, 1977). However, interactionists do insist that the relevance of meso- and macrosocial dimensions for a specific social setting must be demonstrated empirically rather than just being posited a priori.²⁾ The question, therefore, is how qualitative research conducted on the micro-level of concrete contexts and interactions can take into account social order in and beyond the situations under scrutiny. [2]

One prominent and promising answer comes from Anselm STRAUSS and his colleagues with the concept of "negotiated order" (STRAUSS, SCHATZMAN, EHRLICH, BUCHER & SABSHIN, 1963; STRAUSS, 1978; STRAUSS, FAGERHAUGH, SUCZEK & WIENER, 1997). Originally developed in a study of two psychiatric hospitals, negotiated order has become the dominant metaphor of organization studies conducted from a symbolic interactionist perspective (FINE, 1984). STRAUSS himself considers the approach applicable to "unit(s) of any potential scale" (STRAUSS, 1978, p.261) from small groups to nation states. Thus the concept is also a root metaphor for social worlds/arenas theory, which is another interactionist attempt to reconcile interaction with structure, micro with macro levels of analysis (CLARKE, 2005; STRAUSS, 1982). Furthermore, STRAUSS (1978, p.235) claims that the process of negotiation is at the heart of social order and social change, which also means it is at the heart of sociology itself. Therefore, the negotiated order approach would seem to be a well-suited theoretical tool if one is interested in connecting different levels of analysis and linking interactions to organizations and overarching societal structures. This is exactly what we want to show in this paper. With the empirical example of negotiations on "performance," which is a basic legitimation pattern in our society, we will explore how negotiation/interaction relates to structure—in our case primarily to the meso-level of organizations—but beyond that also to the macro-level of labor market structures and overarching societal discourses. In particular, we will further address the question of non-negotiable issues in a given context, i.e. the problem of stability. [3]

The negotiated order concept has been criticized for the same reasons as interactionism in general. STRAUSS has parried some of these attacks himself, seconded by other supporters (e.g. ALLEN, 1997; FINE, 1984; MAINES, 1977; MAINES & CHARLTON, 1985; see also contributions in the Urban Life special issue of October 1982). Nevertheless, some weaknesses, stemming mainly from the looseness of the concept, remain. Therefore we will first present the main features of the negotiated order approach and the criticisms leveled at it (2.), before moving on to our empirical example (3.) and a concluding discussion. [4]

The empirical data presented here were collected in an ethnographic research project on social integration and exclusion which examined how the normative model of the entrepreneurial self is enforced in the domains of welfare and the economy (NADAI & MAEDER, 2006).³⁾ A number of discourse analytical studies have argued that the ideal of the subject as an entrepreneur managing his or her own life has become a pervasive semantic and a mode of (self-)regulation in every social sphere (BURCHELL, GORDON & MILLER, 1991; BRÖCKLING, KRASMANN & LEMKE, 2000; BOLTANSKI & CHIAPELLO, 2003). Individuals are called upon to fashion themselves according to the ever-changing demands of the market in order to survive economically and socially. Those who cannot live up to this norm risk social as well as labor-market exclusion. Having become dependent on some form of welfare, they are still not relieved of the pressures of autonomy and self-responsibility but are subject to the activation programs of the enabling state (GILBERT, 2002; LØDEMEL & TRICKEY, 2001). [5]

This sweeping diagnosis certainly aptly captures broad societal trends. Stemming mainly from discourse analysis, it raises the question of the extent to which the normative model is actually operative in different social contexts. Our study addressed the missing link between discourse and practice with regard to the entrepreneurial self. We did so by analyzing technologies and processes of integration and exclusion in the labor market and adjacent institutions of the welfare state, namely work programs for the unemployed. More specifically, we were interested in the kind of "performance" and behavior economic organizations expect of their employees, and how they handle those who cannot meet these demands. In addition, we examined possible correspondences in unemployment programs, where "performance" is translated into "employability." [6]

Our research project was designed as multi-sited ethnography (NADAI & MAEDER, 2005) based on case studies in three large businesses and three work programs for the unemployed. In the present paper we will focus only on negotiation processes in the companies, in particular on negotiations about performance.⁴⁾ Here, we are not so much interested in how individuals try to bargain for a good rating, but rather how the process of negotiation is dependent on and, at the same time, shapes organizational structure, thereby transforming the concept of "performance" in the long run. [7]

Until the 1950s, symbolic interactionism tended to neglect the realm of social organization (MAINES & CHARLTON 1985, pp.271f.). A more systematic treatment emerged in the 1960s, which eventually resulted in the conceptual framework of "negotiated order." Although the idea of social order as a product of negotiations had, of course, its predecessors in the works of MEAD, BLUMER, HUGHES and GOFFMAN, the term itself was coined by STRAUSS and his colleagues in their early texts on psychiatric hospitals. The concept was quickly broadened to include different types of organizations and social orders of any kind and was published as a consistent theorem in 1978. In that book STRAUSS argued, firstly, that all social order is negotiated order. Any organization depends to some measure on negotiations. Secondly, he recognized that specific negotiations are contingent upon the structural conditions of the organization. They follow existing lines of communication hence they are patterned, not accidental. Thirdly, negotiations are a temporal process: they are a recurring stage in the never-ending evolution and revolution of social order. Ultimately, therefore, structural changes in an organization also require revisions of the negotiated order (FINE, 1984). Thus the negotiated order approach conceptualizes the question of order and change as being reflexive, dialectic and temporal (MAINES & CHARLTON, 1985, pp.301f.). [8]

In his methodological legacy "Continual permutations of action," STRAUSS (1993) reassessed what he now called the negotiated order approach with regard to its implications for social order and social change in an interactionist perspective. Indeed, STRAUSS now emphasized the aspect of the malleability of structure and the creativity of interaction to the point where he suggested a new term altogether: processual ordering. The new designation was intended to better express:

"(…) the lack of fixity of social order, its temporal, mobile, and unstable character, and the flexibility of interactants faced with the need to act through interactional processes in specific localized situations where although rules and regulations exist nevertheless these are not necessarily prescriptive nor peremptorily constraining" (STRAUSS, 1993, p.255). [9]

However, STRAUSS was fully aware that the concept and term of negotiated order were already too well established to introduce a new name.⁵⁾ As FINE (1984, p.240) remarked, there is hardly any image with a more profound and lasting impact on sociology. Its success notwithstanding, the concept has met with severe criticism. As mentioned above, on the one hand critics addressed fundamental issues such as the underestimation of structure, the weight of historical forces and the impact of formal rules in everyday life (BENSON, 1977; DAY & DAY, 1977). They argued that the negotiated order perspective gave the impression that everything was negotiable while in reality there may be small-scale adjustments but little or no change of the more encompassing structural arrangements. In the words of one critic cited by STRAUSS himself (1978, p.248), "The important things are always non-negotiable." [10]

Another charge is that the subjective perspectives of the participants are taken at face value—an allegation that implies a kind of false consciousness on the part of the research subjects who consider themselves to have more power to change structures than they actually possess. The corresponding argument with regard to the negotiated order theorists is that they unduly emphasize cooperation and overlook coercion, conflict and power. STRAUSS (1978, pp.247-259) countered by pointing out the fallacy of reifying structure and advocated a perspective that focuses on the structural conditions pertaining to the phenomena under study. Moreover, he called for the analysis of structural processes instead of portraying inflexible structures and listing their properties. In fact, his concept already distinguished between the structural and the negotiation context (pp.98ff.). The structural context encompasses the context within which negotiations take place, and it is the task of the analyst to discern the salient structural properties in the case at hand. The negotiation context refers to the specific structural properties which directly condition the course of the actual negotiations. These are features such as the number of negotiators, their balance of power and their stakes in the negotiations, alternative actions as perceived by the participants, the number and complexity of issues and the like. Proponents of the negotiated order approach have added further arguments and specifications. For instance, BUSCH (1982) introduced the concept of sedimentation which designates the process whereby the outcome of previous negotiations becomes part of the structural context and acquires a taken-for-granted, non-negotiable status. Similarly, HALL and SPENCER-HALL (1982) show how history and tradition set limits by shaping actors' theories of negotiation and, consequently, their behavior. [11]

On a less fundamental level, the negotiated order concept has also been criticized for its lack of rigorous definitions. This pertains primarily to the core term "negotiation," which STRAUSS never clearly distinguished from other forms of social action (ALLEN, 1997). Throughout his works he often uses terms like "coercion, persuasion, manipulation and so on" as contrasts to negotiation. An implicit definition is given by naming "making trade-offs," "obtaining kickbacks" or "compromising" as subprocesses of negotiations (STRAUSS, 1978, p.237). However, the scattered remarks in his texts do amount to three defining conditions: Firstly, there is some tension between the actors—otherwise there would not be a need for negotiation. Secondly, there are, to some extent, conscious or even openly-declared antagonistic interests and, thirdly, some give and take happens as a result of the interactions. MAINES and CHARLTON (1985, pp.295f.) also identify three dimensions, which must be capable of variation in order to be regarded as negotiation: a degree of consensus (somewhere between complete consensus and complete disagreement), a degree of exchange (which varies in frequency, intensity and duration), and the use of strategies. [12]

One reason for the loose handling of this crucial term may be that in their seminal papers STRAUSS and his colleagues did not, curiously enough, give an ethnographic description of actual negotiations. And STRAUSS (1978, pp.224ff.) probably obfuscated matters even more by introducing "silent bargains" and "implicit negotiations" that may occur without any verbal exchange, but nevertheless have an impact on the situation.⁶⁾ Subsuming these forms of actions under the term negotiation actually makes it impossible to refute STRAUSS' pivotal claim that all order is negotiated order. For instance, in her study on the nursing-medical boundary, ALLEN (1997, p.515) argues that organizational structures can be modified in the absence of face-to-face negotiations and she suggests that social order be regarded as "continuously accomplished rather than negotiated." Thus the problem of definition has profound theoretical implications but remains unresolved. In the present paper, we use a working definition that conceptualizes negotiations as observable attempts on the part of actors to influence the "going concern" (HUGHES, 1971) of the situation according to their interests and intentions. [13]

The performance principle is a fundamental norm in modern society. Performance, formally conceptualized as an intentional and individually attributable effort leading to a socially desired result (NECKEL, DRÖGE & SOMM, 2004), justifies an equivalent socio-economic status and is the only legitimate basis for status differences. While the abstract norm may be pervasive, its substance has always been contested. Which activities should be regarded as useful "performance," how can performance be measured and assessed, and how should it translate into rewards (or sanctions in case of a negative evaluation)? The answers to these questions vary historically and across different social contexts. The issue has always been particularly salient in economic organizations which are premised on the strict quid-pro-quo principle of the economic exchange. Moreover, steering and controlling performance is a basic problem every business enterprise faces. [14]

The sociology of work has identified a wide range of solutions to the problem of transforming potential manpower hired on the labor market into actual performance in the interest of the employer. In recent debates, it has been argued that there has been a general shift from direct hierarchical and/or technical control to indirect modes of self-regulation. The employer sets external parameters such as output and quality goals, time limits and the like, while leaving it up to individual workers or teams as to how they proceed to meet these goals (MOLDASCHL & SAUER, 2000; PONGRATZ & VOSS, 2000). [15]

More and more businesses use some version of individual employee appraisals whereby performance is defined as the level of attainment of preset goals within a given period of time. These individually agreed-upon goals generally consist of more or less clearly measurable outcome indicators (e.g. percentage increase in sales) on the one hand, and of rather vaguely defined aspects of behavior (e.g. customer focus, team spirit, innovativeness etc.) on the other. [16]

The three companies we studied all practice some form of individual performance appraisal, albeit with different fervor and with variations in the organizational handling of the respective procedures. [17]

GALACTICA, a globally operating multi-national company with headquarters in Switzerland, proudly declares itself a "performance-driven company" with the goal of becoming "best in the class," i.e. the top player of the industry.⁷⁾ Performance is the pervasive theme of GALACTICA's organizational culture, and all the roughly 80,000 employees are expected to commit themselves to "excellence." There is a highly sophisticated terminology regarding performance level, especially at the high end of the scale, where we find such creatures as "high performers," "high potentials," "must moves" and the like. Employees are assessed twice a year according to a model developed by the Harvard Business School, where GALACTICA regularly sends its higher-level managers for training. [18]

Performance is measured along two dimensions ("values & behavior" and "performance") on a three-point nominal scale where 1 stands for "not achieved," 2 for "achieved" and 3 for "outperformed." Every employee is thus given a two-digit value ranging from 1.1 (low on both behavior and performance) to 3.3 (high on both dimensions). Employees with at least one 1-rating are labeled "low performers," those with a 3 fall into the "high performer" category with its subgroups. We were informed by the head of Human Resources that measurement is "strict": "If your goal is a 10% increase and you only bring 9.5%, it's 'not achieved' no matter how many excuses you offer." Furthermore, the system operates according to the principle of "raising the bar": performance goals are set higher every year, so that this year's sufficient performance is insufficient next year. At both ends of the scale there are elaborate formal procedures for either rewarding and promoting employees or handling the low performers. Most employees (even low performers!) profit from substantial bonus payments linked to the overall success of GALACTICA and to individual performance. [19]

UNIVERSUM, a nation-wide retail group with 80,000 employees, is one of the best-known companies in Switzerland, providing its customers with goods and services almost from the cradle to the grave. Our study was conducted in one of the largest business units with 9,000 employees.⁸⁾ At UNIVERSUM, the topic of performance is much less prominent than at GALACTICA, and it stands within a very different interpretive frame. That is to say, performance is most often mentioned in the same breath as cost reduction. Retail business in Switzerland has come under sharp pressure from international competitors resulting in substantial price cuts that necessitate cuts on the cost side as well. UNIVERSUM frames the performance issue mainly in terms of a defense battle on the cost front requiring an increase in productivity. However, performance does not carry the almost fetish-like boundless quality it has at GALACTICA where enough is never enough and high performers get all the attention. UNIVERSUM clearly states that "every performance has its value" and as the trainer of an internal manager seminar instructed the participants, "We don't just need chiefs, we also need a lot of good Indians." [20]

Performance appraisals are conducted once a year and the instrument used contains behavioral as well as performance goals. However, the actual assessment on a five-point scale does not directly pertain to goal attainment at all, but refers to eight standard criteria regarding output and behavior. The overall result is expressed as a percentage value, calculated in such an opaque way that our informants could not really explain the procedure. Individual performance has only a small effect on employees' wage levels and UNIVERSUM is strictly opposed to performance-linked bonus payments. Good performance may recommend an employee for promotion, while low performance is mainly met with disciplinary techniques. [21]

At the time of our fieldwork, the performance management system of the PECUNIA bank was in transition and the electronic handling of the system was not yet fully operational. Some managers still used an older version, while others worked with the new system that is designed according to the Balanced Scorecard approach (KAPLAN & NORTON, 1996). Either way, performance seemed to be a minor concern to most people. As one high-ranking manager explained, "We don't play the performance game really hard, we rather play the harmony game. We're addicted to harmony in this bank." [22]

PECUNIA with its 8,000 employees has its origins in the cooperative movement of self-help for local trade and small businesses and is still located mainly in rural areas and small towns. However, it has experienced rapid growth in recent years and an expansion into the bigger cities.⁹⁾ The concomitant change in its organizational culture is very controversial. The "modern" cohort of recently hired managers is determined to turn the traditional, slightly sedate company into a "real bank," that is, into a competitive business using state-of-the-art managerial tools. Meanwhile, the devotees of "Dr. Miller's way" point out that in the good old days of the retired CEO Dr. Miller, who managed the bank in a patriarchal and hierarchical style, "we didn't need all those shiny gadgets we are introducing now." [23]

The complicated performance appraisal system certainly does not help to persuade them of the benefits of these new management tools. The yearly appraisal interviews comprise an evaluation on a four-point scale for seven vaguely-defined dimensions representing so-called "core competences." Moreover, the evaluation has only modest monetary or career effects.¹⁰⁾ Performance appraisals tend to be generally mild in order to avoid conflicts. "If I attain a certain goal, nothing happens," an employee remarked, "If I don't attain it, not much happens either." Fitting in and conventional work discipline are more important than brilliant performance in terms of outcome. [24]

All three businesses claim to practice a top-down approach of setting performance goals which commits each and every employee to the overall strategic goals of the company. However, translating an abstract business strategy into concrete work requirements for engineers, secretaries, truck drivers or sales people, requires extensive negotiation chains. At GALACTICA, for example, each year the top management defines the "top ten priorities" such as "simplicity," "diversity" and the like, which are then interpreted and concretized on every hierarchical level between managers and subordinates. In addition, the items on the company's list of "values & behavior" also have to be adapted for individual employees. This procedure sometimes results in rather bizarre goals, as in the case of a blue-collar worker whose formal goals included such items as "leadership qualities," "creativity" and "innovation."¹¹⁾ At UNIVERSUM and PECUNIA the connection between strategic and individual goals is generally loose and seems to depend more on the line managers' personal style than on the officially-declared company management policy. Since goals are supposed to be set consensually, clever employees can also bargain for "easy" goals. [25]

With regard to measuring goal attainment, the appraisal process is equally open to debate. This is most obvious in the actual appraisal interviews (for an example see 3.2). On the one hand, the performance review is conceptualized as an open discussion between supervisor and employee. On the other hand, however, it is meant to be a one-sided but impartial judgment of the employee by his or her supervisor. Virtually all our informants conceded that some aspects of performance cannot be measured, that subjectivity cannot be eliminated completely, and that some supervisors rate more rigorously than others. In fact, the problem of subjectivity is acknowledged to a certain extent in formal procedures by installing a "calibrating" process: the results of the individual appraisals are compared at the level of departments or more encompassing business units to correct possible bias between mild and harsh managers. Ironically, this second level of negotiations, which is meant to enhance the fairness of appraisals, undermines the legitimacy of the process: employees are convinced that managers have to fulfill quotas of low or high performers and that this is the real purpose of comparing appraisals between teams and departments. [26]

Finally, although the result of the appraisal process, which is expressed in a nominal value, a percentage or a letter, suggests a clear statement, it is still open to debate. Which value indicates sufficient or good performance, what is the threshold for low performance? Despite formal definitions by the Human Resources departments such as "a 1-rating on any dimension means low performance" or "employees with a B are candidates for the management development program," we found vastly divergent interpretations. People invent non-existing values below or above the official scale (a zero at GALACTICA, a "top" at PECUNIA) or they regard the best possible values as purely theoretical rates which are never used. Moreover, these different readings lead to corresponding actions: if a supervisor believes that a merely sufficient rating is actually a good performance he or she may promote average employees. In this way, the assumed end point of the appraisal process only sets in motion a new cycle of interpretation and negotiations. [27]

Thus performance has many faces and various meanings in different contexts.¹²⁾ Nevertheless, under the surface of specific interpretations and techniques of dealing with the problem, we can discern a common cultural model of performance. Cognitive anthropology conceives of such cultural models as "presupposed, taken-for-granted models of the world that are widely shared (…) by the members of a society and that play an enormous role in their understanding of that world and their behavior in it" (QUINN & HOLLAND, 1987, p.4). Cultural models seen this way represent everyday knowledge that is self-evident in a given situation or setting (BERGER & LUCKMANN, 1969). The unquestionable character of this kind of knowledge and its sharedness among participants allows the coordination of frames of interpretation (GOFFMAN, 1974) and serves as an underlying belief system for negotiations. [28]

The cultural model of performance which we found in our research is based on the following five assumptions:

The basic cultural model of performance with its local specifications provides a general framework for the assessment of individual employees. Following BOLTANSKI and CHIAPELLO (2003), we can conceptualize the employee assessment as a "paradigmatic test," as an occasion for evaluating a person's social worth and defining his or her position in a ranking order. Paradigmatic tests are part of the grammar of "justificatory regimes," i.e. ideologies that legitimize capitalism as a just and beneficial system and, at the same time, give individuals reasons for a personal commitment to the system. In particular, a justificatory regime (or "spirit") must respond to questions of personal identification, security and justice (CHIAPELLO & FAIRCLOUGH, 2002). If such tests are based on socially-agreed actors and resources, the resulting order is regarded as legitimate. Performance management systems create legitimacy for the elusive process of judging someone's achievements by installing formal rules for designating authorized actors to give a judgment, resources to be taken into account and procedures to be followed. According to the objectivity assumption of the cultural model described above, the act of evaluating someone's performance is regarded as a technical process of aligning a person's achievements with his or her preset goals, just as if one were reading a meter. In practice, however, this is an equation with unknowns on both sides. Neither performance goals nor the extent to which they have been achieved are always unambiguous. [30]

Empirically, we can observe that all elements of the paradigmatic test of performance appraisal are subject to controversy and negotiations, as the following example of an employee appraisal illustrates. The scene described is a short excerpt from the discussion between UNIVERSUM salesman Gianni Langer and his boss, the sales manager Franz Jöri.¹⁴⁾ [31]

After a short warming-up phase during which the employee talks about his overall job satisfaction, Gianni Langer reads out his self-appraisal following the standard dimensions of the respective form. He gives himself a B on six of the seven dimensions, which is way above average and apparently also better than his supervisor's assessment recorded on the appraisal form. "You know what the letters mean, don't you," Jöri dryly remarks at the end. "C is where we wanna be."¹⁵⁾ Indeed, on his evaluation form Jöri has ticked only one B, but two D's (i.e. insufficient). Where do the discrepancies come from, and how are they resolved? [32]

The next phase, the discussion of the degree of goal attainment, provides a preliminary answer. Even the salesman himself now concedes laughingly that he has only partly attained his goals. The boss attacks him head-on: "Punctuality is not there at all. You're late at least once a week." Langer replies: "Well, what does 'on time' mean?" Jöri retorts, "On time means in the shop at 8.15. If you clock in at 8.15, you can't be in the shop at 8.15. And that's the relevant point. That's actually the only one of your goals I can pin down exactly." [33]

As it turns out, Langer's habit of being late for work is not his only deficit. Jöri opens the next phase, his appraisal of Langer, with the reassuring remark: "We are not so far apart. In principle it's a question of scale, do our curves match?" However, he then launches a series of further severe criticisms. Langer does not act on his own initiative, he does not help other team members, he does not clean his workplace, he neglects part of the range of goods, he has caused major depreciations and so on and so forth. The list even ends with Jöri saying: "After you came back from your unpaid leave your attitude was close to a reason for dismissal." Langer defends himself: "I don't see it as critically as you do. I mean if we don't have any special offers, what can I do for sales promotion?" But his boss insists: "Other people do see it my way, for instance Kappeler [= manager of the whole supermarket]. And sales promotion is exactly the point: you have to take the initiative yourself." [34]

The pattern of accusations and defenses repeats itself during the rest of the talk. The only praise concerns Langer's talent in dealing with customers: "Customer focus is your strength, especially with difficult customers. I'd really like to take a leaf out of your book there." Langer seizes the chance and elaborates on his natural sales talent, before the next round of criticism comes down on him. Rather surprisingly for the observing ethnographer, after all the disagreements the appraisal interview nevertheless ends in a cordial tone, and it turns out that Jöri even wants to recommend Langer for promotion. [35]

The discrepancy between the employee's self-assessment and the manager's assessment may be particularly pronounced here, but it is quite typical. Therefore, framing the situation appropriately in order to ensure the legitimacy of the assessment is a pre-eminent issue in the process. Because, nowadays, the appraisal systems usually comprise a self-assessment part and sometimes also an evaluation of the supervisor by his or her subordinates, the systems structurally provoke contradictory evaluations which then require alignment. However, it is precisely this characteristic of the negotiation which must be concealed in order to preserve the presumed "objectivity" of the process. For example, managers of UNIVERSUM are explicitly instructed not to get drawn into "bargaining over ratings." "Do not alter your evaluation. You may discuss it, but do not change the checkmark on the form or else you have lost," the management trainer explained in a seminar. GALACTICA insists that, "at the end of the day the line manager decides—period!" And PECUNIA admonishes line managers that evaluations are not necessarily based on "consensus," but on the supervisor's judgment. Franz Jöri seems to follow these recipes: in spite of his subordinate's protest he does not alter his rating on the form. Arguably, however, he changes the meaning of the formal grades: in spite of an overall substandard evaluation he obviously backs Langer and recommends him for promotion. [36]

The incongruity between the formal assessment and the actions taken by the supervisor underlines a basic problem of performance indicators. Contrary to the objectivity assumption of the cultural model, most aspects of performance are hard to pinpoint. In our example, Jöri has to concede that punctuality is the only 'hard' indicator of Langer's performance.¹⁶⁾ The formal assessment systems of the companies studied all comprise comprehensive lists of desired traits and behavior as well as output indicators. However, precisely because these catalogues are so extensive they lend themselves to negotiation. Which activities or behavior constitute relevant "performance" for any given employee category and for individual employees (i.e. what are the legitimate resources of the paradigmatic test)? Punctuality is on the official UNIVERSUM list (as an indicator for the criterion "reliability"), but hardly a critical concern of the sales manager on the ground. For Jöri, who has to meet productivity goals, Langer's abilities as a salesman are much more important. The abundance and vagueness of performance indicators allows him to highlight certain activities and behaviors while downplaying others. This, of course, also holds true for the employee. Langer questions the concept of punctuality, but gladly emphasizes the sales talent attributed to him. [37]

The issue of focusing and weighting performance indicators is to some extent regulated formally: the companies set overall abstract goals (e.g. "freshness," "spoilage," "diversity" etc.), which are then concretized for departments, teams and individuals. But it is just as much a matter of negotiations arising ad hoc in the situation of the appraisal interview. Although the cultural model conceptualizes performance as being additive (the sum total of discrete indicators), it seems that, in practice, evaluations, despite their technical sophistication, are conducted in a Gestalt-like fashion. There is an overall impression of an employee, which determines his or her worth, no matter what the indicators show. The indicators then either provide an ex-post legitimation of the impression or are ignored altogether. Jöri appreciates Langer's sales talent, thus he is ready to downplay his unpunctuality and his sloppiness and to excuse the financial losses Langer caused as a result of a one-time slip-up due to a temporary lack of motivation after a prolonged period of unpaid leave. [38]

In this example, the employee is granted a somewhat special status for a short period: the boss attributes low performance to acceptable problems of readjustment to work after a legitimate absence (Langer was studying a foreign language abroad). This may be an untypical reason for a special status. But generally, the terms on which a person enters the paradigmatic test are also open to negotiation. In several of our cases, health-related reductions of the work capacity of employees were a matter of prolonged debate. For example, a GALACTICA production worker with a whiplash injury resulting from a sports accident was first told he would not be assessed since his part-time workload did not allow a reliable performance appraisal. In other words, he was temporarily removed from the category of legitimate actors on grounds of not being fully capable of competing. To his surprise, he was then evaluated after all and received a very bad rating. His impairment was now redefined as low performance and held against him. In this case, several people (managers, doctors and social services) were engaged for more than a year in negotiating the man's work capacity, switching constantly between a frame of illness and a frame of performance. We observed several other cases where negotiations focused on determining whether the problem at hand was poor performance or illness and disability. [39]

Finally, while the actors admitted to the paradigmatic test are in principle formally defined (employee and supervisor), additional actors may be called in. This happens especially in cases of disagreement. On the one hand, there are formally designated categories such as higher-level line managers, Human Resources staff, social workers, union representatives and the like. On the other hand, the actors often involve real or imagined ad-hoc allies. Jöri, for example, supports his allegations by referring to a senior manager's opinion. In other cases, employees invoked some ideal-type customers as proof of the quality of their work ("You say, I'm slow, but the customers never complain"). Not surprisingly, the additional actors called in by supervisors are accorded more credibility than those of an employee trying to negotiate a better assessment. [40]

"Performance" as a basis for legitimating status differences is a social construct dependent on many preconditions. We have identified five assumptions that constitute the cultural model of performance underlying the practices of performance management within economic organizations. These assumptions are that performance is objectively measurable, the sum total of discrete indicators, individually attributable, unequally distributed and consequential. Yet, our data clearly show that all these assumptions are debatable. In fact, they are contradictory, applied inconsistently in all businesses studied, and controversial among the members of these organizations. [41]

Nonetheless, in the actual appraisal process the parties involved have no trouble acting on these premises as if they were uncontested facts. Negotiation is the process by which multi-dimensional and fluid circumstances such as the quality and outcome of a person's activities throughout the year become one-dimensional, solid and objective "facts." Before the negotiation takes place there is only a jumble of discrete actions and personal traits that may or may not be relevant to an employee's job. With the appraisal process some of these aspects—those that have been highlighted as "goals"—are transformed into instances of "performance," "measured" and condensed into one value (e.g. "2.2" or "C"). [42]

These negotiations take place on several levels: from top management, which sets abstract goals for the whole company that have to be concretized for lower-level units, down to individual employees and their direct supervisors. Because the goals are changed annually, this year's performance indicator may not count at all next year. If "freshness" is an overall company goal, the shop assistant is rewarded for sitting fresh and well rested at the checkout early in the morning and for still treating customers politely at the end of the day. If next year's goal is "spoilage" the employee's alertness is just a background expectation which deserves no special attention or rewards. The process of setting goals and assessing their attainment thus actually creates what it supposedly only "measures." Through negotiations, hitherto subjective everyday knowledge of the actors acquires an intersubjective and formal status. Hence, the specific figure on a piece of paper now is performance and entails the consequences linked to this particular value. Therefore, the micro-social process of negotiation generates social facts. [43]

The interactive construction of performance as an objective fact is only possible to the extent that negotiation is institutionalized as a formal paradigmatic test within a given organizational structure of legitimate actors, resources, and procedures. These organizational parameters provide the basic frame (GOFFMAN, 1974) which defines the situation as a legitimate and consequential occasion for establishing a social order. Such a definition precedes interaction, because, as GOFFMAN (1974, pp.1f.) reminds us, "those who are in the situation ordinarily do not create this definition (…); ordinarily all they do is to assess correctly what the situation ought to be for them and then act accordingly." Participants in performance assessments take their cues from the designations of these occasions ("performance dialogue," "employee development talk" and the like), symbols (e.g. specific assessment forms), standard sequences of actions (introductory small talk, general remarks regarding job satisfaction, self-appraisal, appraisal by the boss etc) and the interaction order of this special occasion (e.g. the boss has the last say in the rating). As mentioned before, the appropriate frame for performance appraisals which all these elements are intended to create and support is that of an objective "measurement," not a negotiation. So, the primary framework that provides a background understanding of a given situation circumscribes what the negotiation is all about and how high the stakes are in terms of consequences. In this way, negotiations are dependent on meso-level organizational structures. [44]

What people find when trying to define what is going on are also features that are not of the situation, but that act as constraints and exteriorities (FINE, 1991, 1992) in the situation. Constraints in the sense of internalized social forces (norms, values) impose boundaries on decisions and actions by shaping expectations of possible outcomes. In our example, these cultural constraints pertain to the fundamental norm of performance and the societal discourse of the entrepreneurial self. Since the performance principle is such a basic feature of modern societies, the legitimacy and necessity of ranking people on the basis of performance cannot be challenged per se. Nor can the general cultural model of the workings of performance and its local variations in a given organization be questioned fundamentally. Although the individual companies use different indicators, and each company rewards slightly different kinds of activities and behavior, the understanding of performance in a specific organization has the status of taken-for-granted knowledge in this local context. Thus negotiations are only possible with regard to the individual realization of performance and, to a lesser degree, also with regard to the evaluation procedures.¹⁷⁾ However, they are based upon a stock of non-negotiable tacit knowledge stemming from macro-social discourses. Or, more precisely, they are based on knowledge that cannot be challenged in the present interaction because it is part of overarching societal discourses. Of course, in a historical perspective, discourses also change as a result of negotiations, but these obviously transcend face-to-face interactions and take place in a wider social arena of public, political and scientific debate. While the performance principle is still of paramount significance in modern societies, its meaning has shifted: gradually the result of an activity has become more important than the effort that has been put into achieving it (NECKEL, DRÖGE & SOMM, 2004). Thus if the product of one's work is not successful on the market, the work itself is devalued. [45]

This also holds true for labor itself. With the spread of individual performance appraisals in businesses, it is not enough merely to do one's job during a specified time; one has to sell one's efforts as a personal and special contribution. Even workers and employees in routine jobs with little discretion over their work are required to formulate individual goals and account for their personal achievements and failures. Therefore, the art of self-marketing becomes a vital requirement which regulates the access to the labor market and the success therein. While a variety of everyday understandings of performance can be identified among different social groups (NECKEL, DRÖGE & SOMM, 2005), the institutional form of performance assessments of itself privileges and enforces a certain interpretive scheme, namely that of performance as market success. It induces subjects to see themselves as products to be sold in the market place and demands that they act accordingly. In this way, micro-level negotiations support the transformation of an encompassing cultural pattern by rendering an emerging discourse effective in everyday life. [46]

Moreover, the constraints of organizational structure limit the scope of negotiations, while negotiations, in turn, transform these structures. The organization constitutes an obdurate reality in the sense of external "contingencies that actors must respond to or suffer" (FINE, 1991, p.173). For example, one cannot promote people to non-existing jobs. This may sound trivial, yet it has consequences for the effects of performance assessments. Because UNIVERSUM offers predominantly low-skilled jobs and employs correspondingly unskilled people, there is not much room to transfer low performers to less demanding jobs. And since unskilled workers are easy to replace, the company prefers to dismiss low performers rather than assist them with further training, coaching or other costly measures. In this organizational structure, the results of negotiations on performance are more consequential than at GALACTICA with its more diversified qualification structure and generally higher-skilled jobs where internal transfers and sophisticated "development plans" are more common. Furthermore, employees may question the objectivity of the process or the result (in fact they often do so), but they still have to put up with the consequences. Every now and then, an employee refuses to sign the appraisal form as a protest against the evaluation. However, this neither invalidates the result (i.e. the supervisor's judgment), nor the process as such, because the signature only means that the appraisal has been conducted at all. In such a case, the manager on the next hierarchical level simply signs instead of the employee. Thus performance appraisals not only construct a ranking order within the company but also reproduce the authority structure itself: the employee's perspective is subordinate to that of the boss—power, derived from organizational structure, clearly shapes the negotiation. [47]

According to the basic cultural model which we outlined in this paper, performance ought to entail consequences. Therefore, the specific values defined in an assessment system are linked to respective rewards and sanctions. "High performers" may receive a bonus payment and move up the career ladder, "low performers" may be transferred to dead-end jobs, degraded in their function, eased out for health reasons and referred to the social security system, or simply dismissed. In this way, the "objective facts" constructed by negotiations provide the basis for filling an existing organizational structure. Or more precisely, negotiations not only position individuals in the structure, but this structure is realized only through these interactions. [48]

Performance appraisals are a classic example of the direct impact of interaction on structure insofar as they provide the occasion for sorting people and allocating life chances (GOFFMAN, 1983, p.8). In general, "people-processing encounters" (ibid.) do not dramatically alter social structures but tend to reproduce them. However, because structural variables such as class, gender, age etc can be mitigated by personal traits (looks, personality, health etc.), interaction can also qualify structural variables. In negotiations on performance, interactive skills are crucial. How an employee counters criticism or presents his or her assets does make a difference to his or her fate, influencing the organizational slot into which the person is placed, or whether he or she is eventually excluded from the organization altogether. [49]

Up to this point, the structure as such remains unchanged. But in a medium- or long-term perspective, negotiations on performance also transform organizational structures. GALACTICA's principle of "raising the bar," for example, gradually changes the composition of the workforce in terms of performance levels and occupational qualifications. In the long run, people who cannot keep up with the ever-increasing expectations regarding quantitative and qualitative performance levels are weeded out and replaced by employees with higher qualifications and work capacities. "We just don't have any simple jobs any more," the head of Human Resources explained, "even the desk officer must speak a foreign language and know how to use a computer." During our fieldwork, the company even prepared the outsourcing of a whole department, citing its unsatisfactory performance as the reason. UNIVERSUM also uses performance appraisals to legitimize the reduction of jobs. Its rigorous cost-cutting program has led to a 15 percent decrease in the workforce within three years. The company still claims not to lay off employees for cost reasons. Instead, individual managers under pressure because of tight budgets "have a closer look at what people actually do," as Franz Jöri phrased the problem. They label individual employees as low performers who may eventually be dismissed for this reason. Thus the interactive construction of performance accelerates and legitimizes the structural transformation of the workforce, and at the same time masks it as an individual problem. [50]

We subsumed our reflections on the relation between interaction and organization under the question "negotiations at all points?" After inspecting concrete interactions in a given organizational context, we have to answer in the negative: there are certain features of a social world, which cannot be negotiated by its members in the present. Yet, once we go beyond a static perspective and include the dimension of temporality, invariables at a given point of time turn out to be negotiable in the long run. On the one hand, this is simply a methodological problem of the appropriate observational span: historians recognize things as changeable that appear stable to sociologists. On the other hand, it is a question of the social conditions of negotiations: which circumstances are conducive to negotiations? [51]

HALL and SPENCER-HALL (1982) have identified a number of factors enhancing the likelihood of negotiations. In addition to various organizational features, they stress "situations characterized by change, uncertainty and ambiguity; disagreement, ideological diversity, newness and inexperience, and problematic coordination" (p.340). These conditions correspond roughly to situations of low institutionalization or phases of de-institutionalization. While situations of stability are generally characterized by habitual action, periods of transition and low institutionalization require conscious and strategic action thus enabling and simultaneously enforcing individuals to shape their course of action themselves (HEINTZ, 2004, pp.27-28). It is under the latter circumstances that negotiations are possible and consequential and, as HEINTZ argues, a micro-sociological perspective focusing on action is, therefore, most appropriate. As soon as the results of negotiations have been institutionalized as stable conventions and practices once again, it is less fruitful to direct sociological analysis to the level of (inter)action. In a highly competitive, individualized market society undergoing rapid social and economic change, social positions cannot be secured once and for all. Individuals have to prove themselves again and again. Negotiations on performance provide the institutional frame for the respective paradigmatic tests in the labor market. At the same time, these negotiations serve to legitimize structural economic upheavals by burdening the individual with the responsibility for his or her employability by adapting to changing levels of required "performance." [52]

We set out with the intention of showing how micro-level interactions connect with organizational structures and overarching social discourses. By employing STRAUSS' concept of the negotiated order, we demonstrated how seemingly objective facts, such as performance in business organizations, are created through negotiations within a complex confluence of all three levels. Had we focused on one level alone, we would have created an incomplete, blurred view of this social construction. Therefore, in our view, qualitative research should neither restrict itself to the micro-level of interaction, nor be regarded as a research technique unable to reach out to the macro-levels of organization and discourse. [53]

1) This article is based on a paper presented at the ESA Qualitative Methods Research Network Mid-Term Conference "Advances in Qualitative Research Practice," Cardiff University, September 4th to 6th 2006. <back>

2) Ethnomethodology represents the most radical position in this regard by asserting that social order is always and only "lived" or "endogenous" order (POLLNER & EMERSON, 2001). <back>

3) The research was funded by the Swiss National Science Foundation, as part of the National Research Program 51 "Social Integration and Social Exclusion" (grant No. 4051-69081). In addition to the authors, Matthias HOFER participated in the project as research assistant. His work was funded by the "Research Commission" of the University of St. Gallen. <back>

4) For an ethnographic analysis of the work programs see NADAI (2006), MAEDER and NADAI (2008). <back>

5) Nowadays, his former student and colleague Adele CLARKE (2005) uses the term "negotiated ordering." <back>

6) Silent or implicit negotiations raise the question of perspective: is it just the observer who categorizes a certain kind of action as negotiation, or do the participants themselves interpret their actions as such? <back>

7) We have described the GALACTICA organizational culture in more detail elsewhere (MAEDER & NADAI, 2007). The name of the company is, of course, a pseudonym, as are all the other company or personal names in this paper. <back>

8) Because UNIVERSUM is organized in business units with extensive strategic and operative autonomy, the results of our study cannot be generalized to the whole company. We do know, however, that several other units use the same performance management tools. <back>

9) PECUNIA also has a decentralized organizational structure with local and regional branches operating quite independently. Our study is restricted to headquarters with roughly 1200 employees. <back>

10) Bonus payments are small and restricted to managerial levels, and career paths are not as clearly linked to formal performance evaluations as at GALACTICA. <back>

11) See NADAI (2007) for the systematic reasons and consequences of this kind of absurd goal. <back>

12) For the sake of brevity, the picture presented here is somewhat simplified. In reality, the meaning of performance and the practices surrounding its measurement and sanctioning also vary within the companies between different groups of employees, for instance between managers and lower level employees or (as shown in the case of PECUNIA) between factions within management. <back>

13) In all three companies, managers routinely referred to the Gaussian curve to explain the "normal" distribution to both the ethnographers and the employees. In all the companies, the issue of the population in which this normal distribution was to emerge was highly controversial because it was unclear which units (the whole company, a single division, a department, a work team) were supposed to produce such a distribution. <back>

14) The analysis is based on our fieldnotes, the written appraisal form for Langer and an interview with Jöri. <back>

15) B is defined as "exceeds the expectations," while C means "meets goals and expectations fully." <back>

16) In the interview following the observed scene he even questions the objectivity of this measure: "The problem always is: what is 'normal'? If he is late twice a month, is that normal or not? What is the tolerance?" <back>

17) Negotiations of the assessment systems typically take place on the management levels, sometimes with the participation of employee associations or labor unions. <back>

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Eva NADAI is a sociologist and professor at the School of Social Work of the University of Applied Sciences Northwestern Switzerland. Her research interests include the sociology of organization, work and occupations, gender, social politics and social problems, and qualitative methods (especially ethnography). She is currently conducting an ethnographic research project on inter-institutional cooperation between organizations belonging to different segments of the Swiss welfare system such as means tested social assistance, unemployment insurance and invalidity insurance.

University of Applied Sciences Northwestern Switzerland
School of Social Work
Riggenbachstr. 16
CH-4600 Olten

Christoph MAEDER is a sociologist and professor at the University of Teacher Education Thurgau in Switzerland. He also teaches at the universities of Basel and St. Gallen. His research interests include the sociology of knowledge, sociology of education, social problems, organizational sociology, and in particular ethnographic research methods. He is currently the president of the Swiss Sociological Association and a member of the board of the European Sociological Research Network "Qualitative Methods."

Nadai, Eva & Maeder, Christoph (2007). Negotiations at all Points? Interaction and Organization [53 paragraphs]. Forum Qualitative Sozialforschung / Forum: Qualitative Social Research, 9(1), Art. 32, http://nbn-resolving.de/urn:nbn:de:0114-fqs0801327.

Forum Qualitative Sozialforschung / Forum: Qualitative Social Research (FQS)

ISSN 1438-5627

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