Organizational justice andemployee satisfaction inperformance appraisal

Anastasios Palaiologos, Panagiotis Papazekos andLeda Panayotopoulou

Athens University of Economics & Business, Athens, Greece

Abstract

Purpose – This paper aims to explore the performance appraisal (PA) aspects that are connectedwith organizational justice, and more specifically three kinds of justice, namely distributive,procedural and interactional justice.

Design/methodology/approach – The research is based on a sample of 170 respondents whoanswered a questionnaire giving their perceptions on the purpose and criteria of PA, their satisfactionfrom PA and organizational justice.

Findings – The results show that procedural, distributive and interactional justice are related withdifferent elements of performance appraisal. Elements of satisfaction are strongly related to all aspectsof organizational justice. The PA criteria are related to procedural justice.

Research limitations/implications – The main limitation is that the research providesinformation based only on one source, that of the appraisee. However, it highlights the role ofemployee satisfaction to organizational justice, linking different sources of satisfaction to differentelements of justice.

Practical implications – This paper has practical implications for HRD, as it provides HRpractitioners with suggestions on how to increase the perceived justice of the PA system.

Originality/value – The value of this paper is to HR practitioners who design PA systems, and alsomanagers acting as appraisers of their subordinates.

Keywords Performance appraisal, Perceived purposes, Organizational justice, Employee satisfaction,Justice

Paper type Research paper

1. IntroductionPerformance appraisal (PA) forms the core of performance management systems(Bernardin et al., 1998). According to Swanepoel et al. (2000), PA is a formal andsystematic process of identifying, observing, measuring, recording and developing thejob-relevant strengths and weaknesses of employees. Chen and Kuo (2004) characterizePA as an indispensable process for an organization. Fletcher (2001) posits that the PAhas a strategic approach and integrates organizational policies and human resourceactivities. However, reactions and conflicts on the employees’ side are often inevitable.Dissatisfaction and feelings of unfairness in process and inequity in evaluations canlead any appraisal system to failure (Taylor et al., 1995).

This paper aims to explore the PA aspects that are connected with organizationaljustice, and more specifically three kinds of justice, namely distributive, procedural andinteractional justice. In particular, we take into account the perceived purposes of PA,the criteria used and the perceived satisfaction, that is satisfaction with ratings, raterand feedback.

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0309-0590.htm

JEIT35,8

826

Received 28 September 2010Revised 20 May 2011Accepted 2 July 2011

Journal of European IndustrialTrainingVol. 35 No. 8, 2011pp. 826-840q Emerald Group Publishing Limited0309-0590DOI 10.1108/03090591111168348

2. Literature reviewIn this section we provide a brief literature review of the concepts used in our research,which leads to the development of our hypotheses. We begin with organizationaljustice, which is central to PA. Then we examine the criteria and purposes of PA aswell as employee satisfaction.

Organizational justiceGreenberg (1986) was one of the first authors to apply organizational justice theory toperformance evaluation. Organizational justice may be defined as the study of fairnessat work (Byrne and Cropanzano, 2001). Furthermore, Greenberg (1990) explains thatthe term organizational justice implies that fairness is being considered in theorganization. According to the literature, human beings are specifically interested inthree kinds of justice. The first one is distributive justice, which deals not only with theperceived fairness of the outcomes or allocations that individuals in organizationsreceive (Folger and Cropanzano, 1998), but also with “what the decisions are” at the endof the appraisal process, or the “content of fairness” (Tang and Sarsfield-Baldwin,1996). Erdogan (2002) contends that ratees compare their efforts with the PA ratingthey receive and the fairness of the rating establishes distributive justice perceptions inPA. Some studies found that employees expect ratings above average in relation toothers (Bartol et al., 2001). Subsequent to the previously mentioned is the second kindof justice, procedural justice, which refers to the fairness of the procedures used todecide outcomes and addresses fairness issues regarding the methods, mechanisms,and processes used to determine those outcomes (Folger and Cropanzano, 1998).Procedural justice is related to the means used to achieve the ends (how decisions aremade), or the process of fairness (Tang and Sarsfield-Baldwin, 1996). Finally, the thirdkind of justice is interactional justice, which clearly establishes that people care aboutthe fairness of the interpersonal treatment and communication that they receive(Ambrose, 2002; Bies, 2001). It is important to mention that interactional justice focuseson how formal agents of the organization treat those who are subject to their authority,decisions and actions (Cobb et al., 1995).

The perceived purposes of performance appraisalEmployee perceptions towards PA are a crucial element in determining the long-termeffectiveness of the system (Longenecker and Nykodym, 1996; Roberts, 1992). Not onlydo managers and subordinates generally differ in their perceptions of what shouldconstitute an effective appraisal system, but they also differ in what causes appraisals tobe ineffective. Longenecker and Nykodym (1996) found that subordinates believedappraisers were the key to the system’s success with an emphasis on more effectiveplanning, ongoing feedback, and better performance monitoring by supervisors.Managers, on the other hand, tended to focus on system design, operation, and supportissues. According to Wright (2004), appraisees found appraisals to be more useful whenthey were specific and focused, planned and well prepared, easy to understand and whenthey had more involvement and control over the process. On the other hand, appraiserswere more concerned with strategic issues, describing their most preferred appraisalsystem as linked to business strategy, challenging, value-adding, with an objectivesetting process, well planned, compulsory and structured (Wright, 2004). The success ofappraisal systems may well depend on ratees’ perceptions of fairness and their reactions

Organizationaljustice in PA

827

to important aspects of the appraisal process (Jawahar, 2007). Consequently, withfeelings of dissatisfaction, unfairness in process and inequity in evaluations, anyappraisal system will be doomed to failure (Cardy and Dobbins, 1994). Skarlicki andFolger (1997) suggest that the appraisal process can become a source of extremedissatisfaction when employees believe the system is biased, political or irrelevant.

Holbrook (2002) claims that PA is important to set performance goals, solveperformance problems and administer rewards, disciplinary issues and dismissals.More specifically, PA can be used for numerous purposes including: reward; discipline;coaching; counseling; negotiating improvements in performance; improving the workenvironment; raising morale; clarifying expectations and duties; improving upwardand downward communications; reinforcing management control; helping validateselection decisions; providing information to support HR activities; identifyingdevelopment opportunities; improving perceptions of organisational goals; andselecting people for promotion and redundancy (Wilson and Western, 2000).

According to Youngcourt et al. (2007), evaluation has three perceived purposes. Thefirst two are individual-focused and consist of the Administrative and Developmentalpurpose. The third is position-focused, namely the Role Definition purpose. In theAdministrative purpose, enterprises evaluate the appraisal outcomes and decide aboutissues like pay increases, bonuses, promotions, hires and retires. The Developmentalpurpose focuses on both the improvement of employees’ competencies and theirpersonal development. On the other hand, the Role Definition purpose is useful to theorganization as a whole, as information gathered through PA may show how differentpositions are increasing or decreasing in role breadth, indicating where more or fewerresources should be allocated. Thus, PA decisions, along with their reference toindividual incumbent effectiveness, are also relevant to the effectiveness of the positionas a whole (DeNisi, 2000; Murphy and Cleveland, 1992).

More specifically, the Administrative purpose of PA concerns the link between PAanother HR practices. This link increases the probability that PA is perceived as morefair in regard to both process and content. On the other hand the Developmentalpurpose, which aims at personal development, seems more related to InteractionalJustice that requires good interpersonal relations. Based on the previous, we form thefollowing hypotheses:

H1a. The administrative purpose of PA is related to distributive justice andprocedural justice.

H1b. The developmental purpose of PA is related to interactional justice.

Criteria of PAAccording to Deborah and Brian (1997), since PA systems are not generic or easilypassed from one company to another, their design and administration must betailor-made to match employees and organizational characteristics and qualities. Theauthors support that organizations need to have a systematic framework to ensure thatperformance appraisal is “fair” and “consistent”, and that the system should provide alink between employee performance and organizational goals through individualizedobjectives and performance criteria (Deborah and Brian, 1997).

During the PA process, different criteria and elements are evaluated. Those includethe achieved results and goals, skills and abilities, job-related behaviours, personal

JEIT35,8

828

characteristics and things that are under the employees’ control. The more specializedthese factors are, the more efficient the PA system is. Pooyan and Eberhardt (1989)found that a different set of criteria were significant predictors of appraisal satisfactionfor supervisory and non-supervisory employees.

According to Beer (1987) many of the problems in PA stem from the appraisal systemitself: the objectives it is intended to serve, the administrative system in which it isembedded, and the forms and procedures that make up the system. In addition, theperformance system can be blamed if the criteria for evaluation are poor, the techniqueused is cumbersome, or the system is more form than substance. If the criteria used focussolely on activities rather than output (results), or on personality traits rather thanperformance, the evaluation may not be well received (Pan and Li, 2006; Ivancevich, 2004).

Furthermore, raters’ evaluations are often subjectively biased by their cognitive andmotivational states (DeNisi and Williams, 1988; Longenecker et al., 1987), andsupervisors often apply different standards with different employees, which results ininconsistent, unreliable, and invalid evaluations (Folger et al., 1992). Concentration ongoal attainment contributes to the fairness of the system by lending an air of rationalobjectivity to performance appraisal (Mount, 1984). Goal-setting theory suggests thatappraisal criteria and performance goals should be clear and understandable so as tomotivate the appraisee, otherwise the appraisee would not know what to work towards(Locke and Latham, 2002). This knowledge may well decrease job ambiguity, a sourceof stress for some individuals. On the other hand, appraisal based primarily on endsmay produce overwhelming pressure on subordinates to attain the objectives (Mount,1984). The lack of clarity and objectivity of the criteria used to measure theperformance of the employees creates role ambiguity, confusion and frustration amongthe workers to undertake their job. Moreover, research on sales people suggests thatorganizational commitment is positively associated with the use of explicit evaluativecriteria and openness to discussing the appraisal (Pettijohn, 2001) and negativelyrelated to role ambiguity (Babakus et al., 1996).

Based on the previous, we hypothesise that:

H2. Employees’ perceptions of various criteria used for their PA are positivelyrelated to procedural justice.

Employee satisfactionSeveral researchers have asserted that appraisal reactions play a key role in thedevelopment of favourable job and organizational attitudes and enhance motivation toincrease performance (Lawler, 1994; Taylor et al., 1984). Of all the appraisal reactions,satisfaction has been the most frequently studied (Keeping and Levy, 2000). Accordingto Lai Wan (2007) satisfaction is an important goal for organisations to reach, as it hasbeen shown that profitability, productivity, employee retention and customersatisfaction are linked to employees’ satisfaction. Satisfied, motivated employees willcreate higher customer satisfaction and in turn positively influence organisationalperformance. For this reason satisfaction with aspects of the appraisal process isregarded as one of the most important reactions to PA (Giles and Mossholder, 1990). Inaddition, the appraisal system’s effectiveness depends not only on its technicalcharacteristics, but also on the general organizational and administrative framework,as the PA system is not just a distributive activity but it correlates with all theorganization’s other activities (Pooyan and Eberhardt, 1989).

Organizationaljustice in PA

829

There are three elements of satisfaction linked to PA. First is the Satisfaction withRatings, according to which higher ratings elicit positive reactions toward theappraisal (Kacmar et al., 1996) and are related to satisfaction with the appraisal process( Jordan and Jordan, 1993). The level of performance ratings is an importantcharacteristic of the feedback message (Kluger and DeNisi, 1996), and since it is oftenthe basis for many important administrative decisions (Murphy and Cleveland, 1995)ratees are more likely to be satisfied with higher rather than lower ratings. The secondelement is Satisfaction with Rater. Here, the determinative role that supervisors have inorder to reassure positive outcomes becomes distinct, as they are mainly theemployees’ appraisers and provide feedback for their performance (Milkovich andBoudreau, 1997). According to Pooyan and Eberhardt (1989), the most important PAitem is the employee-supervisor relationship. Last but not least, another element ofsatisfaction is that of Satisfaction with Appraisal Feedback. Feedback is criticalbecause of its potential influence on people’s response to ratings (Kluger and DeNisi,1996). Commentators argue that performance feedback increases job satisfaction andmotivation and many decision-making and career development models include afeedback loop emphasising that individuals learn on the basis of receiving feedback ontheir performance. Thus, performance feedback plays an important role in numerousorganisational activities such as career development, motivation, job satisfaction, andperformance management (McCarthy and Garavan, 2001).

Based on the previous, we could say that perceived satisfaction with ratings, aprocedural element of PA, could lead to increased procedural justice. Additionally,satisfaction with the rater and feedback are a relationship aspect of PA, thus morerelevant to interactional justice.

H3a. Employee satisfaction with ratings is positively related to procedural justice.

H3b. Employee satisfaction with rater and feedback is positively related tointeractional justice.

3. MethodologySampleThe present survey took place during the last quarter of 2008 and the data weregathered using questionnaires that were personally distributed. Respondents wereemployees of 11 private Greek commercial companies of medium and large size, whichwere all part of a consulting project undertook by the Athens University of Economics& Business. The criteria for including an organisation or individual in our sample canbe summarized as follows. First the organisation should have a human resourcesdepartment and the PA processes should exist for over three years. Second, employeescould answer the questionnaire only if they had been evaluated at least two times in thepast. The previous criteria were applied in order to maximize the reliability of ourresults.

Our sample consists of 170 usable questionnaires, with a response rate ofapproximately 85 per cent. Most of the employees in our sample are evaluatedannually, their appraiser being their immediate supervisor in 91 per cent of the cases.Our respondents were employees of various hierarchical levels, namely middle andlow-level managers (32 per cent of the sample) and low level employees.

JEIT35,8

830

MeasuresOur questionnaire was structured based on a range of related research (Jawahar, 2007;Pooyan and Eberhardt, 1989; Tang and Sarsfield-Baldwin, 1996; Youngcourt et al., 2007).Its final form consisted of 63 questions, with the first part comprising items that concernthe PA process, while the second part included demographic information. Regarding PAthe following 11 variables were used (descriptive statistics are provided in Table I).

Procedural justice. The instrument used to measure procedural justice was adoptedfrom Tang and Sarsfield-Baldwin (1996). A five-point Likert scale ranging from “Istrongly disagree” to “I strongly agree” was used. Sample questions include: “Howmuch do you feel your last performance rating truly represented how well you haveperformed in your job?”, “How fair do you feel your last PA was?”, “How accurately doyou feel your performance has been evaluated?”, etc.

Distributive justice. The instrument used to measure distributive justice was alsoadopted from Tang and Sarsfield-Baldwin (1996). A five-point Likert scale ranging from“I strongly disagree” to “I strongly agree” was used. Sample questions include: “How fairhas the organization been in rewarding you when you consider the amount of effort thatyou have put forth?”, “How fair has the organization been in rewarding you when youconsider the responsibilities that you have?”, “How fair has the organization been inrewarding you when you consider the stresses and strains of your job?”, etc.

Interactional justice. The instrument used to measure interactional justice was alsoadopted from Tang and Sarsfield-Baldwin (1996). A five-point Likert scale rangingfrom “I strongly disagree” to “I strongly agree” was used. Sample questions include:“How much does your supervisor sit down and discuss with you the results of yourperformance evaluation?”, “How often does the PA process at your organization resultin specifications of new goals?”, “How much opportunity are you given to express yourfeelings when your performance is evaluated?”, etc.

Administrative purpose. The instrument used to measure administrative purpose ofPA was adopted from Youngcourt et al. (2007). A five-point Likert scale ranging from“I strongly disagree” to “I strongly agree” was used. The items used to assessperceptions of an administrative purpose were “PA helps determine whether topromote, retain or terminate an employee”, “PA determines what raise someone shouldreceive” and “The PA process documents and recognizes employee performance”.

Normalizedstatistics (dividedby no. of items)

Dependent variable Mean SD Cronbach alpha Number of items

Administrative purpose 3.33 0.845 0.796 3Developmental purpose 3.62 0.778 0.784 3Role definition purpose 3.36 0.755 0.682 3Criteria 3.54 0.623 0.804 7Procedural justice 3.29 0.677 0.874 12Distributive justice 2.83 0.928 0.927 5Interactional justice 3.29 0.850 0.924 10Satisfaction with ratings 3.42 0.948 0.921 2Satisfaction with rater 3.20 0.917 0.914 6Satisfaction with feedback 3.09 0.941 0.912 4

Table I.Statistics and reliability

of variables

Organizationaljustice in PA

831

Developmental purpose. The instrument used to measure developmental purpose of PAwas also adopted from Youngcourt et al. (2007). A five-point Likert scale ranging from “Istrongly disagree” to “I strongly agree” was used. The items assessing perceptions of adevelopmental purpose were “Performance ratings let employees know where theystand”, “Performance ratings are used to provide feedback about employee performance”and “Performance appraisals identify individual strengths and weaknesses”.

Role definition purpose. The instrument used to measure role definition purpose ofPA was also adopted from Youngcourt et al. (2007). A five-point Likert scale rangingfrom “I strongly disagree” to “I strongly agree” was used. The three items selected tomeasure perceptions of a role definition purpose were “PA provides information aboutwhat employees are responsible for accomplishing”, “PA provides information thathelps make positive changes in the job itself” and “PA provides information aboutwhat employees actually do in their jobs”.

Appraisal criteria. The instrument used to measure subject’s perceptions of their PAcriteria was adopted from Pooyan and Eberhardt (1989). A five-point Likert scaleranging from “Not at all” to “Very much” was used regarding evaluation criteria. Thecriteria included in the scale are: “results I achieved”, “my job related behaviours”, “myskills and abilities”, “my personality and personal characteristics”, things I cancontrol”, predetermined goals” and “general impressions”.

Satisfaction with ratings. The instrument used to measure satisfaction with ratingswas adopted from Jawahar (2007). A five-point Likert scale ranging from “I stronglydisagree” to “I strongly agree” was used. Sample questions include: “The performanceevaluation I received is acceptable”, “I am satisfied with the evaluation I received”, etc.

Satisfaction with rater. The instrument used to measure satisfaction with rater wasalso adopted from Jawahar (2007). A five-point Likert scale ranging from “I stronglydisagree” to “I strongly agree” was used. Sample questions include: “My supervisorknows how well I am doing my job”, “My supervisor helps me improve my performance”,“Overall, I am satisfied with the support and guidance I receive from my supervisor”, etc.

Satisfaction with feedback. The instrument used to measure satisfaction withfeedback was also adopted from Jawahar (2007). A five-point Likert scale ranging from“I strongly disagree” to “I strongly agree” was used. Sample questions include: “I feltquite satisfied with my last review discussion”, etc.

4. ResultsThe aim of the study is to examine the elements of PA that are related to organizationaljustice. In order to test our model we used SPSS to run a regression analysis. Table IIpresents the correlation matrix.

We examined the PA elements that are linked to organizational justice. Weconsidered the three elements of justice as dependent variables and as independentvariables the three types of perceived purpose, criteria coupled with the three elementsof employee satisfaction. Table III shows the regression model.

Taking the procedural justice as dependent variable, we observed a significantpositive statistical relation (p , 0; 01) between the procedural justice and three of theindependent variables. R 2 was measured at 73.7 per cent, while the significant variableswere Satisfaction with Ratings, Satisfaction with Feedback, Criteria and AdministrativePurpose. These results confirm H1a, H2 and H3a. Taking the distributive justice asdependent variable, we observed a significant positive relation (p , 0; 01) between the

JEIT35,8

832

12

34

56

78

910

Ad

min

istr

ativ

ep

urp

ose

1D

evel

opm

enta

lp

urp

ose

0.65

6*

*1

Rol

ed

efin

itio

np

urp

ose

0.39

5*

*0.

545

**

1C

rite

ria

0.43

9*

*0.

534

**

0.52

5*

*1

Pro

ced

ura

lju

stic

e0.

525

**

0.53

1*

*0.

372

**

0.52

5*

*1

Dis

trib

uti

ve

just

ice

0.43

4*

*0.

328

**

0.21

1*

*0.

366

**

0.56

9*

*1

Inte

ract

ion

alju

stic

e0.

470

**

0.56

1*

*0.

431

**

0.46

9*

*0.

678

**

0.49

2*

*1

Sat

isfa

ctio

nw

ith

rati

ng

s0.

353

**

0.33

9*

*0.

164

*0.

320

**

0.75

4*

*0.

497

**

0.53

4*

*1

Sat

isfa

ctio

nw

ith

rate

r0.

457

**

0.53

2*

*0.

413

**

0.46

7*

*0.

715

**

0.46

3*

*0.

854

**

0.67

6*

*1

Sat

isfa

ctio

nw

ith

feed

bac

k0.

462

**

0.51

9*

*0.

426

**

0.48

2*

*0.

736

**

0.54

5*

*0.

729

**

0.61

2*

*0.

787

**

1

Notes

:*

* Cor

rela

tion

issi

gn

ifica

nt

atth

e0.

01le

vel

(tw

o-ta

iled

);* C

orre

lati

onis

sig

nifi

can

tat

the

0.05

lev

el(t

wo-

tail

ed)

Table II.Correlations

Organizationaljustice in PA

833

distributive justice and three of the variables that we considered as independent. R 2 wasmeasured at 37.4 per cent and the significant variables were Satisfaction with Feedback,Satisfaction with Ratings and Administrative Purpose. These results confirm H1a.Finally, when interactional justice as taken as dependent variable, we observed asignificant positive relation (p , 0; 01) between the interactional justice and two of theindependent variables. R 2 shows that the Satisfaction with Rater and the DevelopmentalPurpose explain the measured variance of the interactional justice at 74,6 per cent,confirming H1b and partly H3b.

5. DiscussionThe intention in this paper is to explore the PA elements that are related toorganizational justice. As Jawahar (2007) supported, the success of appraisal systemsmay well depend on ratees’ perceptions of fairness and reactions to important aspectsof the appraisal process. Traditionally, research on PA focuses on the relationshipbetween employee satisfaction and perceived purposes. For instance, according toKlein et al. (1987) and McEvoy et al. (1988), there is a relation between thedevelopmental purpose and satisfaction with rater.

Our findings support (H1a) that the administrative purpose of PA is related todistributive justice and procedural justice. It seems that when organizations use thedata that have been recorded during the PA process, in order to take decisions relatedto payroll, increases fringe benefits, promotion and employment termination theycreate a positive impression about both the fairness of the procedure an its outcomes.We also confirmed (H1b) that the developmental purpose of PA is related tointeractional justice, indicating a positive connection between employees’ personaldevelopment and good interpersonal relationships.

The administrative and developmental purposes are individual-focused(Youngcourt et al., 2007). By their nature, individual-focused purposes are morerelated to organizational justice. Issues such as hiring, firing, payroll, etc. are tangibleand concern immediate employees, vitally affecting their everyday routine, theirbehavior as well as their general presence in the organization. Therefore, it is essentialto have a sound evaluation system, characterized by justice in individual-focusedpurposes, resulting in the increase of employees’ efficiency and performance, decreaseof potential turnover and absenteeism rate, while at the same time cultivating a senseof loyalty and commitment towards the organization.

Dependent variables Independent variables Beta R 2 Adjusted R 2 Significance F

Procedural justice Satisfaction with ratings 0.462 0.737 0.731 0.000 115.559Satisfaction with feedback 0.305Criteria 0.165Administrative purpose 0.149

Distributive justice Satisfaction with feedback 0.302 0.374 0.363 0.000 33.113Satisfaction with ratings 0.237Administrative purpose 0.211

Interactional justice Satisfaction with rater 0.775 0.746 0.743 0.000 245.044Developmental purpose 0.149

Table III.Results of regressionanalysis fororganizational justice andemployee satisfaction

JEIT35,8

834

Moreover, our results revealed that employees’ perceptions of various criteria used fortheir PA are positively related to procedural justice, leading to the confirmation ofH2. Aspreviously noted, the criteria include the goals that employees must fulfill, their behaviorduring their duties, their competencies, their personal characteristics and their level ofcontrol on their work (Pooyan and Eberhardt, 1989). It is obvious that companies’ PA isbased on the criteria reinforcing their crucial role to the organizational justice.Furthermore, PA criteria are positively related to the three kinds of organizationaljustice, with more significant relationship to procedural justice. It seems that havingclear-cut criteria of evaluation, that are known and understood by employees, makesthem feel that the PA process is fair. The present study is the first on exploring therelationship between procedural justice and the various criteria of PA. Therefore, moreresearch should be conducted in order to verify the validity of these findings.

As we continue, we observe significant relationships between the three kinds ofjustice and the three types of satisfaction. As was hypothesized, employee satisfactionwith ratings is positively related to procedural justice (H3a). Our results confirm thehypothesis, as we found strong correlation between satisfaction with ratings and bothdistributive and procedural justice. Regarding satisfaction with ratings, we also foundthat is positively related to distributive justice. These findings contradict previousstudies, showing that satisfaction with ratings is only related to distributive justice(Sweeney and McFarlin, 1993; Colquitt et al., 2001; Jawahar, 2007). It might be that asignificant part of the population of our sample believes that if the procedure used forPA is fair, this will increase the probability of a fair, utilization of the PA results fororganizational purposes, like compensations and promotions.

Moreover, H3b is partly confirmed, as we only found positive relationship betweeninteractional justice and satisfaction with rater. This result confirms previous research(Cropanzano and Prehar, 1999; Jawahar, 2007; Moye et al., 1997). The relationshipbetween interactional justice and satisfaction with feedback (H3b) was not confirmed.However we found a positive relationship between the procedural justice andsatisfaction with feedback, confirming previous research (Jawahar, 2007; Sweeney andMcFarlin, 1993). We also found a significant relationship between the distributivejustice and satisfaction with feedback, which confirms previous findings (Jawahar,2007). This indicates the importance of feedback and explaining the PA outcomes aswell as its consequences of individuals in organizations.

6. ConclusionThe present research examines the important role of three elements of organisationaljustice, namely interactional, procedural and distributive for the satisfaction from PA.Since PA is often accompanied by feelings of unfairness and dissatisfaction, itsimplementation is important for both HR departments and line managers. Our resultslead to some recommendations for practitioners that can be summarized in thefollowing paragraphs.

First, it is important for new hires to become aware of the PA procedure early intheir organisational life. Therefore they should be thoroughly informed about the PAby the HR staff, during the orientation process. This will help them be better preparedfor their evaluation, in terms of the procedure followed and the criteria expected fromthem. The criteria by which performance appraisal takes place in the organisationshould be made clear early on. These criteria may be the particular goals, attitudes,

Organizationaljustice in PA

835

competencies and abilities, behaviours and any other relevant to the job. Taking intoconsideration all the previous, the goal should be to increase process transparency sothat perceived justice of the PA system is maximized. This can lay the ground for moresatisfied employees that will have a positive contribution to their evaluation process.

Ensuring both procedural and interactional justice can lead to increased employeesatisfaction for all satisfaction elements. More specifically, a continuousimplementation of appraisal standards can be enabled by the use of standardizedappraisal procedures. In order to ensure interactional justice, there should not be aclash between the appraiser’s and the appraisee’s role. The appraisees should be freeand comfortable to express emotions and their “input” during the appraisal interviewshould be encouraged.

Finally, the significant relation found between interactional justice and satisfactionwith rater supports the importance of the supervisor’s role in the employees’satisfaction. Apparently, the appraisers’ role in the interactional justice is fundamental,as they seem to be the basis of the satisfaction that employees receive through the PAsystem. Our results once again highlight the importance of training for PA.Organisations should invest in training appraisers to act in a just way regardinginteractional justice, but also encourage employees to receive everyday informalfeedback, relevant to the nature of their job.

Our research indicates a positive link between organisational justice andsatisfaction with various elements of PA. A limitation of the study is the use ofperceptual data only from one source, that of the appraisees. Future research couldinclude and compare data both from appraisers and their appraisees in order toexamine the gap in perception among those two parts, and its possible impact onorganisational justice and satisfaction.

References

Ambrose, M.L. (2002), “Contemporary justice research: a new look at familiar questions”,Organizational Behavior & Human Decision Processes, Vol. 89 No. 1, pp. 803-12.

Babakus, E., Cravens, D.W., Johnston, M. and Moncrief, W.C. (1996), “Examining the role oforganizational variables in the salesperson job satisfaction model”, Journal of PersonalSelling and Sales Management, Vol. 16 No. 3, pp. 33-46.

Bartol, K.M., Smith, R.H., Durham, C.C. and Poon, J.M.L. (2001), “Influence of performanceevaluation rating segmentation on motivation and fairness perceptions”, Journal ofApplied Psychology, Vol. 86 No. 6, pp. 1106-19.

Beer, M. (1987), “Performance appraisal”, in Lorch, J. (Ed.), Handbook of Organizational Behavior,Prentice Hall, Englewood Cliffs, NJ, pp. 286-99.

Bernardin, H.J., Hagan, C.M., Kane, J.S. and Villanova, P. (1998), “Effective performancemanagement: a focus on precision, customers and situational constraints”, in Smither, J.W.(Ed.), Performance Appraisal: State of the Art in Practice, Jossey-Bass, San Francisco, CA,pp. 3-48.

Bies, R.J. (2001), “Interactional in( justice): the sacred and the profane”, in Greenberg, J. andCropanzano, R. (Eds), Advances in Organizational Justice, Stanford University Press,Stanford, CA, pp. 89-118.

Boice, D.F. and Kleiner, B.H. (1997), “Designing effective performance appraisal systems”, WorkStudy, Vol. 46 No. 6, pp. 197-201.

JEIT35,8

836

Byrne, Z.S. and Cropanzano, R. (2001), “The history of organizational justice: the foundersspeak”, in Cropanzano, R. (Ed.), Justice in the Workplace: From Theory to Practice,Lawrence Erlbaum Associates, Mahwah, NJ, pp. 3-26.

Cardy, R.L. and Dobbins, G.H. (1994), Performance Appraisal: Alternative Perspectives,South-Western Publishing Company, Cincinnati, OH, p. 54.

Chen, H.M. and Kuo, T.S. (2004), “Performance appraisal across organizational life cycles”,Human Systems Management, Vol. 23, pp. 227-33.

Cobb, A.T., Wooten, K.C. and Folger, R. (1995), “Justice in the making: toward understanding thetheory and practice of justice in organizational change and development”, in Pasmore,W.A. and Woodman, R.W. (Eds), Research in Organizational Change and Development, JAIPress, Greenwich, CT, pp. 243-95, Vol. 8.

Colquitt, J.A., Conlon, D.E., Wesson, M.J., Porter, C. and Ng, K.Y. (2001), “Justice at themillennium: a meta-analytic review of 25 years of organizational justice research”, Journalof Applied Psychology, Vol. 86 No. 3, pp. 425-45.

Cropanzano, R. and Prehar, C.A. (1999), “Using social exchange theory to distinguish proceduralfrom interactional justice”, paper presented at the 14th Annual Meeting of the Society forIndustrial and Organizational Psychology, Atlanta, GA, April.

DeNisi, A.S. (2000), “Performance appraisal and performance management”, in Klein, K.J. andKozlowski, S.W.J. (Eds), Multilevel Theory, Research and Methods in Organizations,Jossey-Bass, San Francisco, CA, pp. 121-56.

DeNisi, A.S. and Williams, K.J. (1988), “Cognitive approaches to performance appraisal”, in Ferris,G.R. and Rowland, K.M. (Eds), Research in Personnel and Human Resources Management,JAI Press, Greenwich, CT, pp. 109-55, Vol. 6.

Erdogan, B. (2002), “Antecedents and consequences of justice perceptions in performanceappraisals”, Human Resource Management Review, Vol. 12 No. 4, pp. 555-78.

Fletcher, C. (2001), “Performance appraisal and management: the developing research agenda”,Journal of Occupational and Organizational Psychology, Vol. 74 No. 4, pp. 473-87.

Folger, R. and Cropanzano, R.S. (1998), Organizational Justice and Human ResourceManagement, Sage, Thousand Oaks, CA.

Folger, R., Konovsky, M.A. and Cropanzano, R. (1992), “A due process metaphor for performanceappraisal”, Research in Organizational Behavior, Vol. 14, pp. 129-77.

Giles, W.F. and Mossholder, K.W. (1990), “Employee reactions to contextual and sessioncomponents of performance appraisal”, Journal of Applied Psychology, Vol. 75 No. 4,pp. 371-7.

Greenberg, J. (1986), “Determinants of perceived fairness in performance evaluation”, Journal ofApplied Psychology, Vol. 71 No. 3, pp. 340-2.

Greenberg, J. (1990), “Organizational justice: yesterday, today, tomorrow”, Journal ofManagement, Vol. 16 No. 2, pp. 399-432.

Holbrook, R.L. (2002), “Contact points and flash points: conceptualizing the use of justicemechanisms in the performance appraisal interview”, Human Resource ManagementReview, Vol. 12 No. 1, pp. 101-23.

Ivancevich, J.M. (2004), Human Resource Management, Irwin/McGraw-Hill, New York, NY,pp. 255-87.

Jawahar, I.M. (2007), “The influence of perceptions of fairness on performance appraisalreactions”, Journal of Labor Research, Vol. 28 No. 4, pp. 735-54.

Jordan, J.L. and Jordan, D.N. (1993), “Satisfaction with performance appraisal ratings”,Psychological Reports, Vol. 72, p. 1222.

Organizationaljustice in PA

837

Kacmar, M.K., Wayne, S.J. and Wright, P.M. (1996), “Subordinate reactions to the use ofimpression management tactics and feedback by the supervisor”, Journal of ManagerialIssues, Vol. 8 No. 1, pp. 35-53.

Keeping, L.M. and Levy, P.E. (2000), “Performance appraisal reactions: measurement, modellingand method bias”, Journal of Applied Psychology, Vol. 85 No. 5, pp. 708-23.

Klein, H.K., Snell, S.A. and Wexley, K.N. (1987), “Systems model of the performance appraisalinterview process”, Industrial Relations, Vol. 26 No. 3, pp. 267-80.

Kluger, A.N. and DeNisi, A. (1996), “The effects of feedback interventions on performance:a historical review, meta-analysis and a preliminary feedback intervention theory”,Psychological Bulletin, Vol. 119 No. 2, pp. 254-84.

Lai Wan, H. (2007), “Human capital development policies: enhancing employees’ satisfaction”,Journal of European Industrial Training, Vol. 31 No. 4, pp. 297-322.

Lawler, E.E. (1994), Motivation in Work Organizations, Jossey-Bass, San Francisco, CA.

Locke, E.A. and Latham, G.P. (2002), “Building a practically useful theory of goal setting andtask motivation”, American Psychologist, Vol. 57 No. 9, pp. 705-17.

Longenecker, C.O. and Nykodym, N. (1996), “Public sector performance appraisal effectiveness:a case study”, Public Personnel Management, Vol. 25 No. 2, pp. 151-65.

Longenecker, C.O., Gioia, D.A. and Sims, H.P. (1987), “Behind the mask: the politics of employeeperformance appraisal”, Academy of Management Executive, Vol. 1, pp. 183-93.

McCarthy, M.A. and Garavan, N.T. (2001), “3608 feedback processes: performance improvementand employee career development”, Journal of European Industrial Training, Vol. 25 No. 1,pp. 5-32.

McEvoy, G.M., Buller, P.F. and Roghaar, S.R. (1988), “A jury of one’s peers”, PersonnelAdministrator, Vol. 33, pp. 94-101.

Milkovich, G.T. and Boudreau, J.W. (1997), Human Resource Management, Irwin/McGraw-Hill,Burr Ridge, IL.

Mount, M.K. (1984), “Satisfaction with a performance appraisal system and appraisaldiscussion”, Journal of Occupational Behavior, Vol. 5 No. 4, pp. 271-9.

Moye, N.A., Masterson, S.S. and Bartol, K.M. (1997), “Differentiating antecedents andconsequences of procedural and interactional justice: empirical evidence in support ofseparate constructs”, paper presented at the 56th Annual Meeting of the NationalAcademy of Management, Boston, MA.

Murphy, K. and Cleveland, J. (1992), Performance Appraisal: An Organizational Perspective,Allyn and Bacon, Needham Heights, MA.

Murphy, K. and Cleveland, J. (1995), Understanding Performance Appraisal: Social,Organizational and Goal-based Perspectives, Sage Publications, Thousand Oaks, CA.

Pan, J. and Li, G. (2006), “What can we learn from performance assessment? The system andpractice in an academic library”, Library Management, Vol. 27 Nos 6/7, pp. 460-9.

Pettijohn, S.L. (2001), “Performance appraisals: usage, criteria and observations”, Journal ofManagement Development, Vol. 20 No. 9, pp. 754-71.

Pooyan, A. and Eberhardt, B.J. (1989), “Correlates of performance appraisal satisfaction amongsupervisory and non-supervisory employees”, Journal of Business Research, Vol. 19 No. 3,pp. 215-26.

Roberts, G.E. (1992), “Linkages between performance appraisal system effectiveness and raterand ratee acceptance”, Review of Public Personnel Administration, Vol. 12 No. 3, pp. 19-41.

JEIT35,8

838

Skarlicki, D.P. and Folger, R. (1997), “Retaliation in the workplace: the roles of distributive,procedural and interactional justice”, Journal of Applied Psychology, Vol. 82 No. 3,pp. 434-43.

Swanepoel, B., Erasmus, B., van Wyk, M. and Schenk, H. (2000), South African Human ResourceManagement: Theory and Practice, Juta and Company, Cape Town.

Sweeney, P.D. and McFarlin, D.B. (1993), “Workers’ evaluation of the ends and the means:an examination of four models of distributive and procedural justice”, OrganizationalBehavior & Human Decision Processes, Vol. 55 No. 1, pp. 23-40.

Tang, T.L.P. and Sarsfield-Baldwin, L.J. (1996), “Distributive and procedural justice as related tosatisfaction and commitment”, Advanced Management Journal, Vol. 61 No. 3, pp. 25-31.

Taylor, S.M., Fisher, C.D. and Ilgen, D.R. (1984), “Individuals’ reactions to performance feedbackin organizations: a control theory perspective”, in Rowland, K.M. and Ferris, G.R. (Eds),Research in Personnel and Human Resources Management, JAI Press, Greenwich, CT.

Taylor, S.M., Tracy, K.B., Renard, M.K., Harrison, J.K. and Carroll, S.J. (1995), “Due process inperformance appraisal: a quasi-experiment in procedural justice”, Administrative ScienceQuarterly, Vol. 40, pp. 495-523.

Wilson, P.J. and Western, S. (2000), “Performance appraisal: an obstacle to training anddevelopment?”, Journal of European Industrial Training, Vol. 24 No. 7, pp. 384-91.

Wright, P.R. (2004), “Mapping cognitions to better understand attitudinal and behavioralresponses in appraisal research”, Journal of Organizational Behavior, Vol. 25 No. 3,pp. 339-74.

Youngcourt, S.S., Leiva, P.I. and Jones, R.G. (2007), “Perceived purposes of performanceappraisal: correlates of individual – and positions – focused purposes on attitudinaloutcomes”, Human Resource Development Quarterly, Vol. 18 No. 3, pp. 315-43.

Further reading

Cleveland, J.N., Murphy, K.R. and Williams, R.E. (1989), “Multiple uses of performance appraisal:prevalence and correlates”, Journal of Applied Psychology, Vol. 74 No. 1, pp. 130-5.

Cleveland, J.N., Mohammed, S., Skattebo, A.L. and Sin, H.P. (2003), “Multiple purposes ofperformance appraisal: a replication and extension”, paper presented at the AnnualConference for the Society for Industrial & Organizational Psychology, Orlando, FL, April.

Cook, J. and Crossman, A. (2004), “Satisfaction with performance appraisal systems, a study ofrole perceptions”, Journal of Managerial Psychology, Vol. 19 No. 5, pp. 526-41.

Leventhal, G.S. (1980), “What should be done with equity theory? New approaches to the study offairness in social relationships”, in Gergen, K., Greenberg, M. and Willis, R. (Eds), SocialExchange: Advances in Theory & Research, Springer, New York, NY.

Ostroff, C. (1993), “Rater perceptions, satisfaction and performance ratings”, Journal ofOccupational and Organizational Psychology, Vol. 66, pp. 345-56.

About the authorsAnastasios Palaiologos is a Researcher in the Athens University of Economics & Business(AUEB). He graduated from the Department of Economics at University of Piraeus. He holds anMSc in Human Resource Management from AUEB and an MBA from New York College. He is thewinner of the first prize at the Pan-Hellenic Contest for University Students, by Economic Review.His research interests include corporate social responsibility, new methods of recruitment andselection, and performance management. Anastasios Palaiologos is the corresponding author andcan be contacted at: Anastasios.palaiologos@gmail.com

Organizationaljustice in PA

839

Panagiotis Papazekos has been a Researcher in AUEB since 2009. He graduated from theDepartment of Business Administration at University of Patras and completed his postgraduatestudies in Human Resource Management at AUEB. His research interests include organizationalbehavior, performance management, modern methods of recruitment and selection and theconcept of leadership.

Dr Leda Panayotopoulou is a Lecturer of Human Resource Management at the Department ofMarketing & Communication of the Athens University of Economics & Business (AUEB). Shehas done extensive research in the field of HRM as she is a member of the CRANET project teamin Greece. Her research interests include strategic HRM, career management and SMEs. In 2001she received the second PhD Prize awarded by the European Association of PersonnelManagement, for her PhD in Strategic HRM, completed at AUEB. Her work has been publishedin leading journals such as: The International Journal of HRM, Personnel Review, andManagement Decision.

JEIT35,8

840

To purchase reprints of this article please e-mail: reprints@emeraldinsight.comOr visit our web site for further details: www.emeraldinsight.com/reprints