Organizational Justice in Performance Appraisal System and Work Performance: Evidence from an Emerging Market

Abstract

This study aimed at extending the literature of the effect of performance appraisal on productivity and employees by connecting the employees’ perception on fair performance appraisal and organizational justice-considered practices to job satisfaction and work performance. Prior studies did not explore much this relation due to the geographical sample limitation and governance practice context. Participants of this research were employees of large and well-established companies, which were considered to have well and transparent appraisal systems and a perfect recently context to find the effect of organizational justice conflict. Questionnaires were used and processed with factor analysis and regression to examine the simultaneous effects of few independent variables on a dependent variable. The results reveal that the interactional justice has more influence than other types of organizational justice in evaluating employee’s performance, which is contrary with previous researches. Employees are more concerned on interaction during and after the evaluation process. They are keen on knowing how they have been evaluated and what the feedback of their superior is after the performance appraisal process. It provides strong support for the relationship between employee perception of organizational justice in performance appraisal system and work performance. It also supports a significant relationship between performance appraisal satisfaction and work performance. The important implication for organization is a pivotal role of the employees’ perceptions of the success or failure of a system. Therefore, the management has to keep in view the perceptions of their employees, while designing or modifying the appraisal system.