Perceived justice as a crucial factor of performance management systems

Abstract

Academic journals lack recent research on the state of Performance Management (PM) practices and their assessment in a comprehensive manner. By examining the current trends in line with the research, this article narrows the gap between practice and research and delivers practical recommendations. Based on the four criteria of effectiveness the article describes the comprehensive framework for evaluating the effectiveness of PM systems and highlights the importance of justice perception as one of the effectiveness criteria. The article displays the findings of secondary research about the new PM systems introduced recently by companies, and analyzes the main driving forces of the changes. The general characteristics of the traditional and emerging trends are described and defined as “competitive” and “cooperative” approaches in comprehensive framework. The conclusion of the article is twofold. Firstly, one cannot speak about major changes of PM, but there are signals of a shift from the “competitive” to the “cooperative” approach, which can be explained by situational changes, and the organizations should match their PM with their own situations. Secondly, fairness perception as one of the employees’ reactions to PM is a crucial criteria for effectiveness and it is related to the success or failure of the system.