Relationships Between Personnel Practices Implementing the Merit Treatment and Employees' Perception of Fairness in Performance Evaluation

Abstract

The purpose of the present study was to examine the relationships between several personnel practices that were employed for implementing the merit basedtreatment and the perception of fairness in performance evaluation. This study shed light on three personnel practices: performance appraisals, Management by Objectives (MBO), and the annual “salary system.” Because all three were, in part, utilized in the attempt of realizing the idea of merit treatment in work settings, their effects on the perception of fair treatment were subject to scientific investigation. Hence, the study examined empirically whether three personnel practices improve perceived fairness of performance evaluation. Survey results of the data collected from 1, 823 Japanese employees showed that only the annual “salary plan” was positively related to perceived fairness. In addition, the study investigated if the competitive climates moderate the relationships between three practices and employees' perception of fairness. Hierarchical regression analyses indicated that the relationships between these practices and employees' perception of fairness varied by the degree of competitiveness in the workplace. Implications of the study findings were discussed.