The Effect of Employees’ Perceived Fairness of Performance Appraisal Systems on Employees’ Organizational Commitment

Abstract

Previous researchers have paid significant attention to the effect of employees’ perceived fairness on organizational commitment. However, only few have specifically examined the employees’ perceived fairness on the performance appraisal system practiced in the organizations. Drawing upon the Equity Theory and Social Exchange Theory, this study specifically investigated the relationship between employees’ perceived fairness of performance appraisal (procedural justice, distributive justice, and interactional justice) and their commitment towards organization. The instruments used to measure the variables have been adapted from the previous researchers. A pilot study has been carried out in determining the suitability of the instrument and the research. This research used the probability sampling technique that is simple random sampling. Out of 155 questionnaires that have been distributed to the non-executive employees in Malaysia’s oil and gas industry, only 108 have been completed and valid for this study. The data were codified and analyzed by using SPSS. The results were basically in the form of reliability, frequency, correlations and multiple regressions. From the finding, interactional justice of performance appraisal was the significant predictor towards employees’ organizational commitment behaviors. Thus, managerial implications and directions for further research are discussed.