The performance appraisal process: Best approaches to support organizational justice for employees

What is considered a fair and accurate performance appraisal depends on whom you ask. The performance appraisal, an evaluation/assessment instrument widely used by many human resource departments, has been in the controversial spotlight for almost as long as organizations have been in existence. The performance appraisal process (or lack thereof) is one of the mostly hotly debated human resources issue in today’s work environment, and there is a trend to abandon traditional performance appraisals (Kenny, 2016). One purpose of the performance appraisal is to communicate to employees any information collected about their performance over a specified period of time. While the performance appraisal process is a critical function of human resources that can trigger assessment fairness perceptions, understanding how fairness influences job productivity and employee satisfaction, as well as employee behavior consequences, have practical implications. Social influences of perception are fast becoming contextual components of the performance appraisal process. The traditional approach to the performance appraisal is antiquated because the workplace environment has rapidly changed due to technological advances. The manner in which 21st Century employees work and the definition of performance, significantly impacts how employee performance should be measured (Bititci, Garengo, Dorfer & Nudurapati, 2012). Applying the social comparison, expectancy, and equity theories to the performance appraisal process suggests that an employee expects to be fairly compensated, recognized, and fairly rewarded for their contributions to meeting organizational goals. This research underscores the importance of incorporating organizational justice dimensions into the performance appraisal process. Additionally, this research enhances the understanding of organizational justice and the role that it plays on employee perception of the overall performance appraisal process. Using thematic synthesis, employee and manager/supervisor perceptions, reactions, and observations of performance appraisal accuracy and equity were examined. These variables were identified as predictor constructs for appraisal effectiveness and satisfaction. The findings show that organizational justice within the context of the performance appraisal is significantly impacted by national context and demographic characteristics, and the relationship quality between the appraiser and appraisee is crucial. These results provide HR practitioners and organizations with a meaningful approach to integrate organizational justice. The pivotal role and important implications that organizational justice plays on the performance process is presented.Running head: ORGANIZATIONAL JUSTICE & THE PERFORMANCE APPRAISAL The Performance Appraisal Process: Best Approaches to Support Organizational Justice for Employees Dissertation submitted to the Faculty of the Graduate School of the University of Maryland University College in partial fulfillment of the requirements for the degree of Doctor of Management Dissertation Advisory Committee: G. David Andersen, Ed.D. Eric B. Dent, Ph.D. ORGANIZATIONAL JUSTICE AND THE PERFORMANCE APPRAISAL ii Abstract What is considered a fair and accurate performance appraisal depends on whom you ask. The performance appraisal, an evaluation/assessment instrument widely used by many human resource departments, has been in the controversial spotlight for almost as long as organizations have been in existence. The performance appraisal process (or lack thereof) is one of the mostly hotly debated human resources issue in today’s work environment, and there is a trend to abandon traditional performance appraisals (Kenny, 2016). One purpose of the performance appraisal is to communicate to employees any information collected about their performance over a specified period of time. While the performance appraisal process is a critical function of human resources that can trigger assessment fairness perceptions, understanding how fairness influences job productivity and employee satisfaction, as well as employee behavior consequences, have practical implications. Social influences of perception are fast becoming contextual components of the performance appraisal process. The traditional approach to the performance appraisal is antiquated because the workplace environment has rapidly changed due to technological advances. The manner in which 21st Century employees work and the definition of performance, significantly impacts how employee performance should be measured (Bititci, Garengo, Dorfer & Nudurapati, 2012). Applying the social comparison, expectancy, and equity theories to the performance appraisal process suggests that an employee expects to be fairly compensated, recognized, and fairly rewarded for their contributions to meeting organizational goals. This research underscores the importance of incorporating organizational justice dimensions into the performance appraisal process. Additionally, this research enhances the ORGANIZATIONAL JUSTICE AND THE PERFORMANCE APPRAISAL iii understanding of organizational justice and the role that it plays on employee perception of the overall performance appraisal process. Using thematic synthesis, employee and manager/supervisor perceptions, reactions, and observations of performance appraisal accuracy and equity were examined. These variables were identified as predictor constructs for appraisal effectiveness and satisfaction. The findings show that organizational justice within the context of the performance appraisal is significantly impacted by national context and demographic characteristics, and the relationship quality between the appraiser and appraisee is crucial. These results provide HR practitioners and organizations with a meaningful approach to integrate organizational justice. The pivotal role and important implications that organizational justice plays on the performance process is presented. Keywords: equity theory, expectancy theory, job performance, job satisfaction, organizational justice, performance appraisals, performance evaluation, social comparison theory, trust, 21st Century organizations ORGANIZATIONAL JUSTICE AND THE PERFORMANCE APPRAISAL iv Dedication This dissertation is dedicated to my daughter, Adrienne G. Clayton, and to my son, DeLonte A. Smith. As a single parent at an early age, I knew that someday, somehow, I would leave a legacy the Ware ancestry would be proud of. Never once did I ever imagine that it would be a prestigious degree. Now, that I have reached this milestone in life, I only want to be the best mother that I can possibly be. This journey has consumed so much of me, and my personal and quality time from both of you. I appreciate all the support you have given me while I pursued my dream. This is my legacy, for you, my grandchildren, and my future grandchildren. I love you beyond what words can express. This dissertation is also dedicated to the late Linda P. Ware (my mother), and the late Sarah F. Ware (my grandmother). These two loving and compassionate women instilled in me the value and importance in always striving to be the very best and to always give from the heart. Giving from the heart meant finding ways to help people who were less fortunate than we were and to give back, even though I grew up poor. And by doing so, I would be living life with purpose. They also instilled the values of working hard, persevering through adversity, and helped me understand that failure is a part of success. The values you instilled in me at an early age will always be engrained in my heart. I know that you both are smiling down on me from Heaven. ORGANIZATIONAL JUSTICE AND THE PERFORMANCE APPRAISAL v Acknowledgments This dissertation was possible because of the enormous amount of love, encouragement, and support received from my children, family, friends, my professional and personal colleagues, my fellow cohort, and more importantly, my dissertation advisors. I want to acknowledge my sister (Lynerl Ware), and my colleague and trusted friend, Johnetta Grimes. You both have been encouraging me since Day 1. You both have been instrumental in assisting me when I broke my hand. You both have been my rock through my knee replacement surgery, rehabilitation, and therapy ordeal. I will never forget that you brought all of my school papers, articles, folders, and my two computers to the hospital and rehabilitation center so that I would not miss a due date. The countless days and nights you stayed up with me, helping me organize files, label folders, assisting me in organizing stacks of articles, and countless other big and small tasks you fulfilled to get me through the finish line will never be forgotten. Through all the tears, my hurt, my pains, and the laughing moments, I conceded I was stubborn, yet remained steadfast; I stayed unshakeable and determined not to let these circumstances distract or hinder me from accomplishing my goal. You were the strongest support system through and through. Thank you. To my boss, Joseph P. McKenna, who was influential in suggesting I explore the topic of the performance appraisal. Indeed, this topic resonated with me and I embarked on this journey, pursued it with the confidence knowing that the information I acquired would someday be used to improve the manner in which the performance appraisal process is approached. While we had differing viewpoints, you constantly bounced off ideas or made statements that made me think ORGANIZATIONAL JUSTICE AND THE PERFORMANCE APPRAISAL vi “more critically” and I found myself going back to home base look at other perspectives. Thank you. To my DMGT 892 (2017) cohort, thank you for the assistance you provided at all the residencies and for keeping me inspired. To experience the community closeness and support the group provided help me stay focused, motivated, and pressing forward. Our back-and-forth banter was healthy, encouraging, and is what kept us rooted and grounded to finish together and finish strong. I will miss each of you dearly. I have benefitted tremendously from the academic advising and mentoring from Dr. G. David Andersen, Dr. Eric B. Dent, and Dr. Deborah M. Wharff. There are no words that can amply express my gratitude for all of you. Specifically, the guidance and emotional support provided along this doctoral journey. You all kept me above water through all the stones that life had thrown at me. There were times I had to jump over what seemed to be insurmountable obstacles, and you all saw me through to the end. I am privileged to have received your time and attention throughout this journal and for that, I am truly indebted to you. Thank you. ORGANIZATIONAL JUSTICE AND THE PERFORMANCE APPRAISAL vii Table of Contents Abstract……… ............................................................................................................................... ii Dedication…… .............................................................................................................................. iv Acknowledgments ........................................................................................................................... v List of Tables.. ............................................................................................................................... xi List of Figures ............................................................................................................................... xii CHAPTER 1 INTRODUCTION AND OVERVIEW OF THE DISSERTATION ................ 1 Introduction….. ............................................................................................................................... 1 Background ......................................................................................................................... 8 An Historical Perspective ................................................................................................... 8 21st Century Performance Appraisals – Challenges and Issues ....................................... 18 The Case For and Against Performance Appraisals ......................................................... 20 Statement and Significance of the Problem .................................................................................. 23 Purpose of the Study ..................................................................................................................... 26 Significance of the Study to Management Practice and Scholarship ........................................... 26 Research Questions ....................................................................................................................... 29 Discussion of Concepts and Relevant Literature .......................................................................... 29 Organizational Justice: Overview, Dimensions, and Components ................................... 30 Distributive justice ...................................................................................................... 31 Procedural justice.. ...................................................................................................... 32 Interpersonal/interactional justice.. ............................................................................. 34 Informational justice.. ................................................................................................. 35 Employee Job Satisfaction ................................................................................................ 37 Employee Job Performance .............................................................................................. 40 Trust…. ............................................................................................................................. 45 Definitions and Terminology ........................................................................................................ 47 Chapter 1 Summary ...................................................................................................................... 50 Organization of Dissertation ......................................................................................................... 50 CHAPTER 2 RESEARCH FRAMEWORK AND LITERATURE ANALYSIS .................. 52 Introduction and Review of Study Background ............................................................................ 52 Discussion of the Theoretical Frameworks ................................................................................... 54 Equity Theory ................................................................................................................... 54 Expectancy Theory ........................................................................................................... 55 Social Comparison Theory ............................................................................................... 56 Critical Analysis of the Literature ................................................................................................. 58 Introduction and Presentation of the Research ................................................................. 58 ORGANIZATIONAL JUSTICE AND THE PERFORMANCE APPRAISAL viii Sources of Dissatisfaction in the Appraisal Process ......................................................... 59 Inequity. ..................................................................................................................... 60 Inaccuracy ................................................................................................................... 60 Unfairness.. ................................................................................................................. 67 Employee Job Satisfaction ................................................................................................ 69 Employee Job Performance and the Psychology of Competition ..................................... 72 Employee Job Performance .............................................................................................. 73 Trust….. ............................................................................................................................ 74 Organizational Justice: Moving Forward .......................................................................... 76 Best Approaches that Integrate Organizational Justice into the Perf. Appraisal ............. 77 Open communication .................................................................................................. 78 Narrative comments….. .............................................................................................. 78 Cognitive ability of the rater ................................................................................. 81 Rater rating consistency......………………...……………………………………81 Narrative comments used for employee development……………………….…..83 Narrative comments used for continuous feedback……………………………...85 Narrative comments used for goal setting ............................................................ 87 The Performance Appraisal Purpose ................................................................................ 89 Literature Interpretative Model ..................................................................................................... 92 Research Propositions ................................................................................................................... 94 Chapter 2 Summary ...................................................................................................................... 95 CHAPTER 3 METHODOLOGY .............................................................................................. 96 Introduction to Chapter 3 .............................................................................................................. 96 Evidenced-Based Research (EBR) and Systematic Literature Review (SLR) for Management ................................................................................................................. 97 Synthesis Methodology ............................................................................................................... 100 Search Strategy ........................................................................................................................... 103 The Search Strategy Approach ....................................................................................... 103 Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) ..... 106 Manual and electronic search strategy ...................................................................... 108 Grey literature ........................................................................................................... 108 Inclusion and exclusion criteria ................................................................................ 108 Weight of Evidence Approach and Scholarly Research ................................................. 109 Internal/External Validity ............................................................................................... 111 Publication Bias .............................................................................................................. 114 NVIVO Software Program ............................................................................................. 115 Coding ....................................................................................................................... 116 Developing descriptive themes ................................................................................. 119 ORGANIZATIONAL JUSTICE AND THE PERFORMANCE APPRAISAL ix Generating analytical themes .................................................................................... 120 Sensitivity analysis and bias ..................................................................................... 121 Subject Matter Experts/Panel Members as Evidence or Support ............................................... 121 Introduction ..................................................................................................................... 121 Panel Members ................................................................................................................ 123 Panel Member Comments ............................................................................................... 123 Panel Member’s Impact on the Dissertation ................................................................... 125 Chapter 3 Summary .................................................................................................................... 125 CHAPTER 4 ANALYSIS AND FINDINGS .......................................................................... 127 Introduction…. ............................................................................................................................ 127 Research Questions and Propositions ............................................................................. 128 Research Question #1 and #2 Themes ............................................................................ 129 Findings: Analysis and Results for Research Question #1 ......................................................... 130 RQ#1 Theme: Organizational Commitment and Organizational Citizenship Behavior ................................................................................................................... 130 Findings: Analysis and Results for Research Question #2 ......................................................... 139 RQ#2 Theme 1: The Degree of Communication in the Performance Appraisal Process ...................................