Employees' perceptions of fairness in practice of performance appraisal

Employees’ performance appraisal (PA) is an essential tool used by organisations to develop and improve employees’ competencies and skills, and so assure organisations’ survival. In recent years research has moved from a psychometric approach, such as rater accuracy and rating error studies, to the qualitative aspect of PA where employees’ reactions and perceptions of performance appraisal are seen as indicators of success and effectiveness. Employees’ satisfaction with the system is indicated by scholars as the major indicator of employee perception of fairness (Cardy and Dobbins, 1994; Cawley et al., 1998; Keeping and Levy, 2000; Murphy and Cleveland, 1995). The focus of this research is on the employees’ perceptions of fairness in performance appraisal in Saudi Basic Industries Corporation (SABIC). A conceptual framework is developed based on three dimensions of organisational justice theory (the terms ‘justice’ and ‘fairness’ are used interchangeably): distributive, procedural (using the due process model), and interactional, which involves interpersonal and informational justice, to explore employees’ perceptions of justice in their appraisal. A qualitative approach was applied through an interpretivist paradigm; semi-structured interviews were used for collecting primary data from 44 respondents.The findings reveal the practice of performance appraisal is strongly influenced by cultural factors, which are divided into two dimensions. First, social factors, which include relationship, friendship, family relations, regionalism, tribe, personal interest and emotion. Second, managerial factors or characteristics of the manager (the terms supervisor, manager, direct manager, or rater are used interchangeably to refer to the person who evaluates or assesses employees’ performance) which includes expectations of managers that their subordinates obey them, managers’ tendency to threaten subordinates, and unwillingness to accept criticism. In relation to the process and procedures of appraisal the findings reveal a feeling that appraisal ratings did not reflect employees’ actual contributions or input, absence of standards for allocating salaries, and unequal training course distribution.The findings also reveal that goals and objectives are not set at the beginning of each appraisal period, and the appraisal standards used by supervisors are unclear, there is no clear feedback, and employees cannot participate in their appraisal process, meaning that appraisal decisions are only taken by managers. When employees receive their result, if they are dissatisfied with their grades they cannot appeal as the decision process is not explained to them. Employees were dissatisfied for three reasons: first, raters’ bias and subjectivity; second, evaluation depends on the department budget, and on forced distribution; third, involvement of top management in the rating and their changing the result without contacting the direct manager or supervisor who conducted the evaluation. These findings strongly support the organisational justice theory, and have important implications for practice