Academic journal article IUP Journal of Organizational Behavior

Consequences of Performance Appraisal Justice Perception: A Study of Indian Banks

Academic journal article IUP Journal of Organizational Behavior

Consequences of Performance Appraisal Justice Perception: A Study of Indian Banks

Article excerpt

Introduction

The present business context is defined by increased complexity, uncertainty, risk and competition. Managing and retaining talent continues to be of utmost importance to organizations not only for gaining competitive advantage but also for sustenance (Milligan, 2012). The performance appraisal system plays a significant role in managing employees and has become powerful practice in the area of human resource management. It is also acknowledged that firms having performance management programs on boards outperform on financial and productivity part than their counterparts (Molleman and Timmerman, 2003). Fletcher (2001) defined performance appraisal more broadly as 'a generic term for a variety of activities through which organizations seek to assess employees, develop their competence, enhance performance and distribute rewards'. Various human resource decisions such as between-person decisions (salary administration, promotion, retention and layoffs); within-person decisions (training need identification, determining transfers and assignments and performance feedback); system maintenance (manpower planning, identifying appraisal training and developmental needs, and evaluation of goal achievement) and documentation (documenting personnel decisions and meeting legal requirements) are based on information obtained from performance appraisal (Cleveland et al., 1989).

Performance appraisal is also one of the most comprehensively researched topics in industrial/organizational research (Cascio and Bernardin, 1981; and Maroney and Buckley, 1992). Bretz et al. (1992), Murphy and Cleveland (1995) and Levy and W illiams (2004) observed that major contribution of research is focused on information processing, rating errors, rater training, appraisal feedback and reactions to the appraisal process. Although the focus of enquiry has changed over the time, it began with information processing and psychometric properties, and then moved on to development of appraisal formats, training programs, appraisal sources and consequences of appraisal. Variables included by various researchers are as follows: Brown et al. (2010): Job satisfaction, organization commitment and turnover intention; Kuvaas (2006): Work performance, intention to quit and organization commitment; Poon (2004): Job satisfaction, turnover intention and organization commitment; and Levy and Williams (1998): Organization Commitment and job satisfaction.

Nevertheless, this is the most extensively discussed, praised and criticized topic in research and practice even today, though its effectiveness is still uncertain. It continues to generate dissatisfaction (Banks and Murphy, 1985) among its users and is often viewed as unfair, inaccurate and political (Singh et al., 1981; Furnahm, 2004; and Rao, 2004). Perceived unfairness of appraisal system was identified as the most important issue to be faced by organizations (Bretz et al., 1992). An organization's performance appraisal system can be an effective tool for managing human resources, given that the system is perceived as fair and accurate (IIgen, 1979). However, accurate appraisals are defined as those 'that are accepted by employees and allow the identification of relative contribution to organizational effectiveness within the context of organization and the constraints imposed by the regulatory environment in which it operates'. But it is also argued that a very well-designed and well-implemented system is not supposed to deliver expected results if it is not accepted by its users. This spells that the appraisal system is likely to generate work related positive outcomes as long as the system is perceived as fair and accurate. Various theoretical and empirical evidences confirm that employees' perception of a managerial practice shapes their behavioral intentions and actions (Robert, 2003). Jawahar (2007) demonstrated that in real workplace, employees' reactions towards the appraisal process are largely influenced by their perceived fairness of the outcome, the procedures used to evaluate performance and the way in which appraisal information is communicated. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.