Organizational justice and performance: is appraisal fair?

Abstract

Purpose In a changing economic climate, characterised by pressures to improve productivity and reduce costs, performance management has a more central role in helping to ensure competitive advantage. Appraisals have become an almost universal feature of modern organizations and it is essential that they are perceived as fair if they are to bring about commitment to discretionary effort, which is increasingly a key feature in gaining competitive advantage. The purpose of this paper is to examine the outcomes and processes of performance appraisal through the concept of organizational justice. Design/methodology/approach This paper uses the concept of organizational justice to explore the outcomes, procedures and implementation of appraisal in contemporary organizations. It draws on a range of theoretical frameworks from both philosophy and social science, examines current practices and experiences and looks at future trends. Empirical research includes a ten‐year longitudinal study of practising managers and ethnography, questionnaires and interviews. Research limitations/implications The authors conclude that appraisal frequently creates both actual and perceived injustice in organizations and a tension between managing performance and encouraging engagement, which is dependent on perceptions of fairness. The authors place appraisal within a framework of organizational justice and encourage further research into areas of organizational effectiveness. Originality/value The research clearly indicates that both managers and employees see a potential for appraisal, which is rarely achieved in practice. It opens up a dialogue linking the performance agenda with issues of development, motivation and perceptions of justice in the search for models of competitive advantage. This research also confirms the findings of others, most significantly in terms of reinforcing perceptions of dishonesty, mistrust, inequity and managerialism.