Evaluating employee’s performance is one of the necessary procedures in an effective management process. Reviewing employee’s performance routinely provides an understanding between the organization and the employee.
Human resource management departments use what is known as performance appraisal or also known as performance review. This evaluation system helps measure employee’s performance and the organization allocates rewards based on that. Also it helps improve this performance by providing advice to put things on the right track. But this system needs to be fair and just.
A recently published study has investigated the organizational justice in performance appraisal system. The study which is carried by researchers from Graduate School of Business, Universiti Utara , Malaysia is published in an international Journal of Human Resources Management Research.
When the employee gets feedback including encouragement and criticism over his work he knows what is expected from him and knows if his performance is questioned. The organization, in turn, will keep an eye on performing employees and reward them for that.
Also, this communication offers a chance for employers to know needs and concerns of their employees. As the study stated it “performance appraisal is an ongoing communication process between employees and supervisors. Supervisors should set expectations, monitor performance, and provide feedback to employees. By having this information, they will direct and develop employee performance by identifying training and development needs, correcting, and determining raises and promotions”.
But what makes success of this evaluation system is its fairness. Researchers stated that “the employee’s perception of fairness is the ultimate check for the success of the system… The components of fairness, procedural as well as distributive, should have a positive impact on the employee in order to make him accept the whole procedure and its results without any reluctance.”
What is important is the belief of employee in fairness of performance appraisal system. In contrary to previous researches done on this matter, researchers stressed that “interactional justice has more influence than other types of organizational justice in evaluating employee’s performance”.
Employees need to feel they are evaluated based on tasks and activities related to their job, and not something else. “The employees consider the procedure-based fairness is more important than the equal-distribution justice …In addition, they are willing to accept some injustice in the outcomes if they perceive the procedure itself to be fair” stated by the study.
If the employee does not believe in the appraisal system fairness, he will feel unsatisfied. Researchers mentioned that “the appraisal process can become a source of extreme dissatisfaction when employees believe the system is biased, political, or irrelevant… the employees need a good and fair performance appraisal system to provide them with feedbacks regarding their job, leading to their job satisfaction, and generating an increased work performance”.
A good communication is needed between the employee and organization over and after the evaluating process. “Employees are more concerned on interaction during and after the evaluation process. They are keen on knowing how they have been evaluated and what the feedback of their superior is after the performance appraisal process” researchers mentioned.
This interaction between the organization and its workforce “provides strong support for the relationship between employee perception of organizational justice in performance appraisal system and work performance. It also supports a significant relationship between performance appraisal satisfaction and work performance.”
Success of any performance appraisal system necessarily necessitates an interaction and active communication with the employee. As stated by the study “the important implication for organization is a pivotal role of the employees’ perceptions of the success or failure of a system. Therefore, the management has to keep in view the perceptions of their employees, while designing or modifying the appraisal system.”
Recommendations to Managers
The study provided a list of recommendations to the organizations and managers to follow to ensure success of their appraisal system: