Fairness of and Satisfaction with Performance Appraisal Process

Literature in organizational justice suggest that organizational fairness in decision making processes may encourage employees’ acceptance of and positive reaction to many organizational decisions including decision in human resource interventions such as performance appraisal system. This study seeks to understand how perceived fairness in the performance appraisal process affects employees’ satisfaction. The perception of fairness on performance appraisal was discussed and analysed in the light of theory of organizational justice which consist of procedural, distributive, interpersonal and interaction justice as the independent variables, and employees’ satisfaction as the dependent variable. This study explored employees’ satisfaction as consist of satisfaction with the last performance appraisal ratings, satisfaction toward supervisor in relation with appraisal process and satisfaction toward the performance appraisal system. Data from companies in Malaysia were collected to test these relationships. The findings showed that distributive and informational justice are significantly related to satisfaction with the last appraisal ratings; distributive, interpersonal and informational justice are significantly related to satisfaction with supervision; and distributive and informational justice are related to satisfaction toward the performance appraisal system. It also showed that distributive, interpersonal and informational justice are related to overall employees’ satisfaction. Implication of the justice concerns and practice of a more just performance appraisals are discussed.