Abstract:
This study aimed at extending the literature of the effect of performance appraisal on
productivity and employees by connecting the employees’ perception on fair performance
appraisal and organizational justice-considered practices to job satisfaction and work
performance. Prior studies did not explore much this relation due to the geographical sample
limitation and governance practice context. Participants of this research were employees of
large and well-established companies, which were considered to have well and transparent
appraisal systems and a perfect recently context to find the effect of organizational justice
conflict. Questionnaires were used and processed with factor analysis and regression to
examine the simultaneous effects of few independent variables on a dependent variable. The
results reveal that the interactional justice has more influence than other types of
organizational justice in evaluating employee’s performance, which is contrary with previous
researches. 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. It 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. 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.
