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Literature Review
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This section reviews the major variables of the study namely performance evaluation, performance evaluation process, level of trust, and perceived fairness. Performance evaluation refers to an overall judgment of a worker’s performance at the workplace. It is inclusive of performance appraisal as well as a continuous assessment of the individual's work performance throughout the year.
The success of the execution of performance management is typically mirrored by the effectiveness of performance appraisal which frequently serves as a platform for managers to communicate feedback on employees’ performances and offer advice or a plan to assist them in meeting the desired standards. Al-Jedaia & Mehrez, (2020) define performance appraisal as a gauge of organizational efficiency. According to McShane & Von Glinow (2015), the employee's amount of effort, dedication, and commitment toward their work at the workplace affects productivity and these factors should be taken into consideration during performance evaluation. This implies that the efforts of employees play a crucial role in guaranteeing the achievement of organizational goals. By continually analyzing and assessing their staff, managers can play a crucial role. Additionally, the performance evaluation process often acts as a merit or demerit point to deciding employee promotions, salary rises, terminations, career development, and training opportunities.
Similarly, Iqbal et al. (2016) evaluated the association between what is viewed as performance evaluation fairness, organizational commitment, and job satisfaction, and determined that work satisfaction and performance evaluation fairness have a positive effect on commitment. In addition, studies show that fairness of performance evaluation positively impacts employee work performance (Iqbal et al., 2013). Similarly, Samwel (2018) investigated the link between job performance and job satisfaction with commitment to the organization as an independent variable. The research study determined a comprehensive positive association between performance without organizational commitment and work satisfaction.
To achieve business success and excellence, and also realize the set objectives and long-term competitive viability, organizations are continuously looking for integrated, bias-free performance evaluation and management systems (Sanyal & Biswas, 2015). Employee impressions of their performance evaluations as fair in terms of the process and their interactions with the individual conducting the process are essential for effective evaluations. The best performance standards can be reached by assessing workers’ performance, correctly responding to issues of performance, and giving corrective feedback all at once (Clarke, Harcourt, & Flynn, 2013).
According to Nutakor (2019), fairness is at the heart of a robust evaluation system, thus all employees must be subject to the same regulations in order to guarantee equity in the evaluations that are impartial and consistent with organizational policy. However, the authors underscore the need for gathering and promoting more theories to provide successful policies to enhance employees’ impressions of performance reviews at work and increase job satisfaction. Performance assessment only benefits the organization if precise and equitable, hence it is crucial for companies to train their appraisers on how to apply suitable appraisal methodologies and procedures. This is crucial since a company's performance management method may heavily rely on its capacity to recognize and get rid of performance problems (Dangol, 2021).
References
Al-Jedaia, Y., & Mehrez, A. (2020). The effect of performance appraisal on job performance in the governmental sector: The mediating role of motivation. Management science letters, 10(9), 2077-2088.
Clarke, C., Harcourt, M., & Flynn, M. (2013). Clinical governance, performance appraisal and interactional and procedural fairness at a New Zealand Public Hospital. Journal of Business Ethics, 117(3), 667-678. doi:10.1007/s10551-012- 1550-9.
Dangol, P. (2021). Role of the performance appraisal system and its impact on employees’ motivation. Quantitative Economics and Management Studies, 2(1), 13-26.
Iqbal, N., Ahmad, N., Haider, Z., Batool, Y., & Qurat-ul-ain. (2013). Impact of Performance Appraisal on Employee's Performance Involving Moderating Role of Motivation. Arabian Journal of Business and Management Review, 3(1), 37-56.
Iqbal, Z., Iqbal, G., & Quibtia, M. (2016). Perceived Fairness of Performance Appraisal System and Its Impact on Job Satisfaction and Organizational Commitment; a Case Study of MCB Bank in Pakistan. International Journal of Management and Commerce Innovations, 3(2), 921-937.
McShane, S. L., & Von Glinow, M. A. (2015). Organizational Behavior 7/e. New York: McGraw-Hill Education.
Nutakor, S. D. A. (2019). Employee perceptions of fairness in performance appraisals and job satisfaction (Doctoral dissertation, Walden University).
Samwel, J. O. (2018). Effect of Job Satisfaction on Employees' Commitment and Organizational Performance-Study of Solar Energy Companies in Lakezone Regions, Tanzania. International Journal of Economic and Management, 4(4) 823- 835.
Sanyal, M. K., Biswas, S. B., & Ghosh, R. (2016). The implication of performance appraisal process on employee engagement mediated through the development and innovation-oriented culture: A study on the software professionals of IT companies in West Bengal. Advances in Intelligent Systems and Computing. 277- 294. doi:10.1007/978-981-10-2035-3_29.
Setiawati, T., & Ariani, I. D. (2020). Influence of performance appraisal fairness and job satisfaction through commitment on job performance. Review of Integrative Business and Economics Research, 9(3), 133-151.
