Unionised employee's reactions to the introduction of a goal‐based performance appraisal system1

• Author: Travor C. Brown,Paula Krats
• DOI: http://doi.org/10.1111/j.1748-8583.2012.00205.x
• Published date: 01 November 2013
• Date: 01 November 2013

Unionised employee’s reactions to the introduction

of a goal-based performance appraisal system1

Paula Krats and Travor C. Brown, Faculty of Business, Memorial University

Human Resource Management Journal, Vol 23, no 4, 2013, pages 396–412

While performance appraisal research has a rich history, we sought to address a long-noted void in the

human resource management (HRM) literature, namely an investigation of employees’ reactions to a

newly introduced performance appraisal. Specifically, we examined the reaction of 408 unionised

employees to a newly introduced performance appraisal system. Reactions examined included appraisal

satisfaction, job satisfaction, appraisal fairness, goal setting and the perceived purpose of the system.

Satisfaction with the appraisal system was higher when (a) employees perceived it as being fair, (b) it was

used primarily for developmental purposes and (c) it allowed them to participate in goal setting. Of

additional importance, perception of a developmental focus in the appraisal partially mediated the

relationship between appraisal satisfaction, and each of job satisfaction, appraisal fairness and goal setting.

Contact: Dr Travor C. Brown, Faculty of Business, Memorial University, Elizabeth Avenue,

St. John’s, NL, A1B 3X5, Canada. Email: travorb@mun.cahrmj_205396..412

INTRODUCTION

There is general consensus that organisations will need to develop highly skilled

employees if they are to prosper, and survive, in an increasingly competitive

environment (Crawshaw et al., 2012). human resource management (HRM) practices

related to performance appraisal would seem to be a logical way to address this need as the

primary purpose of appraisal is to develop and motivate staff (Latham and Wexley, 1994). In

fact, performance appraisals are considered both a strategic (Chen and Huang, 2009) and a

high-performance HRM practice (Combs et al., 2006). Some scholars argue that they are among

the most important HRM practices because they ground many HRM decisions (e.g. pay,

promotion; Kuvaas, 2006).

Historically, we see two problems in performance appraisal research. First, as shown in a

recent issue of Human Resource Management Journal, HRM struggles to show concrete evidence

concerning a positive relationship between HRM and performance (Guest, 2011; Thompson,

2011). Clearly, given our introductory paragraph, this is problematic.

Second, ‘many researchers have bemoaned the relative lack of research on employees’

reactions to (performance) appraisals’ (Jawahar, 2006: 214) because the research has largely

focused on issues related to psychometric properties and rating errors/accuracy (Bernardin and

Villanova, 1986; Murphy and Cleveland, 1995). Yet, for over 40 years, scholars have suggested

that employee reactions have as great an impact on the effectiveness of an appraisal system as

do psychometric aspects (Lawler, 1967; Murphy and Cleveland, 1995). After all, strong

psychometric properties alone will have little impact if the appraisal system is not accepted by

the employees.

Recent literature bolsters the need to consider employees, and their views, when examining

HRM practices. Guest’s (2011: 6) review of the literature highlighted the need to not only

examine the presence of HRM practices, but more importantly to assess their effectiveness in

terms of how well they are applied. Specifically, he highlighted that ‘it is more sensible to seek

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doi: 10.1111/j.1748-8583.2012.00205.x

HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 23 NO 4, 2013396

© 2012 John Wiley & Sons Ltd.

Pleasecite this article in press as: Krats, P. and Brown, T.C. (2013) ‘Unionised employee’s reactions to the introduction of a goal-based performance

appraisal system1’. Human Resource Management Journal 23: 4, 396–412.

information from those experiencing the practices, namely workers’, while noting the failure to

consider workers’ values and motives in considerable HRM research. As we discuss later, the

values/motives of our sample of entirely unionised workers played an important role in this

study. Similarly, Thompson (2011) critiqued the limited interest in everyday HRM practices

using an example of appraisee and appraiser perception of performance appraisal consequences.

Clearly, these examples underline the need for HRM scholars and practitioners to consider

employee reactions to appraisal systems. Thus, we sought to address a long-noted void in the

literature, namely the views of employees towards a newly introduced performance appraisal.

As we describe in more detail later in the article, we have seen studies examining appraisal

effectiveness in terms of employee reaction. For example, Kuvaas (2006) found that appraisal

satisfaction was positively related to organisational commitment and turnover intention, two

highly measured concepts in the HRM literature. Cawley et al. (1998) found that participation

in the appraisal process was related to employee satisfaction with the performance appraisal

system. Boswell and Boudreau (2000) found that employees were more satisfied with their

performance appraisals if they perceived it to be focused on developmental purposes, while

Dipboye and de Pontbriand (1981) found that the use of relevant factors and discussion of

future goals were strongly related to employee satisfaction with the appraisal system. These

studies all underscore the role of employee reactions to performance appraisals.

Overall then, research concerning reaction measures, while improving, is less prevalent in

the performance appraisal field when employee reactions represent a criterion of great

interest to the HRM practitioners who ultimately work with such systems (Keeping and

Levy, 2000). This difference in focus reflects the well-debated topic of the schism between the

scientist and practitioner communities (Bartunek, 2007), with some arguing that performance

appraisal has been the domain most affected by this gap (Bretz et al., 1992). To help bridge

this gap between science and practice, we examined unionised employees’ reactions to a

newly introduced performance appraisal system. We examined solely unionised employees

as there are a number of reasons why the existence of a union could impact employee

attitudes regarding appraisals.

The industrial relations (IR) system is considered a core IR theory (Meltz and Adams, 1993).

In Canada, where this study took place, Craig’s model (1967) is often used. In brief, Craig’s

model states that the actors (e.g. labour, management and government) of the system convert

environmental inputs (e.g. legislation, economic factors, etc.) and internal inputs (e.g. actors’

values, goals, strategies, etc.) into organisational (e.g. union/management rights) and worker-

oriented (e.g. wages, satisfaction, etc.) outputs (Hebdon and Brown, 2012). The processes to

convert these inputs to outputs are known as conversion mechanisms. Many HRM and

IR-related processes (e.g. grievances, collective bargaining, performance appraisals, etc.)

represent conversion mechanisms. Based on this model, we could see how the values and goals

of the union, as well as their relative bargaining power, could impact conversion mechanisms

(such as performance appraisal) and employee affect. For example, a union that valued

development could use its relative bargaining power to support the introduction of an

appraisal process that was consistent with the union’s values, thus positively impacting worker

affect. Thus, union bargaining power can increase or lower the cost of introducing high-

performance HRM practices (Bryson et al., 2005), such as performance appraisal. Yet, as rightly

pointed out by Guest (2011), research concerning HRM practices has often failed to examine the

role of worker values/motives.

A review of the IR literature suggests several explanations why HRM practices, including

performance appraisals, would occur differently in unionised firms (Freeman and Medoff, 1984;

Verma, 2005). First, unions prefer seniority, relative to a performance appraisal systems, as the

Paula Krats and Travor C. Brown

HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 23 NO 4, 2013 397

© 2012 John Wiley & Sons Ltd.