Business Administration and Business Economics
An Empirical Study of the Relationship between Performance Appraisal Politics and Job Satisfaction
Associate Professor Azman Ismail, PhD National Defence University of Malaysia, Kuala Lumpur, Malaysia [email protected] Noor Azmi Mohd Zainol, B.A (Hons) Anthropology & Sociology; M.Sc (IT) National Defence University of Malaysia, Kuala Lumpur, Malaysia [email protected] Awangku Mohamad Najib, Bsc in HRD (Hons) National Defence University of Malaysia, Kuala Lumpur, Malaysia [email protected]
Abstract:Performance appraisal politics are viewed as a vital human resource management issue where it consists of two salient features: motivational motive and punishment motive. The ability of appraisers (e.g., immediate bosses/managers) to properly implement such appraisal politics in allocating performance ratings may have significant impact on job satisfaction. Although the nature of this relationship is important, little is known about the role of performance appraisal politics as a predicting variable in the performance appraisal models. Therefore, this study was conducted to examine the effect of performance appraisal politics on job satisfaction using 150 usable questionnaires gathered from employees who have worked in a national postal company in Sarawak, Malaysia. In initial data analysis, the results of exploratory factor analysis confirmed that the measurement scales used in this study satisfactorily met the standards of validity and reliability analyses. Further, in hypothesis testing, the outcomes of stepwise regression analysis showed that performance appraisal politics (i.e., motivational motive and punishment motive) significantly correlated with job satisfaction. Statistically, this result confirms that performance appraisal politics act as important predictors of job satisfaction in the studied organization. In addition, discussion, implications and conclusion are elaborated.
Keywords: motivational motive; punishment motive; job satisfaction; Malaysian National Postal Company
JEL Classification:C15; C19; D21
1. Introduction
Performance appraisal is as a key function of human resource development and management (Aminuddin, 2008; Noe, Hollenbeck, Gerhart & Wright; 2009). In organizations, it is often viewed as a cyclical process where employers design formal appraising methods to yearly evaluate and develop employee performance (Aminuddin, 2008; Pettijohn, Pettijohn, Taylor & Keillor, 2001a). Traditionally, many performance appraisals are designed based on cognitive models, which emphasize on psychometric issues in evaluation, give performance scores, and use objective criteria to measure performance. This appraisal method is useful to resolve routine human resource management functions, such as retain or terminate staff service, promote and determine staff salary (Cook & Crossman, 2004;
Fletcher, 2001, 2002; Snell & Bohlander, 2007).
A review of organizational management literatures highlights the effect organizational climate has on performance appraisal development (Cook &
Crossman, 2004; Kacmar & Baron, 1999; Tahir Suliman, 2007; Thurston &
McNall, 2010). In this perspective, many employers have now shifted their focus from a cognitive based performance appraisal to organization climate based performance appraisal in order to support their strategies and goals (Cook &
Crossman, 2004; Desimone, Werner & Harris, 2002; Noe, et al., 2009). Under this new approach, political behavior is viewed as a crucial organizational climate factor because it has played a more dynamic role than cognitive models in increasing the effectiveness of performance appraisal processes and outcomes.
Armstrong & Baron (1998), Lefkowitz (2000), Boswell & Boudreau (2002) and de Waal (2003) posit the existence of political behavior in the conduct of performance appraisal to discover problems employees have to face with in job performance, provide career counseling, and conduct training programs to better enable employees support organizational strategy and goals. The ability of the management to properly use political behavior in its performance appraisal system would ensure employees motivation to increase organizational competitiveness (Poon, 2004; Ismail, Rafiuddin, Mohamad, Pei Zhen, Yew, & Kuan, 2009; Tahir Suliman, 2007).
According to an organizational behavior’s perspective, political behavior is often viewed as managerial discretion or subjective assessment that strongly allows appraisers to manipulate performance ratings (i.e., decrease or increase performance scores) in order to fulfill or protect their personal goals, particular individuals’ interests (e.g., motivate employees to achieve task-performance goals, and provide better promotion to high achievers), and/or certain groups’ interests (e.g., maintain good rapport, avoid open confrontation and/or accommodate contextual demands) (Fried & Tiegs, 1995; Tahir Suliman, 2007). Performance appraisal politics has two salient motives: motivational and punishment (Poon, 2004). While motivational motive is the appraiser’s personal motive (self-interest)
to give out high performance ratings in order to stimulate, direct, and endure appraisees’ behaviors to achieve organizational and/or departmental goals (Desimone et al., 2002; Fried & Tiegs, 1995), punishment motive is the appraiser’s personal motive (self-interest) to assign low performance ratings in order to punish appraisees who have committed misconducts in order to correct their mistakes as well as increase their work disciplines (Rynes, Brown, & Colbert, 2002; Sabeen &
Mehbob, 2008; Salimaki & Jamsen, 2010; Thurston & McNall, 2010).
Extant studies in performance management highlights the ability of appraisers to properly use political motives in determining performance ratings may have significant impact on employee outcomes, especially job satisfaction (Vigoda, 2000; Poon, 2003a, 2003b). According to many scholars such as, Vroom (1964), Blum and Naylor (1968) and Locke (1976), job satisfaction is often defined as general attitude of employees toward their job, such as a pleasurable or emotional state, a positive reaction, and action tendencies toward work. In a performance appraisal framework, many scholars think that motivational motive, punishment motive, and job satisfaction are distinct constructs, but highly interrelated. For example, the ability of appraisers to properly use motivational motive (i.e., intend to motivate employee performance) and punishment motive (i.e., intend to correct malpractices and improve work disciplines) in performance appraisal systems may increase job satisfaction in respective organizations (Poon, 2003a, 2003b; Vigoda, 2000).
Although the nature of this relationship is interesting, not much is known about the role of performance appraisal politics as a predicting variable in performance appraisal research literature (Poon, 2003a, 2003b; Vigoda, 2000). Many scholars argue that the role of performance appraisal politics as an important predicting variable has been given less emphasis in previous studies because the focus was more on the features of performance appraisal politics and neglect to discuss the effect size of performance appraisal politics on job satisfaction. Consequently, the knowledge drawn from the studies has provided insufficient guidelines that may not to help practitioners in formulating effective strategies to handle internal and external problems about performance appraisal systems in dynamic organizations (Poon, 2003a, 2003b, 2004; Tahir Suliman, 2007; Thurston & McNall, 2010).
Hence, it motivates the researchers to further examine the issue.
2. Objective of the Study
This study has two major objectives: firstly, is to measure the relationship between motivational motive and job satisfaction; secondly, is to measure the relationship between punishment motive and job satisfaction.
3. Literature Review
Relationship between Performance Appraisal Politics and Job Satisfaction There were few studies using a direct effects model to examine performance appraisal politics based on different samples, namely, 303 public sector employees in Israel (Vigoda, 2000), 127 employees from various organizations in Malaysia (Poon, 2003a), and 208 Malaysian employees from diverse occupations and organizations (Poon, 2003b). Findings from these studies show the ability of the management to properly implement motivational motive (e.g., intend to produce mutual benefits) and practice punishment motive (e.g., favoritism, biases and punishing tactics) in giving out performance ratings had increased job satisfaction (Poon, 2003a; Poon, 2003b; Vigoda, 2000).
These findings are consistent with the notion of motivation theory, namely Skinner’s (1954) reinforcement theory, Adams’ (1965) equity theory, Taylor’s (1994) self-interest model of justice and Taylor’s (1994) relational model of justice. According to a reinforcement theory, an individual behavior is strongly motivated by particular reinforcers (Skinner, 1954). Besides that, equity theory posits that an individual tends to compare his/her output (e.g., outcome) and input (e.g., contribution) and/or compares his/her output (e.g., outcome) and input (e.g., contribution) against that of coworkers’. If an individual perceives that he/she receives equitable outcomes (e.g., the amount of performance rating) based on their contributions (e.g., the ability to perform job and/or merit), it would invoke the feelings of distributive justice (Adams, 1965). In addition, self-interest model of justice is also known as resource model of justice, suggests that people pursue self- interest to maximize their own resources or outcomes based on the rules of justice to increase the feelings of distributive justice (Tyler, 1994). Further, relational model of justice proposes that perceptions of distributive justice are formed by concerns for maintaining warm relationships within a group. These concerns refer to balancing between the group interests (e.g., commitment) and individuals’ self- interests (e.g., benefits level). If the mutual interests are well maintained it would contribute to increased individuals’ feelings of distributive justice (Tyler, 1994).
Application of these theories in performance appraisal systems shows that the ability of appraisers to fairly treat appraises using proper motivational motive (e.g., have practiced communication openness, moral and mutual benefits) and punishment motive (e.g., have not practiced favoritism, biases and punishing tactics) in allocating performance ratings may strongly motivate employees to improve their job satisfaction in organizations (Poon, 2003a, 2003b; Vigoda, 2000).
Conceptual Framework and Research Hypothesis
These literatures serve as foundation to develop a conceptual framework for this study as shown in Figure 1.
Independent Variable Dependent Variable
Figure 1. Relationship between Performance Appraisal Politics and Job Satisfaction Based on the framework, it seems reasonable to assume that the ability of appraisers to properly implement motivational and punishment motives in performance appraisal systems may increase employees’ job satisfaction in NPCSRWK as the same practice does in Western organizations.. Therefore, it was hypothesized that:
H1: Motivational motive positively related to job satisfaction H2: Punishment motive positively related job satisfaction 4. Methodology
Research Design
This study used a cross-sectional research method which allowed the researchers to integrate the related literature, the in-depth interview, the pilot study and the actual survey as the main procedure for data collection. The use of this method would contribute to accurate, less bias and high quality data (Cresswell, 1998; Sekaran, 2000). The study was done in a national postal company in Sarawak, Malaysia (NPCSRWK). Its business focus is to provide 'traditional postal services' in order to capture the various customers and marketplace in this country. For example, this company is now offering three innovative mail delivery services: PosMel (day-to- day mailing services for both the general public and retail customers), PosLaju (being the sole national courier provider), and PosNiaga (expanding the accessibility of the national postal service via its extensive network of over 700 outlets in the country). In order to be better able to serve its customers the organization has constantly invest its resources in identifying, evaluating and maximizing the capability of its human capitals in order to meet the increasing demands of its customers.
At the first stage in data collection process, the researchers begin with an interview, for which flexible interview questions covering three issues: motivational motive in
Job Satisfaction Performance Appraisal Politics:
Motivational Motive Punishment Motive
performance appraisal, punishment motive in performance appraisal and job satisfaction facets. A purposive sampling technique was used to identify six experienced interviewees that include one assistant human resource manager, two supervisors and three supporting staff who have more than ten years of working experience in the organization. They have adequate knowledge on performance appraisal politics practiced in the studied organization. The in-depth interview was conducted to obtain clear understanding about the nature of performance appraisal politics and job satisfaction characteristics, as well as the relationship between such variables in the organization.
Performance appraisal system is viewed as a critical success factor that may help the organization to stay competitive in marketplace. Information gathered from the interview shows the HR managers and/or managers conduct performance appraisal based on broad policies and procedures designed by the stakeholder (i.e., board of directors). In the appraisal system, immediate superiors (e.g., supervisors, assistant managers or managers) are given the responsibility to assess the job performance of their subordinates and inform them (the subordinates) of the assessment results and later, file reports to the top management who will then use it to decide on pay raises, promotions, or disciplinary actions.
In the administration of performance appraisal systems, HR managers and/or managers often use motivational motive and punishment motive as means to assess and develop employees’ careers. Motivational motive is present when an immediate superior gives out high performance ratings to subordinates who had performed well according to the organizational policies and procedures.
Conversely, punishment motive is at hand when an immediate superior gives out low performance ratings to subordinates who have shown poor job performance according to the organizational policies and procedures (e.g., absenteeism, deviant behavior and misconducts). The interviewed staff perceived the ability of appraisers (i.e., immediate bosses) to fairly treat appraises using implementing proper motivational motive (e.g., high ratings allocated for high performers or committed employees) and punishment motive (e.g., low ratings allocated for low performer or undisciplined employees) in allocating performance ratings had been important predictors of job satisfaction. The nature of this relationship is interesting, but not much is known about the nature and effect of performance appraisal politics because of the limited empirical data published in Malaysia.
Next, the information gathered from the interview was constantly compared to the related literature review in order to obtain a clear understanding of the particular phenomena under study and put the research results in a proper context. The results of the triangulated process were used as a guideline to develop the content and format of survey questionnaires for a pilot study. Finally, a pilot study was done through a discussion on the pilot questionnaires with the six staff interviewed before. Their views were sought to verify the content and format of actual survey
questionnaires. Back translation technique was used to translate the content of questionnaires in Malay and English Language in order to increase the validity and reliability of the instrument (Wright, 1996).
Measures
The survey questionnaire was divided into two sections. In the first, there were 7 items on motivational motive and 9 on punishment motive, all were developed based on performance appraisal politics literature (Poon 2003a, 2003b; Poon, 2004;
Tahir Suliman, 2007; Thurston & McNall, 2010). Here respondents were given questions on performance rating criteria, procedures and consequences. In the last section, job satisfaction had twenty items that were modified from previous job satisfaction scales (Balzer, Kihm, Smith, Irwin, Bachiochi, Robie, Sinar & Parra, 1997; Janssen, 2001; Rutherford, Boles, Hamwi, Madupalli & Rutherford, 2009;
Warr, Cook & Wall, 1979). In this section respondents were asked to answer the questions about satisfaction on intrinsic and extrinsic job characteristics. All the items used in the questionnaires were measured using a 7-item Likert scale ranging from “strongly disagree/dissatisfied” (1) to “strongly agree/satisfied” (7).
Information on demographic variables was used as controlling variable because this study focused on employee attitudes.
Unit of Analysis and Sampling
The population for this study is 291 employees of NPCSRWK. Prior to conducting the survey, the researchers consulted the HR manager to seek clarification on the rules for distributing survey questionnaires. Upon consideration of organizational rules and for confidentiality reasons 270 survey questionnaires were distributed using a convenient sampling technique to employees to every department in the organizations through the HR office. Of the number, 150 usable questionnaires were returned, yielding 55.6 percent response rate. This figure met the acceptable requirements for inferential statistics (Leedy & Ormrod, 2005; Sekaran, 2000).
Data Analysis
Analysis on the data from the questionnaire was performed using a Statistical Package for Social Science (SPSS). The process begins with exploratory factor analysis (EFA) to assess the validity and reliability of the measurement scales (Hair et al., 1998; Nunally & Bernstein, 1994). Next, factor analysis with direct oblimin rotation was done for all items representing the research variables, followed by, Kaiser-Mayer-Olkin Test (KMO), Bartlett’s test of sphericity (BTS), eigenvalue, variance explained and Cronbach alpha (α). The value of factor analysis for all
items representing each research variable was 0.4 and more, indicating the items met the acceptable validity standard. All research variables exceeded the acceptable standard of Kaiser-Meyer-Olkin’s value of 0.6 and were significant in Bartlett’s test of sphericity, showing that the measure of sampling adequacy for each variable was acceptable. All research variables had eigenvalues larger than 1, signifying that the variables met the acceptable standard of validity (Hair et al, 1998). All research variables also exceeded the acceptable standard of reliability of 0.70, indicating the variables met the acceptable standard of reliability (Nunally &
Bernstein, 1994). Variables meeting the acceptable standard of validity and reliability analyses were used in testing the hypotheses. Next, Pearson correlation analysis and descriptive statistics were perfomed to analyze the constructs and the usefulness of the data set (Cohen & Cohen, 1983). Finally, Stepwise regression analysis was used to assess the direct relationship between variables as well as show the causal relationship and the nature of relationship between variables.
Stepwise regression can accurately quantify the magnitude and direction of many independent variables and one dependent variable (Aiken et al., 1991; Berenson and Levine, 1992; Foster et al., 1998).
5. Findings
Participant Characteristics
Table 1 shows the characteristics of participants in the studied organization.
Majority respondents were male (75.4 percent), aged between 26 to 35 years old (30.7 percent), Malaysian Certificate of Education (54 percent), working experience of less than 5 years (26% percent), and non-management employees (56.7 percent).
Table 1. Participant Characteristics (N=150)
Note:
SRP/PMR: Sijil Rendah Pelajaran Malaysia/Penilaian Menengah Rendah;
SPM/MCE: Sijil Pelajaran Malaysia/ Malaysia Certificate of Education (O-levels);
STPM/HSC: Sijil Tinggi Pelajaran Malaysia/Higher School Certificate (A-levels).
Gender (%) Male=75.4 Female=24.6
Age (%) 18-25=29.3 26-35=30.7 36-45=15.3
>46 =24.7
Education (%) Diploma =11.3 STPM =8.7 SPM =54.0 SRP/PMR =26.0
Length of Service (%)
<1 years =14.0 1-5 years =26.0 6-10 years =18.7 11-15 years =9.3 16-20 years =6.7
> 21 years =25.3
Position (%) Management =43.3 Non-management =56.7
Validity and Reliability Analyses for the Measurement Scales
Table 2 shows the validity and reliability analyses for measurement scales. The factor analysis with direct oblimin rotation was done on 36 items covering the four variables: motivational motive (7 items), punishment motive (9 items), and job satisfaction (20 items). Kaiser-Mayer-Olkin Test (KMO), a measure of sampling adequacy, was conducted for each variable and the results indicated that it was acceptable. The results of these statistical analyses showed that (1) all research variables exceed the minimum standard of Kaiser-Meyer-Olkin’s value of 0.6 and were significant in Bartlett’s test of sphericity, (2) all research variables had eigenvalues larger than 1, (3) the items for each research variable exceeded factor loadings of 0.50 (Hair et al., 1998), and (4) all research variables exceeded the acceptable standard of reliability analysis of 0.70 (Nunally & Bernstein, 1994).
These statistical results confirm the validity and reliability of measurement scales used for this study as shown in Table 2.
Table 2. Validity and Reliability Analyses for Measurement Scales
Measure No.
ofItem Factor
Loadings KMO
Bartlett’s Test of Sphericity
Eigenval ue
Variance Explaine d
Cronbach Alpha
Motivational
motive 7 0.62
to0.83 0.84 421,53,
p=.000 4.41 63.05 0.93
Punishment
motive 9 0.56
to0.87 0.93 934,17,
p=.000 5.47 60.74 0.86
Jobsatisfaction 20 0.59
to0.81 0.90 2042,22,
p=.000 9.20 45.99 0.94
Analysis of the Constructs
Table 3 shows the Pearson correlation analysis and descriptive statistics. The mean values for the variables are from 5.1 to 5.2, signifying the levels of motivational motive, punishment motive, and job satisfactions ranging from high (4) to highest level (7). The correlation coefficients for the relationship between the independent variable (i.e., motivational motive and punishment motive) and the dependent variable (i.e., job satisfaction) were less than 0.90, indicating the data were not affected by serious collinearity problem (Hair et al., 1998). The measurement scales that met the validity and reliability requirements were used to test research
Table 3. Descriptive Statistics and Pearson Correlation Analysis
Variables Min Standard
Deviation
Pearson Correlation (r)
1 2 3
1. Motivational
Motive 5.2 1.20 (1)
2. Punishment
Motive 5.1 1.32 0.76** (1)
3. Job Satisfaction 5.1 1.06 0.65** 0.69** (1)
Note: Significant at **p<0.01 Reliability estimation are shown diagonally (value 1)
Outcomes of Testing Hypothesis 1 and Hypothesis 2
Table 4 shows the results of testing research hypotheses using the stepwise regression analysis.
Table 4. Results for Stepwise Regression Analysis
Variables Dependent Variable
(Job Satisfaction)
Step 1 Step 2
Control Variables Gender
Position Age
Education Level Length of Service
0.14 0.01 0.19 0.27 0.04
0.21 0.03 0.35 0.24 0.14 Independent Variables
Motivational Motive Punishment Motive
0.28**
0.46***
R
Adjust R Square R square change F
F ∆ R Square
0.26 0.04 0.07 2.09 2.09
0.73 0.51 0.46 23.06***
70.43***
Note: Significant at **<0.01; ***p<0.001.
Table 4 shows the results of testing hypotheses in Step 2. Motivational motive and punishment motive significantly correlated with job satisfaction (ß=.28, p<0.01;
ß=.46, p<0.000, respectively), therefore H1 and H2 were supported. In terms of explanatory power, the inclusion of these variables in Step 2 explained 73 percent of the variance in dependent variable. Statistically, this result confirms that performance appraisal politics (i.e., motivational motive and punishment motive) act as important predictors of job satisfaction in the studied organization.
6. Discussion and Implications
The findings of this study confirm that performance appraisal politics act as important determinants of job satisfaction in the studied organization. In the context of this study, HR managers and/or managers have been using the standardized policies and rules set up by the stakeholder to determine equity (i.e., justice or fairness) in performance appraisal systems. In the administration of performance appraisal system, the majority of the employees perceive that the ability of appraisers to appropriately use motivational and punishment motives in allocating performance ratings have strongly invoked employees’ job satisfaction in the organization.
There are three major implications of this study: theoretical contribution, robustness of research methodology, and practical contribution. In terms of theoretical contribution, the findings of this study reveal that performance appraisal politics (i.e., motivational motive and punishment motive) act as important determinants of job satisfaction. This result is consistent with the findings by Vigoda (2000) and Poon (2003a, 2003b). With respect to the robustness of research methodology, the survey questionnaire data used in this study have exceeded the minimum standards of the validity and reliability analyses. Therefore, a more accurate and reliable findings could be expected.
In terms of practical contribution, the findings of this study could serve as guidelines by managers to improve the design of performance appraisal systems in organizations. In order to achieve the objectives, management needs to consider the suggestions: firstly, participation style should be highly encouraged in order to
appreciate employees’ voices and encourage them involve in making decisions about performance appraisal systems. The implementation such participation styles may help employees to understand the reasons and justifications used by managers in determining their performance ratings. Secondly, managers who conduct performance appraisal exercises need to possess certain skills such as good interpersonal communication, counseling and problem solving. In doing so, any misconceptions pertaining to the systems could be addressed and in return, appreciation towards the policies and procedures of performance appraisal system could be better inculcated. If these suggestions are heavily considered this may positively motivate employees to support organizational and human resource department’s strategies and goals.
7. Conclusion
This study proposed a conceptual framework based on the performance appraisal politics research literature. The measurement scales used in this study satisfactorily met the standards of validity and reliability analyses. Outcomes of testing research hypothesis confirmed that performance appraisal politics (i.e., motivational and punishment motives) did act as important determinants of job satisfaction. This result support and broaden research literature mostly published in Western organizational environments. Therefore, current research and practice within performance appraisal politics need to consider motivational and punishment motives as a key dimension of performance appraisal systems. These findings further suggest that the ability of appraisers to treat appraises through properly implementing motivational and punishment motives in allocating performance ratings will strongly increase positive attitudinal and behavioral outcomes. Thus, it may lead to sustained and increased organizational competitiveness in an era of global competition.
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