The Effects of Performance Rating, Leader–Member Exchange,Perceived Utility, and Organizational Justice on PerformanceAppraisal Satisfaction: Applying a Moral Judgment Perspective
Carrie Dusterhoff • J. Barton Cunningham •
James N. MacGregor
Received: 23 April 2012 / Accepted: 20 January 2013
� Springer Science+Business Media Dordrecht 2013
Abstract The performance appraisal process is increas-
ingly seen as a key link between employee behaviour and
an organization’s strategic objectives. Unfortunately, per-
formance reviews often fail to change how people work,
and dissatisfaction with the appraisal process has been
associated with general job dissatisfaction, lower organi-
zational commitment, and increased intentions to quit.
Recent research has identified a number of factors related
to reactions to performance appraisals in general and
appraisal satisfaction in particular. Beyond the appraisal
outcome itself, researchers have found that appraisal
reactions are affected by perceptions of fairness and the
relationship between the supervisor and the employee. To
explain the relationships among these factors, the present
article proposes a moral cognition perspective. We suggest
that employees judge a performance appraisal from the
perspective of its moral justifiability, and that appraisal
reactions will be determined, at least in part, by the per-
ceived moral justifiability of the process. The proposal was
supported by results from a survey of government
employees using measures of performance ratings, leader–
member exchange, perceived utility, and organizational
justice.
Keywords Performance appraisal satisfaction � Moral
judgment � Leader–member relations � Organizational
justice
Introduction
Performance appraisals enable employers and employees to
define, communicate, and review expectations, goals, and
progress in achieving strategic objectives (Bacal 2004). The
purpose is to improve the way employees contribute to an
organization’s goals and job performance. Appraisals are
also intended to sustain, improve, and help an employee
develop and to overcome barriers to performance. If done
well, performance reviews fulfill an important organiza-
tional need to provide feedback, guide, and encourage people
to develop their skills and focus their performance toward
organizational priorities and objectives (Lawler 1994).
Unfortunately, many respected researchers and manag-
ers have questioned whether performance appraisals or
reviews are worth the effort because of difficulties expe-
rienced in conducting them. Resulting conflicts created
between supervisors and employees are sometimes long
lasting (Lawler 1994). Employees, the recipients of per-
formance feedback, are often very dissatisfied with, and
reject, the performance review process and the feedback
they receive (Elicker et al. 2006). The reviews often fail to
change how people work, nor do they improve perfor-
mance, motivate, or guide personal development (Keeping
and Levy 2000). In a survey of almost 50,000 organiza-
tional respondents, an international consulting firm found
that only 13 % of employees and managers, and 6 % of
CEOs, felt that their performance management systems
were useful (Posthuma and Campion 2008).
There is a growing consensus among researchers and
practitioners that the success with the performance appraisal
process is extremely important in encouraging employee
development and motivation (Kuvaas 2006; Fletcher 2001).
The performance appraisal process is increasingly seen as a
key part of the strategic approach to management, in
C. Dusterhoff � J. B. Cunningham (&) � J. N. MacGregor
School of Public Administration, University of
Victoria, Victoria V8P5E7, British Columbia
e-mail: [email protected]
123
J Bus Ethics
DOI 10.1007/s10551-013-1634-1
providing a tool to facilitate the linkage between an
employee’s competencies and behaviors and an organiza-
tion’s strategic objectives.
If managers expect to use the performance appraisal
process to encourage employee development and perfor-
mance, employees have to be view it positively and gen-
erally be satisfied with it. If employees are dissatisfied and
feel the process to be unfair, they are unlikely to accept and
use the results of the appraisal (Keeping and Levy 2000;
Giles and Mossholder 1990). Employees who are more
satisfied with the process are more likely to agree with their
evaluation and see it as useful in improving their perfor-
mance and development. Positive employee reactions and
agreement with the performance appraisals are linked to an
improved understanding between manager and employee,
motivation to improve performance and actual improve-
ment (Burke et al. 1978; Maier 1976). A person’s dissat-
isfaction and disagreement with the performance appraisal
process is also related to increased job dissatisfaction,
lower organizational commitment, and greater intentions to
quit (Brown et al. 2010).
Over the last few years, researchers have pointed to a
number of factors that are related to employee reactions to
performance appraisals. For example, providing more
positive feedback in the performance appraisal is seen as
one way to improve the performance review process. When
feedback is positive and people receive higher ratings than
expected, they are more likely to react positively to a
review (Blakely 1993). Beyond the appraisal outcome
itself, researchers have found that appraisal reactions are
affected by perceptions of fairness (Cawley et al. 1998).
Others have identified the importance of the relationship
between the supervisor and the employee, suggesting that a
more positive leader–member relationship is more likely to
result in higher employee satisfaction and agreement with
the process (Elicker et al. 2006).
The present article takes a moral cognition perspective
on appraisal reactions. We propose that employees may
judge a performance appraisal from the perspective of its
moral justifiability. Appraisal reactions will be determined,
at least in part, by the perceived moral justifiability of the
process.
Appraisal Reactions
Researchers have typically measured appraisal reactions in
terms of appraisal satisfaction, motivation to improve,
perceived accuracy, and perceived utility (Elicker et al.
2006). In their meta-analysis of the effects of participation
on appraisal reactions, Cawley et al. (1998) reported that
appraisal satisfaction was the most frequently measured
reaction, perhaps because it affects important outcome vari-
ables, such as motivation, commitment, and productivity.
Two forms of appraisal satisfaction have been distin-
guished; satisfaction with the appraisal session, and satis-
faction with the wider appraisal system. A second widely
used appraisal reaction reported by Crawley et al. (1998) is
perceived utility, originally measured by Greller (1978)
using a four-item scale that assessed the extent to which the
performance appraisal-clarified supervisor expectations
and helped to improve job performance.
Organizational Justice Approach to Appraisal
Reactions
An important and influential approach to understanding
performance appraisal reactions has been provided by the
organizational justice perspective (Elicker et al. 2006;
Thurston and McNall 2010). Originally couched in terms
of fairness and equity (Adams 1963; Greenberg 1986), a
number of distinct types of organizational justice have now
been proposed. The first of these, distributive justice, is
concerned with the fairness of rewards relative to the work
expended, and has been consistently found to be an
important factor in appraisal reactions. Subsequently,
procedural justice was recognized as a second form of
organizational justice. In this case, determinants of fair-
ness, beyond the outcomes themselves, are the procedures
used in conducting evaluations (Greenberg 1986). Proce-
dural justice is enhanced through adherence to ‘‘due pro-
cess’’ criteria, including lack of bias, consistency and
accuracy (Leventhal 1980). In addition, some researchers
have considered ‘‘voice’’—the degree of input an employee
has into the evaluation process to be an aspect of proce-
dural justice (Colquitt 2001;Scandura 1999), while others
have treated voice as a separate factor (Cawley et al. 1998;
Elicker et al. 2006). A third type of organizational justice
has been identified in the form of interactional justice (Bies
and Moag 1986) which, in the context of performance
appraisal, will be enhanced when an employee is treated
with consideration and respect during the appraisal process.
In a further elaboration, interactional justice has been
subdivided into two types; informational justice, focusing
on issues such as the adequacy of explanations, and
interpersonal justice, stressing issues of politeness, and
respect (Colquitt 2001; Greenberg 1993).
The recognition of different forms of organizational
justice has resulted in considerable debate and research on
the dimensionality of the construct (Colquitt 2001; Thur-
ston and McNall 2010). Some have argued that conceptual
confusion exists about the differences between interac-
tional and interpersonal justice and how these constructs
should be defined (Roch and Shanock 2006). Greenberg
(1993), for example, proposed that both interactional and
informational justice may be viewed as interpersonal
aspects of distributive and procedural justice, respectively.
C. Dusterhoff et al.
123
Others have argued that interactional justice is better
viewed as a component of procedural justice (Moorman,
1991). Even the distinction between the original two forms
of organizational justice may be questioned. Cropanzano
and Ambrose (2001), for example, have argued that dis-
tributive and procedural justice may not be as conceptually
distinct as generally believed, since what is an outcome and
what is a process may often be a matter of perspective.
Thus, the conceptual debate seems to allow for the possi-
bility of from one to four dimensions of organizational
justice. Empirical research seems to reinforce this conclu-
sion, with some results being unable to empirically dis-
tinguish between distributive and procedural justice, while
other results support the full four-factor model (Colquitt
2001). Recently, Thurston and McNall (2010) reported
evidence distinguishing the four justice factors, but cau-
tioned that the high correlations among them and the minor
gains in incremental fit challenge the practical importance
of distinguishing between them.
As of date, research on the dimensionality of organiza-
tional justice and how it relates to appraisal outcomes may
be characterized as dealing with the ‘‘horizontal’’ issues of
how to separate the dimensions of organizational justice
and arrange them with other variables, such as leader–
member exchange quality (LMX), in a causal sequence that
has appraisal reactions as the outcome. We aim in this
paper to introduce a complementary ‘‘vertical’’ dimension
to the relationships among organizational justice compo-
nents by suggesting that some may be more fundamental
than others, and that this may provide an order or prece-
dence among them. To do so, we apply a moral judgment
framework to explain satisfaction with performance
appraisal, as described below.
Conceptual Framework and Hypotheses
We propose that satisfaction with performance appraisal
may depend on the degree to which those being appraised
perceive the process to be morally justifiable. In addition,
we suggest that many of the variables previously reported
as being associated with appraisal reactions may be orga-
nized within a moral judgment framework.
In organizations, perceptions of what is morally right
are considered to be a function both of the individual’s
moral perspective and the moral culture of the organiza-
tion. Taking a contingency view, Ferrell and Gresham
(1985) proposed that ethical decision making results from
the interplay of individual, organizational, social, and
cultural factors. Similarly, Trevino (1986) proposed an
interactive person-situation model, in which the organi-
zational factors of job context, work characteristics, and
organizational culture act as situational moderators of the
individual’s moral cognitions. Following Kohlberg’s
model, Trevino proposed that individual moral cognitions
are determined by the individual’s stage of moral devel-
opment. It has been proposed that, like individuals, orga-
nizations may be characterized in terms of their level of
moral development, and Kohlberg’s approach has been
adapted to this context also (Logsdon and Yuthas 1997;
Reidenbach and Pobin 1991; Sridha and Camburn 1993).
Because Kohlberg’s ideas have influenced organizational
and management thinking on ethical decision making, we
begin with a brief outline of his theoretical position,
drawing primarily from his own summary (Kohlberg and
Hersh 1977).
Following Piaget, Kohlberg was interested in the cog-
nitive development of moral reasoning in the individual,
from infancy into adulthood. He concluded that moral
reasoning progressed through three levels, each of which in
turn consisted of two stages. Level I was referred to as the
‘‘preconventional’’ level, in which morality is determined
in terms of the physical consequences of actions. At Stage
1, right actions are those which avoid punishment. At Stage
2, they are those which satisfy one’s own needs. At Level
II, referred to as the ‘‘conventional’’ level, right actions
consist of conforming to the expectations of the immediate
social group and of loyalty towards it. Stage 3 morality is
typified by an orientation toward social approval of sig-
nificant others while at Stage 4, the ‘‘law and order ori-
entation’’ becomes more dominant, and right actions rest
on duty, responsibility and respect for rules. At Level III,
referred to as the ‘‘postconventional’’ or principled level,
moral values are defined in terms of principles that have a
more general application. At Stage 5, there is a legalistic or
social-contract orientation which recognizes the relativism
of values and the need for procedural rules for reaching
democratic consensus. At Stage 6, in contrast, moral
judgment rests on self-chosen, universal, abstract, ethical
principles.
Kohlberg believed that the sequence of moral develop-
ment is fixed, unidirectional, and involves the hierarchical
integration of each preceding stage into the next. The latter
characteristic means that cognition at a higher stage com-
prehends each lower stage of thinking, although there is a
preference to operate at the highest available stage,
according to Kohlberg. One important modification to
Kohlberg’s theory was proposed by Rest (1986), that
people may simultaneously demonstrate more than one
stage of moral development. While there have been many
criticisms of Kohlberg’s approach (Krebs and Denton
2005; Snarey 1985; Sachdeva et al. 2011), it continues to
be widely influential, informing research into moral
behaviour in many areas, including business and manage-
ment (Greenberg 2002; Monga 2007) and related applied
disciplines (Myyry et al. 2009).
A Moral Judgment Perspective
123
Application to Performance Appraisal
We propose here that one way individuals in organizations
may view the performance appraisal process is through a
moral judgment lens, and that their reactions to perfor-
mance appraisal may be influenced by the degree to which
they judge the process to meet ethical standards. We adopt
a position similar to Trevino’s (1986), that moral judg-
ments in organizations will be a function both of the
individual’s stage of moral development and situational
factors, including the moral culture of the organization. We
also follow Reidenbach and Pobin (1991) in assuming that
different components of an organization may occupy dif-
ferent stages of moral development. Together, these con-
siderations suggest that, unless the organizational culture
and situational factors are powerful enough to constrain
individuals to a particular stage, they will exhibit a variety
of stages of moral reasoning, up to the highest level
available to them.
Next, we consider how a number of the variables that
have been associated with performance appraisal satisfac-
tion may map on to different stages of moral development.
Specifically, we consider: (a) the outcome of the appraisal
in terms of a summative evaluation, (b) the immediate
social context as exemplified by LMX, (c) the utility of the
appraisal, and (d) the fairness of the process, as reflected by
Organizational Justice.
Appraisal Evaluation
To the extent that an appraisal’s overall evaluation of
performance may be interpreted in terms of rewards and
punishments, this variable has the potential to engage
moral judgments at the most basic level, comprising Stages
1 and 2. That is, a person reacting to the outcome of their
appraisal from a perspective of rewards and punishments
may tend to interpret a favourable outcome as more mor-
ally justified than an unfavourable one. If the overall
hypothesis is correct, that satisfaction with performance
appraisal depends on its perceived moral rightness, we
therefore hypothesize that:
Hypothesis 1 There is a direct relationship between the
favorability of a performance rating and appraisal
satisfaction.
LMX
Within Level II, maintaining immediate social expectations
is regarded as valuable in its own right. At Stage 3, the
basis for moral judgment is the immediate social context,
and good actions are those approved by significant others.
Loyalty and support within the immediate social context
are valued (Kohlberg and Hersh 1977). In the context of
performance appraisal, the relationship with the immediate
supervisor is likely to be highly significant. If the appraisal
is conducted in a way than maintains or promotes a loyal
and mutually supportive relationship between the individ-
ual and supervisor, then it will be more likely to be judged
as morally acceptable. Consequently, we hypothesize that:
Hypothesis 2 There is a direct relationship between
LMX and appraisal satisfaction, independently of the
effects of the performance rating itself.
Utility
At Stage 4, maintenance of the social order takes on a more
formal aspect, focussed on respect for rules, regulations
and authority. We consider that these concerns are reflected
in the utility of a performance appraisal, in terms of how
well it assists in the clarification of formal expectations,
duties and responsibilities. At this stage, a performance
appraisal that accomplishes this type of clarification will be
regarded as more morally justified than one that does not.
Hypothesis 3 There is a direct relationship between
perceived utility and appraisal satisfaction, independently
of the effects of both LMX and the performance rating
itself.
Justice
At Stage 5, moral judgment takes on a legalistic and social-
contract orientation, emphasising due process and socially
agreed-upon individual rights. Within the context of per-
formance appraisal, the construct that most clearly reflects
this type of concern is Organizational Justice. Other things
being equal, a person operating at this stage will judge an
appraisal process that respects justice to be more morally
acceptable than one that does not.
Hypothesis 4 There is a direct relationship between
perceived justice and appraisal satisfaction, independently
of the effects of perceived utility, LMX, and the perfor-
mance rating itself.
Organizational Context
This study was undertaken to partially provide input into a
new performance management system introduced a Cana-
dian provincial government. The system is connected to an
electronic review form linked to a corporate database. Each
employee received an overall rating on performance and
their implementation of organizational values. The form
also allowed supervisors to offer suggestions for training,
development, and career advancement.
C. Dusterhoff et al.
123
Method
Survey Sample
Seventy-one respondents, out of a total sample of 166
employees in an organizational unit, responded to our inter-
net survey, representing a 43 % response rate. The majority
of the participants were female (70 %). The average age of
the participants was 42 years, and the average tenure was
13 years.
Measures
The survey included measures of performance rating,
LMX, utility, justice, and performance appraisal satisfac-
tion. Except where otherwise noted, ratings used a five-
point Likert-type scale ranging from 1 = strongly disagree
to 5 = strongly agree.
Performance Rating
Respondents were asked to report the rating they received in
the most recent performance appraisal. Ratings used a five-
point scale of: 1 = ineffective, 2 = developing, 3 = solid
performance, 4 = high achievement, 5 = exceptional.
Leader–Member Exchange
LMX was measured using a seven-item scale (Graen and
Uhl-Bien 1995). Sample items included: ‘‘I know where I
stand with my supervisor’’. (Alpha = 0.91).
Utility
Utility was measured using three items, similar to those
used by Greller (1978). These were: ‘‘As a result of the
discussion, I feel that I have a better understanding of what
my supervisor expects of me on the job’’; ‘‘I have a good
idea of what my supervisor expects in terms of job per-
formance improvements’’; ‘‘As a result of the final per-
formance review meeting, I feel the mutual understanding
between my supervisor and myself has improved.’’
(Alpha = 0.81).
Justice
We used seven items reflecting different facets of Orga-
nizational Justice, including ‘‘I feel my final review was
fair’’ (distributive justice), ‘‘I believe my supervisor has the
skills required to assess my performance fairly’’ (proce-
dural justice), and ‘‘My supervisor was helpful and con-
structive during the review process’’ (interactional justice).
(Alpha = 0.91).
Performance Appraisal Satisfaction
‘‘I felt satisfied with the performance review session.’’
‘‘Overall, I felt the performance review process (including
the planning and focusing phases) was valuable.’’ ‘‘I have
positive expectations of future performance review meet-
ings.’’ ‘‘I agreed with my performance review result.’’
(Alpha = 0.78).
We also collected information on age, gender, length of
service, and job position.
Results
The results from survey respondent (N = 71) are summa-
rized in Table 1, which presents the means, standard
deviations, and correlations for the various measures.
(Entries on the main diagonal show alpha values for multi-
item scales.) For all variables, mean ratings were above the
scale midpoints, indicating that respondents were in gen-
eral more positive than not. As can be seen from Table 1,
all of the correlations between variables were positive and
significant (p \ 0.05), as would be expected from previous
research. The correlations between the four-independent
variables and appraisal satisfaction variables ranged from
0.52, for performance rating, to 0.78, for organizational
justice. This set of significant positive correlations is gen-
erally consistent with our hypotheses. A more detailed test
is described below.
Hierarchical Regression Analysis
We conducted a hierarchical regression analysis with
appraisal satisfaction as dependent variable and age, gen-
der, length of service, job position, performance rating,
LMX, utility, and justice as independent variables. The
four demographic variables were entered in the first block,
followed by each of the remaining independent variables
separately in the order of priority specified by the moral
judgment framework: that is, performance rating, LMX,
utility, and justice. The main results are shown in Table 2.
Overall, the independent variables accounted for 71 %
of the variance in performance appraisal satisfaction. On
the initial step of the analysis, the four demographic vari-
ables were entered together, and accounted for 7 % of the
variance in appraisal satisfaction. The combined effect of
the demographic variables was not significantly greater
than zero. As a test of Hypothesis 1, performance rating
was entered at the next step, resulting in an increase in the
variance accounted for to 34 %. The increase was signifi-
cant (p \ 0.001), and supported the hypothesis that
appraisal satisfaction is a positive function of the perfor-
mance rating awarded. As a test of Hypothesis 2, LMX was
A Moral Judgment Perspective
123
entered next, and increased R2 by an additional 15, to
49 %. Again, the change in R2 was significant (p \ 0.001),
supporting the hypothesis that appraisal satisfaction is a
positive function of LMX, when the effects of the perfor-
mance rating itself are controlled for. Testing Hypothesis 3,
perceived utility of the appraisal was added on the next
step, and resulted in a further increase in R2 to 65 %.
Again, the increase was significant (p \ 0.001), supporting
the hypothesis that appraisal satisfaction is a positive
function of the perceived utility of the appraisal, beyond
the effects of the rating itself and the relationship with the
supervisor. As a test of Hypothesis 4, perceived justice was
entered on the final step, and increased R2 by 6 %, to 71 %.
The significant increase (p \ 0.001) supported the
hypothesis that appraisal satisfaction is a direct function of
organizational justice, independently of the combined
effects of the rating itself, the relationship with the super-
visor, and the perceived utility of the appraisal.
Discussion
In some respects, the results of this study are unsurprising.
The individual relationships observed here between per-
formance appraisal satisfaction and the other factors have
all been previously reported, as have interrelationships
among various combinations of the factors. For example,
the relationship between LMX and justice perceptions has
now been well-established (Erdogan and Liden 2006).
LMX has been reported to influence both appraisal satis-
faction and perceived utility, mediated by voice, and justice
perceptions (Elicker et al. 2006). Sparr and Sonnentag
(2008) reported that the relationship between perceived
justice of performance appraisals and job satisfaction was
fully mediated by LMX. Similarly, Masterson et al. (2000)
reported that LMX mediated the relationship between
interactional justice and job satisfaction, while Piccolo
et al. (2008) found that LMX moderated the effects of
perceived justice on withdrawal. Erdogan (2002) proposed
a model in which pre-appraisal LMX and favorability of
performance ratings positively affect justice perceptions
which in turn positively affect post-appraisal LMX and
various performance-related outcomes.
What is less expected, perhaps, is that the individual
relationships conformed to a pattern consistent with a
hierarchical ordering of justice-relevant variables. Based
on Kohlberg’s (1969) theory of moral reasoning, and
informed by applications of the theory to organizations
(Reidenbach and Pobin 1991; Trevino 1986), we suggested
that a number of variables previously observed to correlate
with appraisal satisfaction might all be aspects of the single
construct of ‘‘moral justifiability’’. We proposed that, other
things being equal, a performance appraisal that is per-
ceived to be morally justified will be perceived as more
satisfactory than one that is not. From Kohlberg’s per-
spective on moral cognitions, the performance rating itself,
Table 1 Means, standard deviations and correlations
Means SD Appraisal sat. Perf. rating LMX Utility Justice
Appraisal satisfaction 3.11 0.76 0.78
Performance rating 3.21 0.74 0.52 na
LMX 3.58 0.80 0.62 0.50 0.91
Utility 3.31 0.80 0.69 0.27 0.72 0.81
Justice 3.56 0.74 0.78 0.49 0.78 0.78 0.91
* All correlations significant at p \ 0.01 except for performance rating with utility, p \ 0.05
Table 2 Summary of hierarchical regression analysis for variables predicting performance appraisal satisfaction
Variable Model 1 Model 2 Model 3 Model 4 Model 5
B SE B b B SE B b B SE B b B SE B b B SE B b
Age, gender,
time, position
Not sig.
Performance rating 0.58*** 0.11 0.56 0.30* 0.12 0.29 0.39*** 0.10 0.38 0.28* 0.10 0.27
LMX 0.44*** 0.10 0.47 -0.02 0.12 -0.02 -0.15 0.12 -0.16
Utility 0.58*** 0.11 0.61 0.36** 0.12 0.37
Justice 0.48*** 0.14 0.47
R2 0.07 0.34 0.49 0.65 0.71
F for R2 change 1.26 ns 25.90*** 19.52*** 29.56*** 12.36***
* p \ 0.05, ** p \ 0.01, *** p \ 0.001
C. Dusterhoff et al.
123
the relationship with a supervisor, the perceived utility of
the appraisal, as well as perceptions of the justice of the
outcome and procedures of the appraisal process, may all
be viewed as relevant factors in moral judgments. Fur-
thermore, they are factors that are likely to engage moral
reasoning at different levels. Based on these consider-
ations, we derived four hypotheses about the relationships
of these factors with appraisal satisfaction, all of which
were supported by the results.
The inter-relationships among LMX, organizational
justice, performance ratings, and other outcomes are fre-
quently explained in terms of social exchange theory
(Masterson et al. 2000; Wayne et al. 2002). Both the per-
ceived fairness of rewards and of the leader’s behavior in
allocating them are related to enhanced LMX (McFarlin
and Sweeney 1992; Murphy et al. 2003). The social
exchange explanation of these and similar relationships is
that employees reciprocate the perceived fairness or lack of
fairness of leader treatment by developing higher or lower
quality exchanges (Erdogan and Liden 2006).
While the present results are consistent with social
exchange explanations, the interpretation we propose offers
the additional suggestion that social exchange processes may
be viewed as a component in a more general system of moral
cognitions. The basic idea, proposed by Kohlberg, is that
moral cognitions appear in a specific developmental order,
reflecting growth from an egocentric perspective through
more socio-centric perspectives that may both encompass
and transcend social exchange as we conventionally under-
stand it. We have suggested here that individuals apply moral
cognition to the processes and outcomes of performance
appraisal, and judge them accordingly. To the extent that the
moral culture of the organization does not completely con-
strain individuals, the resulting moral judgments may vary
both between individuals and within individuals (Rest 1986)
in terms of the level of moral reasoning that they reflect.
Consequently, the perceived moral rightness of an appraisal,
and the resulting satisfaction with it, may be influenced by
factors ranging from ego reward/punishment, reciprocity
and social support, to more impersonal and abstract con-
ceptions of fairness and justice. The present results are
consistent with this suggestion, indicating that additional
variance in appraisal satisfaction can be accounted for by
adding variables in order from basic, egocentric moral
judgments, through socio-centric perspectives, to more
abstract, general considerations.
Limitations and Future Directions
Several limitations should be taken into account in con-
sidering the contributions of this study. The method
consisted of a cross-sectional survey of employees sub-
sequent to their annual performance appraisal. Although
our analysis-specified appraisal satisfaction as dependent
variable and the other factors as independent variables,
we cannot rule out other possible causal patterns. For
example, perceptions of organizational justice and LMX
may have been consequences rather than antecedents of
appraisal satisfaction. At the same time, our present
interest was not so much in the causal ordering of vari-
ables as in their hierarchical ordering. The supposition
was that some variables play a more basic role than others
in the perception or judgement of what is morally justi-
fied. Once the effects of those more basic variables are
taken into account, the question was whether the proposed
higher-order variables have an additional effect, and
hierarchical regression analysis provided a means of
addressing this. Therefore, our interest was not so much
in whether the ‘‘independent’’ variables caused appraisal
satisfaction, as in whether the pattern of relationships
among them was consistent with their proposed hierar-
chical ordering.
A second limitation is that the measures we used had
similar scale formats. In measuring four of the constructs
we asked respondents to rate their relationship with their
supervisor, perceived usefulness of the process, feelings
of justice, and satisfaction. In a slightly different mea-
sure, we asked respondents to summarize the actual rat-
ing they received in the last performance evaluation. In
research on performance appraisal reactions, methods bias
specifically arising from affectivity has been a topic of
interest (Keeping and Levy 2000; Sparr and Sonnentag
2008). Keeping and Levy reported finding a small
methods effect associated with both positive and negative
affectivity, but concluded that the effects did not exert
any meaningful bias on appraisal reactions. However,
while Keeping and Levy’s results offer some comfort, we
acknowledge the possibility of common methods effects
in these results.
A third limitation is that our measure of organizational
justice may have combined different forms of the construct
by including items reflecting distributive, procedural, and
interactional justice. In our defence, there are precedents
for using a combined measure of this kind (Elicker et al.
2006). In addition, the scale reliability was 0.91 which may
support the Elicker et al. contention, following Lind (2001)
that people often make global justice judgments without
necessarily attending to its separate dimensions. Never-
theless, it may be useful in future research of the present
type to employ separate justice scales. This would allow
testing of whether different forms of organizational justice
may be organized at different levels in a hierarchy of moral
cognitions.
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123
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