The Perceived Fairness of Performance Evaluation: The Role of Uncertainty

Management Accounting Research, Forthcoming

Posted: 13 Oct 2011

See all articles by Frank G. H. Hartmann

Frank G. H. Hartmann

Radboud University Nijmegen - Institute for Management Research

Sergeja Slapničar

University of Queensland

Date Written: October 12, 2011

Abstract

This paper investigates the relationship between performance evaluation procedures and managerial perceptions of procedural justice. We examine two metric and two process characteristics. Metric characteristics are the diversity of metrics used by superiors and their reliance on outcome versus effort metrics. Regarding process characteristics, we analyze the amount of subordinate’s voice in the performance evaluation process, and the extent of formalization of the process. Using uncertainty management theory, we argue that justice effects of performance evaluation procedures may not be direct but are instead conditional on the amount of task uncertainty managers face in the their job context as well as on managers’ tolerance for ambiguity. Using a sample of 178 managers from the banking industry, we find that all four performance evaluation characteristics are related to justice perceptions, yet their effect depends on the level of task uncertainty and tolerance for ambiguity. These findings explain some inconsistencies in extant studies on fairness of performance evaluation procedures.

Keywords: performance measurement system, procedural justice, formality, voice, diversity, outcome measures, task uncertainty, tolerance for ambiguity

JEL Classification: M4

Suggested Citation

Hartmann, Frank G. H. and Slapničar, Sergeja, The Perceived Fairness of Performance Evaluation: The Role of Uncertainty (October 12, 2011). Management Accounting Research, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1942861

Frank G. H. Hartmann (Contact Author)

Radboud University Nijmegen - Institute for Management Research ( email )

Postbus 9108
Nijmegen, 6500 HK
Netherlands

Sergeja Slapničar

University of Queensland ( email )

St Lucia
Brisbane, Queensland 4072
Australia

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