Implementing Performance Appraisal: Exploring The Employee Experience

IMPLEMENTING PERFORMANCE
APPRAISAL: EXPLORING THE

EMPLOYEE EXPERIENCE
ELAINE FARNDALE AND CLARE KELLIHER
Line managers play an important role as implementers of performance appraisal, enacting procedures designed by the HR function. However, the actual employee experience of these procedures (which may differ from how they
were intended or enacted) in terms of perceptions of justice in the process is
likely to have consequences for levels of organizational commitment. Furthermore, based on signaling theory, the broader organizational climate, measured here in terms of the level of trust employees have in the senior management, sets the context in which this experience takes shape. Presenting
multilevel analysis of 4,422 employees across 22 business units, we show that
organizational units with high trust in senior management have both higher
levels of commitment, and show a stronger link between employee perceptions of fair treatment by their line manager during performance appraisal,
and organizational commitment. This provides initial evidence that the impact
of line manager actions is important for employee-level outcomes but is also
constrained by the organizational climate. 2013 Wiley Periodicals, Inc.
Keywords: performance appraisal, line manager enactment, employee perceptions, organizational justice, trust, organizational climate, commitment, multilevel analysis
Introduction
uman resource management practices in organizations may be observed through three lenses (Nishii
& Wright, 2008): the practices as
intended by the human resources
function and as embodied in policy documents and practice guidelines; the enactment
of these practices by line managers in the
workplace; and the employee experience of
these practices (irrespective of what the HR
function or the line manager intended). This

distinction between intended, enacted, and
experienced HRM has received little empirical attention to date, yet it is experience that
guides employee behaviors and attitudes
(Whitener, 2001). Thus, if organizations focus
on the signals they send to employees, rather
than the practices themselves, they may be
closer to understanding the resultant employee outcomes (Haggerty & Wright, 2009).
Similarly, Becker and Huselid (2006) argue
that in moving forward our understanding of
Correspondence to: Elaine Farndale, School of Labor & Employment Relations, 506e Keller, Pennsylvania State
University, University Park, PA 16802, Phone: 814.867.3320, Fax: 814.863.3578, E-mail: euf3@psu.edu.
Human Resource Management, NovemberDecember 2013, Vol. 52, No. 6. Pp. 879897
2013 Wiley Periodicals, Inc.
Published online in Wiley Online Library (wileyonlinelibrary.com).
DOI:10.1002/hrm.21575
880
HUMAN RESOURCE MANAGEMENT, NOVEMBERDECEMBER 2013
the relationship between HR and organizational performance, attention needs to be

paid to implementation of HR strategies,
since it cannot be assumed that effective implementation will automatically follow strategy design (Barney, 2001). This concern with
implementation thus moves the focus from
the activities of the HRM function to those of
line managers who enact them (Guest, 2011).
At the micro level, it has been acknowledged that line managers play a crucial role
in implementing HRM practices (Purcell
& Hutchinson, 2007; Truss, Gratton, Hope
Hailey, Stiles, & Zaleska, 2002), and specifically performance appraisal (Maxwell &
Watson, 2006). The organizational justice
literature explains how employee
perceptions of their treatment
By contrasting
during the performance appraisal
groups of employees process are linked to attitudinal
or behavioral outcomes (Erdogan,
who record high and 2002). The manner in which
a line manager carries out the
low levels of trust in
appraisal process (procedural jussenior management tice) and the personal communication between the employee
at the businessand their line manager during
this process (interactional justice)
unit level, the study
influences how fair the employee
examines the extent believes the appraisal process to
be. Using social exchange theory
to which employee
(Blau, 1964), it can be argued
that the employee reciprocates
perceptions of line
perceived justice with positive
manager enactment outcomes, such as organizational
commitment (Masterson, Lewis,
Goldman, & Taylor, 2000).
of performance
Relationships between an
appraisal impact
individual and their supervisor
exist, however, within the broader
organizational
context of the organizational climate (Schneider, 1990). Signaling
commitment at the
theory (Spence, 1973) explains
individual level.
how members of an organizational group receive signals from
senior management, and interpret these to
form shared perceptions. Perceived organization support describes how employee
attitudes and behaviors are then affected
by these shared perceptions (Eisenberger,
Huntington, Hutchison, & Sowa, 1986). Thus,
it is important to understand the prevailing

organizational climate, in order to explore
the broader context within which employees interpret the actions of line management.
This necessitates a multilevel approach to
the study of employee experiences of performance appraisal. In this study, organizational
climate is investigated by exploring employee
trust in senior management. By contrasting
groups of employees who record high and
low levels of trust in senior management at
the business-unit level, the study examines
the extent to which employee perceptions
of line manager enactment of performance
appraisal impact organizational commitment
at the individual level.
The article contributes to current discussions in the HRM and organizational behavior fields by focusing on the implications
of employee experiences of line managers
implementation of performance appraisal
practices for an important outcome: organizational commitment. Much extant literature tends to treat employees as if they are
independent of the broader organizational
context (Heck, Thomas, & Tabata, 2010);
therefore, the study addresses calls for more
multilevel research in the HRM field (Boselie,
Brewster, & Paauwe, 2009; Saunders &
Frenkel, 2011; Wright & Boswell, 2002). This
approach explains the role that line managers and, importantly, the broader climate created by senior managers play in organizations
when it comes to implementing performance
appraisal. The study contributes to further
theorizing on the relationship between the
HR function and management, in particular
highlighting multilevel issues and the micro
employee perspective.
Line Managers and HRM

Since the emergence of HRM over personnel
management, there has been much debate
about the trend of assigning the implementation of HRM practices to line managers
(Boselie et al., 2009; Eisenstat, 1996;
McGovern, Gratton, Hope Hailey, Stiles, &
Truss, 1997; Ulrich, 2001). If the ability to
implement strategy effectively can be a source
of competitive advantage (Barney, 2001),
Human Resource Management DOI: 10.1002/hrm
IMPLEMENTING PERFORMANCE APPRAISAL: EXPLORING
then line managers can play an important

role in this process. Moreover, involving line
managers in the implementation of HRM is
seen as a means of adding value and delivering results for organizations, since it can result in a more comprehensive approach to
HRM and speed up decision making, as line
managers are closer to employees (Budhwar,
2000; Renwick, 2003). It can also reduce costs
and lead to smaller HR teams (Larsen &
Brewster, 2003), who can then focus on strategic and business issues (Francis & Keegan,
2006; Truss et al., 2002).
Research has identified certain HRM practices that are commonly transferred to line
managers, including performance appraisal
(Maxwell & Watson, 2006). The implementation of such practices by line managers
introduces the possibility that the enactment
may differ from what was intended (Nishii &
Wright, 2008; Wright, Gardner, Moynihan,
& Allen, 2005), since the way in which they
are actually implemented may be shaped
by line managers themselves (Bondarouk &
Looise, 2009). As such they constitute a variable between the intended and experienced
that may influence performance outcomes
(Wright et al., 2005), potentially resulting in
the practice either being implemented poorly
or not at all (Guest, 2011).
Line managers roles have grown as a
result of taking on increased HRM responsibilities (Hales, 2005; Perry & Kulik, 2008), but
in an unclear and unstructured way (Hope
Hailey, Farndale, & Truss, 2005; Purcell,
Kinnie, Hutchinson, Rayton, & Swart, 2003;
Watson & Maxwell, 2007). This may in
part explain why the implementation of
HRM activities does not always work out as
intended (Brandl, Madsen, & Madsen, 2009;
Nehles, Van Riemsdijk, Kok, & Looise, 2006)
with consequences for the effectiveness of
HRM policy (McGovern et al., 1997; Truss et
al., 2002). This has been attributed to a number of factors, including low levels of interest
on the part of line managers (Hope Hailey et
al., 2005; Watson, Maxwell, & Farquharson,
2007), lack of training and competence in
HRM activities (Renwick, 2003; Truss, 2001),
and a reluctance to handle conflicting environmental pressures, which result in line
THE
EMPLOYEE EXPERIENCE
881
managers prioritizing short-term operational

or performance-related tasks (Hales, 2005;
Hope Hailey et al., 2005). Crucially, the different ways in which line managers enact HRM
practices can influence how employees experience these practices.
HRM and Organizational

Commitment
Organizational commitment is frequently a
variable of interest in studies of HRM and individual or organizational performance
(Swailes, 2002), and has engendered a field of
study of high-commitment work practices
that includes performance appraisal (Farndale,
Hope-Hailey, & Kelliher, 2011).
Organizational commitment is
Line managers
defined as believing in and accepting the goals and values of an orroles have grown
ganization, being willing to exert
effort on behalf of the organiza- as a result of taking
tion, and desiring to maintain
on increased HRM
membership of the organization
(Mowday, Steers, & Porter, 1979). responsibilities, but
Commitment has been shown to
in an unclear and
be strongly associated with organizational success factors such as
unstructured way.
higher job satisfaction, performance, productivity, receptivity
to change, willingness to share knowledge,
and organizational citizenship behavior, and
lower turnover, absenteeism, and tardiness
(Cohen, 1992; Fedor, Caldwell, & Herold,
2006; Lease, 1998; Mathieu & Zajac, 1990;
Organ, 1990). In summary, individuals with
high levels of commitment are more willing
to devote greater efforts toward an organizations goals and objectives (Guest, 1987).
Organizations are thus keen to uncover the
mechanisms by which they can increase levels of commitment among their employees.
Social exchange theory (Blau, 1964) proposes that when one party provides a benefit
to the other, the other party feels obliged to
respond by providing something beneficial
in return, creating an exchange relationship
between the two parties. In psychological
contract terms, an informal exchange agreement between employees and the organization is built on an employees beliefs about
882
promises made by the organization, and their

related obligations or expectations (Conway
& Briner, 2005). How employees experience
organizational actions thus determines their
perception of the organizations support and
their corresponding reciprocation with commitment (Eisenberger et al., 1986; Robinson,
Kraatz, & Rousseau, 1994; Whitener, 2001).
Employees experience many HRM policies and practices in organizations. One
area of practice that highlights strongly
the employeeline manager interaction is
performance appraisal (Farndale, Van Ruiten,
Kelliher, & Hope Hailey, 2011), and there is
also evidence that line managers consider it to be an important
The primary aim
activity (Wright, McMahan, Snell,
of performance
& Gerhart, 2001). The primary
aim of performance appraisal is for
appraisal is for line
line management to provide guidance to its employees on how to
management to
apply their resources for the benefit of the organization (Gardner,
provide guidance
Moynihan, Park, & Wright, 2001),
to its employees
creating an ongoing process of
identifying, measuring, and develon how to apply
oping performance, and aligning
this with the strategic goals of
their resources
the organization (Aguinis, 2007).
for the benefit of
While this might be the intention,
there is a need to explore how perthe organization,
formance appraisal practices are
actually experienced by employcreating an
ees (Gratton & Truss, 2003; Nishii
ongoing process
& Wright, 2008) in order to understand how they impact behaviors
of identifying,
and attitudes (Guest, 1999).
Experience of performance appmeasuring,
raisal can be examined through
and developing
the concept of organizational
justice (i.e., the extent to which
performance, and
employees perceive the process
aligning this with the as fair; Cohen-Charash & Spector,
2001). There are different types
of organizational justice (see,
strategic goals of
for an overview, Cohen-Charash
the organization.
& Spector, 2001); however, two
types in particular focus on the
interaction between the employee and their
line manager: procedural and interactional
justice. Procedural justice refers to employee
perceptions of the fairness of a process as it

is carried out (Greenberg, 1990; Thibaut &
Walker, 1975). Bies and Moag (1986) examined the social side of justice, interactional
justice, which focuses on employee perceptions of fairness of interpersonal treatment
received during implementation of processes
(Chang, 2005). Interactional justice is thus
proposed to be a subset of procedural justice
(Cropanzano, Prehar, & Chen, 2002).
In the context of performance appraisal,
procedural justice relates to the fairness of the
process by which employees feel their performance is measured, whereas interactional justice relates to the way in which they feel they
are treated by their line manager during this
process.1 Procedural and interactional justice
have been shown to be associated with organizational commitment, job performance
ratings, and trust in line management (Folger
& Konovsky, 1989; Greenberg & Colquitt,
2005; McFarlin & Sweeney, 1992). Measuring
perceptions of procedural and interactional
justice in the performance appraisal process therefore allows us to explore employee
experiences of an HRM practice that is implemented by line managers. Based in social
exchange theory, these experiences, if positive, will be related to higher levels of organizational commitment. This leads to the first
hypothesis for this study:
Hypothesis 1: Employee experiences of justice in
performance appraisal are positively related to
their level of organizational commitment.
Organizational Climate
Organizational justice in performance appraisal examines the relationship between an
employee and his or her line manager; however, this relationship exists within the
broader context of the organization as a
whole. Here, the focus is on understanding
the prevailing climate within a business unit,
in terms of employee attitudes toward senior
management.
Organizational climate comprises employees shared perceptions of the types of
behaviors and actions that are rewarded and
supported by the organizations policies,
practices, and procedures (Schneider, 1990).

There are multiple explanations of how individuals perceptions are transformed into
higher-level unit constructs (Van de Voorde,
2009). Common experiences of organizational practices, combined with social interactions among unit members (Salancik &
Pfeffer, 1978), are seen to result in the development of shared perceptions across an
organizational unit (Nishii & Wright, 2008;
Ostroff, 1992). Structural characteristics, such
as hierarchy and leadership, can also inform
a common interpretation by unit members
of the organizational climate (Schneider &
Reichers, 1983). In short, members of the
same business unit are subject to the same
work environment and leaders (Mason &
Griffin, 2002), and through group socialization processes resulting in consistency in
affect and behaviors (George, 1996).
Much extant literature treats employees as if they are independent of the broader
organizational climate, which ignores the
complexity of the clustered nature of individuals in higher-level groupings (Heck
et al., 2010). The notion of clustering can be
combined with signaling theory (Connelly,
Certo, Ireland, & Reutzel, 2011; Spence,
1973): employees develop a shared understanding of their organizational context by
inferring the organizations interests and priorities from information in the work environment, which guides their attitudes and
behaviors (Murray, 1991; Srivastava & Lurie,
2001). Employees observe actions by senior
managers, line managers, and colleagues,
and interpret these as signals of less observable characteristics (i.e., values and goals;
Haggerty & Wright, 2009). Such practices
can promote positive employee and organizational outcomes: for example, work-life
balance policies have been found to facilitate organizational attachment indirectly, by
signaling that the organization cares about
employee well-being (Casper & Harris, 2008).
The aspect of organizational climate of
interest here is the level of trust that employees display in senior management. It is proposed that trust may facilitate the effects of
other determinants (i.e., line manager actions)
on desired outcomes such as commitment:
THE
EMPLOYEE EXPERIENCE
Dirks and Ferrin (2001, p. 451) acknowledge

that there is empirical evidence that trust has
a main effect, but also develop a theoretical
argument that trust moderates the relationship between an interaction partners action
and the trustees response by influencing ones
interpretation of the action. Employee trust in
senior management is based on the outcomes
of organizational decisions made by these top
managers and less on direct experience of their
character, words and actions (Costigan, Ilter,
& Berman, 1998, p. 304). Employees need to
have confidence in the actions of the organizations leaders (Eisenhardt, 1989), trusting that senior managers will make decisions
that are at least not detrimental to employee
interests (Farndale, Van Ruiten et al., 2011).
In return, trust creates conditions that affect
employee responses to HRM practices, including commitment (Eisenberger et al., 1986;
Macky & Boxall, 2007; Masterson et al., 2000;
McAllister, 1995). This leads to the second
hypothesis for this study:
Hypothesis 2: A climate of employee trust in senior management is positively related to organizational commitment.
It is thus hypothesized that there is a
positive relationship between perceptions
of organizational justice and commitment,
and between trust and commitment. Based
on this reasoning, and in line with Dirks and
Ferrin (2001), it is suggested further that a
climate of trust in senior management across
an organization moderates the relationship
between employee perceptions of how they
have been treated by their line manager in
the performance appraisal process, and their
related behavioral and attitudinal outcomes
in terms of commitment. This leads to the
final hypothesis:
Hypothesis 3: A climate of employee trust in senior management at the group level moderates the
relationship between individual employee experiences of justice in performance appraisal and their
level of organizational commitment.
In summary, the hypothesized model for
this study is presented in Figure 1.
883
884

Business-unit level
SM trust
H2: +
H3: +
PA justice
Individual level
H1: +
TABLE
BU 1: 34
BU 2: 34
BU 3: 25
93
BU 1: 39
BU 2: 21
BU 3: 35
BU 4: 92
187
BU 1: 339
BU 2: 44
BU 3: 172
BU 4: 258
BU 5: 331
BU 6: 104
1,248
BU 1: 529
BU 2: 1,136
BU 3: 631
BU 4: 236
BU 5: 203
2,735
BU 1: 37
BU 2: 59
BU 3: 45
BU 4: 18
Methodology
Organizational commitment was measured

using four items at the individual level. The
scale includes two elementsa belief in and
acceptance of an organizations goals
Total No. of
Responses
FIGURE 1. Hypothesized Conceptual Model
Measures
Company Responses
No. of Employees per

Company Business Unit (BU)
Commitment
The data for this study were collected by the

Change Management Consortium (CMC), a
collaboration of practitioners and academics.
To test the hypotheses, five large organizations, members of the CMC in the United
Kingdom, were surveyed. After removing
incomplete responses, the total number of responses used in this analysis is 4,422, representing 22 business units across these five organizations (see Table I). Due to the large
variation in group size at the business-unit
level, additional calculations were made to
calculate average group size (as recommended
by Bliese & Halverson, 1998). The resultant
average business-unit size was 184.5
employees.
Questionnaires were distributed by internal post to the population of the business
units included in the study.2 Completed
questionnaires were returned anonymously
directly to the researchers. The questionnaire
was previously piloted within a large organization and showed strong reliability of the
measures used. Details of each of the measures included are given below, and details of
the items used are presented in the Appendix;
all items were measured on a five-point Likert
scale ranging from strongly disagree to
strongly agree. The overall mean of each
scale was used to generate a factor score per
respondent.
159
Total: 4,422
and values, and a willingness to exert effort on

behalf of the organizationbased on Mowday
et al.s (1979) Organizational Commitment
Questionnaire. The scale showed strong reliability (Cronbachs = .767).
Justice in performance appraisal (PA justice)
incorporates employee perceptions of how
they felt they were treated by their line manager in the process of performance appraisal.
Two items focused on the content and process of conversations between the employee
and his/her line manager during performance
appraisal, drawing on the work by Folger and
Konovsky (1989). Three remaining items
considered whether the employee felt he/
she was treated with dignity, sensitivity, and
consideration, and the quality of information
used to reach decisions on performance (Bies
& Moag, 1986; Skarlicki, Folger, & Tesluk,
1999). Due to the lack of clarity in the literature as to whether it is preferable to measure
procedural or interactional justice separately
or combined, both approaches were adopted

here. First, based on a combined approach, factor analysis revealed a single factor with strong
reliability (Cronbachs = .885). Second,
breaking the concept down into two dimensions, factor analysis also revealed a single factor for procedural justice and for interactional
justice, both again with strong reliability
(Cronbachs = .795 and .883, respectively).
Senior management trust (SM trust) was
measured using four items that asked for
employee perceptions of the sincerity, equity,
and integrity of senior management, based
on Cook and Wall (1980). The scale showed
strong reliability (Cronbachs = .824). SM
trust is used as an aggregate variable at the
business-unit level, calculated from the mean
of individual-level perceptions. Business
unit refers to an operating division of the
larger organization.
Regarding control variables, there is
some debate as to whether there is a consistent relationship between gender and organizational commitment (Aven, Parker, &
McEvoy, 1993); however, gender differences
in the relationship between organizational
justice and organizational commitment have
been found (Sweeney & McFarlin, 1997).
Cohen (1992) also found varying relationships between organizational commitment
and personal antecedents like tenure across
manual, technical, and professional staff.
Tenure significantly predicted organizational
commitment (Mathieu & Zajac, 1990), as did
job grade, with managers being more positive
than clerical workers (McFarlin & Sweeney,
1992). Therefore, three control variables
were included in the analysis: job grade was
measured on a five-point scale from junior
to senior, based on the actual job titles or
grades used in each organization; gender was
included as a dichotomous variable; and tenure with the organization was measured on an
eight-point scale ranging from less than one
year to over 30 years at stepped intervals.
Analysis Strategy
To model the relationships presented in
Figure 1, a two-level hierarchical linear
modeling (HLM) analysis was carried out.
THE
EMPLOYEE EXPERIENCE
The level 1 analysis explored the PA justicecommitment relationship at the individual

employee level. The level 2 analysis introduced the business-unit variable, SM trust, at
the between-group level of analysis.
Before carrying out the HLM analysis, the
first step was to explore the construct validity
of the group-level variable. Intra-class correlations (ICCs) and average deviations (ADs) were
first calculated for SM trust. The results show
strong group-level reliability (ICC(2) = .98;
AD = .68 [standard deviation = .49]). The
ICC(1) results show that 17.4 percent of variance in trust in senior management can be
explained by group membership, which supports aggregation of this variable to this level.
As a single source was used for collection
of both the independent and dependent variables, Harmans single-factor test was carried
out to try to eliminate concerns over common method bias. In line with the unrotated
factor solution, four factors emerged from the
data. As all items did not load onto a single
factor, this indicates that common method
effects are not likely to be a contaminant
of the results observed in this investigation,
although this test may be considered insufficient in itself (Podsakoff, MacKenzie, Lee, &
Podsakoff, 2003). In addition, aggregating the
SM trust variable to the mean at the businessunit level reduces the impact of same-source
response bias, while at the same time giving
a shared perspective at the group level. HLM
analysis was therefore deemed appropriate,
as it maintains the requirements of independence for the group-level data (Hofmann,
1997).
To establish further the reliability of the
factors, in addition to the high Cronbachs
results reported earlier, confirmatory factor analysis was carried out. An initial model
with all items at individual level loading onto
a single factor produced a poor level of fit
(Root mean square error of approximation
[RMSEA] = .225; Akaike information criterion
[AIC] = 14,633), while a model including the
four factors (PA procedural justice, PA interactional justice, SM trust, and commitment)
improved the level of fit significantly (RMSEA
= .059; AIC = 1,065). To test further for possible common method bias, the data were
885
886
refit with a single-method factor to control

for the portion of variance in the indicators
that is attributable to obtaining the measures
from the same source (as recommended by
Podsakoff et al., 2003). The method factor
was defined as having all of the employees
self-report measures as indicators. In this
model, the estimated factor loadings for the
method factor remained positive, statistically
significant (p < .01), and all but two were
smaller than their corresponding trait factor
loadings. This indicates that the relationships
observed are not wholly attributable to samesource variance.
Results
It was hypothesized that organizational
commitment would be related to justice perceptions in performance appraisal at the individual level, and trust in senior management
at the business-unit level. Before proceeding
with the HLM analysis, whether there was
systematic within-group and between-group
variance in commitment was explored by estimating a null model. The results showed
that there is significant variance to be
explained within business units (Wald
Z = 46.899, p < .01) and across the sample of
business units (Wald Z = 2.982, p < .01). The
data are therefore suitable for further exploration of the relationships at the individual and
group levels.
TABLE
II
Table II presents the means, standard

deviations, reliabilities, and intercorrelations of the variables in the study. This shows
that PA justice (combined, procedural, and
interactional) and SM trust are significantly
related to commitment. Job grade, gender,
and tenure are also associated with SM trust
and commitment; however, PA justice (combined and procedural) is only significantly
related to job grade, while PA interactional
justice is also significantly related to tenure.
No problems of multicollinearity were indicated in the data, with all correlations below
the .700 level generally accepted as the cutoff point indicating problematic data (with
the exception of PA combined justice and
its two components as would be expected).
Procedural and interactional justice correlate
at .662, indicating that these are distinct constructs in the data.
The first step in testing the hypotheses,
represented by Model 1 in Table III, specifies
commitment as the outcome variable including only control variables in the analysis. The second step involved adding the PA justice variable
to create Model 2 to explore the within-group
effect. This model (see Table III) reveals that PA
justice explains considerable unique variance
in commitment beyond that explained by
the control variables. As predicted, there is a
significant positive relationship between PA
justice (combined) and commitment (.224,
p < .01), lending support to Hypothesis 1.
Descriptive Statistics and Correlation Matrix
Variables
Mean
SD
1. Commitment
3.05
.79
(.767)
2. PA justice
3.64
.70
.235***
(.885)
.202***
.877***
.224***
.941***
.662***
.84
.487***
.267***
.249***
.241***
.86
.106***
.077***
.054***
.083***
.059***
***
.002
.004
.000
.090*** .252***
.171***
.039
.025
3. PA procedural
justice
3.50
.80
4. PA interactional
justice
3.74
.75
5. SM trust
2.36
6. Job grade
3.15
7. Gender
(0 = Male)
0.49
.50
8. Tenure
5.72
2.10
.079
(.795)
(.883)
(.824)
.043*** .173***
.315***
.175***
N = 4,422.
***p < .010.
Factor reliability on the diagonal in parentheses.

TABLE
III
THE
EMPLOYEE EXPERIENCE
Results of Hierarchical Linear Modeling Analysis on Commitment

A. Using combined PA justice variable
Model 1
Model 2
Model 3
Model 4
Fixed Effects
.224***
PA justice
(.016)
.224***
(.016)
.605***
SM trust
(.035)
.035
(.115)
.306*
(.183)
.081*
PA justice * SM trust
(.049)
Control Variables
.144***
Job grade
(.016)
***
Gender
.161
(.023)
.049
Tenure
***
(.006)
***
Constant
2.966
.131***
(.016)
***
.152
(.023)
.045
***
(.006)
***
2.172
.123***
(.014)
.146
***
(.023)
.041
***
(.006)
***
0.576
.122***
(.014)
.146***
(.023)
.041***
(.006)
1.275**
B. Using separate PA procedural and interactional justice variables

Model 1
Model 2
Model 3
Model 4
Fixed Effects
.097***
PA procedural justice
(.018)
PA interactional justice
.127
***
(.020)
.096***
(.018)
***
(.127)
.128
.104
(.020)
(.134)
.605***
SM trust
.072
(.035)
PA procedural justice * SM trust
.310*
(.183)
.072
(.053)
PA interactional justice * SM trust
.011
(.057)
Control Variables
Job grade
.144***
(.016)
Gender
***
.161
(.023)
Tenure
.049
***
(.006)
Constant
***
2.965
.131***
(.016)
***
.152
(.023)
.045
***
(.006)
2.174
N = 4,422 individuals (level 1), 22 business units (level 2).

Signicance values for xed effects are based on t-tests: *p < .10. **p < .05. ***p < .01.
Standard error included in parentheses.
Nonsignicant random intercepts removed from analysis for Models 3 and 4.
***
.124***
(.014)
.146
***
(.023)
.041
***
(.006)
0.577
***
.123***
(.014)
.146***
(.023)
.041***
(.006)
1.264**
887
This is also supported separately for procedural justice (.097, p < .01), and interactional
justice (.127, p < .01).
Model 3 (Table III) adds the business-unit
level variable, trust in senior management, to
explain further the cross-level main effects.
PA justice remains significant after addition of
the SM trust variable (.224, p < .01). This was
also supported when applying the separate
procedural and interactional justice variables
(.096, p < .01 and .128, p < .01, respectively). These models show that SM trust at
the business-unit level is positively related to
mean changes in commitment (.605, p < .01)
after controlling for PA justice. This supports
Hypothesis 2.
The final model, Model 4 (Table III),
explores the cross-level moderating effect
of SM trust on the PA justice-commitment
relationship. Hypothesis 3 predicted that
business-unit SM trust would moderate the
relationship between PA justice and commitment in such a way that the higher the trust,
the stronger the relationship. Observing
the results of the combined PA justice variable, the interaction of SM trust is significant
(.081, p < .10), supporting this hypothesis.
However, neither of the interaction effects
of the separate procedural and interactional
justice variables is significant, indicating that
SM trust moderates only the combined effect
of PA justice, and not each of its components.
Exploring the interaction of low and high
levels of combined procedural and interactional PA justice and SM trust, Figure 2
illustrates how the PA justice-commitment
relationship is stronger in business units
where members share high levels of trust, as
well as commitment being higher in these
high SM trust units.
Discussion
Although it has been recognized that HRM
practices can be examined at different levels
intended, enacted, and experienced (Nishii &
Wright, 2008)to date there has been little
empirical attention to how employees experience HRM practices. In this study, employee
experiences of performance appraisal were examined in terms of perceptions of justice
Employee commitment
888
Low SM trust (1 sd
below mean)
High SM trust (1 sd
above mean)
0
Low PA justice
High PA justice
FIGURE 2. Interaction Between SM Trust at BusinessUnit Level and PA Justice in Predicting Commitment
when these practices are enacted by line

managers. Based on a literature review, it was
proposed that positive attitudes toward the
organization, such as belief in and adoption
of the goals of the organization, would be related to employee perceptions of fairness
(Cropanzano & Greenberg, 1997). Using the
principles of social exchange (Blau, 1964) and
the psychological contract (Conway & Briner,
2005), it was argued that employee experiences of organizational actions would influence their perception of organizational support leading to reciprocation in terms of
commitment (Whitener, 2001).
As there have been many studies exploring the relationship between micro-level
organizational justice perceptions and commitment (although fewer focus on performance appraisal), additional investigation of
the impact of a macro-level phenomenon,
group-level trust, is an important contribution made by this investigation. Perceptions
of fairness, based on line manageremployee
interaction, need to be seen in the broader
context of the organizational climate (Murray,
1991; Srivastava & Lurie, 2001). This perspective stems from the principles of signaling theory (Spence, 1973), arguing that
employees attitudes and behaviors are influenced by the actions and perceptions of those
around them in the workplace. Organizational
climate was measured here by considering the

level of trust employees exhibited in senior
management.
In line with these arguments, it was
hypothesized that where employees perceive
fair treatment by their line manager in the
performance appraisal process, levels of organizational commitment will be higher. This
positive relationship was also expected to be
amplified where employees reported a high
level of trust in senior management within
the business unit. The findings gave support
to these hypotheses, providing evidence of
the importance to commitment of employee
perceptions of how line managers enact performance appraisal practices, and how these
perceptions are affected by the level of trust
placed in senior management. By being
able to explore organizational climate at the
business-unit level, it has been shown how
a positive climate of trust has a moderating
impact on the performance appraisal justice
commitment relationship.
The separate impact of procedural and
interactional justice in performance appraisal
was also explored, as evidence is mixed
regarding whether a combined or separate
justice measure is preferred (Cohen-Charash
& Spector, 2001). The results indicated that
both types of justice were positively associated with commitment, but that neither form
of justice had a significant effect in the final
model tested, implying the combined effect
of procedural and interaction justice is stronger than the individual effect of each type.
This finding supports applying both a combined and separated approach to exploring
organizational justice in future research.
At a general level, these findings are in
line with Whiteners (2001) work suggesting
that the employee experience of organizational actions influences levels of commitment. In the specific context of performance
appraisal, where managers are making judgments about employee performance (Aguinis,
2007), perceptions of procedural and interactional justice in this process were found
to have a significant relationship with organizational commitment. This context adds
detail and refinement to the extant work
that looks more generally at the relationship
THE
EMPLOYEE EXPERIENCE
889
between perceptions of justice and employee

attitudes and behavior (Folger & Konovsky,
1989; Purcell et al., 2003). In addition, previous work suggests that procedural justice has
a stronger relationship with organizationrelated outcomes such as commitment, while
interactional justice is more closely linked
to supervisor-related outcomes (Masterson
et al., 2000). In contrast, the study presented
here found both types of justice to be significantly related to organization commitment.
Further research is required to explore these
mixed findings in the field.
The findings also suggest that organizational climate (Parker et al., 2003) influences
levels of commitment, and acts as a moderator
of the relationship between perceptions of justice in performance
In the specific
appraisal and commitment. In line
with Mason and Griffin (2002),
context of
shared perceptions, specifically
trust in senior management in this
performance
instance, were found to influence
appraisal, where
commitment. This would suggest
that although the line manager
managers are
may in some circumstances be seen
as a representative of the organizamaking judgments
tion as a whole (Coyle-Shapiro &
Shore, 2007), there are other organiabout employee
zational representations that influperformance,
ence employee attitudes. As a result,
account needs to be taken of higherperceptions of
level groupings to understand
the different drivers of employee
procedural and
outcomes (Heck et al., 2010). This
also lends support to other more interactional justice
general findings that trust can crein this process
ate conditions that affect employee
responses to HRM practices (Dirks
were found to
& Ferrin, 2001; Macky & Boxall,
have a significant
2007; McAllister, 1995).
It is proposed that these findrelationship with
ings in relation to organizational
commitment can be explained by
organizational
reference to social exchange (Blau,
commitment.
1964) and psychological contract
theory (Conway & Briner, 2005):
Organizational commitment is a
means by which employees reciprocate benefits provided to them, in this case in the form
of perceived fair treatment from their line
890
manager, and actions that engender trust on

the part of senior management. The findings
also demonstrate how a high-trust climate
is more likely to be associated with higher
employee perceptions of fairness in the performance appraisal process (Dirks & Ferrin,
2001). Overall, this suggests that line managers have an important role to play in the
effective implementation of HRM practices
(Becker & Huselid, 2006), but that outcomes
are also influenced by the wider organizational climate in which the line manager
employee interaction takes place.
In considering these findings,
a number of potentially fruitful
This study has
areas for further research emerge.
First, the research reported here has
demonstrated
only examined the employeeline
the significance
manager interaction in the context
of performance appraisal. Given
of line managers
the significance of line managers
in the HRM-performance chain,
in enacting
other HRM practices enacted by
performance
line managers are worthy of investigation, since they may impact
appraisal practices
employee outcomes in different
ways. Second, the employee expeto influence
rience of performance appraisal
was examined here by exploring
employee
perceptions of justice. It may be
commitment.
that other employee experiences
of performance appraisal (e.g.,
However, it also
clarity of guidance and direction), which, although potentially
confirms that the
related to perceptions of justice,
significance of
might deliver different outcomes.
Third, organizational climate has
the line manager
been examined by looking at trust
in senior managers. Other meaemployee
sures of organizational climate
relationship does not (e.g., pressure to produce, or a
focus on well-being) might influoccur in isolation.
ence employee outcomes differently, and hence could contribute
to developing understanding of the influences
on performance-related outcomes.
Conclusions
Since there may be differences between what
is intended by the HRM function and what is
actually experienced by employees (Nishii &

Wright, 2008), line managers play a crucial
role in enacting HRM practices in the HRMperformance chain. More specifically, this
study has demonstrated the significance of
line managers in enacting performance appraisal practices to influence employee commitment. However, it also confirms that the
significance of the line manageremployee
relationship does not occur in isolation
(Heck et al., 2010). The organizational climate, examined here through trust in senior
managers at the business-unit level, is associated not only with levels of commitment directly, but also moderates the relationship
between perceived performance appraisal
justice and levels of organizational commitment. This would suggest that employees see
their relationship with the organization (and
hence their commitment) personified by
both line managers and senior management
(Coyle-Shapiro & Shore, 2007). Taken together, these findings start to construct a
picture of the range of factors that influence
effective HRM implementation, and relatedly organizational performance (Becker &
Huselid, 2006).
In practical terms, prior research has
shown evidence of different line manager
behaviors in the performance appraisal process affecting perceptions of justice. For
example, employee voice as one aspect of
the performance appraisal process has been
shown to influence perceptions of fairness
(Dulebohn & Ferris, 1999). Similarly, in career
management, line managers behavior in
terms of respect, feedback, voice, consistency,
and bias suppression has also been shown to
influence perceptions of justice (Crawshaw,
2006). In the current study, the focus has
been on the outcomes of these perceptions,
but further research that explores the detailed
events of the performance appraisal process
as well as the related employee-level outcomes would be beneficial.
On a positive note, the findings underline the added value of line managers in
the implementation of HRM practices for
performance-related outcomes. Yet perhaps
of more concern is that assignment of HRM
practices to line managers increases the
potential for variation in what is enacted.

Hence, line managers need to be well briefed
and well prepared to ensure that what is
implemented and experienced is aligned, as
closely as is possible, to what was intended.
This may require training and development
on such issues as awareness of how events in
the performance appraisal process (including
personal communication, respect, feedback,
and facilitating employee voice) impact how
employees interpret and act on the line manager behaviors they experience. Whereas the
HR function can outline the guidelines for
what constitutes an appropriate performance
appraisal procedure, it is the line manager
who needs to be aware that employees will
not only judge this procedure, but also how it
is implemented, in reaching conclusions on
how they feel about the organization. Prior
research has uncovered low levels of line
management interest, a focus on short-term
operational issues, and a lack of competence
regarding line management implementation
of HRM as noted earlier. By focusing on the
positive outcome of employee commitment
if performance appraisal is implemented
fairly in the eyes of the employee, this may
motivate line managers to be more effective
in their implementation.
Equally, it is important to ensure that signals communicated to employees and actions
undertaken by senior management take due
account of the implications for creating a
shared organizational climate; senior managers need to be aware of how their wider
actions may be interpreted by employees,
as much as line managers need to be aware
of the implications of their actions directly in
the performance appraisal process. Finally, line
managers alone cannot be held accountable for
employee outcomes of performance appraisal
the broader organizational climate also has a
role to play in developing these attitudes and
behaviors.
Despite the interesting findings emerging from this study, there are limitations
to consider. As with many tests of moderation, the direction of causality of the
model explored here has not been tested,
as cross-sectional data have been used. It is
possible that higher levels of organizational
THE
EMPLOYEE EXPERIENCE
891
commitment improve perceptions of treatment by line management and the actions of

senior management. Further research, preferably longitudinal, is required to explore
this further.
A further consideration is the composite
aggregation of individual-level data on SM
trust to the business-unit level. First, tests
were run to assess the usefulness of aggregation to the business-unit level: calculation of
ICC and AD values, as well as HLM analysis
reported earlier, highlighted that there was a
much greater degree of variance in commitment explained at the business-unit rather
than company level. Hence, the analysis was
carried out using business units as the second level of analysis. Second, the
aggregation process risks ignorOn a positive
ing potentially meaningful individual-level variance (Hofmann,
note, the findings
1997). However, this limitation is
partly overcome by the items used
underline the
to measure this variable being
added value of line
worded at the group level (i.e.,
with senior management as the
managers in the
point of referencesee Mathieu
& Chen, 2011). Ultimately, the
implementation
multilevel analysis allows a more
detailed consideration of factors
of HRM practices
at different levels within an orgafor performancenization impacting on individual
employee experiences (Fedor et
related outcomes.
al., 2006).
Finally, for HLM as applied Yet perhaps of more
here, although a minimum of
concern is that
20 groups and 30 respondents
per group is deemed acceptable
assignment of HRM
(Bickel, 2007, p. 272), the study
has a relatively small number of
practices to line
groups (22 business units) and
considerable variation in group managers increases
size (with three business units
the potential for
falling below the minimum
requirement of 30 members). The
variation in what is
restricted maximum likelihood
enacted.
technique was therefore used in
the analysis to reduce bias in estimates of variance and covariance
parameters and produce more reliable results.
This article has responded to calls to
examine HRM beyond the intended level
892
(Nishii & Wright, 2008) and as a result has

added to our knowledge about HRM in organizations by examining employee experiences of performance appraisal as enacted
by line managers. It also speaks to requests
to examine the implementation of HRM
strategy and its role in the HR architecture
organizational performance chain (Becker &
Huselid, 2006; Gerhart, 2005). Importantly,
this article has addressed calls for more multilevel research (Boselie et al., 2009; Saunders
& Frenkel, 2011; Wright & Boswell, 2002),
exploring the impact of the broader organization climate that affects this relationship.
It is hoped that future research in this field
will continue to combine perceptions from
different levels of the organization to help
improve our understanding of the role of

line managers in HRM implementation.
Notes
1.
Distributive justice is a third type of justice

commonly studied; however, this refers to fairness
of the outcome of the appraisal process, rather than
the interaction between employees and their line
manager during the process. As this study focuses
on the perceptions of line manager enactment, this
dimension of justice is not investigated here.
2.
Except for one company where, at the companys

request, the sample was based on selection of
the nth employee on a nonstratied alphabetical
listing, reducing the population of 10,000 to a
sample of 180 participants.
ELAINE FARNDALE is an assistant professor in the School of Labor & Employment

Relations at the Pennsylvania State University, and afliated with the Department of
Human Resource Studies at Tilburg University, the Netherlands. She was a member
of the Change Management Consortium Research team in the Cass Business School at
City University in the United Kingdom. Her specialist areas of interest include international HRM; the power, professionalism, and roles of the HR department; change management and HRM; and eHRM and new HR delivery mechanisms. Her work has been
published in refereed academic journals and practitioner publications, as well as presented at international academic conferences.
CLARE KELLIHER is a professor in work and organization in the Craneld School of
Management at Craneld University in the United Kingdom. She was a member of the
Change Management Consortium Research team in the Cass Business School at City
University in the United Kingdom. Dr. Kellihers research interests center on the organization of work and the management of the employment relationship in the context
of organizational change. She has particular interests in the use and implementation of
exible working practices. She has authored many published papers and book chapters
and regularly presents at national and international conferences.
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APPENDIX
THE
EMPLOYEE EXPERIENCE
A Scale Items
Organizational commitment
Externally, I say this is a great organization work for.
I am proud to tell others that I am part of this organization.
I am willing to put a great deal of effort beyond that normally expected in order to help this organization be successful.
I really care about the fate of this organization.
PA procedural justice
When conducting your performance appraisal, does your manager provide opportunities to appeal or challenge the decision?
When conducting your performance appraisal, does your manager collect accurate information
necessary for making decisions?
PA interactional justice
The last time you had a performance appraisal, did your manager treat you with kindness and
consideration?
The last time you had a performance appraisal, did your manager show concern for your rights
as an employee?
The last time you had a performance appraisal, did your manager consider you viewpoint?
SM trust
I feel confident that senior management will always try to treat me fairly.
Senior management is sincere in its attempts to take account of the employees point of view.
Senior management can be trusted to make sensible decisions for this organizations future.
Our senior management would be prepared to gain advantage by deceiving the workers (reversed).
897
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IMPLEMENTING PERFORMANCE

APPRAISAL: EXPLORING THE

function or the line manager intended). This

HUMAN RESOURCE MANAGEMENT, NOVEMBERDECEMBER 2013

the relationship between HR and organizational performance, attention needs to be

it is important to understand the prevailing

Line Managers and HRM