IMPACT OF PERFORMANCE APPRAISAL JUSTICE ON EMPLOYEE

ENGAGEMENT: A STUDY OF INDIAN PROFESSIONALS

Authors:
1) Vishal Gupta
Affiliation: Indian Institute of Management Lucknow, India
2) Sushil Kumar
Affiliation: Indian Institute of Management Lucknow, India

This is an Accepted Manuscript of an article published by Emerald Group in Employee

Relations: An International Journal on 05/11/2012, available online:
http://dx.doi.org/10.1108/01425451311279410

1
 IMPACT OF PERFORMANCE APPRAISAL JUSTICE ON EMPLOYEE
ENGAGEMENT: A STUDY OF INDIAN PROFESSIONALS

Abstract
Purpose – Performance appraisal is one of the most important human resource management
practices as it yields critical decisions integral to various human resource actions and outcomes.
This paper explores the relationship between perceptions of performance appraisal fairness and
employee engagement in the Indian business context.
Design – The study was conducted in two parts. The first part explored the relationship between
justice perceptions and a one-dimensional conceptualization of engagement. The second part
explored the relationship between justice perceptions and a three-dimensional conceptualization
of engagement. The relationships between justice perceptions and engagement were analyzed
using zero-order correlations and hierarchical regression analysis.
Findings – The study findings suggest a significant positive association between distributive and
informational justice dimensions and employee engagement. Distributive justice and
informational justice dimensions were found to have a stronger impact on employee engagement
conceptualized as antipode of burnout.
Research Limitations – The research was cross-sectional and so any inferences regarding
causality are limited. All responses on engagement and justice scales are from self-report
measures and it is likely that method variance inflated the relationships among these variables.
Practical Implications – Psychometrically valid scales for performance appraisal justice and
engagement were developed and tests of relationships between them have been established. The
study suggests that distributive and informational justice perceptions during a performance
appraisal session lead to enhanced engagement among employees.
Originality/value – The study tests the relationship between performance appraisal justice and
employee engagement in the Indian context. A significant positive relationship between some
performance appraisal justice dimensions and engagement has been established. To the best of
our knowledge, such a study is the first of its kind undertaken in the Indian context.
Article Type – Research paper.

Keywords: Performance appraisal; procedural justice; distributive justice; informational justice;

employee engagement; Indian context.

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 IMPACT OF PERFORMANCE APPRAISAL JUSTICE ON EMPLOYEE
ENGAGEMENT: A STUDY OF INDIAN PROFESSIONALS

Introduction

Performance Appraisal (PA) is one of the most important Human Resource Management (HRM)

practices in organizations as it yields critical decisions integral to various human resource actions

and outcomes (Jawahar, 2007; Murphy and Cleveland, 1995; Steensma and Visser, 2007).

Implementation of performance appraisal systems remains one of the greatest challenges of

effective HRM (Taylor, Tracy, Renard, Harrison, and Carroll, 1995). While a good performance

appraisal system is expected to provide valuable information to an employee about his/her

performance and progress at work, appraisal reliability and validity continue to remain a major

concern for organizations and also performance appraisals are often met with substantial

resistance (Banks and Murphy, 1985; Cleveland, Murphy and Williams, 1989; Taylor et al.,

1995).

Performance appraisal has broad implications for attitudes and behaviors in organizations

(Erdogan, 2002). Reactions to appraisal and the appraisal process are believed to significantly

influence the effectiveness and the overall viability of appraisal systems (Jawahar, 2007). Of late,

employee engagement has received increased attention from researchers as an important

determinant of employee performance (Gruman and Saks, 2011). The construct has become

popular among consulting firms and has been found to positively influence an individual

performance as well as organizational performance, productivity, retention, financial

performance, and even shareholder return (e.g. Bates, 2004; Baumruk, 2004; Gruman and Saks,

2011; Harter, Schmidt and Hayes, 2002; Richman, 2006; Rich, Lepine and Crawford, 2010;

Robinson, 2006; Welbourne, 2007). Given the importance of employee engagement to

organizations, a key issue is how to promote the engagement of employees (May, Gilson and

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Harter 2004). As has been explained in the next section, engagement researchers (e.g. Kahn

[1990], Hallberg and Schaufeli [2006]) contend that engagement is conceptually distinct

from traditional variables like commitment, motivation and therefore the factors that

produce engagement may be different from those that produce these variables (Macey and

Schneider, 2008).

The notion of ‘fairness’ has been identified as one of the most important aspects of

employees’ responses to performance appraisal sessions (Bretz, Milkovich, and Read, 1992;

Erdogan, 2002). Perceptions of performance appraisal justice can lead to satisfaction with

performance ratings, performance appraisal system, rater and appraisal feedback (Cawley,

Keeping, and Levy, 1998; Jawahar, 2007; Korsgaard and Roberson, 1995; Thurston Jr. and

McNall, 2010) and to individuals’ feelings of instrumental control over the appraisal process

thereby enhancing their sense of psychological safety, self-worth and group standing (Kahn,

1990; Taylor et al., 1995). Little is known about the potential impact of performance appraisal

justice on employee engagement (Moliner, Martínez-Tur, Ramos, Peiró and Cropanzano, 2008)

and presents a significant research gap in justice, performance management and engagement

literatures. Though there exist few studies that have explored the impact of justice perceptions on

employee engagement, most of these have been conducted in a developed economy context. The

focus of the present study is to test the impact of performance appraisal justice on employee

engagement in India, an emerging economy.

With the liberalization of the Indian economy and opening of its markets to foreign firms,

India has become an extremely important contributor to the world economy and the global order.

According to a World Bank report, it is likely that by 2025 emerging economies – such as Brazil,

China, India, Indonesia, and the Russian Federation – will be major contributors to global

growth, alongside the advanced economies (World Bank, 2011). During the past two decades

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India has increased its share of global GDP from 3 to 7 percent (Harris, 2005; Olarreaga,

Lederman and Solaga, 2007). Indian and multinational corporations based in India are playing an

increasingly prominent role in global business and cross-border investment. The best Indian

companies like the Tata Group, Bharti Airtel, ArcelorMittal, and Infosys have become global

competitors even expanding abroad through numerous acquisitions. India is currently the tenth

largest economy in terms of GDP and one of the world’s largest trading economy (Olarreaga et

al., 2007).

Along with its strong economic potential, India is distinct from other countries in terms

of its culture (high power distance, strong long-term orientation, low uncertainty avoidance,

medium collectivist orientation and medium masculinity) (Hofstede, 2001). People’s perceptions

of fairness in organizations requires considering the prevailing cultural standards in which those

organizations operate. Markus and Kitayama (1991) suggested that in different cultures people

have either independent or interdependent self-construals. The difference between

interdependent and independent self-construals is the extent to which people see themselves as

connected to versus distinct from others. In individualistic cultures like North America, the

emphasis is more on independent self-construal. In contrast in collectivist cultures, such as India

and China, the emphasis is on interdependent self-construal. Consequently, North Americans can

be expected to be more sensitive to injustice as it may compromise the expression of their

uniqueness and hamper achievement of personal goals (Li and Cropanzano, 2009). In collectivist

cultures, where the focus may be more on maintaining interpersonal harmony, people would be

willing to tolerate greater amounts of injustice. This suggests that people may have different

perceptions of fairness because they belong to different national cultures and have internalized

different norms and values (Greenberg, 2001; Skarlicki, 2001).

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 Taking into account the dominant social norms and values, adopting HRM practices

suitable for a national context is crucial for achieving desired performance (Björkman and

Budhwar, 2007; Singh, 2009). Liberalization has drastically changed the Indian industrial

context by providing new opportunities and challenges. The increasing presence of

multinationals has made it necessary to pay more attention to the issue of integrating traditional

and western management practices (Sinha and Kanungo, 1997).

The present study contributes to justice, performance appraisal and engagement

literatures in three important ways. First, through a confirmatory test of performance appraisal

justice, we provide an understanding of performance appraisal justice and its constituent

dimensions. Second, we test the relationship between performance appraisal justice and

engagement. Finally, being embedded in the Indian cultural context, the study adds to the limited

set of studies that have assessed engagement and performance appraisal in this context.

Literature Review and Hypotheses

This section presents a review of performance appraisal justice and engagement literature and

integrates the two, thereby, developing the rationale for the research hypotheses.

Performance Appraisal Justice

Performance appraisal justice is a sub-part of the broader construct organizational justice that

refers to the general, overall perception of fairness of the HR system (consisting of work

systems, career systems, development system, culture system and self-renewal system) of the

organization. Performance appraisal justice refers specifically to the fairness of the career system

– to the whole procedure, including establishment of performance standards, appraisal related

behaviors of raters within the performance appraisal period, determination of performance rating,

and communication of the rating to the ratee. It is possible to study different types of justice

perceptions in the context of performance appraisals. Distributive Justice refers to the fairness of

6
outcomes or final decisions in comparison to what others receive (Colquitt, Conlon, Wesson,

Porter and Ng, 2001). In performance appraisals, individuals compare their efforts and the rating

they received with the efforts of others and the ratings others received. The fairness of the rating

constitutes distributive performance appraisal justice perceptions. Procedural Justice refers to

the fairness of policies or processes used to make or implement decisions and distribute

outcomes (Colquitt et al., 2001). Procedural performance appraisal justice refers to perceived

fairness of procedures supervisors use during performance appraisals and to perceived fairness of

the performance appraisal criteria adopted by the organization. Bies and Moag (1986) introduced

the most recent advance in the justice literature by focusing attention on the importance of

interactional justice, the quality of the interpersonal treatment employee receives when

procedures are implemented. Greenberg (1993) proposed that interactional justice might actually

consist of two factors. The first factor is labeled as interpersonal justice and reflects the degree

to which subordinates are treated with politeness, dignity, and respect by supervisors involved in

executing procedures or determining outcomes. The second factor, labeled informational justice,

focuses on the information provided to subordinates about why procedures are implemented in a

certain way or why outcomes are distributed in a certain fashion. Performance appraisal requires

substantial amount of communication between the rater and the ratee. During this interaction,

individuals expect to be treated respectfully. The type of treatment meted out to them by the rater

affects their interpersonal performance appraisal justice perception. The fairness of interpersonal

communication during appraisal process constitutes informational justice perception.

Employee Engagement

The literature on employee engagement has had a practitioner influence and research studies are

sparse in this area (Bhatnagar, 2007). Due to the scant literature available on engagement, a lot

of confusion exists about its conceptualization. Kahn (1990) suggested that engagement involves

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“the harnessing of organizational members’ selves to their work roles; in engagement people

employ and express themselves physically, cognitively, and emotionally during role

performances” (p. 694). Building on the traditions of positive psychology (Seligman and

Csikszentmihalyi, 2000), Schaufeli, Salanova, Gonzalez-Roma, and Bakker (2002) proposed that

engagement is conceptually opposite to burnout and viewed these constructs as independent

states with dissimilar structures that must be measured with different instruments. For them

engagement is “a positive fulfilling, work-related state of mind that is characterized by vigor,

dedication, and absorption” (p. 74). Vigor is characterized by high levels of energy and mental

resilience while working, the willingness to invest effort in one’s work, and persistence even in

the face of difficulties. Dedication refers to being strongly involved in one’s work and

experiencing a sense of significance, enthusiasm, inspiration, pride, and challenge. Finally,

absorption is characterized by being fully concentrated and happily engrossed in one’s work,

whereby time passes quickly and one has difficulties with detaching oneself from work.

Luthans and Peterson (2002) built on Kahn’s (1990) work on personal engagement, and

developed Gallup’s empirically derived employee engagement scale. Questions were derived

through thousands of focus groups conducted over 2,500 business, healthcare and education

units. Rich et al. (2010) also built on Kahn’s (1990) dimensions of physical, emotional and

cognitive engagement but proposed a separate scale to measure it. Thomas (2007) developed a

unidimensional conceptualization of engagement. He argued that although the consequences of

engagement (i.e. behaviors) occur in three categories – physical, cognitive, emotional – the state

preceding these behaviors is essentially unidimensional.

Another problem with the engagement research is that the concept of employee

engagement has been criticized for having substantial overlap with other similar constructs such

as job involvement, motivation, and commitment. Researchers have, however, argued that

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engagement is conceptually different from commitment, involvement and motivation

(Bhatnagar, 2007; Hallberg and Schaufeli, 2006; Saks, 2006). They argue that each of the

concepts has its specific trademark, and displays different associations with health complaints,

job and personal characteristics and turnover intentions. Saks (2006) observed that organizational

commitment differs from engagement in that it refers to a person’s attitude and attachment

towards their organization. Engagement is not an attitude; it is the degree to which an individual

is attentive and absorbed in the performance of their roles. Further, Gruman and Saks (2011)

observe that:

“there is overlap among many constructs in the organizational sciences. For example, meta-
analysis of the association between job satisfaction and affective commitment reveals a
correlation of .65 (Meyer, Stanley, Herscovitch, and Topolnytsky, 2002). Such levels of
association still leave room for differential relationships with other outcome variables of interest
and can add to our understanding of organizational phenomena. Nonetheless, as a relatively new
construct, more work establishing the validity, differential antecedents and differential outcomes
associated with engagement is warranted” (p. 3).

Performance Appraisal Justice and Employee Engagement

In order for employees to employ and express themselves physically, emotionally and

cognitively during role performances (i.e. displaying engagement), performance appraisals must

be perceived as fair by the employees (Latham, Almost, Mann, and Moore, 2005). Kahn (1990)

mentioned that people vary their personal engagements according to their perceptions of the

benefits, or the meaningfulness, and the guarantees, or the safety, they perceive in situations.

Psychological safety is associated with elements of social systems that create non-threatening,

predictable, and consistent social situations in which to engage. Perceptions of justice aid in

creating a sense of safety in the minds of employees as they begin to believe that even if they fail

in their task, the organization will recognize their efforts and will treat them fairly. In such a

situation, employees are able to show and employ themselves without fear of negative

consequences to self-image, status, or career (Kahn, 1990).

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 According to the social exchange theory (Blau, 1964), greater justice at workplace should

be reciprocated with behaviors that benefit the source. Basing their argument on the norms of

reciprocity, Macey and Schneider (2008) observed that engaged employees invest their time,

energy, or personal resources trusting that their investment will be rewarded (intrinsically or

extrinsically) in meaningful way by the supervisor/management. Greater justice perceptions will

more likely be related to an employee performing effectively and contributing to organizational

outcomes, leader-related outcomes and performance outcomes (Cropanzano, Bowen, and

Gilliland, 2007; Elicker, Levy, and Hall, 2006). Spell and Arnold (2007) found that justice

perceptions, within a primary appraisal role, minimize psychological distress, anxiety and

depression.

Only few researchers have tested the relationship between justice and engagement and

there has been no uniformity in the scales used in their studies and none who have tested

performance appraisal justice-engagement relationship. Moreover, there has been no study that

has tested the justice-engagement relationship in the Indian context. Saks (2006), in a study of

Canadian employees, tested the impact of procedural and distributive justice perceptions on job

and organizational engagement. In the study, he developed his own scales of job engagement and

organizational engagement rather than using any established scale. Maslach and Leiter (2008)

modeled engagement as an antipode of burnout (exhaustion, cynicism, and inefficacy). They,

however, did not use multi-factor conceptualization of justice and used a six item scale to

measure fairness. Moliner et al. (2008) tested the relationship between distributive, procedural

and interactional justices and engagement in the Spanish service sector (hotels). In the study,

they only measured vigor and dedication and left out absorption. No study has tested the

relationship between justice and engagement using established measures of both justice and

engagement and no two studies measured justice and engagement in a consistent manner. It is,

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therefore, difficult to reach any conclusion about the relationship between justice and

engagement.

As described above, the engagement construct has been operationalized in two ways:

Kahn’s (1990) view of engagement as the simultaneous employment and expression of a

person’s “preferred self” in task behaviors that promote connections to work and to others,

personal presence (physical, cognitive, and emotional), and active, full role performances; and

Schaufeli et al.’s (2002) view of engagement as conceptual opposite of burnout and as a positive

fulfilling, work-related state of mind that is characterized by vigor, dedication, and absorption. In

the present study we have used one measure of engagement from each set in order to study the

relationship of justice perceptions with both types of conceptualization of engagement 1. The first

scale is a 9-item item measure developed by Thomas (2007) and conceptualizes engagement as a

second-order one-dimensional construct comprising of first-order affective, cognitive and

behavioral components. The second measure used in the study is based on the three dimensional

conceptualization of employee engagement consisting of vigor, dedication and absorption

dimensions. The scale is a 9-item measure developed by Schaufeli, Bakker and Salanova (2006).

Thus, we hypothesize:

Hypothesis 1. Performance appraisal justice will be positively associated with Kahn’s

(1990) conceptualization of employee engagement.

Hypothesis 2. Performance appraisal justice will be positively associated with Schaufeli

et al’s. (2002) conceptualization of employee engagement.

Method

1
We believe that doing so will add robustness to the study and enhance the confidence we have in the findings.

11
Sample

The sample used in the study consisted of professionals working in Indian subsidiaries of Multi-

National Corporations (MNCs), Indian private and public sector organizations. The study was

divided into two parts. In part 1, we administered a questionnaire consisting of measures of

performance appraisal justice and Thomas’ (2007) scale of employee engagement. In part 2, we

administered a questionnaire consisting of measures of performance appraisal justice and

Schaufeli et al.’s (2006) scale of engagement. The questionnaires were uploaded on a website.

Authors sent out a mail describing the objective of the study and containing the link of the

survey to their colleagues working in the industry and to their students who had graduated from a

management program of the institute in the last 6 years. These are referred here as ‘first-level

contacts’. The first-level contacts were requested to circulate the survey mail to their colleagues

in their respective organizations. Each first-level contact reported back the number of mails

he/she had sent out. Ninety-six mails were sent out by the authors to their first-level contacts in

the industry. Combining the mails sent out by the first-level contacts, a total of 432 mails were

sent out. To encourage frank and free responses, participant anonymity was maintained.

Participation was both confidential and voluntary. The online questionnaire enabled the

respondents to fill out the questionnaire in their free time avoiding any problems of being noticed

by other colleagues or their supervisors. For the first part we received 203 responses and for the

second part we obtained 120 responses. The one hundred and twenty respondents who filled the

second part also filled the first part of the questionnaire. Only employees who had gone through

at least one performance appraisal cycle were requested to fill in the survey. The response rate

for the first part was 46.99% and for the second part was 27.78%. Ninety percent of the

respondents were male for part 1 while 91% were for part 2. Around 20% of the respondents in

part 1 were employed in public-sector organizations. For part 2 the corresponding ratio was 13%.

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Thirty-three percent belonged to the senior management (i.e. supervising more than 5

employees) and had job tenures greater than 5 years. The average reported job tenure was 5.1

years with a standard deviation of 3.9 years.

Measures
Performance appraisal justice. The performance appraisal justice items for distributive,

procedural, interpersonal and informational justices were adapted from Colquitt (2001). The

language of the items was modified to reflect performance appraisal settings. Distributive justice

was measured using 4 items (e.g. the outcome of PA process reflect the effort I have put into my

work), procedural justice was measured using 7 items (e.g. I am able to express my views and

feelings during the PA process), interpersonal justice using 4 items (e.g. during the PA meeting,

my supervisor treated me in a polite manner), and informational justice using 5 items (e.g. my

supervisor was candid in his/her communications with me). The responses were measured using

a 5-point Likert scale that ranged from “strongly disagree – (1)” to “strongly agree – (5).”

Employee engagement. The first part of the study used employee engagement measure as

suggested by Thomas (2007). The scale consisted of 9 items (e.g. I am willing to really push

myself to reach challenging work goals). Employee engagement, as measured by this scale, is

modeled as a one-dimensional construct. The second part of the study used Schaufeli et al.’s

(2006) 9-item measure of engagement. Engagement, as measured by this scale, is modeled as a

three-dimensional construct consisting of vigor (e.g. When I get up in the morning, I feel like

going to work), dedication (e.g. My job inspires me) and absorption (e.g. I get carried away

when I am working and lose track of time). The responses were measured using a 5-point Likert

scale that ranged from “strongly disagree – (1)” to “strongly agree – (5).”

Control variables: Employee gender, organization sector (private/public), employee job

position and job tenure were kept as control variables. Employee gender was modeled as a

13
categorical variable (1 – female, 0 – male). Organization sector was modeled as a categorical

variable (0 – private, 1 – public). Employee job position was measured using an interval scale

and was allowed to take values 1 (“employee supervising none”), 2 (“supervising less than 5

subordinates”), 3 (“supervising 5 to 10 subordinates”) or 4 (“supervising more than 10

subordinates”). Job tenure was modeled as a continuous variable.

Procedure

Given that the data collection technique employed in the present study was cross-sectional self-

reports, the threat of common method variance exists. In an effort to determine the extent of this

problem, a Confirmatory Factor Analysis (CFA) was used to implement Harman one-factor test

(Andrews, and Kacmar, 2001; Podsakoff, MacKenzie, Lee, and Podsakoff, 2003; Podsakoff, and

Organ, 1986). All twenty-nine items of part 1 and 2 were included in two separate one-factor

models that were estimated via LISREL 8.52 (Jöreskog and Sörbom, 1993).

The next step was to determine the dimensionality of the performance appraisal justice

and engagement scales. This is an important step for the study as it helps to identify sources of

misspecification and enhances reliability of parameter estimates (e.g. Andrews and Kacmar,

2001). Under this procedure, we performed CFA for performance appraisal justice for part 1 and

2 separately, CFA for Thomas’ (2007) scale of engagement, and CFA for Schaufeli et al.’s

(2006) scale of engagement. To assess model fit, we report the overall model chi-square

measure, the Non-Normed Fit Index (NNFI), Comparative Fit Index (CFI), Standardised Root

Mean Square Residual (SRMR) and Root Mean Square Error of Approximation (RMSEA)

(Hooper, Coughlan, and Mullen, 2008; Hu and Betler, 1999). Relative χ 2 (χ2/df) less than 2,

RMSEA less than 0.08, CFI greater than 0.95, SRMR less than 0.08, and NNFI (TLI) greater

than 0.95 were taken as acceptable threshold levels (Hooper et al., 2008; Hu and Bentler, 1999).

14
The relationships between justice perceptions and engagement were analyzed using hierarchical

regression analysis.

Results

Common Method Variance

A confirmatory factor analysis was used to implement Harman one-factor test. The 1-factor CFA

for part 1 (χ2[377]=3864.35; CFI=0.86; NNFI=0.85; RMSEA=0.22 and SRMR=0.15) and 1-

factor CFA for part 2 (χ2[377]=1915.27; CFI=0.87; NNFI=0.86; RMSEA=0.19; and

SRMR=0.12) both showed poor fit indicating that the one-factor model did not fit the data well.

While the results of these analyses do not preclude the possibility of common method variance,

they do suggest that common method variance is not of great concern and thus is unlikely to

confound the interpretations of results.

CFA for Performance Appraisal Justice

Table 1 summarizes the results of CFA runs of performance appraisal justice scale. Table A1 of

appendix shows the final item loadings of items retained after CFA.

………………………………..
Insert Table 1 about here
………………………………...

Part 1. We assessed the fit of our data to a measurement model prior to assessing substantive

relationships. We first specified a one-factor model (model 1) in which all 20 items loaded on a

single latent variable. The results of this model indicated poor fit to the data in an absolute sense

(χ2[170]=807.70; CFI=0.94; NNFI=0.93; RMSEA=0.14; and SRMR=0.071). The items did not

appear to reflect a single justice factor. Next, we specified a four-factor model (model 2) in

which we loaded each item onto its corresponding justice dimension, allowed error variances of

items measuring same justice sub-dimensions to correlate and removed overlapping items.

Results of CFA indicated that this model fit the data in an absolute sense (χ 2[110]=189.16;

15
CFI=0.99; NNFI=0.99; RMSEA=0.06; and SRMR=0.05) and as compared to model 1

(∆χ2[60]=618.54, p<0.01).

Part 2. Proceeding in exactly the same manner as in part 1, we specified a one factor

model (model 1) that showed poor fit with the data (χ 2[170]=612.54; CFI=0.92; NNFI=0.91;

RMSEA=0.15; and SRMR=0.09). Next, we specified a four-factor model (model 2) in which we

loaded each item onto its corresponding justice dimension, allowed error variances of items

measuring same justice sub-dimensions to correlate and removed overlapping items. The CFA

results showed good fit in absolute sense (χ 2[108]=183.07; CFI=0.98; NNFI=0.97;

RMSEA=0.08; and SRMR=0.07) as compared to model 2 (∆χ 2[62]=429.47, p<0.01). All fit

indices showed good fit.

CFA for Engagement

Table 2 summarizes the results of CFA runs for engagement. Table A2 of appendix shows the

final item loadings of items retained after CFA.

………………………………..
Insert Table 2 about here
………………………………...

Part 1. For the first part, we used Thomas’ (2007) scale of employee engagement. Engagement,

as measured by this scale, is a one-dimensional construct. We, therefore, specified one-factor

model and loaded all the items onto a single factor. To account for variance due to measurement

artifacts and wording similarity, we allowed error variances of items to correlate. The CFA

results showed excellent fit (χ2[22]=28.56; CFI=1.00; NNFI=1.00; RMSEA=0.04; and

SRMR=0.02).

Part 2. For the second part, Schaufeli et al.’s (2006) scale of employee engagement was

used. Engagement, as measured by this scale, is a three-dimensional construct. We began by

specifying a one factor model. The CFA results showed poor fit (χ2[27]=124.45; CFI=0.93;

16
NNFI=0.91; RMSEA=0.18; and SRMR=0.08). A three-factor model (model 2) was specified in

which individual items were loaded onto their respective latent dimensions. Two items (one

measuring dedication and another measuring absorption) were dropped from the scale as they

loaded onto multiple dimensions. The model showed excellent fit in absolute sense

(χ2[11]=18.92; CFI=0.99; NNFI=0.98; RMSEA=0.08; and SRMR=0.03) and as compared to

model 1 (∆χ2[16]=105.53, p<0.01).

Discriminant validity test. We loaded the engagement items of the two measures onto a

single factor and checked for the model fit. The CFA results showed that the model did not fit

the data well (χ2[77]=398.28; CFI=0.91; NNFI=0.89; RMSEA=0.19; and SRMR=0.08). Next,

we loaded the individual items onto their respective factors. As mentioned above, the items for

Thomas’ (2007) measure were all loaded onto a single factor while the items of Schaufeli et al.’s

(2006) were loaded onto the respective first-order factors. The CFA results showed good fit in

absolute sense (χ2[70]=118.90; CFI=0.98; NNFI=0.98; RMSEA=0.08; SRMR=0.11) and as

compared to one-factor model (∆χ2[7]=279.38, p<0.01). The results proved that the measures

indeed measured different types of engagement.

Test of Substantive Relationship

Table 3 reports descriptive statistics and correlations among the study variables. As shown in the

table, all the study variables possess adequate internal consistency. Our findings suggest that

there is a significant association between engagement and justice perceptions which ratified our

hypothesis in both studies. The correlations between justice and both measures of engagement

were significant and in positive directions. The correlations suggest that individuals who

reported that they were more engaged in their jobs also reported higher levels of justice.

Although these zero-order correlations are meaningful and provide preliminary support for our

theorizing, we formally tested our hypotheses through hierarchical regression analysis.

17
 ………………………………..
Insert Table 3 about here
………………………………...

Table 4 shows the results of hierarchical regression analysis. We hypothesized that

justice dimensions would be positively related to employee engagement dimensions. Results of

regression analysis provided support for hypothesis 1 and 2. One dimensional engagement was

positively associated with interpersonal justice (β=0.21, p<0.1) and informational justice

(β=0.35, p<0.01). Vigor was positively associated with distributive justice (β=0.47, p<0.01).

Dedication was positively associated with distributive justice (β=0.44, p<0.01) and informational

justice (β=0.38, p<0.01). Absorption was positively associated with procedural justice (β=0.34,

p<0.01). Second order Schaufeli et al.’s (2006) engagement was positively associated with

distributive justice (β=0.31, p<0.05) and informational justice (β=0.25, p<0.05).

Significant relationships were found to exist between distributive and informational

performance appraisal justice dimensions and engagement, even when we used measures of

engagement that conceptualize it differently. The results thus provide some support for the

justice-engagement relationship. The variance explained (R2) by justice construct in the first

model was 0.12 while in the second model was 0.28. The results show a stronger relationship

between justice and engagement when it is conceptualized as an antipode of burnout.

Discussion

The study tests the relationship between performance appraisal justice perceptions and

engagement. Employees who perceive distributive and informational justice during performance

appraisal process are more likely to be engaged in their work and exhibit greater well-being. The

two justice dimensions were found to significantly predict engagement irrespective of the

manner in which it is conceptualized. This strongly suggests that employee perceptions of these

two justices play an important role in deciding his/her engagement at workplace.

18
 The research illuminates the nature of the behavioral contributions made by employees to

their organizations as a function of their justice perceptions. More specifically, employees who

perceive procedural justice during performance appraisal session show greater absorption,

employees who perceive distributive performance appraisal justice exhibit greater dedication and

vigor. Employees who perceive informational justice are more physically, cognitively and

behaviorally engaged in their work. Also, they are more likely to show greater overall motivation

and commitment to their job, feel excited and take pride in their work, search for new ways of

doing things, and try to go an ‘extra mile’ in order to do their job well.

The results of the study show that distributive justice and informational justice take

precedence over procedural justice. Employees who feel that they have been given fair ratings

also tend to believe that the procedures followed are fair and just. When an employee feels that

the outcomes (salary hike, rewards etc) commensurate with the effort put in, he/she reciprocates

it with greater vigour, dedication and is more engaged (physically, cognitively and emotionally)

in his/her job. Thus, distributive justice is more important than procedural justice during

performance appraisals. Due-process appraisal system consists of three important characteristics:

adequate notice – requires organizations and their agents to publish, distribute, and explain

performance standards to employees, to discuss how and why such standards must be met, and to

provide for regular and timely feedback on performance; fair hearing – requires a formal review

meeting in which an employee is informed of a tentative assessment of his or her performance

and how it was derived by his or her manager; and judgment based on evidence – requires the

organization and its agents to apply performance standards consistently across employees,

without yielding to external pressure, corruption, or personal prejudice (Folger, Konovsky and

Cropanzano, 1992). Informational performance appraisal justice is an essential component of

employee’s due process and determines the amount of information and the truthfulness of the

19
information that gets shared with the employees. The informational aspect of justice increases

individuals’ perceptions of instrumental control over the appraisal process and enhances their

sense of self-worth and group standing (Taylor et al., 1995). Employees who perceive that they

have been communicated the necessary and needed information during the performance

appraisal process tend to exhibit greater engagement at their work.

Contributions to Practice

Our findings have practical implications. First, at a very general level, our results suggest that

distributive and informational justice perceptions lead to enhanced engagement among

employees. In a performance appraisal setting, it is important for the supervisor to ensure that the

outcomes of the performance appraisal are distributed fairly and equitably. The procedures

should be explained to the employees and all the relevant information should be communicated

to them timely. Explanations should be provided to the employee regarding the outcomes of the

appraisal process and all the rewards/punishments awarded to the employee should be given

along with proper feedback and in a manner that is perceived as fair. Raters should choose

explanations for favorable ratings that emphasize aspects of the ratee’s behavior as the basis for

the rating. This will allow personal attributions and enhance ratee’s self-efficacy (Holbrook,

2002). These findings suggest that rather than spreading resources over various actions aimed at

assessing and improving a variety of attitudes and motivational states, it may be worthwhile to

focus resources on ensuring fair distribution of rewards and appraisal related information.

The impact of justice perceptions on employees’ feeling of burnout and well-being is

significantly greater. An employee who perceives justice at workplace has positive feelings

about health, well-being and has lesser chances of reporting burnout at work. Though there is

already good reason to believe in the value of justice that can increase the prevalence of these

factors at work, their strong impact on engagement provides an additional reason for

20
recommending these practices. Leadership training that focuses on justice can foster perceptions

among employees that the organization is supportive and can lead to significant enhancement in

employee engagement.

Implications for Research

The present study contributes to justice, performance appraisal and engagement literature in

multiple ways. This study tests the possible relationships between performance appraisal justice

mechanisms and subordinate engagement. Through a confirmatory test of performance appraisal

justice, we provide an understanding of performance appraisal justice and its constituent

dimensions in the Indian context. The justice scale confirmed in the present study can be used in

future studies on performance appraisal justice. Next, the study tests the impact of performance

appraisal justice on engagement. Informational performance appraisal justice and distributive

performance appraisal justice perceptions emerge as important antecedents of employee

engagement. Future studies should verify the findings of the present study and ascertain the

importance of informational justice and distributive justice in a performance appraisal setting.

An important area of future research could be to analyze the important mediating mechanisms

through which justice influences engagement. Variables such as value congruence, perceived

organizational support, core self-evaluations, perceived supervisory support can be explored as

possible mediating variables for the relationship. Given the accepted importance of employee

engagement by academicians and consultants around the world and the idiosyncrasies of the

Indian context, it is imperative that the topic of engagement is given more attention. Embedded

in an Indian cultural context, the study extends the limited set of studies that have focused on

engagement and performance appraisal justice.

Limitations

21
Although the findings of this study are in line with the developed theory, there is space to

address the limitations in carrying out similar future research. For instance, though we used

multiple measures of engagement and collected responses over multiple periods of times, our

research was cross-sectional and any inferences regarding causality are limited. However, we

had strong theoretical and logical reasons to presume causal ordering, which was subsequently

reflected in our statistical analysis.

Further, we did not analyze the impact of the type of performance appraisal systems

which participants were exposed to on their perceptions of performance appraisal justice.

Participants of this study were from different organizations. It is likely that different

organizations follow different types of performance appraisal systems. These differences may

cause differences in the perceptions of performance appraisal justice and their impact on

engagement. Future studies on this topic should also consider the type of performance appraisal

system followed in an organization as a possible influencer of the relationship between

performance appraisal justice perceptions and engagement.

All responses on engagement and justice scales were from self-report measures, and

therefore, it is likely that method variance inflated the relationships among these variables.

Though, we checked for the common method variance through the Harman 1-factor test, the

possibility of this error cannot be all together discounted.

A possible area of concern in studies such as this is regarding the problem associated

with the use of instruments developed in the US with samples from other cultures. Fortunately,

the present sample consisted of employees having a university degree wherein the medium of

education was English. As a result, we feel that though the problems of language associated with

the use of the instrument in English were present, they were not significant.

Conclusion

22
The study contributes to HRM, justice and engagement literature by testing the relationship

between performance appraisal justice and employee engagement in the Indian context.

Psychometrically valid scales for performance appraisal justice, engagement and test of

relationships between them have been provided. The validated scales provided here can be

further used by researchers in their studies on engagement and justice in the Indian context. A

positive and significant relationship between justice perceptions and engagement has been

established. Distributive justice and informational justice dimensions have been found to have

stronger impact on employee well-being, health and reported levels of burnout. To the best of

our knowledge, such a study is the first of its kind to be undertaken in the Indian context. Results

from this study have strong implications for mangers and provide seeds for future research.

Acknowledgment
We gratefully acknowledge the helpful comments of anonymous reviewers on earlier drafts of
this manuscript.

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Appendix

………………………………..
Insert Table A1 about here

28
 ………………………………...

………………………………..
Insert Table A2 about here
………………………………...

Table 1. Summary of CFA Runs for Performance Appraisal Justice Scale

Part 1 (N = 203)
Structure χ2[df] CFI NNFI SRMR RMSEA ∆ χ2[df]a

29
Model 1: One-factor model 807.70 [170] 0.94 0.93 0.071 0.14 --
Model 2: Four-factor model 189.16 [110] 0.99 0.99 0.047 0.061 618.54 [60]*

Part 2 (N = 120)
Structure χ2[df] CFI NNFI SRMR RMSEA ∆ χ2[df]a
Model 1: One-factor model 612.54 [170] 0.92 0.91 0.088 0.152 --
Model 2: Four-factor model 183.07 [ 108] 0.98 0.97 0.067 0.078 492.47 [62]*
a - ∆ χ2 tests relative to preceding model
* p < 0.01

Table 2. Summary of CFA Runs for Engagement Scales

Part 1 (N = 203)
Structure χ2[df] CFI NNFI SRMR RMSEA ∆ χ2[df]a

30
Model 1: One-factor model 28.56 [22] 1.00 1.00 0.024 0.039 --
Part 2 (N = 120)
Structure χ2[df] CFI NNFI SRMR RMSEA ∆ χ2[df]a
Model 1: One-factor model 124.45 [27] 0.93 0.91 0.078 0.18 --
Model 2: Three-factor model 18.92 [11] 0.99 0.98 0.033 0.08 105.53 [16]*
Discriminant Validity Test
Structure χ2[df] CFI NNFI SRMR RMSEA ∆ χ2[df]a
Model 1: One factor model 398.28 [77] 0.91 0.89 0.081 0.19 --
Model 2: Two factor model 118.90 [70] 0.98 0.98 0.11 0.078 279.38 [7]*
a - ∆ χ2 tests relative to preceding model
* p < 0.01

Table 3. Descriptive Statistics and Correlations for Study Variables

M SD 1 2 3 4 5 6 7 8 9

31
1. PJ 3.01 0.82 (0.78 -- -- -- -- -- -- -- --
)
2. DJ 3.26 0.97 0.80* (0.90 -- -- -- -- -- -- --
)
3. INTPJ 3.95 0.72 0.54* 0.58* (0.84 -- -- -- -- -- --
)
4. INFJ 3.38 0.87 0.66* 0.65* 0.69* (0.81) -- -- -- -- --
5. VIG 3.62 0.86 0.45* 0.50* 0.35* 0.43* (0.89) -- -- -- --
6. DED 3.62 0.92 0.44* 0.55* 0.38* 0.54* 0.77* (0.86) -- -- --
7. ABS 3.85 0.80 0.39* 0.36* 0.18 0.30* 0.55* 0.59* (0.72) -- --
8. ENGC 4.14 0.74 0.33* 0.33* 0.38* 0.33* 0.70* 0.66* 0.62* (0.94) --
9. ENGSCH 3.70 0.75 0.49* 0.54* 0.35* 0.49* 0.89* 0.91* 0.81* 0.76* (0.90)

Note:
1. PJ – Procedural Justice; DJ – Distributive Justice; INTPJ – Interpersonal Justice; INFJ – Informational
Justice; VIG – Vigor; DED – Dedication; ABS – Absorption; ENGC – Engagement measured using
Thomas (2007) scale; ENGSCH – Engagement measured using Schaufeli et al.’s (2006) scale
2. Coefficient alpha reliability estimates are provided in parenthesis along the diagonal
3. Correlations shown are Pearson bivariate correlation
4. * p<0.01(two-tailed).

Table 4. Hierarchical Regression Results

32
 Vigor Dedication Absorption Schaufeli et al.’s One-dimensional
(N=120) (N=120) (N=120) Engagement Engagement
(N=120) (N=203)

Step1 Step2 Step1 Step2 Step1 Step2 Step1 Step2 Step 1 Step 2

Gender 0.017 0.006 -0.025 -0.055 0.032 0.027 0.008 -0.016 -0.032 -0.032
OrgSec 0.043 0.058 0.130 0.176 0.033 0.071 0.082 0.131 0.072 0.119
JobPos 0.123 0.024 0.148 0.026 0.167 0.125 0.168 0.064 0.097 0.045
JobTen 0.067 0.059 0.042 0.035 0.074 0.021 0.070 0.038 0.038 0.019
PJ 0.116 -0.152 0.344* 0.070 0.127
DJ 0.473* 0.439* 0.045 0.314** 0.097
INTPJ 0.101 -0.057 -0.047 -0.048 0.212$
INFJ 0.181 0.380* 0.057 0.253** 0.352*
∆R2 0.031 0.214* 0.052 0.333* 0.047 0.113* 0.055 0.278* 0.023 0.120*
R2 0.031 0.245 0.052 0.385 0.047 0.159 0.055 0.333 0.023 0.143
Adj. R2 -0.01 0.210 0.017 0.338 0.012 0.120 0.020 0.282 -0.012 0.104

Note:
1. Standardized coefficients (betas) are reported. Gender, Organization Sector (OrgSec), Job Position
(JobPos) and Job Tenure (JobTen) entered in Step 1. Procedural Justice (PJ), Distributive Justice (DJ),
Interpersonal Justice (INTPJ), and Informational Justice (INFJ) entered in Step 2.
* p < .01. ** p < .05. $ p < .10.

Table A1. Performance Appraisal Justice Items and Factor Loadingsa

33
 Items Part 1b Part 2c
Procedural Justice (Part 1 – α = 0.78; Part 2 – α = 0.80)
2. I have influence over the outcomes of PA procedures. 0.53 0.59
3. The procedures followed during PA process have been applied consistently in my 0.61 0.56
organization.
4. The procedures followed during PA process are free of bias. 0.73 0.70
5. The PA procedures are based on accurate information. 0.71 0.73
6. I can appeal against the outcomes arrived at by the PA procedures. 0.53 0.59
Distributive Justice (Part 1 – α = 0.90; Part 2 – α = 0.90)
1. The outcome of PA process reflects the effort I have put into my work. 0.76 0.76
2. The outcome of PA process is appropriate for the work I completed. 0.83 0.87
3. The outcome of PA process reflects what I have contributed to the organization. 0.88 0.83
4. The outcome of PA process is justified, given my performance. 0.87 0.80
Interpersonal Justice (Part 1 – α = 0.84; Part 2 – α = 0.81)
1. During the PA meeting, my supervisor treated me in a polite manner. 0.72 0.72
2. My supervisor treated me with dignity during the PA meeting. 0.90 0.87
3. My supervisor treated me with respect during the PA meeting. 0.82 0.80
4. My supervisor refrained from improper remarks or comments. 0.60 0.50
Informational Justice (Part 1 – α = 0.81; Part 2 – α = 0.81)
1. My supervisor was candid in (his/her) communications with me. 0.66 0.68
2. My supervisor explained the procedures of the PA process thoroughly. 0.74 0.69
3. My supervisor gave reasonable explanations regarding the procedures. 0.78 0.75
5. My supervisor tailored (his/her) communications to my specific needs. 0.64 0.65
Dropped Items
1. I am able to express my views and feelings during the PA meeting (Procedural Justice)
7. The PA meetings upheld ethical and moral standards (Procedural Justice)
4. My supervisor communicated details regarding the PA process in a timely manner. (Informational Justice)
a - All factor loadings are significant at p<0.01; b – n = 203; c – n = 120

Table A2. Engagement Scale Items and Factor Loadingsa

34
 Thomas (2007) Items Loadingsb
1. I am willing to really push myself to reach challenging work goals. 0.78
2. I am ready to put my heart and soul into my work. 0.70
3. I am prepared to fully devote myself to performing my job duties. 0.85
4. I get excited thinking about new ways to do my job more effectively. 0.80
5. I am enthusiastic about providing a high quality product or service. 0.87
6. I am willing to “go the extra mile” in order to do my job well. 0.91
7. Trying to constantly improve my job performance is very important to me. 0.81
8. My job is a source of personal pride. 0.64
9. I am determined to be complete and thorough in all my job duties. 0.79
Schaufeli et al. (2006) Items Loadingsc
Vigor (α = 0.89)
1. When I get up in the morning, I feel like going to work. 0.76
2. At my work, I feel like bursting with energy. 0.91
3. At my job, I feel strong and vigorous. 0.93
Dedication (α = 0.86)
1. My job inspires me. 0.91
3. I am proud of the work I do. 0.86
Absorption (α = 0.72)
2. I am immersed in my work. 0.79
3. I feel happy when I am working intensely. 0.74
Dropped Items
2. I am enthusiastic about my job (Dedication).
1. I get carried away when I am working and lose track of time (Absorption).
a - All factor loadings are significant at p<0.01; b – n = 203; c – n = 120

35