Effects of Employees’ Perception of Performance Appraisal Fairness on Job Satisfaction (The Case of Adama Science and Technology University)

Abstract

This study investigates the effect employees’ perception of fairness in the performance appraisal system on job satisfaction of an employee. The perceived fairness in appraisal system is discussed with the help of organizational justice theory which was principally derived from Adam’s equity theory and used by many researchers in organizational research. The perception of fairness in performance appraisal  system  consists  of  three  main  factors:  Distributive  justice,  procedural justice,  interactional  justice  and  are  used  as  independent  variables  and  job satisfaction of an employee as dependent variable. Using a random sample of 297 employees from a total of 1624 population the required data is obtained through structured questionnaires. Descriptive statistics, independent sample t-test, one way- ANOVA, correlation analysis and multiple regression analysis were performed. The independent sample t-test shows that there is significant difference between genders in fairness perception in performance appraisal system, however there is no significant difference between genders in distributive and procedural fairness perception. The one way-ANOVA test shows that there is significant difference among work experience groups and age level groups, however no significant difference found among educational level groups. The descriptive finding of the study shows that in ASTU employees had low level of fairness perception towards the existing performance appraisal practice, and low level of job satisfaction. The correlation analysis   result also indicates that distributive, procedural and interactional fairness in the appraisal system had positive and significant relationship with job satisfaction. Whereas the finding of multiple regression analysis indicates that distributive, procedural and interactional fairness in the appraisal system had positive and significant influence job satisfaction. The human resource management of the University should create organizational climate that enhance positive perception among employees regarding distributive, procedural, and interactive justices of performance appraisal more than ever.