978-3-659-11868-5

Title

IMPACT OF PERCEIVED FAIRNESS INPERFORMANCE APPRAISAL ON

ORGANIZATIONAL COMMITMENT ANDORGANIZATIONAL CITIZENSHIP BEHAVIOR

[EVIDENCE FROM BANKING SECTOR OFPAKISTAN]

Author

SAHER KHUSHI MUHAMMADRIZWAN SAEED

Dedicated

To

Allah Almighty Creator of the Universe

The Lord of Lords

And

Holy Prophet Muhammad (PBHU)

Great human educator the cause of creation of theuniverse

And

My affectionate and loving Parents

Whose encouragement, inspiration, appreciation,sacrifices, prayers and kind guidance helped me in the

course of my life and proved a beam of light in thedarkness of life at every moment.

And

My dearest Brothers & loving Husband

Who helped me and encourage me whatever and

whenever I need.

TABLE OF CONTENTS

CHAPTER CONTENTS PAGE No.

TITLE PAGE 1

DEDICATION 2

TABLE OF CONTENTS 3

CHAPTER-I THE PROBLEM & ITS SETTING

1.1. Introduction 8

1.2. Significance of the Study 13

1.3 Purpose of the Research Study 15

1.4. Summary of the Chapter 17

CHAPTER -II LITERATURE REVIEW

2.1. Theoretical Background 18

2.1.1 Mode of Theorizing 19

2.2. Preceding Study 20

2.2.1 Performance Appraisal 20

2.2.2. Organizational Commitment 42

2.2.3. Organizational Citizenship Behavior 47

2.2.4. Performance Appraisal Fairness and

Organizational Commitment 56

2.2.5 Performance Appraisal Fairness and

Organizational Citizenship Behavior 59

2.2.6. Organizational Commitment and


2.2.7. Performance Appraisal Fairness, Org.

Commitment and Org. Citizenship 66


CHAPTER-III RESEARCH METHODOLOGY

3.1. Scheme of Research Study 69

3.2. Research Model 70

3.2.1. Hypothesis 71

3.3 Research Design 71

3.3.1. Sampling Technique 71

3.3.2. Survey Methods 72

3.3.3. Response Rate ` 73

3.3.4. Description of Instruments 74

3.3.5. Measures 76

3.4. Questionnaire 77

3.4.1. Biographical Questionnaire 78

3.4.2. Perceived Fairness in Performance Appraisal78

3.4.3. Outcomes of Performance Appraisal Fairness80

3.5. Research Question 82

3.6. Statistical Techniques 82

3.6.1. Descriptive Statistics 83

3.6.2. Inferential Statistics 83


CHAPTER-IV RESEARCH FINDINGS

4.1. Demographical Characteristics 86

4.2. Descriptive Statistics 90

4.3. T- Test 91

4.4. Analysis of Variances (ANOVAs) 94

4.5. Regression Analysis 99


CHAPTER-V FINDINGS & DISCUSSION OF

THE STUDY

5.1. Discussion of Findings 109

5.2. Conclusion 111

5.3. Contribution to the Study 111

5.4. Implications for Management 112

5.5. Limitations of the Study 114

5.6. Directions for Further Research 116

REFERENCE 120

APPENDIX 139

LIST OF TABLES

Table 4.1 Demographic Characteristics of

Respondents 87

Table 4.2 Descriptive Statistics 90

Table 4.3 T-Test Group Statistics 91

Table 4.4 Independent Samples T-Test 93

Table 4.5 Test of Homogeneity of Variances for

Organizational Commitment 95

Table 4.6 ANOVA for Age 97

Table 4.7 ANOVA for Year of Experience 97

Table 4.8 ANOVA for Level of Employment 98

Table 4.9 ANOVA for Current Experience 98

Table 4.10 Perceived Fairness in Performance

Appraisal & Org. Commitment 100

Table 4.11 Perceived Fairness in Performance

Appraisal and Org. Citizenship 103

Table 4.12 Organizational Commitment and


LIST OF FIGURES

Figure 1 HYPOTHESIZED RELATIONSHIP 70

CHAPTER 01

THE PROBLEM AND ITS SETTING

1.1 INTRODUCTION

Human resource is an essential key of management,

because it serves as a machinery of an organization.

Moreover, it leads to continuous and systematic

developments of the organization including promoted

the effective function and successful organization.

Thus, all organizations required human or the

employees that are able to perform effective

cooperation.

Measuring, developing and evaluating human

performance has always been an attractive deal of

interest for researchers and specialist. No doubt, there

is an essential role played by performance appraisal

from ancient times to immediate past. In today’s

business environment performance appraisal is very

important for continuous improvement. Today, a large

number of organizations are using performance

appraisal as a tool to retain the best employees and get

rid of those ones that constitute a liability.

In the organizations, employee’s performance

appraisal is the most widely used management

practices. According to the view point of human

resource specialists and managers, for the effective

functioning of the organization, performance appraisal

is one of the most important and critically needed

tools for the improvement in performance and the

management of human resource practices

(Longenecker & Goff, 1992). Performance appraisal is

a key tool in the organization that helps the

management the management of the organization to

effectively meet their objectives and goals. For the

effective functioning of performance appraisal, it

should be properly documented and there should be a

commitment from the management side to make the

performance appraisal system fair and effective in the

organization. For this reason the typical standards of

the organization regarding performance appraisal

process should be consistent, fair, accurate (based on

facts, not opinion), and contain as much direct

observation & objective documentation as possible.

Notwithstanding its extensive use, or most probably

due of it, the formal practice of performance appraisal

is continuously under considerable criticism and

become a subject of great scrutiny. According to

Bernardin and Beatty (1984) the reaction of

employees towards performance appraisal system is

generally presumed to be the better indicator to judge

the overall viability of the appraisal system than the

more narrow psychometric indices. Ilgen & Feldman

(1993) states that most often employees felt satisfied

with appraisal ratings when these ratings match with

their overstated beliefs about their performance and

discrepancy of these appraisals rating can create

interpersonal conflicts between supervisor and

subordinate.

According to Bretz, Milkovich & Read (1992) the

most common issue regarding performance appraisal

which is faced by organizations is the perceived

fairness on the performance appraisal system.

Research indicates that in general the perceptions of

fairness come up with the consideration of the

received results known as outcome fairness, the

procedures which are used to reach those results or

outcomes known as procedural fairness, and the way

in which these decision-making procedures were

communicated, implemented and explained known as

interpersonal fairness (Smither, 1998). The

explanation of these components of fairness is usually

taken from the research and literature of the

organizational justice. Fairness in the organizations is

extensively studied in the field of organizational

justice by many researchers and specialist. The theory

of organizational justice has been extensively applied

to a large number of organizational systems and due to

this reason it provides a strong theoretical base to

investigate the complexities of performance appraisal

in detail.

Performance appraisals are used in the organizations

as a way to communicating with the employees about

their performance and giving them advices regarding

the required changes into their behavior and attitudes.

Major concepts of organizational justice related to

performance appraisal fairness and reactions of

employees related to these different types of injustice

have been well documented in the organizations

(Cropanzano & Greenberg, 1997). Considerable

evidence has been provided by Prior empirical

research that the level of organizational justice has

been proved as an important predictor of different

employee behaviors and attitudes like organizational

commitment, organizational citizenship behavior, job

satisfaction and trust (Rupp & Cropanzan 2002;

Masterson et al 2000). In organization behavior (OB)

field, organizational commitment and organizational

citizenship behavior are two important constructs.

This research study focuses on how the sense of

justice regarding performance appraisals, affects an

individual employee organizational behavior like

organizational commitment and organizational

citizenship behavior. Koys (1988) states that

commitment of the employees towards their

organization based on their belief that the

organization’s HRM practices were motivated by a

desire to be fair in the treatment of employees and to

attract and retain good employees in the organization.

When focusing on employee behaviors that can

enhance and contributes into organizational success,

Katz (1964) identifies the employee’s citizenship

behavior that is necessary for the overall effectiveness

of any organization system. Katz (1964) incorporates

a difference between formal in-role and extra-role

behaviors that are involved in effective organizational

functioning.

The main purpose of this present research study is to

examine that how the sense of justice regarding

performance appraisals, affects an individual

employee organizational behavior like organizational

commitment and organizational citizenship behavior

and also the impact of organizational commitment on

organizational citizenship behavior in the banking

sector of Pakistan.

1.2 SIGNIFICANCE OF THE STUDY

In this research study an effort has been done to

illuminate the organizational justice literature

regarding performance appraisal to more fully explain

employees' perceptions of fairness concerning

performance appraisal. Performance appraisal fairness

has been recognized as a significant determinant to

evaluating the effectiveness and usefulness for the

organizational work (Erdogan 2002). This thesis

extends fairness of performance appraisal research by

examining organizational commitment and


sector of Pakistan. The present study will provide

important information regarding the relative impact of

fairness in performance appraisal on organizational


and also the impact of organizational commitment on


sector of Pakistan. As banks play a vital role in the

economic development of any country. Pakistan also

has a well-developed banking system that plays a very

important and positive role in the economic

development of the country. A lot of research work

has been done in the banking sector of Pakistan. But

there is a little hard evidence found for the research

work on the perceived fairness in performance

appraisal impact on organizational commitment and


sector of Pakistan. So, the reason for choosing the

banking sector of Pakistan for the present research

study is to fill the gap of that research. This present

research work will undoubtedly prove to be a

significant addition into the current body of

knowledge. This research study also has various

applied aspects. Such as, findings of this research

work may be communicated to the bank authorizes for

implementation in the banking sector of Pakistan to

increase the commitment and citizenship behavior of

the employees employed into the banks by practicing

the perceived fairness in the performance appraisal

system.

1.3 PURPOSE OF THE RESEARCH STUDY

The purpose of this research study is to scrutinize the

effects of perceived fairness in performance appraisal

on organizational commitment and organizational

citizenship behavior in banking sector of Pakistan and

also find out the role of organizational commitment

between perceived fairness in performance appraisal

and organizational citizenship behavior. Identification

of high performance generating factors is a difficult

job, but most of the organizations, round the globe, are

claiming ‘human resource as most valuable resource’.

Making best use of organization’s favorite resource

requires the evaluation of their performance. As

performance appraisal provides opportunities to the

managers and employees that they can discuss the

areas in which employees excel. This research is

aimed to find out the impact of perceived fairness in

performance appraisal at organizational level.

The main objectives of this study are:

• To examine the impact of perceived

fairness in performance appraisal on

organizational Commitment at the

employees of banking sector in Pakistan

• To examine the impact of perceived

fairness in performance appraisal on

Organizational Citizenship Behavior at

the employees of banking sector in

Pakistan.

• To examine the relationship of

organizational commitment (OC) and

Organizational Citizenship Behavior

(OCB) at the employees of banking

sector in Pakistan.

1.4 SUMMARY

In this chapter, an insight on the perceived fairness in

performance appraisal and its impact on


citizenship behavior are discussed. Theme of the study

is to explore the impact of perceived fairness in

performance appraisal on organizational commitment

and organizational citizenship behavior in the banking

sector of Pakistan and also explore the impact of

organizational commitment on organizational

citizenship behavior. In order to develop a conceptual

framework, in the next chapter a review will be

presented on perceived fairness in performance

appraisal, organizational commitment and

organizational citizenship behavior.

CHAPTER 02

LITERATURE REVIEW

2.1 THEORETICAL BACKGROUND

Measuring, developing and evaluating human

performance has always been an attractive deal of

interest for researchers and practitioners. No doubt,

there is an important role played by performance

appraisal from ancient times to immediate past. In

today’s business environment performance appraisal

is very important for continuous improvement. Today,

a large number of organizations are using performance

appraisal as a tool to retain the best employees and get

rid of those ones that constitute a liability. This

research project will undoubtedly add the contribution

of different researchers and authors as a literature

review and guideline for the study on performance

appraisal

The chapter clarifies the fairness of performance

appraisal concept. It will further summarized through

sentiments of authors in the fairness of performance

appraisal literature. Furthermore, theoretical

underpinnings for organizational commitment and

organizational citizenship behavior that influence

fairness of performance appraisal will be explain in

this chapter.

2.1.1 Mode of Theorizing

Our study is based on the impact of perceived fairness

of performance appraisal on organizational


in the banking sector of Pakistan and also the impact

of organizational commitment on organizational

citizenship behavior. Different opinions have been

found about the impact of fairness of performance

appraisal on organizational commitment and

organizational citizenship behavior through research

and studies of different researchers and authors. In this

research study research has tried to discuss those

elements of fairness of performance appraisal,


citizenship behavior that are agreed upon by different

researchers.

2.2 PRECEDING STUDIES

2.2.1 Performance Appraisal

Performance appraisal may be defined as

“a structured formal interaction between

a subordinate and supervisor, that usually

takes the form of a periodic interview

(annual or semi-annual), in which the

work performance of the subordinate is

examined and discussed, with a view to

identifying weaknesses and strengths as

well as opportunities for improvement

and skills development (North 2005) ”

According to Wright (2002), performance appraisals

can be traced back to the Han Dynasty (206BC -220

AD). Coens and Jenkins (2000) states that the exact

origin of performance appraisals is not known but the

practice can be dates back to the third century when

the emperors of the Wei Dynasty (221-265AD) rated

the performance of the official family members.

Ignatius Loyola established a procedure to formally

rate members of the Jesuit Society (Whisler & Harper,

1962). Fairness of raters was questioned by the

Chinese philosopher Sin Yu since the third century

who alleged that “the Imperial Rater of Nine Grade

seldom rates men according to their merits, but always

according to his likes and dislikes” (Banner & Cooke,

1984). In his book first published in 1957, McGregor

(1962) questions the ethical perspectives of man

sitting in judgment of another for purposes of

controlling rewards. Our Holy book Quran also states

the importance of justice in judgments as it is stated in

Surah 4: verse 58 of Holy Book translated by Yusuf

Ali:

ALLAH doth command that you render back

your trusts to those whom they are due; and

when ye judge between man and man that ye

judge with justice: verily how excellent is the

teaching which He giveth you! For Allah is He

who heareth and seeth all things.

(Quran, Surah 4: verse 58, p. 197)

Performance appraisals were formally implemented in

the United States military in 1813. According to

Banner et al (1984), the military was in the forefront

in developing the performance appraisal techniques

such as ranking, forced-choice, and trait-rating scales.

Another precedence of performance evaluation is

noted by Wiese et al (1998) when the unions, in the

early 1900s recommended seniority based decisions

over performance-based decisions. This provided

supervisors with discretionary power in relation to

salary increases, promotions and other human

resource outcomes, which created negative job related

behavior in followers. The technological age guided

the quantitative decision techniques that ushered the

interest of managers toward concern with systematic

control and measurement and away from the “human

relations philosophy” and social aspects of workplace

activity (Whisler et al., 1962).

Performance appraisal, within its wider sense serves

three major purposes in the organization: i.e.

Administration, development and communication

(Ferris, Butler & Napier, 1991). Administrative

functioning of performance appraisal includes

staffing, promotion, reward accompany with the

structure of compensation and penalty while

development function of the performance appraisal

includes the identification and development approach

of future performance which ultimately leads towards

the planning of personal development and Finally the

communication function helps the organization to give

feedback to employees regarding their current

performance and guiding them towards their future

goals.

Three broad areas which are closely relating to

performance appraisal are identified in the literature.

Firstly, developing and shaping of appraisal

instruments to measure human performance perfectly

and impartially (Tznier et al, 1993). Secondly, a

researcher focuses on the employee and supervisor

characteristics and their prospective prejudice on

performance appraisal ratings (Dewberry 2001;

Cleveland & Murphy 1992). While the third area

focuses on the applications and kinds of performance

appraisal systems within the organizations (Scott &

Einstein, 2001).

There are a large number of publications and research

articles that outlined the importance and necessity of

performance appraisal. Edwards(2000) state that

“performance appraisal, if done properly, can

strengthen the organization as it prepares and develops

the personnel in that organization and the sum total of

the individual performance is the performance of the

organization.” Employee performance appraisal

outcomes—positive or negative—not only establish

the foundation for employee/employer relationships,

they also can determine whether an employee receives

an equal opportunity to grow and/or excel in an

organization (Encyclopedia for Business, 2007).

According to Walsh’s review of research (2003),

performance appraisal is a mandated process in which

all or a group of employees’ work behaviors and traits

are individually rated, judged, or described by a rater

for a specific period of time and results are kept by the

organization. Performance appraisal also includes a

communication between a manager and an employee

for the purpose of evaluating past performance of the

employees and discussing the relevant areas for future

job performance.

According to Gomez-Meijia & Balkin et al. (2004) the

dimensions of performance in appraisal process

should be taken carefully because if a significant

dimension is missed then those employee’s will be

demoralize who do well on that dimension and if an

irrelevant or trivial nature of dimension is included in

the appraisal process then the whole appraisal process

may regard as meaningless by employees. So selection

of the appraisal list is central to meet the objectives of

performance appraisal fully as if the appraisal list is

chosen carefully then it will predicts the estimates

performance appraisal more objectively and

comprehensively. If the model and rules of

performance appraisal are effective and highly

dependable then the objectivity and reasonability of

performance appraisal can be enhanced and in result it

will enhance the personnel’s morale and can

maximize the management effects.

Einstein & LeMere-LaBonte (1989) and Monga,

(1983) explains some of the approaches of appraisal.

They elaborated that intuitive approach is an approach

in which managers or supervisors judges the

employees on the basis of their perception on

employee’s behavior while in self-appraisal approach,

employees access their own performance using a

common format. Next, Group approach is an approach

in which employees are accessed by a group of

persons. The approach in which an employee is

evaluated by his manager or supervisor on the basis of

her observable dimensions of personality such as

honesty, integrity, punctuality and dependability

known as conventional or trait approach. Appraisal

based on achieved results is an approach in which

appraisal is judged on the bases of concrete,

measureable work achievements of goals and fixed

targets which are set mutually by the assessors. While

Behavioral methods focus on the observed behaviors

and observable critical occurrences.

There are different methods or techniques to evaluate

the performance. A manager usually conducts the

appraisal using one or more of the formal techniques

or methods. According to Holbrook’s review (2002),

the most common performance appraisal method

involves two stages: mainly calculation of the rating

and secondly conduct an interview in which ratings

are communicated to the subordinates (Maier 1976).

When developing an employee performance appraisal

system for an organization, it is important to examine

the most widely used performance appraisal

assessment techniques. Techniques of performance

appraisal differ with regard to chronological

importance. These techniques sometimes emphasis on

the past through rating and ranking and sometimes

focuses on the use of management by objectives to

provide a future insight. The first and most widely

used system is Graphic rating scale systems. In

Graphic rating scale the rater rates the employee on

the quality, quantity and performance of his work. It is

a scale which lists a number of traits such as

reliability, adaptability and communication skills for

each employee and then rates them by identifying the

scores that best describes his level of performance for

each trait (Edwards 2005). Another method is Essay

appraisal method in which the appraiser writes a short

essay which provides the strengths, weaknesses and

potential of appraise. For objectivity purpose, it is

essential for the appraiser that he knows about

appraise well and should have an interaction with her

(Oberg 1972).

A method that has proven effective is the Critical

incident method. Critical incident appraisal method is

a method in which a supervisor identifies and record

behavior of employees both positive and negative

which have a significant effect on the performance.

These are used to maintain a record of infrequently

goods or undesirable examples of an employees work

related behavior. These are discussed afterwards with

the employee. These discussions mainly focus on

actual behavior rather than on traits. For performance

review interviews this technique is so much

compatible (Edwards 2005).

Forced-choice rating method is a special kind of

checklist in which the rater has to choose the

favorable or unfavorable statements from a group of

statements. These statements are then weighted to

access the employee score. To avoid the favoritism of

the rater, the weights assigned to the individual

statement are kept confidential from assessor. While,

forced distribution method is used to describe a

performance appraisal system similar to grading on a

curve. The rater had been asked to rate subordinates in

some fixed distribution categories. Rater has to choose

equally attractive or unattractive alternatives pairs of

the factors which he feels best describes the worker.

An interesting system that is being used in the

organizations today is the Management by the

Objectives (MBO). This system requires that a

supervisor and employee set individual performance

goals for the employee to achieve and in the review;

the employee is evaluated on whether the desired

objectives are met (Bacal, 2004). This unique type of

system requires a very good communication between

a supervisor and employee to set the pattern for

accomplishing the desired goals and objectives

(Edwards 2005). The key element to the evaluation of

the objective is that they must be focused on a result

not an activity. Moreover, they should be consistent

and related to time.

A Ranking System is another evaluation system that

is being used in the workplace. This system is used to

evaluate the employees with the same job description

and ranks them accordingly. This system is mostly

used in large organizations. There is lot of criticism on

this system. Critics claim that this system is

subjective, unfair and discriminatory (Grote, 2002).

As this system is designed to rank employees against

each other with respect to their performance so it may

create morale issues among employees (Edward

2005).

Total quality Management system has gained

popularity in the workplace. This concept mainly

focuses on the continuous improvement in all areas of

work by providing feedback to employees by letting

them know to how they can improve their

performance. Through this system employee mistakes

are identified and the hope is that in future those

mistakes will be eliminated (Hashmi, 2002). Three

specific building blocks of TQM system are ethics,

trust and integrity which must work cohesively

together to ensure success. Moreover, employer and

employee communication must take place for ultimate

success (Padhi, 2000).

Another system that has been a great source of

controversy is referred to as the 360-Degree

Appraisal system. In this technique employee is

evaluated by his supervisors, co-worker and even

subordinates. This mysterious system directly

evaluates the employee and the supervisor may not be

fully aware of the results. While this system provides

the results of the performance, it may not permit an

employer to access employee performance. Due to

these reasons, additional appraisal systems are also

required to be developed in this system for

development purposes (Neal, 2001).

An interesting system that effectively used in

organizations is Behaviorally Anchored Rating

Scales (BARS). This system combines the elements of

graphic rating scales and critical incident system to

rate an employee’s performance. This system uses

numbers along with a scale and a description of

employee’s specific job behaviors. This description

put into each section and includes information about

the expected level of performance. This system mainly

focuses on specific job-related behaviors rather than

on traits or characteristics (Smith & Kendall 1963)

Another increasingly used technique for appraisal is

Electronic Performance Monitoring (EPM) system.

EPM system uses the computer network technology to

give the access of employees’ telephones and

computers to their managers (Dessler 2005). It thus

allows management to determine at any moment

throughout the day the pace at which employees are

working, their degree of accuracy, log-in and log-off

times, and even the amount of time spent in bathroom

breaks. Recent studies indicate that in certain

circumstances, EPM system can improve productivity.

It showed that low-skilled but highly monitored

employees did poorer than did low skilled,

unmonitored employees. Some empirical studies also

showed the strong evidence linking EPM with stress

(Dessler 2005).

For designing Performance appraisal system different

techniques and approaches could be blended, keeping

in view the goals of performance appraisal in the

organization. For example, critical incident appraisal

can be a good measure of supervisor’s personal

assessment and criticism when needed. For

supervisory promotion purpose, a well-developed

forced-choice rating provides a very helpful study of

the individual performance. Combining graphic rating

scale and essay appraisal method helps the

management into their decisions regarding training

needs of employees and development decisions of the

organization.

Ryan Fyfe (2010) is of the view that performance

appraisal should be on regular basis so that employees

can be evaluated according to the assigned duties. In

his view it creates a two way communication between

management and employees. Employees will

understand what organization wants them to do and

how much they have achieved until. If it’s not done it

will demoralize the employee and will result in

decline in organization’s efficiency. Ryan Fyfe also

mentioned some guidelines, like a standard format

should be followed, schedule the time of review,

inform the employee about the schedule, performance

review must be professional and done by experts,

record fully maintained and two way communication.

According to Landy and Farr (1983), “a rating is used

to represent the performance of an employee over a

period of time. The rating received as outcome of the

raters’ evaluation of performance is likely to have

financial implications for the ratee as well as the

organization. According to Greenberg (1986),

employees may base perceptions of fairness of

performance appraisals on the procedures used to

determine ratings rather than the actual rating

received. When procedures are perceived to be fair

employees tend to be supportive of outcomes and

authorities responsible for taking decisions that affect

these outcomes (Beugrè 2000). Spangenberg et al.,

(2001) say that the rating may be influenced by its

purpose, rater characteristics or attitudes and the

degree to which the rater likes or dislikes the ratee.

Frequent discussion between rater and ratee towards

improving performance weaknesses has been

correlated with perceived fairness and accuracy of

performance appraisal (Landy, Barnes, & Murphy,

1978).”

Bretz, Milkovich & Read (1992) illustrate that in

performance appraisal system, the most essential

problem faced by an organization is the perceived

fairness of its performance appraisal system.

Greenberg (1987) illustrate that perceptions of fairness

in organizations are not only influenced by outcomes

(distributive justice). They are also driven by the

fairness of the process used to reach those outcomes

(procedural justice). Greenberg (1986a) was one of

them who use the organizational justice theory for the

evaluation process of performance. His basic research

question focused on how giving voice (or inputs) in

the performance evaluation processes increases the

perceived fairness of the performance appraisals and

evaluation process. He investigated that it was what

one receives (rating or other outcome) against its input

or how it is decided about that output which makes an

appraisal evaluation process seem to be fair.

Greenberg (1986) suggests that ratings allocated based

on performance and rating-based salary adjustments or

promotions are related to the Distributive Justice

dimension. Greenberg (1986) argues that distributive

as well as procedural factors need to be taken into

account when one wants to conceptualize justice in the

workplace. Procedural justice theory states that people

can see beyond from short-term decision outcomes

and may willingly make sacrifices under certain

circumstances. Thus unfavorable outcomes can be

considered acceptable provided they are based on a

process that is perceived as fair. Distributive justice

involves the perceived fairness of the allocations or

outcomes, those individuals received in the

organizations (Nurse, 2007).

Erdogan (2002) states that in performance appraisals,

to make the individual perception of distributive

justice, individuals compare their appraisal rating with

their efforts they performed and the fairness of that

rating. Flint (1999) proposed a model to determine the

reaction of employees towards performance appraisal

rating. The model suggested that when performance

appraisal ratings are low then employees use

procedural justice evaluation to determine the fairness

of rating and employees try to improve those low

ratings if they perceive it to be fair. Greenberg's

(1986) work supported by the earlier research such as

Landy, Barnes & Murphy (1978) research which

showed that employees were more likely to accept an

appraisal system and believe that their performance

was rated fairly under certain conditions. Landy &

Farr (1980) generalized that a fair evaluation is one

that contains certain procedural elements regardless of

the outcomes of the evaluations themselves.

Moreover, it is recommended that the perceived

fairness of performance appraisals is an important

decisive factor in analyzing the effectiveness and

usefulness for an organization. Murphy & Cleveland

(1991) argue that performance appraisal is unlikely to

be effective unless those people who are using this

process perceive it as fair. It follows that within the

performance appraisal process the appraise needs to

be considered as salient stakeholders (Simmons &

Lovegrove, 2002).

A third type of justice is often referred to as

"interactional" justice. Bies & Moag (1986) defined

interactional justice as the fairness of the interpersonal

treatment that one receives at the hands of an authority

figure during enactment of organizational processes

and distribution of outcomes. Skarlicki & Folger

(1997) included the interactional justice concept as an

interpersonal aspect of procedural justice and also as a

distinct construct along with distributive and

procedural justice.

To more elaborate the application of justice to

performance appraisal Folger, Konovsky &

Cropanzano (1992) used a "due process" metaphor.

Three essential factors were used to describe a

procedurally fair system, these factors based on fair

hearing, adequate notice, and judgment based on

evidence. Taylor, Tracy, Renard, Harrison & Carroll

(1995) subsequent work showed that the due process

model is consistent with the procedural justice

theoretical model.

Erdogan (2002) proposed the model of antecedents

and consequences of justice perception in performance

appraisal context. The model that Erdogen (2002)

suggested does not stress on the one form of justice

perception at the expense of other one rather argues

that different forms of justice perception are related to

different types of behaviors and attitudes. The model

also focuses on the need to consider the bigger picture

when trying to increase the justice perception. For

example, high performance appraisal ratings may

increase the perception of distributive justice and may

lead to higher performance in the future because of a

need to getting feedback to the leader. This model

suggested by Erdogen (2002) can also help the

practitioners to predict the possible outcomes of their

behaviors during the performance appraisal and

suggest alternative ways in which they can improve

actual and perceived fairness of performance

appraisals.

Skarlicki & Folger (1997) argues that if employees

feel that the system is biased, political, or irrelevant

then the appraisal process can become a source of

extreme dissatisfaction for them. So, when employees

feel that they are not treated fairly then they react by

changing their job attitudes (Vigoda, 2000). For those

employees who feel that their output is effectively

accessed, performance appraisal can motivate them.

However, performance appraisal can be seen as a

phony tool to refute rights and privileges for those

employees, who receive negative feedback. If the

evaluation of employees is done through their

supervisor and based on the personal opinion of the

supervisor then favored employees can anticipate

receiving special privilege and better rating then their

peers (Kinner, 2006).

There are some problems that are faced by an

organization that complete performance appraisal for

employees. One of the most distressing obstacles is

the lack of support by the top level management. The

inability to have the support of all levels of

management will definitely cause a failure of the

system (Bender, 2007). Lack of training for those

individuals who will be conducting the performance

appraisal is a common issue in performance

appraisals. Depending on the complication, it may

necessitate a comprehensive training program in a

conventional classroom (Grote, 2002).

Eckes (1994) give a negative view of performance

appraisal; he argues that an organization can use

performance appraisal records to guard against the

cases of wrongful dismissal. Coens et al., (2000)

opponent to the use of performance appraisal ratings

to evaluate the job performance. Coens et al. (2000)

states people are psychologically influenced by

appraisal ratings whether these ratings are accurate or

inaccurate. He claims that annual performance ratings

undermine commitment, hinder good communications

and move on the perception of unfair pay practices.

Instead, they advocate enabling people to increase the

net contribution or value of their work through

coaching (Coens et al., 2000). Coens & Jenkins (2000)

states that performance appraisal undermines the

usefulness of feedback and there is no solid proof that

it motivates people or lead to meaningful

improvement. It normally generates distorted and

unreliable data about the contribution of employee. So

this resultant data is not helpful in staffing decisions.

According to the U.S. General Accounting Office

(GAO) (2002), creating and sustaining a high-

performance culture helps both eliminate poor

performers and retain high performers. The U.S. GAO

adds that high performing organizations allow people

to flourish and contribute exceptional levels of

commitment that helps to define organizational

success.

The dissertation continues with the literature reviews

of the organizational commitment and organizational

citizenship behavior in order to complete the general

framework of the research model that will helps to

propose the hypothesis development.

2.2.2 Organizational Commitment

The theory of organizational commitment has become

a hot topic in the literature of organizational behavior

and industrial/organizational psychology in the past

few decades. Since the 1960's organizational

commitment is an exciting issue for researchers and

managers. The nature and relation of the

organizational commitment with other organizational

concepts has been explored by many researchers

.Researchers have studied organizational commitment

from different viewpoints, though there is no

agreement on its definition. There are several different

ways of defining and measuring organizational

commitment. The common theme in these various

definitions and measures is that “organizational

commitment is a bond or link of the individual to the

organization” (Mathieu & Zajac, 1990).

In general sense commitment is an engagement of

employees which restricts freedom of action (Oxford

English Dictionary, 1969). Becker (1960) defines

Commitment as “a side bet that comes in to being

when a person links extraneous interests with a

consistent line of activity.” Scholl (1981) states that

“commitment is a stabilizing force that operates to

maintain behavioral direction when conditions are not

met and do not function”. Oliver (1990) defines it as

“an intention to act in a given way towards a particular

target of commitment.” Porter, Steers, Mowday &

Boulian (1974) defined organizational commitment as

“the relative strength of an individual’s identification

and involvement with in a particular organization.” O’

Reilly & Chatman (1986) states that “commitment is

the psychological attachment felt by an employee

towards her organization; it will reflect the degree to

which the individual internalizes or adopts

characteristics or perspective of the organization”.

Allen & Meyer (1990) defined organizational

commitment as “A psychological state that binds an

individual to the organization (i.e., makes turnover

less likely).”

In the words of Porter (1974); Employee commitment

can be defined as the relative strength of the

individual's identification with and involvement in a

particular organization. It consists of three factors.

Mainly a strong desire to remain a member of the

organization along with a strong belief in and

acceptance of, the values and goals of the organization

then a readiness to exert considerable effort on behalf

of the organization.

There are four approaches have to be emerged to

conceptualize the organizational commitment. First

approach is attitudinal approach that emphasis on the

process by which people comes to think about their

relationships with the organization (Mowday, Porter

&Steers 1979). Next Behavioral approach relates to

the process by which individuals become locked into a

certain organization and their way of dealing with this

problem (Meyer & Allen 1997). Normative approach

defines the commitment as an obligation to remain

with the organization (Marsh & Mannari, 1997;

Wiener, 1982). Multidimensional approach combines

all the above mentioned approaches “... to expand

upon the concept of OC as a mindset, or psychological

state” (Meyer & Allen 1991).

In organizational commitment research the nature of

commitment has been conceptualized into

trichotomic nature e.g., affective, continuance, and

moral, (Jermier, Jaros, Sincich, & Koehler, 1993),

affective, continuance, and normative (Meyer &

Allen, 1991), and compliance, internalization, and

identification (O’Reilly & Chatman, 1986). Other

types of attachments have also been conceptualized

into trichotomic nature of organizational attachment.

Organizational involvement has been conceptualized

by Etzioni (1975) as moral, calculative, and alienative.

Ashforth & Mael (1989) specified affective, cognitive

and evaluative identification in organization and

Virtranen, (2000) specified commitment into

obligation, emotions and utilities as the components of

organizational culture.

Meyer and his colleagues (Allen & Meyer, 1990;

Meyer & Allen, 1991; Meyer & Allen, 1997) have

been at the forefront of the multidimensional

approach. They differentiate commitment into three

dimensions on the basis of different mind sets. They

identified and developed measures of three forms of

commitment: affective, continuance, and normative.

Affective Commitment refers to the employee’s

emotional attachment to, identification with and

involvement in the organization. The desire to

maintain membership in an organization is due to

mostly work experiences. Employees with a strong

affective commitment continue employment with the

organization because they want to so. Continuance

Commitment refers to the awareness of the costs

associated with leaving the current job which may

include organizational and individual investments in

career building of individual and may include

economic losses such as pension accruals and social

costs such as friendship ties with co-workers that

would have to be given up or the threat of wasting the

time and effort spent acquiring nontransferable skills.

It also develops as a result of lack of alternative

employment opportunities. Individuals thus with

strong continuance commitment remain with the

organization because they have to do so. Unlike

affective commitment, which involves emotional

attachment, continuance commitment reflects a

calculation of the costs of leaving versus the benefits

of staying. Normative commitment is a sense of

obligation that an employee feels towards its

company. Employee may feel obliged toward his

organization for many reasons. For example, the

company might have invested in his training and skill

development that he wants to reciprocate by offering

his services. Employees thus with strong normative

commitment remain in the organization because they

ought to do so (Meyer & Allen, 1991).

2.2.3 Organizational Citizenship Behavior

Today the popular term which is used to describe the

broad range of cooperative behaviors that are beyond

the formal role in the organization is known as

organizational citizenship behavior (Bateman &

Organ, 1983). Bateman and Organ (1983) and Smith

et al. (1983) originally conceptualized organizational

citizenship behavior based on the works of Barnard

(1968, first publication was in 1938). Sixty eight years

ago, Barnard proposed that the informal cooperative

system of an organization was facilitating the

execution of the formal system. He emphasized on

“willingness to cooperate” since he considered such a

will as an essential component of formal

organizational functioning. This emphasis was the

first notice of the construct later called OCB (Barnard,

1968). Barnard related OCB to the informal

organization. According to Barnard (1968), the formal

structure was deficient and far from perfection, and

cooperation was the most important requirement of

the organization that must supplement the formal

structure for an effective work environment. This

idea of Barnard was further refined by Daniel Katz

(Katz, 1964; Katz & Kahn, 1966, 1978) to include a

distinction between formal extra-role and in-role

behaviors that are involved in effective organizational

functioning. Katz (1964) identifies three basic types of

employees’ behavior that are critical for the overall

effectiveness of any organization system. These three

behavior patterns include people who (1) are entering

and remaining with the system, (2) carrying out their

role assignment in a dependable fashion, and (3)

creating innovation and activities that support the

achievement of organizational objectives. These

behaviors divided into 2 types. These are: “in-role”

behaviors and “extra-role” behaviors.

Organizational citizenship behaviors are defined by

Organ (1988) as “an individual behavior that is

discretionary, not directly or explicitly recognized by

the formal reward system, and that in the aggregate

promotes the effective functioning of the organization.

By discretionary, we mean that the behavior is not an

enforceable requirement of the role or the job

description, that is, the clearly specifiable terms of the

person’s employment contract with the organization;

the behavior is rather a matter of personal choice, such

that its omission is not generally understood as

punishable.”

Examples of traditional organizational Citizenship

behavior include volunteering for extra duty, helping

others with job-related problems, being punctual,

tolerating the occasional inconveniences of work

without complaining, protecting and defending the

organization against external threats, promoting the

organization to outsiders, adhering scrupulously to

roles and regulations (even if no one is watching),

participating actively in governance of the

organization, encouraging cooperation within the

work group, and keeping abreast of the latest skills in

one's field (Podsakoff, MacKenzie, Paine, &

Bachrach, 2000).

Morrison (1994) criticize that Organ's (1988)

definition of citizenship behavior is not providing the

adequate explanation of the OCB in-role and extra-

role behavior. Recent studies have shown that often

OCB is consider as a nondiscretionary part of their job

by the employees and they get rewarded for it as well

(Kamdar, McAllister, & Turban, 2006; Tepper,

Lockhart, & Hoobler, 2001). As in the formal job

description, organizational citizenship behaviors are

not mentioned clearly so there is a possibility of

differentiation between someone’s actual role of work

and job description. Role describes that how various

situational forces perceived that one who is acting

(Wexley & Yukl 1983). Managers communicate with

employees regarding job descriptions and role

exceptions along with role-laden messages, such as

direction about preferred behaviors and those to avoid,

and about those rewards and penalties which are based

on role performance: Roles then emerge (Katz &

Kahn, 1978).

Since the inception of OCB, many related studies have

been done, and new concepts have emerged. These are

pro-social organizational behavior which is defined by

Brief & Motowidlo (1986) another one is extra-role

behavior which is defined by Van Dyne Cummings &

Parks (1995), and contextual performance concept is

elaborated by Borman & Motowidlo (1997).

Pro-social organizational behavior (POB) was defined

by Brief & Motowidlo (1986) as behavior that was

performed by an individual directed toward an

individual, group, or organization with whom he or

she interacts while carrying out his or her

organizational role, and performed with the intention

of promoting the welfare of the individual, group, or

organization.

Another related construct is extra-role behavior

(ERB). Van Dyne and his colleagues Cummings, &

Parks (1995) argue that observers differ across person

and times as to what is exactly in-role or extra-role,

and therefore it is somewhat arbitrary in many

instances as to what is actually extra-role. However,

they defend the viability of extra-role behavior as a

construct and insist that extra-role behavior and in-

role behavior are useful theoretical building blocks.

Extra-role behavior was defined by Van Dyne,

Cummings & Parks (1995) as behavior that benefits

the organization and/or is intended to benefit the

organization, which is discretionary and which goes

beyond existing role. Van Dyne and colleagues

(1995) further highlight three consequences of such a

distinction: first, the behavior must be intentional,

second, the intention must be positive, and finally, the

behavior must be disinterested from the standpoint of

the employee which means that extra-role behavior

does not result in formal reward or punishment.

Contextual Performance (CP) is a result of the

distinction between task and contextual performance

(Borman & Motowidlo, 1997). Task performance is

defined as the effectiveness with which job

incumbents perform activities that contribute to the

organization’s technical core. This can be done either

directly by implementing a part of the organization’s

technical process, or indirectly by providing the

organization with needed resources. Contextual

performance reflects behaviors that do not support the

technical core itself so much as they support the

broader organizational, social, and psychological

environment in which the technical core must

function.

Motowidlos' and Borman (1993) research on

“contextual performance” has been found very close

to the concept of OCB. Contextual performance was

refers to as extra-role behavior while task-related

performance was refers to in-role behavior. Other

related research areas of extra-role behavior may

include OCB, Pro-social behavior, principal

organizational dissent and whistle blowing (Van

Dyne, Cummings, & Parks, 1995). Task related

performance is expected to be determining by Task-

related knowledge, skills, and abilities, whereas

contextual performance is better predicted by attitudes

or dispositional factors.

Williams (1988) suggested that organizational

citizenship behavior have two dimensions. First

dimension is Organizational Citizenship Behavior

directed toward individual (OCBI).”OCBI behavior

immediately benefit specific individual (helping a

specific other person with an organizationally relevant

task or problem) but through this means contribute to

the organization. Second dimension is Organizational

Citizenship Behavior directed toward the organization

(OCBO) is a behavior that benefits the general

organization (carry out role requirement well beyond

minimum required levels).

Organ (1991) suggested five dimensions of

organizational citizenship behaviors. These are (1)

Altruism which consists of those voluntary actions

that help another person with a work related problem

like instructing a new hire on how to use equipment,

help a co-worker catch up with an accumulation of

work, fetching materials that a colleague need and

cannot procure on his own. (2) Courtesy considers all

of those foresight gestures that help someone else

prevent a problem like providing advance notice to

someone who needs to know to schedule work.(3).

Sportsmanship is a posture of tolerating the expected

troubles and burdens of work without whining and

complaints. (4) Conscientiousness is a pattern of going

well beyond minimally required levels of attendance,

punctuality, housekeeping, conserving resources, and

related matters of internal maintenance. (5). Civic

virtue is responsible, constructive involvement in the

political process of the organization, including not just

expressing opinions but reading one’s mail, attending

meetings, and keeping abreast of larger issues

involving the organization.

Graham (1994) suggested that organizational

citizenship behavior have three dimensions. These are

(1) Obedience is a behavior that is respecting for rules

and instructions, punctuality in attendance and task

completion, and stewardship of organization resource.

(2) Loyalty is a behavior that is defending the

organization against threats, contributing to its good

reputation, and cooperating with others to serve the

interests of the whole. (3) Participation is a behavior

that is attending non required meetings, sharing

informed opinions and new ideas with others, and

being willing to deliver bad news or support an

unpopular view to combat.

2.2.4 Performance Appraisal fairness and

Organizational Commitment

Mowday, Porter & Dubin (1974) link performance to

commitment, states that the employees who are more

committed are anticipated to give a superior

performance as compare to those ones who are less

committed. Mowday (1998) argued that organizational

commitment can be a key mediating construct linking

human resource management practices with

performance constructs. Koys (1988) states that

commitment of the employees towards their

organization based on their belief that the practices of

HRM in the organization were motivated by a desire

to be fair in the treatment of employees and to attract

and retain good employees in the organization.

Various authors found that there is a relationship

between organizational commitment and perceptions

of employees about organizational justice. However,

how different dimensions of organizational justice

interact with different forms of commitment is still a

point of conflict between authors, as different study

findings support different hypothesis drawn by

authors. A survey on bank employees was conducted

by Sweeney & McFarlin (1992) and the result of that

survey revealed that distributive justice proven to be a

stronger predictor as compare to procedural justice to

predicting the personal outcomes rather than

organizational outcomes. The procedures of the firms

regarding fairness which are used in the firm's may

have a greater impact on organizational commitment

than the fairness of distributive outcomes that workers

receive, possibly because procedures define the

organization's capacity to treat employees fairly. Thus,

if the procedures are fair, employees may view the

organization positively, even if they are currently

dissatisfied with such personal outcomes as a low pay

raise. It was also found out that fair procedures also

lead to positive evaluations of the supervisors.

Cropanzano & Folger's (1989) states that if in an

organization both distributive and procedural justice

are not perceived as fair by the employees then the

outcomes of subordinate’s evaluation regarding

supervisor and organizational commitment would be

negative. But positive evaluations would be expected

when procedural justice is high, regardless of the level

of distributive justice.

It might however be noted that the studies done by

Lowe & Vodanovich (1995) on a sample of university

employees showed different findings. They concluded

that outcomes (distributive justice) were a better

predictor of organizational commitment than the

elements of procedural justice. These findings have

been explained with the view that chronological

factors may affect perceptions of organizational

justice, that is, that the relative significance of

Procedural Justice and Distributive Justice Judgments

varies over time. Another possible reason behind

distributive justice as a better predictor of attitudinal

outcomes of employees might be that employees are

not exactly aware of the procedures used by the

organization and therefore rely on outcomes.

Jaros et al. (1993) argues that affective commitment is

the most widely discussed form of psychological

attachment to an employing organization. This could

probably be because affective commitment is

associated with desirable organizational outcomes.

Meyer & Herscovitch (2001) report that affective

commitment has been found to correlate with a wide

range of outcomes such as turnover, absenteeism, job

performance and organizational citizenship behavior.

Gray (2002) observed that after many years of use and

much study, there is little hard evidence that

performance appraisal program extract the desired

effects and thus tying performance appraisal to merit

increases may simply be a waste of time. The main

point here is that human behavior is complex and

complicated and hence understanding and

manipulating it for effective organizational results

requires going beyond the mastery of rhetoric and

untested concepts.

2.2.5 Performance Appraisal fairness and


Among the most reliable empirical findings in the

OCB domain has been the positive relationship

between Organizational Citizenship Behavior and

managers’ evaluation of employees’ performance

(Podsakoff et al., 2000).

Organizational justice has to be proven a key

determinant of citizenship behavior and related

outcomes such as commitment and satisfaction (Moor-

man, 1991; Konovsky & Folger, 1989), and it reflects

both the fairness of procedures as well as outcomes

which are used in their allocation (Lind & Tyler,

1988). The literature of citizenship behavior has

focused on the fairness of outcomes like pay received

by an employee and the fairness of procedures used to

determine those outcomes (Moorman, 1991).

Folger (1991)’s study showed a preliminary evidence

for a relationship between procedural justice and

altruism. Findings suggest that if both job satisfaction

and organizational justice are used to predict

citizenship behavior, justice typically shows a stronger

relationship to citizenship behavior than satisfaction.

Although it is exactly not known that how justice

affects citizenship behavior so an important variable

trust appears as a mediating variable. Employee trust

is enhanced by Organizational justice, which in turn

displayed in the stimulation of citizenship behavior

(Konovsky & Pugh, 1994).

A number of studies have supported that individual

who are more frequently engaged in OCB are more

likely to be recommended for organizational rewards

as compare to those individuals who are less

frequently engaged in OCB (Motowidlo & Kiker,

1999; Allen & Rush, 1998; Podsakoff, MacKenzie, &

Hui, 1993; Park & Sims, 1989)

Two past studies have examined the link between

actual reward outcomes and OCB. Specifically, Hui,

Lam, & Law (2000) found that both supervisor ratings

and self-ratings of OCB related to promotions among

bank employees. Van Scotter, Motowidlo & Cross

(2000) by using a military sample, found that

contextual performance showed a distinctive

discrepancy towards informal rewards (e.g., letters of

appreciation, special projects), but increases in rank

(i.e., promotions) were mainly an effect of the impact

of tenure.

In a sample of 114 employees from various

organizations, industries and positions Williams S,

Pitre R & Zainuba M. (2002) found that the likelihood

of organizational citizenship behaviors (OCB)

increased when employee perceptions of fair treatment

by supervisors became more positive.

One common limitation of prior investigations is the

focus on OCBs that are widely applied regardless of

types of industries (Bettencourt et al., 2001).

Specifically, OCBs in the service industry are

somewhat neglected (Yoon & Suh, 2003) even though

service-oriented employees’ behaviors have become

more and more important with the growing of the

service industry. Usually service-oriented employees

have special requirements on factors related to dealing

with customers and representing their organization to

outsiders (Motowidlo et al., 1990), and their behaviors

can ultimately enhance or diminish organizational

image (Schneider & Bowen, 1993).

2.2.6 Organizational Commitment and


Individual forfeit for the organization can be

encouraged through the attitude of commitment

(Wiener, 1982). Scholl (1981) and Wiener (1982)

proposed models of commitment supporting

relationships with OCBs. According to the

organization theory, organizational commitment has

been confirmed to be an important variable in

explaining employees’ OCBs (MacKenzie et al.,

1998). For instance, Morrison (1994) found that

(affective) organizational commitment was positively

related to all OCB dimensions. Significant

interrelationship between organizational commitment

and OCB-type behaviors is supported by O'Reilly and

Chatman (1986). They found that dimensions of

organizational commitment such as identification and

internalization were positively related to OCB-type

behaviors.

A basic perception of prior theory and research in the

OCB literature is that citizenship behaviors are

motivated by positive job attitudes such as

commitment (Konovsky & Pugh, 1994; Organ &

Ryan, 1995). Indeed, as Mowday et al. (1982) implied

in their seminal work, OCB is a behavioral expression

or perhaps consequence of the underlying attitude of

organizational commitment. Being positively

associated with individuals’ willingness to commit

extra effort to their workplace job (Meyer & Allen,

1997), employees’ organizational commitment is

expected to positively influence OCBs by offering

quality service to customers (Yoon & Suh, 2003;

Williams & Anderson, 1991). Nevertheless,

employees are believed to engage in discretionary

behaviors due to the level of their involvement with

the organization and their desire to remain in it

(Kuehn & Al-Busaidi, 2002).

Mathieu & Zajac (1990) indicate that Katz & Kahn

(1966) provided evidence suggesting that employees

who were committed would be more likely to engage

in more creative and innovative behaviors which

would enhance their performance and keep the

organization competitive. The behaviors implied in

this statement are OCBs. Organizational commitment

is a candidate to mediate the relationship between job

characteristics and OCBs in the present study since it

is associated with job characteristics and OCBs

according to previous research. Mathieu & Zajac

(1990) argued that committed employees were more

likely to exhibit citizenship behaviors, which was

often important for a competitive organization.

Schappe (1998) research based to investigate the

influence of job satisfaction, procedural justice, and

organizational commitment together on OCB.

Organizational commitment had the only significant

relationship to OCB when considered with job

satisfaction and procedural justice simultaneously.

Organizational commitment emerged as a significant

predictor of OCB in this study. Organizational

commitment is a determinant of OCB since the latter

describes behaviors that occur with little expectation

of formal organizational rewards for performance

(Williams & Anderson, 1991). In Wiener’s (1982)

model, organizational commitment causes behaviors

that (a) reflect personal forfeit made for the

organization, (b) do not depend primarily on

reinforcements or punishments, and (c) indicate

personal preoccupation with the organization.

Additional support is found for commitment as an

antecedent of OCB since the characteristics mentioned

in the model of Wiener (1982) identify OCB.

2.2.7 Performance appraisal fairness,

organizational commitment and

organizational citizenship behavior

Considerable evidence has been provided by Prior

empirical research that the level of organizational

justice has proven to be an important predictor of a

number of important employee behaviors and attitudes

including job satisfaction, organizational commitment,

organizational citizenship behavior (Masterson et al,

2000; Rupp & Cropanzano, 2002). According to

Malatasta & Byrne (1997) model, perceptions of

procedural justice are based on an organization’s

formal policies. They found that individuals

reciprocate perceptions of fairness in procedures by

exhibiting organizational commitment and

organizational citizenship behavior. Furthermore, they

suggested different outcomes of interactional justice

thus making a distinction between procedural and

interactional justice. In their findings they showed that

interactional justice perceptions of individuals lead

them to reciprocation in form of commitment and

organizational citizenship behavior directed towards

supervisor. Masterson et al (1997) arrived at similar

conclusion. Malatasta et al (1997) demonstrate that

organizations can increase the level of commitment

for their employees by providing them equitable and

fair rewards.

2.3. SUMMARY OF THE CHAPTER

The chapter clarifies that in the fairness of

performance appraisal context, Distributive Justice

refers to the fairness of outcomes received, whereas

Procedural Justice refers to the fairness of the process

used that determined the outcome (Greenberg, 1986).

Distributive justice and Procedural Justice are two

forms of organizational justice (Tang & Sarsfield-

Baldwin, 1996). Furthermore, theoretical

underpinnings for organizational commitment and

organizational citizenship behavior that influence

fairness of performance appraisal are explained.

Chapter two further summarized through sentiments

of authors in the fairness of performance appraisal

literature.

Bretz et al., (1992) reported that managers identified

fairness as the most important performance appraisal

issue organizations face. In the organizations, fairness

of performance appraisals has been identified as an

important predictor of judging the effectiveness and

usefulness (Erdogan 2002). Researchers generally

argue that performance appraisal is future orientated

and is not expected to be rewarding in itself but it can

change and create future effective performance

(Tjosvold & Halco, 2001)

CHAPTER 03

RESEARCH METHODOLOGY

This chapter will provide information about the

methods used in this thesis to provide a solution for

the research questions posed earlier in the present

research study. This methodology chapter will

addresses the methods that will used in this research

study e.g. research design, purpose of research,

research model and variables, hypothesis of the

research, research question, sample and response rate.

3.1 SCHEME OF THE RESEARCH STUDY

As the objectives and significance denote, the main

concern of this study is to identify the impact of

perceived fairness in performance appraisal on


citizenship behavior in the banking sector of Pakistan

also find out the organizational commitment role


and organizational citizenship behavior. The main

variables under consideration are fairness in

performance appraisal, organizational commitment

and organizational citizenship behavior. Literature

given in the up given chapter support that there are

certain affects of fairness in performance appraisal on


commitment have a certain impact on organizational

citizenship behavior. So using the literature, this

research study is aimed to find out the impact of fairness

of performance appraisal at organizational level on

commitment and citizenship behavior in the banking

sector of Pakistan.

3.2 RESEARCH MODEL

Perceived Fairness inPerformance Appraisal

OrganizationalCommitment

OrganizationalCitizenshipBehavior

Figure 1. Hypothesized Relationships

3.2.1 Hypothesis:

H11 = Perceived fairness in performance

appraisal is significantly related to

organizational commitment.

H21= Perceived fairness in performance

appraisal is significantly related to

organizational citizenship Behavior.

H31= Organizational commitment is

significantly related to organizational

citizenship behavior

3.3 RESEARCH DESIGN

3.3.1 Sampling Technique

In this research attempt “simple random sampling” (a

form of Non-probability sampling) technique has been

used. This technique is used to make sure that each

respondent has the same chance of being selected into

the sample. So I have used the same technique to

collect data from the banks. All listed operating banks

in Pakistan were selected as a population of the study.

The total number of banks operating in Pakistan is

203. 10 listed banks were taken as sample of the

study. The platform which helped to choose the

sectors and the organizations for this research study is

the official website of the “State Bank of Pakistan”.

Their website contains all the necessary information

of listed operating scheduled banks.

3.3.2. Survey Methods

Survey methods have been used many times in history

as a source of data collection in Management

Sciences. For this reason following the tradition of

social sciences, in this research study same approach

was used because in Pakistan secondary data on

performance appraisal as such is not available in this

field so the questionnaire was used for primary data

collection. Due to limited budget and shortage of time,

mail survey is used as a tool for data collection. But it

showed a very low response rate because employees

of bank were not quick in answering and they are

reluctant to give response about their performance

appraisal due to the fear of using it against them. To

deal with this problem, authority letter had been

issued from college along with personal referrals self-

administered survey method was used to quicker the

response.

3.3.3. Response Rate

For concrete research work, information regarding

perceived fairness in performance appraisal and their

impact on organizational commitment and

organizational citizenship behavior were collected

from employees of targeted banks. The banking

employees were requested to respond to all of the

questions asked in the questionnaire to the best of

their knowledge with reference to the perceived

fairness in performance appraisal implemented to their

organizations and also about their commitment and

citizenship behavior in their organizations.

Out of 10 listed banking institutions, 10 responded

back. For data collection commercial and retail

banking units were selected. For research purpose, a

questionnaire was developed and distributed to the

four hundred (400) employees of 10 banks consisting

of UBL, ABL, HMB, BOP, BAF, MCB, RBS, SCB,

MBL and NBP. Out of these 400 questionnaires 318

returned back. From these 318 questionnaires 292

were completed and remaining 26 were incomplete.

Only complete questionnaires were used for data

analysis. So, the overall response rate of completely

filled questionnaires was 72.5% which is a better

representative for sample. We have not disclosed the

names of the employees because most of the

employees want to keep their names confidential as

these employees were not willing to disclose their

responses on performance appraisal fairness and data

was provided on the condition that these figures will

not be used with the name of those employees

3.3.4. Description of Instrument

This research attempt is related to examining the

perceived fairness in performance appraisal impact on

Organizational commitment and organizational

citizenship behavior in the banking sector of Pakistan.

This research was conducted on primary level as data

on this research was not available primarily.

Employees acting at all levels in the banks were

surveyed using a structured questionnaire. A brief

description was given to the Participants on the

general purpose of the study that all the study was

solely for academic purposes and asks to complete the

questionnaire anonymously. This questionnaire was

designed on a five point-Likert scale with options; 5

for strongly agree, 4 for agree, 3 for neither agree nor

disagree, 2 for disagree and 1 for strongly disagree.

Whilst the seven questions includes in the

questionnaire concerning about biographic data were

categorical in nature.

Questions in the body of the questionnaire relating to

the perceived fairness of performance appraisal,


citizenship behavior were asked. The data being

gathered through questionnaire is used to test the three

hypotheses. The reliability of whole questionnaire

which was developed for this research study is .872.

In this study, the part of perceived fairness of

Performance appraisal was measured by developing

an 11 items questionnaire by taking research work of

different researchers (Sweeney & McFarlin. 1997; Joy

& Witt. 1992; Hodson et al 1994, Dulebohn & Ferris

1999). The resulting Cronbach alpha value comes .748

for this developed performance appraisal fairness part.

In this study, organizational commitment was

measured by using the 23-item instrument developed

by Allen & Meyer (1990). The resulting Cronbach

alpha value for this part of questionnaire for this

research study comes .833. In this study, OCB was

measured by using the 19-item instrument which is

taken from the research work of Motowidlo & Van

Scotter (1994) and Lee & Allen (2002) along with

Podsakoff et al. (1990) and Podsakoff & MacKenzie

(1994) research work and the resulting Cronbach

alpha value of this research work comes 0.918 for the

organizational citizenship behavior in this

questionnaire.

3.3.5. Measures

A survey questionnaire has been designed for

employees of banks working on all the levels. As

stated by Fink (1995b), that only purposeful

statements which are based upon research objectives

and research hypotheses were included. All the

questions/statements were designed to reduce

standardize responses. In questionnaire English

language was used as a medium of communication

with a focus on the use of conventional language. The

wordings of survey questions were kept unbiased and

simple and trivial nature questions were avoided. A

brief introduction was given at the start of

questionnaire. For a quick response these survey

questionnaires were administered through personal

referrals.

To ensure the accuracy in the test scores,

measurement scales were applied carefully. For all

survey questions a 5 point Likert scale was used as a

research design. For some personal information

questions, nominal scale was also used. In this

research study, to test the hypothesis inferential

statistics were used but tools of descriptive statistics

were also used for the description of facts which are

found in the data. For statistical treatment data was

prepare in such a way that it can be used for further

descriptive and confirmatory analyses. To find out the

answer of the research questions, three hypotheses

were developed and tested.

3.4. QUESTIONNAIRE

The data collection was done through questionnaire

based on the queries of perceived fairness in

performance appraisal as well as the questions on


citizenship behavior was also asked. The

questionnaire was formulated after an extensive

literature review. The findings of that literature review

were converted into at 5 Point Likert Scale form of

Questions.

3.4.1. Biographical Questionnaire

In this study a questionnaire was developed to obtain

the demographic information from the employees of

banks. Participants of the study were required to

furnish the details with regard to age, gender,

qualification, years of experience, level of

employment, name of the organization and number of

years in the banking sector.

3.4.2. Perceived Fairness in Performance appraisal

In the organizations, fairness of performance

appraisals has been identified as an essential predictor

of judging the effectiveness and usefulness for the

organization (Erdogan 2002). The description of the

components of fairness draws heavily on the research

and literature in the area of organizational justice.

Organizational justice research starts from the premise

that employees focus on their fairness in

organizational systems in determining their

commitment, satisfaction and intention to turnover. In

the fairness of performance appraisal context,

Distributive Justice refers to the fairness of outcomes

received, whereas Procedural Justice refers to the

fairness of the process used that determined the

outcome (Greenberg, 1986). Distributive justice and

Procedural Justice are two forms of organizational

justice (Tang & Sarsfield-Baldwin, 1996). Folger &

Cropanzano (1998) and the empirical work by Taylor,

Tracy, Renard, Harrison & Carrol (1995) recognize

the relevance of setting criteria and Murphy &

Cleveland (1991) suggest that systems will be

perceived as more fair if job dimensions are highly

relevant.

Dulebohn & ferris (1999) uses 6-items to assess the

fairness of the procedures and process used for

performance evaluation which focuses on the extent to

which employees believe their supervisors used

important and accurate information in appraising

employee performance. Scarpello & jones (1996)

designed measure to assess employee perception about

the fairness of procedures used for performance

appraisal. Joy & witt (1992) uses distributive and

procedural justice to assess performance appraisal. To

get the data on perceived fairness of performance

appraisal from various banking institutions, in the

questionnaire an 11 items scale was developed from

the research work of Sweeney & McFarlin 1997; Joy

& Witt. 1992; Hodson et al 1994 and Dulebohn &

Ferris 1999 and confidentiality were ensured to the

employees of the banks as they were a bit hesitant

and reluctant to providing the data.

3.4.3. Outcomes of Performance Appraisal

Fairness

Considerable evidence has been provided by Prior

empirical research that the level of organizational

justice has proven to be an important predictor of a

number of important employee behaviors and attitudes

including job satisfaction, organizational commitment,

organizational citizenship behavior (Masterson et al,

2000; Rupp and Cropanzano, 2002). In the fairness of

performance appraisal context, the distributive and

procedural justice scales measures the fairness

perceptions of performance appraisals.

To measure the organizational commitment of the

bank employees, questionnaire was developed by

using 23 items scale taken from Allen & Myer’s

(1990) instrument. Possible responses of

organizational commitment were arrayed on a five

point likert scale (rather than on Allen & Myer’s

seven point scale).

To measure Organizational Citizenship Behavior

(OCB) in this research study, a combination of an

OCB measure developed by Lee & Allen (2002) and a

measure of contextual performance developed by

Motowidlo & Van Scotter (1994) along with

dimensions of OCB were taken from the questionnaire

developed by Podsakoff et al., 1990; Podsakoff &

MacKenzie, 1994. The respondents were assured of

confidentiality to guarantee the fairness of responses.

To avoid any oversight due to a non-serious attitude

we tried to utilize the time off of employees to fill the

questionnaires. Also the respondents were provided

with full explanation of the questionnaire.

3.5. RESEARCH QUESTION

Using the mentioned methodology, following research

questions are investigated in this study:

1. What is the impact of perceived fairness in

performance appraisal on organizational

commitment at employees of banking sector in

Pakistan?

2. What is the impact of perceived fairness in

performance appraisal on organizational

citizenship behavior at employees of banking

sector in Pakistan?

3. What is the impact of organizational

commitment on organizational citizenship

behavior at employees of banking sector in

Pakistan?

3.6. STATISTICAL TECHNIQUES

The Microsoft Excel software package in combination

with the “Statistical Package for Social Sciences

(SPSS) 16.0” was utilized for statistical analysis of the

research data. The data analyses involved both

descriptive and inferential statistics.

3.6.1. Descriptive Statistics

Descriptive statistics are statistical procedures that

allow researchers to describe data through summary or

display (Brace, Kemp and Snelgar, 2000).

Frequencies, percentages, means and standard

deviations utilized to analyze the demographic data

and research variables in the present research study.

3.6.2. Inferential Statistics

According to Fife-Shaw (2001) inferential statistics

are techniques that allow the researcher to use sample

data to make statements about the population that the

sample came from. Inferential statistics provide an

indication of how justified the researcher is to draw

conclusions about the population based on the sample

data. Regression Analysis is an inferential statistics

technique that was employed to test the research

hypotheses.

3.7. SUMMARY OF THE CHAPTER

Chapter Three outlined the research design, the

sample and the procedure employed to collect data.

The chapter addressed the details of the measuring

instruments used and the confidentiality concerns

during administration of the measure. The statistical

packages and techniques used to test the research

hypotheses were described.

CHAPTER 04

FINDING OF THE STUDY

In this chapter an empirical analysis of the data is

presented that was solicited from the research

respondents (n=292) of the current study. The

presentation is followed by the demographical

overview of the sample. Then the Descriptive analysis

of the variables under consideration is provided. The

presentation further proceeds with the analysis of

inferential statistics which was based on the

examination of each hypothesis formulated for the

research. The upper level of statistical significance

was set at 5% for the testing of null hypothesis.

In the present research study for the analyses of data

the software of “Statistical Package for the Social

Sciences (SPSS) 16.0 for Windows” in combination

with the “Microsoft Excel” was used. The analysis of

descriptive statistics in the present research study

based on the frequency tables those are providing

information regarding the key demographic variable.

This was achieved through “summary statistics, which

include the means, standard deviations, minimum and

maximum values” which were computed in the

present study for each of the variables.

4.1. Demographical Characteristics:

This section presents the details of the demographical

questionnaire of the participants and the respondents

which is administered in the banking sector of

Pakistan. The descriptive statistics is then outlined that

was calculated on the variables included in the

demographical questionnaire. The data analysis of the

demographical characteristics gathered from the

sample (n=400) and respondents (n=292) is presented.

The following demographical variables were

recorded:

1. Gender of the respondents

2. Qualification of the respondents

3. Age of the respondents

4. Year of Experience of the respondents

5. Level of Employment

6. Name of the Organization

7. Number of year in the organization

Table 4.1 Demographic Characteristics ofRespondents

Characteristic Category Frequency %

GenderMale 254 87.0

Female 38 13.0

QualificationUndergraduate 18 6.2

Graduation 126 43.2Post-Graduation 148 50.7

Age

20-30 214 73.330-40 66 22.640-50 12 4.1

Above 50 0 0

Year of Experience

0-10 244 83.610-20 40 13.720-30 8 2.7

Above 30 0 0

Employment LevelLower Level 38 13.0Middle level 234 80.1Top Level 20 6.8

Name of theOrganization

ABL 54 18.5UBL 54 18.5BAF 28 9.6BOP 16 5.5HMB 20 6.8MCB 48 16.4MBL 18 6.2NBP 18 6.2RBS 20 6.8SCB 16 5.5

Number of years inthe organization

1-10 277 94.911-20 8 2.721-30 5 1.731-40 2 .7

Notes: Age and Experience were measured in terms of years. Gender:1=“Male” and 2=“Female”. Qualification: 1=“Undergraduate”,2=“Graduation”, 3=“Post Graduation”. Level of Employment:1=“Lower Level”, 2=“Middle Level”, and 3=“Top level”.

The demographical characteristics of the sample are

presented in the above Table 4.1. The results of the

above table indicate that the sample constituted 13%

female and 87% male. Qualification of the

respondents result shows that 6.2 % are

undergraduates, 43.2% are graduates and 50.7% have

a qualification of post-graduation. Result shows that

most of the individuals 73.3% falling in the age

category of 20-30. 22.6% individuals are between the

age of 30-40 and 4.1% respondents have an age of 40-

50 and the category with the lowest number of

individuals is the 40-50 years old (4.1%). There is no

respondent recorded above 50 years.

Table 4.1 also shows a spread in terms of year of

experience in the sample, ranging from 0-10 to above

30. Most individuals are falling in the experience

category of 0-10 showing a large percentage of 83.6%.

In the range of 10-20 years of experience (n=40)

shows 13.7% of individuals and the category with the

lowest number of individuals is the 20-30 years

(2.7%). No response is recorded for Above 30 year of

experience. Results shows that 13% (n=38) of

respondents were working at the lower level. A large

number of respondents (n=234) 80.1% were working

at the middle level while the respondents at top level

are only 6.8% (n=20).

For this research 10 banks have been selected as a

sample. A large number of responses comes from

UBL and ABL (n=54) with the percentage of 18.5%

independently. Then the next high response rate

comes from MCB having (n=48) 16.4%. An average

response rate was comes from BAF, HMB, Meezan

Bank, NBP, RBS and Soneri Bank with a percentage

of 9.6%, 6.8%, and 6.2%, 6.2% and 6.8%

respectively. The lowest response rate comes from

Standard chartered and BOP having a percentage of

5.5% independently.

Table 4.1 also shows that 94.9% of employees in the

organization were those who are working in the

category of 1-10 year. Generally speaking, in the

banking sector most of the employees were fresh

recruiters.

Table-4.2 Descriptive Statistics

N Min Max MeanStd.

DeviationOrganizationalCommitment

292 1.57 4.26 3.0631 .48713

OrganizationalcitizenshipBehavior

292 2.05 5.00 3.6511 .65424

Fairness ofperformanceappraisal

292 1.09 4.45 3.4701 .57063

In the above table descriptive of research variables are

shown. Results shows that the mean score of

organizational commitment is average (M=3.0631,

S.D= .48713) having a minimum value of 1.57 and

maximum value 4.26 which means that employees are

neither agree nor disagree towards organizational

commitment. The mean score of organizational

citizenship behavior is above average (M=3.6511,

S.D= .65424) with the minimum value of 2.05 and

maximum value having 5.00 which means that

employees are agreed towards citizenship behavior.

Table shows that fairness of performance appraisal

has a mean sore of 3.4701 which is a bit above from

average along with Standard deviation of .57063

which means employees are a bit agreed towards the

perceived fairness in performance appraisal. The

minimum value for perceived fairness in performance

appraisal is 1.09 while maximum value is 4.45.

4.3 T-Test

According to Christensen (2001), “the t-test is a

statistical test for analyzing the data obtained from

two different groups of participants to determine

whether the groups mean difference is so large that

they could not reasonably be attributed to chance.”

The greater the t value, the greater the between group

mean difference compared with the average within the

group variability and the greater the probability that

the group differences are real and not due to chance.

Table 4.3 Group Statistics

Gender N MeanStd.

Deviation

Std.ErrorMean


Male 254 3.0938 .49446 .03103

Female 38 2.8581 .38061 .06174OrganizationalcitizenshipBehavior

Male 254 3.7103 .61837 .03880

Female 38 3.2548 .75258 .12208

In the above t-test table, it is shown that the average

mean of organizational commitment for male is

3.0938 and for females also shows a below average

mean (2.8581) for organizational commitment. It

shows that females are less committed as compare to

males. Table shows that there are no significant

difference of organizational commitment between

male and female and both show a neutral behavior

towards organizational commitment. The above table

shows a strong mean score of organizational

citizenship behavior for males is 3.7103 and shows an

above average mean score (3.2548) of organizational

citizenship behavior for females. It shows that males

show more organizational citizenship behavior as

compare to females. It shows that males are agreed

towards organizational citizenship behavior but

females show a neutral behavior towards


Table 4.4: Independent Samples Test

Independent Samples Test

Levene's Test

for Equality

of Variances

t-test for Equality of

Means

F Sig. t df

Sig. (2-

tailed)

Organizational

Commitment

Equal variances

assumed2.552 .111 2.815 290 .005

Equal variances

not assumed3.411 57.508 .001

Organizational

citizenship

Behavior

Equal variances

assumed8.494 .004 4.111 290 .000

Equal variances

not assumed3.556 44.785 .001

In the above table Leven’s test for Equality of

Variance for organizational commitment shows that F

(2.552) is not significant (.111) therefore “Equal

variances assumed” row will be used for the t-test.

Under the “t-test for Equality of Means” sig (2.tailed)

for “equal variance assumed” score is 0.005 (which is

less than 0.05); therefore we can say that there is a

significant difference between the means of the two

groups (male and female).

In the above table Leven’s test for Equality of

Variance for organizational citizenship behavior

shows that F (8.494) is significant (.004), therefore

“Equal variances not assumed” row will be used for

the t-test. Under the “t-test for Equality of Means” sig

(2.tailed) for “equal variance assumed” score is 0.001

(which is less than 0.05); therefore we can say that

there is a significant difference between the means of

the two groups (male and female).

4.4. Analysis of variance (ANOVA)

According to Christensen (2001), “analysis of

variance is an extension of the t-test. It is a general

statistical procedure appropriate for analyzing data

generated from a research design that uses more than

two levels of one independent variable and/or more

than one independent variable. The one-way analysis

of variance (ANOVA) is used to determine whether

there are any significant differences between the

means of three or more independent (unrelated)

groups. The one-way ANOVA compares the means

between the groups we are interested in and

determines whether any of those means are

significantly different from each other. One of the

assumptions of the one-way ANOVA is that the

variances of the groups which we are comparing

should be similar.” The table “Test of Homogeneity of

Variances” shows the result of Levene’s Test of

Homogeneity of Variance, which tests for similar

variances. If the significance value is greater than 0.05

(found in the Sig. column) then we have homogeneity

of variances.

Table 4.5: Test of Homogeneity of Variances for

Organizational Commitment

LeveneStatistic df1 df2 Sig.

Age .396 2 289 .673

Year of Experience .362 2 289 .696

Employment Level 2.777 2 289 .064

Current experience 1.175 3 288 .319

In the above table Levene's F Statistic .396 for age has

a significance value of 0.673 for organizational

commitment; therefore the assumption of

homogeneity of variance is met. It means that we have

similar variances for different age groups. Similarly,

Levene's F Statistic .362 for year of experiences has a

significance value of 0.696 for organizational

commitment; therefore the assumption of

homogeneity of variance is met. It means that we have

similar variances for different groups of year of

experience.

In the above table Levene's F Statistic 2.77 for level of

employment has a significance value of 0.064 for

organizational commitment; therefore the assumption

of homogeneity of variance is met. It means that we

have similar variances for different groups of level of

employment. In the above table Levene's F Statistic

1.175 for current experience has a significance value

of 0.319 for organizational commitment; therefore the

assumption of homogeneity of variance is met. It

means that we have similar variances for current

experience groups.

ANOVA Tables for Organizational Commitment

Table 4.6: ANOVA for Age

Sum ofSquares df

MeanSquare F Sig.


BetweenGroups

1.474 2 .737

3.15 .044WithinGroups

67.578 289 .234

Total 69.052 291

In the above table of ANOVA, F value is 3.15 and

value of p is .044 which is insignificant. So, it shows

that the mean organizational commitment of the age

groups is significantly different.

Table 4.7: ANOVA for Year of Experience

Sum ofSquares df

MeanSquare F Sig.


BetweenGroups

.797 2 .398


68.255 289 .236

Total 69.052 291


value of p is .187 which is significant. So, it shows

that there is no significant difference between the

means of the four groups of year of experience for


Table 4.8: ANOVA for Level of Employment

Sum ofSquares df

MeanSquare F Sig.


BetweenGroups

2.083 2 1.042


66.968 289 .232

Total 69.052 291


value of p is .012 which is insignificant. So, it shows

that the mean organizational commitment of the level

of employment four groups is significantly different

Table 4.9: ANOVA for Current Experience

Sum ofSquares df

MeanSquare F Sig.


BetweenGroups

1.025 3 .342


68.027 288 .236

Total 69.052 291


value of p is .230 which is significant. So, it shows

that there is no significant difference between the

means of the four groups of current experience for


4.5. REGRESSION ANALYSIS

Regression is a statistical technique for summarizing

the nature between variables and for making

predictions of likely values of the dependent variable.

The relationship between two variables is summarized

by producing a “line of best fit” a line that fits the data

closely. The predictions about likely values of the

dependent variable can be made for particular values

of the independent variable (Bryman & Cramer,

1994). In the present research study Regression is

however used as a statistical technique to specify the

degree to which one variable can be predicted or

explained by one of the other variables. In this

research study the rating allocated is the independent

variable.

Regression Analysis method is used in the present

research study to determine that either the independent

variable (predictor) “perceived fairness in

performance appraisal” will predict the variance in

dependant (predicted) variables “Organizational

Commitment and Organizational Citizenship

Behavior” that are experienced by the participants.

Then organizational commitment is also used to

predict the variance into organizational citizenship

behavior.

Hypothesis 1 proposed that perceived fairness in

performance appraisal predicts organizational

commitment. To test this hypothesis, the independent

variable, perceived fairness in performance appraisal

was regressed with the dependent variable,

organizational commitment. The results of this

regression analyses are shown below in table 4.10.

Table 4.10: Perceived Fairness in Performance

Appraisal and Organizational Commitment

Dependant Variable=organizational Commitment

In the above table 4.10, dependent variable is

organizational commitment and independent variable

is perceived fairness in performance appraisal. In this

table R value .257 shows a week positive relationship

Independent Variable R R2 B F P

Perceived Fairness inperformance appraisal

.257 .066 .219 20.43 .000


and organizational commitment. R value is always

equivalents to the correlation coefficients of

dependent and independent. So, the value of R

predicts that there is a week positive correlation

(0.257) between perceived fairness in performance

appraisal and organizational commitment. In this table

R square value shows a week impact of perceived

fairness in performance appraisal on organizational

commitment. R Square value is fraction of variation in

dependent variable that is accounted for independent

variable. We can say that most of the change in

commitment is not due to perceived fairness in

performance appraisal. It shows that only 6.6% (.066)

of commitment is due to perceived fairness in

performance appraisal and rest of the portion is

attributed to other sources/reasons. So there is a week

dependency of organizational commitment on

perceived fairness in performance appraisal. The slope

of regression line is positive as shown by the sign of

Constant’s value in B column; it shows that there is

positive relation between perceived fairness in

performance appraisal and organizational

commitment.

F statistics of regression model shows that the results

are statistically significant at 1% level and hence

prove the validity of estimated model. This table

shows that P value (.000) or significance level is very

high between dependent and independent variables.

This value illustrates that whether null hypothesis

should be accepted or rejected. In this table P value

(0.000) is far below significant level shows that our

regression test is highly significant. So we can say

there is a week relationship between perceived

fairness in performance appraisal and organizational

commitment. Finally we can reject the null hypothesis

and can accept the alternate one.

Hypothesis 2 proposed that “Perceived fairness in

performance appraisal predicts organizational

citizenship behavior.” To test this hypothesis, the

independent variable, perceived fairness in

performance appraisal was regressed with the

dependent variable organizational citizenship

behavior. The results of this regression analyses are

shown below in table 4.11.

Table 4.11: Perceived Fairness of Performance

Appraisal and Organizational Citizenship

Behavior

Dependent Variable= Organizational Citizenship Behavior


organizational citizenship behavior and independent

variable is perceived fairness in performance

appraisal. In this table R value .097 shows that there is

no relationship between perceived fairness in

performance appraisal and organizational citizenship

behavior. R value is always equivalents to the

correlation coefficients of dependent and independent.

So, the value of R predicts that there is no correlation

(0.097) between perceived fairness in performance

appraisal and organizational citizenship behavior. In

this table R square value shows no impact of


organizational citizenship behavior. R Square value is

Independent Variable R R2 B F P

Perceived Fairness inperformance appraisal

.097 .009 -.12 2.78 .096

fraction of variation in dependent variable that is

accounted for independent variable. We can say that

most of the change in organizational citizenship

behavior is not due to perceived fairness in

performance appraisal. It shows that only .9% (.009)

of commitment is due to perceived fairness in

performance appraisal and rest of the portion is

attributed to other sources/reasons. So there is a very

week or no dependency of organizational citizenship

behavior on perceived fairness in performance

appraisal. The slope of regression line is negative as

shown by the sign of Constant’s value in B column; it

shows that there is negative relation between

perceived fairness in performance appraisal and



are not significant and shows the less validity of

estimated model. This table shows that P value (.096)

or significance level is low between dependent and

independent variables. This value illustrates that

whether null hypothesis should be accepted or

rejected. In this table P value (0.096) is above from

significant level shows that our regression test is not

highly significant. So we can say there is a very week

or no relationship between perceived fairness in

performance appraisal and organizational citizenship

behavior. Finally we can accept the null hypothesis

and can reject the alternate one.

Hypothesis 3 proposed that “organizational

commitment predicts organizational citizenship

behavior.” To test this hypothesis, the independent

variable, organizational commitment was regressed

with the dependent variable, organizational citizenship

behavior. The results of this regression analyses are

shown below in table 4.12.

Table 4.12: Organizational Commitment and


Dependent Variable= organizational citizenship Behavior


organizational citizenship behavior and independent

Independent

Variable

R R2 B F P


.282 .079 .378 25.017 .000

variable is organizational commitment. In this table R

value .282 shows a week relationship between


citizenship behavior. R value is always equivalents to

the correlation coefficients of dependent and

independent. So, the value of R predicts that there is a

week positive correlation (0.282) between


citizenship behavior. In this table R square value

shows a week impact of organizational commitment

on organizational citizenship behavior. R Square value

is a fraction of variation in the dependent variable that

is accounted for independent variable. So, we can say

that in organizational citizenship behavior most of the

changes are not due to the organizational commitment.

It shows that only 7.9% (.079) of organizational

citizenship behavior is due to organizational

commitment and rest of the portion is attributed to

other sources/reasons. So there is a week dependency

of organizational citizenship behavior on

organizational commitment. The slope of regression

line is positive as shown by the sign of Constant’s

value in B column; it shows that there is positive

relationship between organizational commitment and



are statistically significant at 1% level and hence

prove the validity of estimated model. This table

shows that P value (.000) or significance level is very

high between dependent and independent variables.

This value illustrates that whether null hypothesis

should be accepted or rejected. In this table P value

(0.000) is far below significant level shows that our

regression test is highly significant. So we can say

that there is a week relationship between


citizenship behavior. Finally we can reject the null

hypothesis and can accept the alternate one.

4.6. SUMMARY OF THE CHAPTER:

In this chapter an overview of the most salient

findings had been provided those are obtained from

the empirical analysis of the collected data.

Significant differences were also identified between

the biographical data of the respondents,


citizenship behavior. For statistical analysis,

“Microsoft Excel” and the “Statistical Package for the

Social Sciences (SPSS) 16.0 for Windows” were used

on the data gathered from the Scales of perceived

fairness in performance appraisal, organizational

commitment and organizational citizenship behavior.

For the purpose of preliminary data manipulation,

Microsoft Excel was used. Inferential methods namely

Linear Regression Analysis and Descriptive were

involved in the Statistical analysis of the present

research study. In the next chapter, a discussion of the

findings will be presented those are obtained from the

present research study of perceived fairness in

performance appraisal impact on organizational


amongst the employees of the banking sector in

Pakistan and it will also contextualizes the present

research findings based on previous research.

CHAPTER 05

IMPLICATIONS OF STUDY

This chapter addresses: major findings,

recommendations, implications of these findings for

management, and finally limitation of the study that

are thrashed out with further research directions.

5.1 DISCUSSION OF FINDINGS

The purpose of this present research study was to find

out the impact of perceived fairness in performance

appraisal on organizational commitment and

organizational citizenship behavior and also

investigate the impact of organizational commitment

on organizational citizenship behavior in the banking

sector of Pakistan.

This research study has a considerable contribution to

the existed literature. First, we found that perceived

fairness in performance appraisal had a significant

effect on the organizational commitment and had no

effect on organizational citizenship behavior and we

also found that organizational commitment has a

positive week impact on the organizational citizenship

behavior. Few previous studies have exposed the

impact of human resource management practices on


citizenship behavior, in this research study an attempt

is made to fill the gap in literature.

Table-4.10 is being built on the regression results

indicating positive week relationship between

perceived fairness in performance appraisal and

organizational commitment. The outcome indicates

that independent variable namely perceived fairness in

performance appraisal has a positive week impact on



indicating no relationship between perceived fairness

in performance appraisal and organizational

citizenship behavior. The outcome indicates that

independent variable namely perceived fairness in

performance appraisal have no impact on



indicating a positive relationship exists between the


citizenship behavior. The outcome indicates that

independent variable namely organizational

commitment has a week positive impact on


5.2 CONCLUSION

In this research study, a structural model was

developed and tested in which the perceived fairness

of performance appraisal impact on organizational


had been investigated and also the impact of

organizational commitment searched out on


sector of Pakistan. The main findings of this study are

as follows. Firstly, the perceived fairness of

performance appraisal had a significant effect on

organizational commitment and showed no effect

towards citizenship behavior. Secondly, the study

findings showed that organizational commitment leads

to organizational citizenship behavior.

5.3 CONTRIBUTION TO THE STUDY

Although several studies have examined the

relationship between work/organizational outcome

variables and organizational justice (Colquitt, 2001;

Cropanzano, 2001), but about the interrelationships

between organizational justice in performance

appraisal, organizational commitment and

organizational citizenship behavior is known

relatively less. Previous research studies have

hypothesized that the organizational commitment

mediates the relationships between performance

appraisal and organizational citizenship behavior

(Masterson et al, 2000). The study provides new

directions in the research; by opening a debate on the

relationship of fairness in performance appraisal and

its impact on work related behaviors like


citizenship behavior along with their different

dimensions.

5.4 IMPLICATION FOR MANAGEMENT

The findings of the current research work propose that

if there is a perceived fairness in the performance

appraisal then the employees will be committed, and

more the employees of the organization are

committed, the more they will try to perform

citizenship behaviors that lead to organizational

effectiveness. This is true for the aggregate context of

fairness in the banking sector of Pakistan.

The contribution of organizational commitment into

the workplace should be taken into consideration from

the view point of the banking sector since it fosters the

exhibition of OCBs which are important for

organizational survival. More committed employees

are usually more likely to engage in the organizational

citizenship behaviors in the banking work settings.

Managers should focus on the attitude of commitment

as an approach to enhance the prevalence of

organizational citizenship behaviors in the workplace.

To do so, managers should concentrate on career-

oriented employment practices. Such an emphasis

would provide the employees an enhanced level of

psychological attachment with the organization.

Managers should understand the importance of

building a positive relationship with their subordinates

and stating the goals with the contributions of

employees to the work environment

Employee commitment and organizational citizenship

behavior can be improved by focusing attention on

human resource management (HRM) practices like

fairness in performance appraisal since they have the

potential to influence these constructs.

In the present research design, impact of perceived

fairness in performance appraisal is investigated on


citizenship behavior in the banking sector of Pakistan.

It is important for HRM systems to be aligned to these

constructs. If they are not aligned, they will negatively

influence the likely effectiveness of the organization.

Hiring, assessment, and compensation strategies

should be reconsidered if having committed

employees engaging in OCB is important to achieve

organizational goals

5.5 LIMITATIONS OF THE STUDY

Like all other empirical research studies, this research

study also has some of the limitations. The findings of

this research study should be taken into the

consideration in the light of several potential

limitations.

This research study has following limitations:

It is felt that there is an ample room for research

in this field but the lack of resources poses a

serious limitation. Also it is believed that the

sample size is not enough to represent the

whole industry and there is a slight possibility

that the future research in the same industry

may yield a bit different results

The second limitation of this study is that it

used a cross-sectional design. The cross

sectional study means that the direction of

causality cannot be determined, because data

were collected at a single point in time. That is,

causality among the independent and dependent

variables cannot be concluded. For example, it

may be found that, over time, fairness of

performance appraisal have a strong effect on


citizenship behavior.

Another limitation is generalizing the findings

from this study. Data were collected from

specific city (i.e. Lahore). A vast majority of

the study participants (87%) were men. Thus,

the results may not be applicable to other cities

or to women.

5.6 DIRECTIONS FOR FUTURE RESEARCH

This study provides an integrated model to understand

and better explain the relationships between perceived

fairness of performance appraisal, organizational

commitment, and organizational citizenship behaviors

in the banking sector of Pakistan. It serves as a

foundation for further investigation of the

relationships between perceived fairness in

performance appraisal and organizational

commitment, perceived fairness in performance

appraisal and organizational citizenship behaviors,


citizenship behaviors in the banking sector of

Pakistan.

There are other important aspects of fairness of

performance appraisal that have not been investigated

in the literature. These additional forms should be

examined in order to complete and enhance the

general framework provided by fairness of

performance appraisal research.

Important determinants as well as consequences of the

perceived fairness in performance appraisal,


citizenship behavior should be investigated in future

research. The current study suggests that more

research distinguishing between the different aspects

of perceived fairness in performance appraisal,


citizenship behavior needed to understand the specific

antecedents related to these aspects. There is potential

for researchers to come across different

mediating/moderating variables for the different

aspects of perceived fairness in performance appraisal.

The direct/indirect and moderating influences of other

values and work attitudes such as motivation,

satisfaction, leadership behaviors, work environment,

intention to leave, trust and organizational support

may be analyzed to explain the effects on perceived

fairness in performance appraisal that may prove

worthwhile to study in the future.

Improvement of fairness perceptions is however a

very crucial element in the public service when

dealing with those challenges that requires the

improvement of an excellence in service ethos. For

further study, a public service-wide research should be

considered that is based on the fairness perceptions of

performance appraisal systems to contribute into the

improvement of fairness perceptions and that will

eventually helpful for the effective management of

service delivery in the public service.

The sample of the current study was drawn from

banking sector. This study has to be replicated and

expanded upon the present findings using samples

with different characteristics from different sectors,

such as telecom, education and from employees of

different industries and organizations, so as to be able

to generalize the results regarding the impact of



citizenship behavior to larger populations.

This study contributes theoretically and empirically to

the literatures on perceived fairness in performance

appraisal, organizational commitment, and

organizational citizenship behavior by demonstrating

that the relationships between fairness of performance

appraisal and work attitudes are integral parts. Hope

so, this research study will stimulate the researchers to

begin to think about how the perceived fairness in

performance appraisal relates to organizational

commitment and how the organizational commitment

helps to contributes into the enhancement of

citizenship behaviors in the organizations. In the 21st

century it is very important for the organizations that

they must develop such strategies that help them to get

employees be good citizens.

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APPENDIX

QUESTIONNAIRE

Dear Respondents,I am a student of M.Com (Hons) from Hailey College of

Commerce, University of the Punjab Lahore. Thisquestionnaire is designed to study the “Impact of PerformanceAppraisal system on Commitment and Citizenship Behavior inBanking Sector of Pakistan”. This research would be a greatcontribution for future as this would unveil and unexploredareas of business. Your co-operation would be highly useful forthis research. So it is requested to spare few minutes to fill thequestionnaire. Try to be realistic in your answer. Yourresponses will be kept confidential and used for only researchpurpose.

Name (optional)Mr./Miss/Mrs._______________________________

Gender : Male [ ] Female [ ]Qualification:(a) Undergraduate (b) Graduation (c) Post GraduationAge:(a) 20-30 (b) 30-40 (c) 40-50 (d) Above50Years of experience(a) 0-10 (b) 10-20 (c) 20-30 (d) Above30Level of employment(a) Lower level (b) Middle level (c) Top levelName of the organization ____________________________You have been in this organization for last years. _________

Section I: Fairness of performance appraisal1 Do You have considerable voice in determining your

performance evaluation?2 Some people at my workplace receive special treatment

because they are friendly with supervisors3 The supervisor considers the important aspects of your

work when rating you.4 The supervisor rates you on how well you do your job, not

his/her personal opinion of you.5 The supervisor treats you with consideration when giving

you your performance appraisal results6 The supervisor that evaluated you showed concern for

your right as an employee7 Overall, supervisor tries to be fair with you when he rates

your performance.8 The procedure used to evaluate your performance have

been fair and objective9 My performance rating presents a fair and accurate picture

of my actual job performance10 In general, disciplinary actions taken in the organization

are fair and justified11 There is a tendency for supervisor to give the same rating

of performance regardless of how well people performtheir job

Section II: Commitment1 I really feel as the Bank’s problems are my own2 I enjoy discussing about my Bank people outside it3 I do not feel like 'part of the family' at the Bank4 I could easily become as attached to another bank as I am

to this bank5 I would be very happy to spend the rest of my career

within this Bank6 I do not feel 'emotionally attached' to the Bank7 This Bank has a great deal of personal meaning for me8 I do not feel a strong sense of belonging to this Bank9 I am not afraid of what might happen if I quit my job

without having another one lined up10 It would be very hard for me to leave this bank right now,

even if I wanted to11 Too much in my life would be disrupted if I wanted to

leave this Bank now12 It wouldn't be too costly for me to leave this Bank Job

right now13 Right now, staying with this Bank is a matter of necessity

as much as desire

14 I feel that I have too few options to consider leaving theBank

15 Jumping from organization to organization does not seemunethical to me

16 I think that people these days move from company tocompany too often.

17 One of the few serious consequences of leaving this Bankwould be the scarcity of available alternatives

18 I continue to work in this Bank because leaving wouldrequire significant personal sacrifice which may not matchthe benefits of any other bank

19 I do not believe that a person must always be loyal to hisor her organization

20 I continue to work for the Bank because I believe thatloyalty is important and therefore feel a sense of moralobligation to remain

21 If I got another offer for a better job elsewhere I would notfeel it was right to leave the Bank

22 Things were better in the days when people stayed withone organization for most of their careers

23 I was taught to believe in the value of remaining loyal toone employer

Section III: Organizational Citizenship Behavior1 I adjusted my work schedule to accommodate other

employees2 I like to Help others who have been absent3 I always show genuine concern and courtesy toward

coworkers, even under the most tiring business orpersonal situations.

4 I try to offer ideas to improve the functioning of theorganization.

5 I always Expressed loyalty toward the organization.6 I attempts to take action to protect the organization from

potential problems7 I seek to demonstrate concern about the image of the

organization.8 Voluntarily I did more than the job requires to help

others or to contribute the overall functioning of the

facility.9 I try to take initiative to troubleshoot and solve technical

problems before requesting help from a supervisor.10 I always willingly give my time to help out others who

have work-related problem11 I am always willing to take time out of my busy

schedule to help with recruiting or training newemployees.

12 I Rarely takes long lunches or breaks13 I Do not take unnecessary time off work.14 I Did not like to take extra breaks15 My Attendance at work is above the norm.16 I always obeys company rules and regulations even

when no one is watching17 I attend functions that are not required but help the

company’s image.18 I attend training/information sessions that I am

encouraged to, but not required to attend.19 I attend and actively participate in company Meetings.

***Thanks for your Time and Cooperation***

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