Research Method

Investigating the Determinants of Perceived Procedural Fairness in Performance Evaluation

1. Introduction

Relatively little research has been conducted on the factors which affect perceived

procedural fairness; and their results are inconclusive. The objective of this paper is to

investigate the main determinants of perceived procedural fairness.

2. Research Approach:

Quantitative, questionnaire was distributed to three companies, and qualitative method of

interview was also conducted because some variables were measured using a single item,

the interview was conducted to compensate this. Overall the research is a mixed method

approach

3. Research Design:

Cross Sectional design, the approached three major companies in the same time period

and collected data.

4. Population:

The organizations were approached to participate in the study because they were leading

companies in their sector that had been operating PMERS for some time with varying

degree of satisfaction.

5. Sampling Technique:

Purposive Sampling, for the purpose of filling in the questionnaire, purposive sampling

was employed. The principle in this type of sampling is to get all possible cases that fit

particular criteria (Neuman, 2003).

The criteria to be included as the samples are:

1) Managers have been working for the organizations for more than one year;

2) They have been evaluated by their superiors; and

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Research Method

Investigating the Determinants of Perceived Procedural Fairness in Performance Evaluation

3) They have received the performance evaluation feedback.

These criteria are to ensure that the samples are valid.

6. Sample Size:

The distribution of the survey instruments is as follows: 102 to company 1, 99 to the

company 2, and 95 to company 3. Of 296 questionnaires distributed, 174 were returned,

55 from company 1, 52 from company 2, and 67 from company 3. Total response rate of

59% was achieved.

7. Pilot Study:

To increase the validity of the measures and to be more comparable with the previous

studies, all measures were taken from previous literature. All the instruments were pilot-

tested prior to the distribution to the respondents, on executive MBA students of a UK

University.

8. Measurement of Variables Used:

The measurements of the variables in this study are done separately using two different

measurement systems. The dependent variable of the study procedural fairness was

measured using a four-item instrument developed by McFarlin and Sweeney (1992). The

independent variables are participation in target setting, the transparency of the goal-

attainment-reward link and the goal specifies. These independent variables were

measured using seven-point Likert type scale.

9. A survey approach

The researcher collected data via questionnaires and complimented the limitations of his

questionnaire through a brief interview with selected managers.

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Research Method

Investigating the Determinants of Perceived Procedural Fairness in Performance Evaluation

10. Data collection technique

Working closely with managers from the three organizations, a preliminary notification

was circulated encouraging managers to participate in the survey. After obtaining senior

management permit to conduct the independent research study the survey instrument was

distributed to potential respondents, together with the assurance of confidentiality.

Reminders were sent one, three and seven weeks after the original mailing. The survey

package and reminder letters were sent via e-mail. Respondents could return the

completed questionnaires electronically by e-mail or send a hard copy version by post.

11. Reliability and validity of the variables used

The model is then tested using a PLS regression approach. The results of the PLS

approach are broadly consistent with the results of the OLS approach. Procedural fairness

is significantly affected by participation in target setting, goal-attainment reward link, and

goal specificity. On the other hand, procedural fairness is not affected by the type of

performance measure (either financial or nonfinancial measures) used to evaluate

performance.

12. Response Rate:

Total response rate of 59% was achieved. After a careful examination there was 9

responses, 1 from company 1, 2 from company 2, and 6 from company 3 were not usable,

yielding a total of 165 usable responses, 56%.

13. Analysis Technique:

To test the hypotheses, data were analyzed using both multiple regressions and PLS. prior

to the main analysis, ANOVA tests between groups were performed to see whether there

are and differences among sub-samples. It was found that variability of variance between

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Research Method

Investigating the Determinants of Perceived Procedural Fairness in Performance Evaluation

the groups (i.e.Organizations) for procedural fairness, participation, transparency of goal

attainment- reward link and goal specificity is significant. Therefore in running

regression we controlled the organization effect. (Sholihin & Pike, 2013)

14. Conclusion and Recommendation

The study contributes to the literature of procedural fairness in the context of PMERS by

providing empirical evidence on the factors which influenced perceived procedural

fairness.

Article Reviewed:

Sholihin, M., & Pike, R. (2013). Investigating the Determinants of Perceived Procedural Fairness in Performance Evaluation. Journal of Applied Management Accounting Research, 11(1), 29–42.

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