Performance appraisal is a human resource management tool that has received much attention for more than seven decades, and fairness in appraising employees has been identified as an important criterion in judging the effectiveness and usefulness of employees for organisations (Erdogan 2002:566). Erdogan indicated that if not well handled, performance appraisal could have broad negative implications for employee attitudes and behaviour in organisations. Sudin (2011:68) posited that understanding fairness or organisational justice in performance appraisal processes and practices is extremely important for organisations because of the relationship of performance appraisal with employee job satisfaction and employee organisational commitment,
and, consequently, the likelihood that employees could seek other employment. According to Hashim (2008:150), performance appraisal is a formal system of setting work standards, assessing performance, and providing feedback to employees, for the purpose of motivating, correcting, and sustaining them in their performance. Information obtained from a performance appraisal is used to make pay and promotion decisions (Grobler et al. 2011:298). It is a fact that most employees dislike performance appraisals. For example, Baldwin (2006:6) speculates that employees’ inherent suspicion in or dislike of being appraised is likely to stem from their perceptions of the way performance reviews are conducted, despite their intrinsic value.
Performance appraisal plays an essential role in the overall success of an organisation. Arnold (2005:137) asserted that effective appraisals should include career counselling and feedback to employees concerning development efforts that should be implemented to improve their promotional opportunities within the organisation. Ikramullah, Shah, Hassan, Zaman and Shah (2011:39) claimed that organisational success or failure could be determined by the means through which employee performance is managed. Baldwin (2006:7) asserted that people want to see their work performance assessed in an accurate and unbiased manner. Walsh (2003:29) indicated that the most important performance appraisal issue faced by organisations is the perceived fairness or unfairness of the system. Organisations therefore need to be cautious when assessing employees’ performance. Walsh suggested that the appraisal process can become a source of extreme dissatisfaction when employees believe that the system is biased or political. According to Vasset, Marnburg and Furunes (2010:30), assessment processes are usually perceived to be just if they (1) are transparent and are explained sufficiently, (2) gather evidence, rather than express personal bias, and (3) allow employees to present their own views and point out aspects of the assessment that they have perceived to be unfair or unfortunate.
There is sufficient evidence to suggest that supervisors tend to appraise employees inaccurately and unfairly (Hashim, 2008:155). The findings from a study conducted by Kgantlapane (2009:77) on a performance management system in the Ekurhuleni
Metropolitan Municipality (EMM) revealed that rewards linked to good performance are an aspect that is falling short in the performance management cycle. A relatively high proportion of respondents (employees in this case) do not believe that the performance management of the EMM is fair and equitable (Kgantlapane 2009:77). It is thus tempting to conclude that the politically polarised environment of municipalities increases the tendency for performance appraisal to be biased and open to political interference, and hence municipalities have the potential to be perceived as unfair by employees. It is therefore prudent that HR professionals strive for fair and just performance systems within their organisations. This, according to Aslam, Shumaila, Sadaqat, Bilal and Intizar (2012:5), is imperative because, when employees observe that performance rating and the chances of promotion are not based on just practices but on political and biased motives, and their performance is not truly considered, they become demotivated, and their job satisfaction decreases.
Baldwin (2006:7) suggested that HR professionals seeking to create a fair performance appraisal should, among others things, involve employees in establishing appropriate performance criteria, and should allow employees to express their feelings and opinions in appraisal interviews. It is important that organisations, including municipalities, pay special attention to appraisal interviews if they want their performance appraisal to be considered fair by employees. Baldwin (2006:7) recommended that appraisers produce a written account or summary of the appraisal interview and comment on it. Baldwin (2006:7) further suggested that the interviewer and the interviewee should discuss and attempt to resolve any points of disagreement.
The main objectives of performance appraisal, according to Grobler et al. (2011:288), are evaluative and developmental. To evaluate means to pass judgement, or to determine the worth of something (Grobler et al. 2011:288). The evaluative objective of performance appraisal provides valuable information for personnel decisions, such as pay increases, promotions, demotions, transfers and terminations (Pillai 2012:33). The developmental objective of performance appraisal is concerned with performance feedback, as employees will always want to know how they are performing. According to Grobler et al. (2011:298), employees will want to know how their supervisors feel about their performance. It is important that during the performance interview, or
during the feedback meeting, employees are treated with respect and dignity, irrespective of their performance, thus ensuring interactional justice. Pillai (2012:8) indicated that respect for the individual, procedural fairness, and transparency in decision-making should prevail when governing the operation of the performance management process.
The developmental objective also means that the results of performance appraisals should be used to improve the abilities of employees, and not for mere fault finding. History, however, shows that performance appraisals are loathed by employees, and in South Africa, workers unions, such as the South African Democratic Teachers Union (SADTU), have always viewed performance appraisals in a very bad light. This is evidenced by SADTU’s rejection of performance contracts for teachers and principals (Gernetzky 2012:1). This does not detract from the fact that information provided by performance appraisals could help municipalities identify performance and skills gaps which could be bridged though training and development, in order to improve service delivery. Whatever purpose performance appraisal is used for, passing judgement about or establishing the worth of employees can be controversial, unless it is done in a manner that leaves no doubt in the mind of the appraisee of the objectivity, and hence fairness, of the process.
Based on Kgantlapane’s (2009:77) findings and Walsh’s (2003:29) views, it is judicious that HR practitioners guard against biased, unfair, and unjust performance appraisals, because such appraisals will lead to important decisions being made based on faulty information. Besides this, should employees perceive performance appraisals as being biased, unfair, or unjust, they will have negative justness perceptions, which could have detrimental consequences for organisational performance. Performance-based compensation is the dominant HR practice that organisations use to evaluate and reward the efforts of employees (Vlachos 2009:29), and this is supposed to be the case in municipalities as well. However, Chikulo (2011:10) cautions that the growing culture of political opportunism, infighting and factionalism, corruption, nepotism, and patronage is now so rampant in most local authorities that a recipe has been created for unjustness, employee demotivation, and the ultimate failure of the organisation to achieve its goals.
Distributive, procedural and interactional justices are affected by performance appraisals, because employees naturally expect outcomes to be distributed in accordance with performance, as well as involvement in the processes that determine outcome distribution. Self-assessments could be used by organisations to involve employees in their performance appraisals, thereby enhancing procedural justice. Ikramullah et al. (2011:39) stated that any appraisal system that is associated with dissatisfaction or perceived as unfair or inequitable will be doomed to failure. This seems to be the reason that Ikramullah et al. (2011:39) considered fairness of the performance appraisal to be a critical issue that organisations have to deal with. Interactional justice in performance appraisals implies that employees are treated with respect and dignity throughout the performance appraisal, and also kept informed of proceedings that affect them. It also means giving prompt feedback on performance. Ikramullah et al. (2011:39) stated that interpersonal justice deals with appraisees’ perceptions of their treatment by a supervisor, and procedural justice is associated with fairness perceptions of the standards followed and the methods and processes used in appraising performance.
HR practitioners in organisations, including municipalities, would promote employee justness perceptions of their municipalities if they heeded the advice of Tatlah, Saeed and Iqbal (2011:15). These authors argued that performance appraisal has implications for interactive-procedural justice. They point out that the HR manager could do several things to ensure that organisational appraisal methods are perceived as fair: the interpersonal treatment of the employee should reflect politeness and respect for the appraisee by the assessor, and there should be the opportunity for two- way communication. They also recommended that employers provide explanations (informational justice) on how certain decisions were arrived at. Tatlah et al. (2011), citing Cropanzano and Wright (2003:4-6), suggested that individuals perceive an appraisal system as fair when the employer provides useful information about the employee’s performance and the assessment procedures that the employer has used. Performance appraisal in organisations, including municipalities, could provide the opportunity for HR officials to promote the justice image of their organisations through the manner in which people are treated in interpersonal interactions in the workplace.