Abstract
This paper seeks to understand the association between ratees’ relational justice perceptions and their feedback acceptance, both directly and through leader–member exchange (LMX). The paper also examines the moderated mediation effect of supervisory trust. The paper presents the findings of two studies. Study 1 utilized two data sets collected through an online survey from 280 part-time students working full-time (Sample 1) and 292 working professionals (Sample 2) in Pakistan. Study 2 utilized data collected from N = 167 students recruited for a scenario-based experiment that manipulated whether a manager was fair or unfair. Results revealed that relational justice positively predicted feedback acceptance in Studies 1 and 2. LMX positively mediated the above-mentioned relationship in both studies. As expected, supervisory trust negatively moderated the relational justice–feedback acceptance relationship in Study 2. The present study contributes to performance management theory and practice by illuminating that raters can stimulate performance partnership by employing a relational justice approach that increases the likelihood that employees accept performance feedback.
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Introduction
In the recent past, studies have started paying attention to ratees’ reactions to performance appraisal (PA) systems and the implications for PA effectiveness (e.g., Ikramullah et al., 2016). They suggest that raters and ratees are instituted in the same social environment of PA; therefore, ratees’ reactions are closely related to the rater’s actions. On the one hand, giving accurate performance feedback (the rater’s action) is deemed essential for improvement of employee performance (Schaerer et al., 2018), while on the other hand feedback acceptance (the ratee’s reaction) is considered instrumental to the overall effectiveness of PA (Ilgen et al., 1979). PA theory and practice have realized that if ratees’ reactions to feedback are adverse, the PA system will be prone to failure (Murphy & Cleveland, 1995).
In the wake of debates on getting rid of performance ratings (Adler et al., 2016), PA literature has shifted its focus from performance ratings to performance feedback. Substantiating this notion, organizations have also shifted to more flexible PA activities, e.g., conversation days for providing employees with informal but regular feedback (Dessler, 2020). Some PA studies have identified that getting ratees to accept performance feedback is a serious problem (e.g., Christensen-Salem et al., 2018). One major factor shaping such acceptance is ratees’ perceptions of justice demonstrated by the rater (Anseel & Lievens, 2009). At a theoretical level, a paucity of research on how rater-centric justice perceptions determine ratee feedback acceptance in the PA system is an issue that needs more research attention. Hence, investigating feedback acceptance with respect to relational justice is timely. Relational justice includes procedural justice (Van Dijke et al., 2015), informational justice and interpersonal justice (Nasr et al., 2019), and excludes distributive justice (Sousa & Vala, 2002).
Moreover, it is yet unclear how the quality of the rater–ratee relationship affects feedback acceptance, especially when raters exhibit relational justice. Indeed, recent research suggests that leaders having high leader–member exchange (LMX) with some members may offer more mentoring and empowerment to them, while giving less of these incentives to others with whom they have low LMX (Mumtaz & Rowley, 2020). Nevertheless, research is equivocal regarding LMX as an antecedent to, or consequence of, justice as a proxy of ratee reactions to the PA system (Erdogan, 2002). Despite numerous studies on antecedents and consequences of LMX (e.g., Harris et al., 2014), the extant literature still calls for investigation on how justice perceptions predict LMX (Mumtaz & Rowley, 2020) in the context of a PA system.
Drawing from the above, the present study investigates ratees’ PA feedback acceptance as a function of their perceptions of relational justice. Furthermore, it investigates the role of LMX as a mechanism behind the above relationship. We expect to contribute to the PA literature by focusing on three issues. First, our study empirically examines relational justice based on three justice dimensions, that is, procedural, informational, and interpersonal. In so doing, our study attempts to emphasize relational needs of ratees, e.g., social connection, cooperation, respect, communication, fulfilling which can be helpful in motivating them to participate in the PA feedback process. Second, our study seeks to examine the underlying mechanism behind the relationship between relational justice and feedback acceptance. Being mindful of the relational context of PA, which is grounded in social exchanges, we add to our line of reasoning more support provided by LMX theory (Graen & Scandura, 1987) that explains the relationship between each rater–ratee dyad uniquely (Lam et al., 2017). Therefore, we consider the quality of the unique rater–ratee relationship to be of importance for the relational justice–feedback acceptance relationship (Elicker et al., 2006).
Finally, supervisory trust is an important factor in most social exchanges, including LMX (Masterson et al., 2000). Building on the notion that fairness often serves as a substitute of trust (Van den Bos et al., 1998), it stands to reason that the relationship between relational justice and feedback acceptance, both directly and through LMX, can be stronger when supervisory trust is low than when it is high. This is because when people have high trust in their supervisor, as reflected in perceived consistency between actual and desired actions of supervisors (Javed et al., 2018), they are likely to assume a high level of fairness anyway, rendering weaker effects of relational justice on feedback acceptance both directly and through LMX. In the following, we discuss the concept of relational justice, followed by its relationships with other constructs in more detail.
Theoretical Background and Hypotheses
The concept of relational justice has gained notable attention from justice scholars (Bies & Moag, 1986). However, researchers have a lack of consensus about its conceptualization. They view it in four distinct ways. First, some researchers believe justice is an innate relational concept, as it is arguably linked to an individual’s moral goodness (Wielsch, 2013). Hence, there exists the need for virtue in all aspects of justice, including distributional, procedural, informational, and interpersonal (Malagueño et al., 2019). Second, some scholars separate the distribution of resources and benefits to the target from the quality of interaction with the target. They hold that only interactional component(s) of justice represent relational justice (Nasr et al., 2019). Third, some researchers maintain that procedural justice and interactional justice complement each other (Ndjaboué et al., 2012), and hence, these may together contribute toward the formulation of a target’s relational justice perceptions.
Finally, some scholars suggest that relational justice includes both procedural and interactional dimensions of justice. In addition, they also emphasize the exclusion of a distributional component (Gewirtz, 1998). The key difference between the third and the final approaches is that the former is silent about distributive justice, whereas the latter explicitly excludes distributive justice while defining relational justice. Employee reactions to procedures are contingent upon their concerns for a social relationship with their supervisors who hold the authority to employ those procedures (Tyler & Lind, 1992). In addition, distribution of resources and benefits is often specific to individuals, depending on levels of deservingness. Such deservingness separates distributional aspects from interactional aspects, as all individuals deserve respect and dignity regardless of what resources and benefits they should get (Gewirtz, 1998). Extrapolating these considerations to organizational justice in the PA context, Sousa and Vala (2002) maintain that employees consider PA more accurate when they perceive procedural and interactional justice have been demonstrated than when distributive justice is upheld. Also, procedural and interactional components together are found to have predicted employee perceptions about the authority more strongly than the distributional component (Gouveia-Pereira et al., 2003).
Furthermore, building on a distinction between employee motives put forth by Lind and Tyler (1988), Sousa and Vala (2002) suggest when employees’ motives relate to outcomes, e.g., their PA ratings, they seek procedural and distributive justice. However, when their motives relate to the quality of their relationship with their supervisor, e.g., respect, they seek procedural and interactional justice. Certain organizational justice studies suggest that procedural justice (Blader & Tyler, 2003; Tyler & Smith, 1998), and informational justice and interpersonal justice (Virtanen & Elovainio, 2018) are of a relational nature, but piecemeal. Hence, Sousa and Vala (2002) pronounce underlying justice dimensions of procedural, interpersonal, and informational justice as parts of the overarching construct relational justice, which in turn is a predictor of employee acceptance of the supervisor’s actions.
At a theoretical level, relational justice affects certain outcomes under different social exchanges (Masterson et al., 2000). More specifically, social exchanges come into play when a supervisor treats an employee fairly or unfairly (Cropanzano et al., 2017). Social Exchange Theory (SET) examines actor-target’s mutually dependent actions in economic and social terms (Blau, 1964), also known as the transactional exchange and the relational exchange, respectively (Miles, 2012). As an overarching notion, relational exchanges explain our research model (Fig. 1) that contemplates justice-oriented rater–ratee relationships in the social context more compellingly. We maintain this because relational exchanges are associated with intangible outcomes such as appreciation or respect, while transactional exchanges are associated with tangible outcomes such as PA ratings or rewards. Specifically, intangible outcomes benefit the target with value that cannot be determined in material terms, and hence, such an outcome carries a unique value for an employee. Tangible outcomes, however, benefit the target with a generic value that is not unique for an employee, especially in comparison with peers at the same job level or grade (Blau, 1968). Next, we discuss the hypothesized relationships.
The research model
Relational Justice and Feedback Acceptance
Justice is defined as “the perceived adherence to rules that reflect appropriateness in decision contexts” (Colquitt & Zipay, 2015, p. 76). The rater is supposed to demonstrate adherence to rules on the behalf of the organization. Hence, it stands to reason that ratees’ feedback acceptance is closely tied with their relational justice perceptions of the PA process as administered by the rater (Wallace et al., 2016). PA research suggests ratees’ feedback acceptance is instrumental to success of the PA process. When ratees accept and internalize their feedback during the PA process, their likelihood to improve subsequent performance is high (Iqbal et al., 2019). Feedback acceptance is defined as “the recipient’s belief that the feedback is an accurate portrayal of his or her performance” (Ilgen et al., 1979, p. 356). Thus, it reflects people’s perception of accuracy of the performance feedback they receive (Anseel & Lievens, 2009). Four factors are considered crucial for feedback acceptance: (1) the feedback content, e.g., accuracy; (2) the feedback context, e.g., legitimacy; (3) the feedback recipient, i.e., the ratee; and (4) the feedback provider, i.e., the rater (Boudrias et al., 2014). In fact, feedback originates from the rater, s/he cannot be detached from the feedback content and the context. Therefore, characteristics of the rater are considered to influence ratee feedback acceptance the most (Ilgen et al., 1979).
Building on the above, we maintain that the link between relational justice and feedback acceptance is primarily guided by the relational exchange component of SET. Ratees consider the feedback appropriate when they receive it as a “soft” message from the rater that contains positive and respectful remarks. Having felt that the rater has demonstrated relational justice, ratees consider performance feedback considerate, and hence, they tend to accept and act upon it (Krings et al., 2015). In addition, per organizational justice theory (Greenberg, 1987), ratees’ perceptions of relational justice predict their likelihood of accepting the feedback. So, employees consider fair feedback a valuable resource that can contribute to their development and self-worth (Krings et al., 2015). More specifically, relational justice perceptions in the PA process may let ratees deem the considerate feedback a positive gesture from their supervisors, thereby signaling supervisors’ interest in developing employees and improving their performance (Sparr & Sonnentag, 2008).
Provision of performance feedback is a core responsibility of the rater (Dessler, 2020). Therefore, offering voice to employees in the PA process, especially in the feedback session, is expected to increase their perceptions of procedural justice, which subsequently can foster ratee feedback acceptance (Korsgaard & Roberson, 1995). Similarly, employees may expect sensitivity of interpersonal treatment (interpersonal justice), as well as honest and open communication, and access to information (informational justice) (Cropanzano et al., 2002). The raters may treat ratees with respect and dignity with the objective of making feedback delivery more interpersonally fair, increasing the likelihood of feedback acceptance (Leung et al., 2001). Likewise, the honest and open communication of feedback regarding employee performance can predict higher levels of ratee feedback acceptance (Roberson & Stewart, 2006). Thus, we hypothesize that:
H1
Ratees’ perceptions of relational justice will positively predict their feedback acceptance.
The Mediating Effect of LMX on Relational Justice–Feedback Acceptance Relationship
The SET posits that social reciprocation plays a vital role in the success of a relational exchange process (Blau, 1964). That is, supervisors who demonstrate relational justice are likely to have more favorable employee reactions than their counterparts who are less prone to demonstrate relational justice. The social context of PA accentuates the quality of rater–ratee relationship as a mechanism behind the above link (Russo et al., 2017), which may be seen effectively from the standpoint of LMX theory as well. Having roots in the SET, the LMX theory (Graen & Scandura, 1987) provides that, in a high-quality professional relationship, an individual offers something of value to his/her dyadic partner, and the fairness of the exchange is vital for defining the quality of future interactions between them (Liden et al., 1997).
Additionally, from the agent–system model (Bies & Moag, 1986), it is apparent that employee reactions are affected by the actions of the agent (the rater) and the system (PA procedures). The interrelationship of agent and system lies in the fact that formulated procedures of an organization are mainly implemented by the rater, which may result in integrity and fairness of PA ratings (Jawahar, 2007). Ratees’ justice perceptions regarding procedures run by the rater and interaction with the rater serve as the foundation of employee satisfaction with agent and system, which may foster a high-quality rater–ratee relationship. This notion is supported by Cropanzano et al., (2002), who argue that the ability of the rater to effectively implement PA procedures and to treat ratees with respect, dignity, and integrity may help them develop a high-quality relationship with ratees. It is noteworthy for managers who desire demonstration of relational justice that per actor-focused model (Scott et al., 2014), raters have the maximum freedom in demonstrating interpersonal justice, followed by informational justice, and then procedural justice. Thus, establishing high LMX by demonstrating high relational justice is not beyond the control of a manager (Scott et al., 2009).
PA involves giving and receiving feedback, yet the perspective of the “feedback receiver” is less widely discussed (Rasheed et al., 2015). The perceptions and reactions of the feedback receiver are significant in both defining the level of LMX and accepting feedback (Masterson et al., 2000). A recent study has highlighted affective, cognitive, and behavioral factors that can help explain the linkage between LMX and the likelihood of ratee feedback acceptance: Ratee liking of the rater represents the affective component; ratee knowledge about the rater’s ability refers to the cognitive component; and ratee feedback acceptance represents the behavioral component. We consider the above factors instrumental to the rater–ratee relationship, especially when they are engaged in feedback process (Niemann et al., 2014). Thus, we hypothesize that:
H2
LMX will mediate the relationship between ratees’ perceptions of relational justice and their feedback acceptance.
The Moderated Mediation Effect of Supervisory Trust
The extant PA literature suggests that employees’ trust in their supervisor is vital to their proclivity to accept feedback (Nae et al., 2015). Such supervisory trust primarily indicates perceptions of employees about the ease of communication with the supervisor without any fear of mistreatment and negative consequences concerning their jobs (Mulki et al., 2006). Supervisory trust hence reflects an enduring characteristic of the supervisor–subordinate relationship, which is developed over time through mutual interaction (Saunders & Thornhill, 2004). The experiences and interactions of ratees with raters contribute to shaping the trust that ratees have in their respective raters (Ambrose & Schminke, 2003). Supervisory trust is considered a general characteristic of relationships, which is an integral psychological context element of supervisor–subordinate interaction (Colquitt et al., 2007). Hence, the presence of supervisory trust can be considered as an indication of a high-quality rater–ratee relationship. Here, the question of interest pertains to the notion whether trust of the ratee in the rater moderates the association between relational justice and feedback acceptance, both directly and via LMX (i.e., moderated mediation).
In general, justice perceptions and trust are considered as conceptually different, yet interrelated constructs. Nevertheless, their relationship is ambiguous (Colquitt & Rodell, 2011; Lewicki et al., 2005). Few studies argue that trust leads to justice (Lind & Tyler, 1988; Tyler & Lind, 1992). Conversely, others contemplate that justice perceptions predict trust (e.g., Blau, 1964). Moreover, relational exchanges often involve uncertainty (Miles, 2012), and from the standpoint of uncertainty management theory (Lind & Van den Bos, 2002), fairness is often seen as a heuristic proxy for trust. Indeed, it would be plausible to argue that presence of relational justice or supervisory trust may enhance ratees’ feedback acceptance. Therefore, we assume that ratees with high relational justice perceptions need low supervisory trust to accept feedback. However, in PA process, if relational justice perceptions are low, then supervisory trust may play a role to lessen the feelings of unfairness. Hence, we hypothesize that:
H3a
Supervisory trust will moderate the direct relationship between relational justice and feedback acceptance, such that the above link will be stronger when supervisory trust is low than when it is high, and vice versa.
The association between justice perceptions and LMX has already been discussed substantially in the previous section; that is, ratee justice perceptions are more likely to contribute to high LMX between the rater and the ratee (Burton et al., 2008; Elicker et al., 2006). However, in the presence of supervisory trust, the association of justice perceptions with LMX can be strengthened further (Aryee et al., 2002). So, the higher level of trust with which raters follow the organizational procedures and fulfil their role of performance evaluator may reflect the strength of relational justice–LMX relationship, especially in the eyes of ratees (Saunders & Thornhill, 2004). Here, we argue that for ratees with low supervisory trust, relational justice demonstrated by the supervisor matters most for LMX. Ratees with high supervisory trust are expected to assume a high level of fairness anyway, and thus, for them there is a weaker effect of relational justice on LMX. Connecting the above discussion to recent review of Ashford et al. (2016) on performance feedback, we propose that supervisory trust is likely to moderate the intervening association of ratee relational justice perceptions and their feedback acceptance through LMX.
These arguments are consistent with SET, which proposes that high-quality relationships are characterized by the degree of trust, which followers have on the leader (Cropanzano et al., 2002). The development of LMX is considered as a trust-building process, with the presence of trust indicating high-quality LMX. The interaction of trust and justice perceptions has the potential to influence the development of LMX (Masterson & Tong, 2015). Trust in supervisor not only weakens the association between justice perceptions of ratees and LMX, but it also amplifies the mediation effect of LMX on relational justice–feedback acceptance relationship (Elicker et al., 2006). Thus, we hypothesized that:
H3b
Supervisory trust will moderate the strength of the mediated relationship between relational justice and feedback acceptance via LMX, such that the mediational effect of LMX in the relational justice–feedback acceptance link will be stronger when supervisory trust is low than when it is high, and vice versa.
Study 1
Methodology
Samples and Data Collection
We collected data from two samples. First, we obtained student e-mail addresses of 625 part-time students (working full-time) enrolled in management courses from five different universities in Islamabad, Pakistan. The link of the survey questionnaire was sent to them via e-mail. The survey questionnaire included a total of 33 items for measuring the study variables, four questions on demographic variables and two open-ended questions. We received back 280 usable questionnaires, which is a response rate of 44.80% (Sample 1). Second, 978 working professionals who had signed up as members of management or human resource management groups on social networking website (LinkedIn) were provided with the link of survey questionnaire. A total of 292 usable questionnaires were received, a response rate of 29.86% (Sample 2). Characteristics of both the samples are summarized in Table 1.
Measures
Unless mentioned otherwise, we have anchored survey questions/items to seven-point Likert-type response categories (1 = strongly disagree to 7 = strongly agree).
Relational justice. Consistent with Sousa and Vala’s (2002) approach, we measured relational justice as a second-order variable using three first-order latent variables of procedural, informational, and interpersonal justice, as developed by Colquitt (2001). We used seven items to measure procedural justice. A sample item is: “Have PA feedback procedures been applied consistently?”. We used five items to measure informational justice. A sample item is: “Has your manager been candid in (his or her) communications with you?”. We used four items to measure interpersonal justice. A sample item is: “Has your manager treated you in a polite manner?”. All responses of the items were made on five-point Likert-type scale ranging from 1 = to a small extent to 5 = to a large extent.
LMX. This variable was measured by using a seven-item LMX scale developed by Scandura and Graen (1984). A sample item is “My immediate supervisor understands my problems and needs,” and participants responded to these items on seven-point Likert-type scales (1 = strongly disagree to 7 = strongly agree).
Feedback acceptance. We measured feedback acceptance by using six items of Stone et al. (1984). A sample item is: “My manager’s evaluation of my work matched my own evaluation.” We asked participants to indicate their responses on a seven-point Likert-type scale, ranging from 1 = strongly disagree to 7 = strongly agree.
Control variables. PA researchers maintain that demographics are likely to affect feedback receptivity (Chawla et al., 2016). Hence, we used age, gender, and education as control variables. Age was measured as 1 = 18–24 years, 2 = 25–34 years, 3 = 35–44 years, and 4 = 45 years and above. Gender was measured as 1 = male and 2 = female. Education was measured as 1 = 14-year education, 2 = 16-year, and 3 = 18-year and above.
Analysis and Results
To begin with, we examined the normality assumption of our data by performing Shapiro–Wilk’s W test (recommended: p > 0.05) and visual inspection of histograms, box plots, and normal Q–Q plots for all direct paths (Razali & Wah, 2011). All DVs in relation to response categories of all IVs appeared non-normally distributed. Thus, we used PLS-SEM approach and analyzed the measurement model and structural models, for both Hypothesis 1 (basis relationship) and Hypothesis 2 (mediated relationship) in WarpPLS 7 (Kock, 2020).
We used two approaches for controlling common method bias (CMB) (Podsakoff et al. 2003). First, we employed procedural remedies at the design stage, e.g., randomizing items in the survey. Second, we employed full collinearity tests at the analysis stage (Kock, 2015). As a result, we found values of the variance inflation factor (VIF) for all study variables acceptable (VIF ≤ 5), i.e., sample 1: 1.14–2.75; sample 2: 1.38–3.76 (Kock, 2020), see Table 3. Finally, average block variance inflation factor (AVIF = 1.36 and 1.50) and average full collinearity variance inflation factor (AFVIF = 1.67 and 1.99) were found to be ideal (≤ 3.3), both for samples 1 and 2 respectively, see Table 2. The above estimates indicated no serious effect of CMB on our findings.
Results on fit indices indicate overall goodness of fit of our data, see Table 2 (Kock, 2020). Per Hair et al. (2014), both Cronbach’s α values (sample 1: 0.81–0.94; sample 2: 0.87–0.95) and composite reliability coefficients (ρc) (sample 1: 0.89–0.95; sample 2: 0.92–0.96) are satisfactory, ≥ 0.70, see Table 3. This confirms the reliability of our measures. We established construct validity of all constructs by verifying both convergent and divergent validities. Toward convergent validity, first, in absolute terms, all factor loadings at indicator level satisfied the criterion, λ ≥ 0.50, p < 0.05 (sample 1: 0.69–0.92; sample 2: 0.79–0.91, ps < 0.001). Secondly, values of average variance extracted (AVE) for all variables satisfied the traditional criterion, AVE ≥ 0.50 (sample 1: 0.61–0.74; sample 2: 0.66–0.79), see Table 3. Toward divergent validity, first, we found all values of \(\sqrt{\mathrm{AVE}}\) greater than correlation coefficients in their corresponding rows and columns (see Table 4). Secondly, we found the absolute values of factor loadings (sample 1: 0.69–0.92; sample 2: 0.79–0.91) greater than the respective cross-loadings (sample 1: 0.00–0.25; sample 2: 0.00–0.34). Also, all cross-loadings were ≤ 0.40. Lastly, toward predictive validity, all coefficients of predictive relevance appeared to be nonzero, Q2 ≠ 0 (Table 3). This suggested no threats to the internal validity of our findings.
Hypothesis Testing
Hypothesis 1 pertains to the relationship between ratee perceptions of relational justice and their feedback acceptance. The results in Table 5 indicate that relational justice positively predicted feedback acceptance (sample 1: β = 0.73, t = 21.96, p < 0.001; sample 2: β = 0.82, t = 27.64, p < 0.001 respectively). Hence, Hypothesis 1 is supported.
Hypothesis 2 pertains to the mediation effect of LMX on relational justice–feedback acceptance relationship. The results in Table 5 indicate that the relationship between relational justice and LMX (paths a) is positive and significant (sample 1: β = 0.73, t = 18.70, p < 0.001; sample 2: β = 0.78, t = 26.28, p < 0.001). Moreover, the relationship between LMX and feedback acceptance (path b) is positive and significant (sample 1: β = 0.44, t = 7.45, p < 0.001; sample 2: β = 0.28, t = 3.55, p < 0.001). Furthermore, the relationship between relational justice and feedback acceptance (paths c′) is reduced in magnitude after controlling for LMX (sample 1: β = 0.41, t = 7.46, p < 0.001; sample 2: β = 0.60, t = 7.53, p < 0.001). The indirect effect of relational justice on feedback acceptance via LMX is also positive and significant (sample 1: β = 0.32, p < 0.001; sample 2: β = 0.22, p < 0.001). Thus, Hypothesis 2 is supported.
Utilizing survey-based samples, we have tested the basic model (Hypothesis 1) and mediation model (Hypothesis 2) in Study 1. Use of cross-sectional single source data can be appropriate for testing the basic model, but it may preclude us from drawing strong inferences of a mediation model. Therefore, with a twofold objective of verifying our results pertaining to the basic and mediation models (Hypotheses 1 and 2) and testing the moderated mediation model (Hypothesis 3), we have carried out Study 2 (a scenario-based experiment). For Study 2, we have collected data in five waves, utilizing reading material (two scenarios), video-taped material (three videos), and three questionnaires. Details are presented below.
Study 2
Methodology
Sample
Our sample for this scenario-based experiment included 167 undergraduate students enrolled in a business administration program at a renowned university in Islamabad, Pakistan (see Table 1). Due to the COVID-19 pandemic, we performed all experimental activities on Microsoft Teams, in five waves. At Time 1 (week 1), to register students for participation in the experiment against extra study credits, we contacted them through their course instructors using questionnaire 1. In addition to information about the experimental activities, questions included in questionnaire 1 pertained to consent for participation and demographic information. Initially, 206 students consented for participation, but finally, data elicited from N = 167 could be utilized for the analyses (81.07% response rate). This is because of nonresponse (n = 15), and exclusion of participants due to incorrect answers to questions which intended to confirm that they had completely read the scenario and watched the video before giving their responses on measures (n = 12) and unmatched responses across four waves of data collection—time 2 through time 5 (n = 12).
Experimental Material
Consistent with previous PA research (e.g., Gorman & Rentsch, 2009; Hoffman, et al., 2012), we utilized video-taped material (three videos) along with reading material (two scenarios) for eliciting data during four experimental activities (Time 2 through Time 5). In fact, we borrowed a role-playing video, demonstrating two performance review meetings between a manager (Mike) and his employee (Abigail) having a non-apparent disability, and a meeting between the HR manager (Celeste) and the ex-manager (Nora) of the same employee. Job Accommodation Network (JAN) had developed this high-quality video for their professional use, and on our request, they permitted us to use it for the present research. From this video-taped material, we produced the following three videos.
The first video shows a meeting between the HR manager and the ex-manager providing information that the employee has no performance problems. We used this video to control the performance of the employee across experimental conditions. The second video shows a performance review meeting between the manager and the employee in which the manager demonstrates unfair treatment with the employee (unfair condition). The third video shows another performance review meeting between the same manager–employee dyad in which the manager demonstrates fair treatment with the employee (fair condition).
Furthermore, we developed two scenarios. Initially, these provide some common information that if a manager is flexible enough to allow work from home, it is not considered a procedural violation by the organization, if employees complete the assigned tasks. Therefore, Mike—the manager—in both the fair and unfair conditions can provide flexibility to his employees, if required. However, he turns down some employees’ requests for a flexible work schedule and takes more serious actions against them, e.g., censure, but accedes to the similar request of some other employees. In this state of affairs, Abigail, an employee who is a good performer, but due to her therapy exercises, is unable to observe her office timings regularly. In the first scenario, Abigail expects Mike to set a flexible work schedule for her. Additionally, she does not want an adverse mid-term performance review. She also wants to be treated fairly, politely, candidly, and with dignity and respect by her manager. In the second scenario, Abigail expects Mike to set a flexible work schedule for her. Additionally, she wants Mike to help her in keeping her good performance continue by providing relevant feedback, so that she keeps on meeting the performance standards. Abigail also wants to have a trust relationship with Mike. Before reading the scenarios and watching videos about both fair and unfair conditions, each subject was asked to imagine him/herself as an employee shown in the videos and record responses concerning, justice perceptions, LMX, feedback acceptance, and supervisory trust.
Experimental Activities
At Time 2 (week 2), participants read the first scenario in which the employee (Abigail) expected her manager (Mike) to demonstrate justice and have a good manager–employee relationship. They then watched the first video revealing Abigail’s good performance, followed by the second video wherein the manager demonstrates unfair treatment (unfair condition). After this, they filled in the questionnaire 2, which included measures on justice and LMX. At Time 3 (week 3), participants read the first scenario again. They then watched the first video revealing Abigail’s good performance, followed by the third video wherein the manager demonstrates fair treatment (fair condition). Subsequently, they again filled in the questionnaire 2, which included measures on justice and LMX.
At Time 4 (week 5), participants read the second scenario in which the employee (Abigail) expected her manager (Mike) to help her continue the good performance by providing constructive feedback and have a trust relationship. They then watched the first video revealing Abigail’s good performance, followed by the second video wherein the manager demonstrates unfair treatment (unfair condition). After this, they filled in questionnaire 3, which included measures on feedback acceptance and supervisory trust. At Time 5 (week 6), participants read the second scenario again. They then watched the first video revealing Abigail’s good performance, followed by the third video wherein the manager demonstrates fair treatment (fair condition). Afterward, they again filled in questionnaire 3, which included measures on feedback acceptance and supervisory trust. It is noteworthy that in order to counterbalance the ordering effect of one experimental condition on the subsequent one, we randomly divided participants into two groups and then performed the above experimental activities.
Measures
We used the same measures which we used for Study 1. However, the following three things are notable. First, we made minor modifications in the text to make the items consistent with the above-mentioned scenarios and videos, e.g., we replaced “I…” with “I (Abigail)…”, “My manager…” with “My manager (Mike)…”. Second, we used the original response categories for each variable, e.g., LMX (1 = no chance to 4 = certainly would), feedback acceptance (1 = small extent to 5 = large extent). Third and the final, per need of the Study 2, we also measured supervisory trust, the moderating variable, and distributive justice as an additional control variable.
Supervisory trust. We used four items of Korsgaard and Roberson (1995) to measure supervisory trust. A sample item is: “I trust my manager.” The items were measured on a seven-point Likert-type scale ranging from 1 = strongly disagree to 7 = strongly agree.
Distributive justice. This variable was measured by using a four-item scale developed by Colquitt (2001). A sample item from this scale is “Does the (outcome) reflect the effort you have put into your work?” Participants responded to these items on seven-point Likert-type scales (1 = to a small extent to 5 = to a large extent).
Analysis and Results
We employed PLS-SEM to estimate the measurement model and structural models, i.e., the basic model (Hypothesis 1), the mediated model (Hypothesis 2), and the moderated mediation model (Hypothesis 3) in WarpPLS 7 (Kock, 2020). Given the nature of data, we have employed the same analysis approach here, which we have used for study 1, i.e., PLS-SEM. We found all VIF values acceptable (≤ 5) both for data under fair condition: 1.20–1.96; and unfair condition: 1.19–1.59 (Kock, 2020), see Table 3. Similarly, AVIFs = 1.12 and 1.18, and AFVIFs = 1.37 and 1.34, for both fair and unfair conditions were found to be ideal (≤ 3.3), see Table 2. Our assessment of 15 model fit and quality indices revealed that all estimates fell within the acceptable limits, see Table 2 (Kock, 2020). For all constructs, both α values (fair condition: 0.63–0.96; unfair condition: 0.64–0.96) and ρc values (fair condition: 0.76–0.97; unfair condition: 0.77–0.97) are well above the threshold, ≥ 0.70, but the second-order construct of relational justice, see Table 3.
Furthermore, toward convergent validity, first, all factor loadings at indicator level satisfied the criterion, λ ≥ 0.50, p < 0.05 (fair condition: 0.61–0.98; unfair condition: 0.64–0.99, ps < 0.001). Secondly, AVE values for all variables satisfied the traditional criterion, AVE ≥ 0.50 (fair condition: 0.52–0.80; unfair condition: 0.52–0.83), see Table 3. Toward divergent validity, first, we found all values of \(\sqrt{AVE}\) greater than the correlation coefficients in the respective rows and columns (see Table 4). Secondly, at the indicator level, all factor loadings (fair condition: 0.61–0.98; unfair condition: 0.64–0.99) were greater than the respective cross-loadings (fair condition: 0.00–0.26; unfair condition: 0.00–0.35). Notably, all cross-loadings were ≤ 0.40. Lastly, toward predictive validity, all coefficients of predictive relevance appeared to be nonzero, Q2 ≠ 0 (Table 3). This suggested no threats to internal validity of our findings.
Manipulation Check
We performed a manipulation check to see whether the intended manipulations have successfully induced participants’ justice perceptions (IV) across two different conditions, i.e., manager’s fairness vs unfairness. As expected, after watching the video revealing manager’s fairness, participants responded to all measures of justice with a significantly higher mean than when they responded to the same scales after watching the video revealing manager’s unfairness. That is, relational justice: MFair = 4.16, MUnfair = 2.43, t(df) = 22.97(320), p < 0.001; procedural justice: MFair = 3.92, MUnfair = 2.76, t(df) = 10.40(320); informational justice: MFair = 4.05, MUnfair = 2.25, t(df) = 18.91(319); interpersonal justice: MFair = 4.64, MUnfair = 2.37, t(df) = 24.20(270).
Hypothesis Testing
Hypothesis 1 pertains to the relationship between ratee perceptions of relational justice and their feedback acceptance. The results in Table 5 indicate that relational justice positively predicted feedback acceptance under fair condition: β = 0.25, t = 3.42, p < 0.001, but not under unfair condition: β = 0.09, t = 1.17, p = 0.12. Substantiating the above, the results of paired t test, t(df) = 14.16(166), p < 0.001, suggest that participants are more prone to accept feedback under fair condition, MFair = 3.63, SD = 0.79, than under unfair condition, MUnfair = 2.34, SD = 0.93. Hence, Hypothesis 1 is supported.
Hypothesis 2 pertains to the mediation effect of LMX on relational justice–feedback acceptance relationship. The results in Table 5 indicate that the relationship between relational justice and LMX (paths a) is positive and significant (fair condition: β = 0.28, t = 3.81, p < 0.001; unfair condition: β = 0.41, t = 5.73, p < 0.001). Moreover, the relationship between LMX and feedback acceptance (path b) is positive and significant under fair condition: β = 0.32, t = 4.36, p < 0.001, but not under unfair condition: β = 0.10, t = 1.37, p = 0.09. Furthermore, the relationship between relational justice and feedback acceptance (paths c′) is reduced in magnitude after controlling for LMX (fair condition: β = 0.20, t = 2.68, p < 0.01; unfair condition: β = 0.06, t = 0.76, p = 0.23). The indirect effect of relational justice on feedback acceptance via LMX is positive and significant under fair condition: β = 0.09, p < 0.05, but not under unfair condition: β = 0.04, p = 0.22). Thus, Hypothesis 2 is supported.
Hypothesis 3a pertains to the interaction effect of supervisory trust on relational justice–feedback acceptance relationship. The results in Table 5 indicate that, as expected, under fair condition the interaction term (supervisory trust X relational justice) has a negative and significant effect on feedback acceptance (β = –0.22, t = − 2.90, p < 0.01). And under unfair condition, the interaction term (supervisory trust X relational justice) has a positive and significant effect on feedback acceptance (β = 0.22, t = 2.99, p < 0.01). In addition, for graphical presentation of the moderating effect, see Fig. 2. Hence, Hypothesis 3a is supported.
Focused graphs for moderating effects of supervisory trust (Study 2)
Hypothesis 3b pertains to the conditional process effect of supervisory trust on the strength of LMX as mediator between relational justice and feedback acceptance. Results of moderated mediation analysis (Hayes, 2013) reveal that supervisory trust does not influence the strength of LMX as mediator of the relational justice–feedback acceptance relationship, i.e., fair condition: B = 0.02, SE = 0.03, CI95% [− 0.06; 0.09]; unfair condition: B = − 0.00, SE = 0.01, CI95% [− 0.03; 0.02]. Hence, Hypothesis 3b is unsupported.
Discussion
The first objective of the study entailed an examination of the link between ratee relational justice perceptions and their feedback acceptance in the relational context of PA, wherein relational exchanges matter the most. This was based on the notion that ratees are more likely to accept performance feedback when performance was evaluated fairly, and when the feedback was communicated in a respectful and transparent manner. The considerate feedback is often rooted in fair procedures and interactions. More specifically, relational justice enhances employee dignity and their sense of self that encourages them to respond positively to any call from the organization (e.g., PA system) or her representative (e.g., the rater). Among others, ratee feedback acceptance can be one of such reactions (Krings et al., 2015).
Results of both samples of our Study 1, and fair condition of Study 2, confirmed that based on their experiences of PA events ratee justice perceptions positively predicted their feedback acceptance. Here, it is notable that in Study 2, under the unfair condition the above link was nonsignificant, while the controlled variable of distributive justice appeared to have a significant effect on feedback acceptance, which was nonsignificant under fair condition. This finding helps us understand that high versus low relational justice matters in the formulation of ratee reactions to PA feedback. Put simply, when relational justice is high, ratees tend to accept feedback with less care about distributional aspects. When relational justice is low, it is less likely to get ratees accept feedback, and ratees tend to seek distributive justice before accepting feedback. This finding also suggests the relative importance of both components of SET over another. That, social exchanges overtake transactional ones when relational justice is high, and vice versa.
Pertaining to the second objective, building on the recent literature (Lam et al., 2017) the current study suggests that positive social ties between raters and ratees are likely to mediate the relationship between ratee justice perceptions and their feedback acceptance. Therefore, we examined the role of LMX as a mechanism behind the relationship between ratee justice perceptions and their feedback acceptance. Results of both samples of our Study 1 and fair condition of Study 2, supported that LMX strengthened the relationship between ratee relational justice perceptions and their feedback acceptance. This affirms that in the relational context of PA, strong ties between the rater and the ratee ensue favorable ratee reactions (Javed et al., 2019).
Of note is that, once again fairness is found to play its role. In Study 2 under the unfair condition, the indirect effect of relational justice on feedback acceptance through LMX appeared nonsignificant, which was significant under the fair condition. This finding provides more clarity that when relational justice is high, LMX is more likely to be the underlying mechanism behind the relational justice–feedback acceptance relationship, compared to when relational justice is low. Although both possibilities may exist that in relational exchanges, LMX is likely to be sensitive either to relational justice perceptions or feedback acceptance, in the case of the present study, the latter holds true. Ostensibly, ratees perceive high quality LMX when they perceive high relational justice, and vice versa. Thus, the relationship between relational justice and LMX is likely to remain direct. However, congruence between high vs low LMX and positive vs negative feedback needs more clarity, especially under the tenets of SET. This entails more investigation about when relational exchanges alone suffice, and when economic exchanges insistently covariate, making the relationship between LMX and feedback acceptance, inverse, insignificant, or both.
Combining the results of both the studies, we conclude that when the quality of social ties comes in to play, that is, LMX mediates the relational justice–feedback acceptance relationships, ratees desire more procedural, informational, and interpersonal justice. The other possible explanation is that the SET offers a notion of reciprocity, which provides that the development of employee perceptions of relational justice requires reciprocation in the form of favorable employee reactions. Taking it further, LMX theory provides that in high-quality professional relationships, people offer something of value to their dyadic partner, and the fairness of exchange is vital for defining the level of future interactions between them (Erdogan, 2002). Corroborating the above theoretical explanations, our results suggest that for ratees to have the relational justice–feedback acceptance relationship strengthened, LMX appears to be a useful mechanism.
The final objective of our study was to examine the moderated mediation of ratee trust in supervisor. Moderated mediation entails two moderating effects simultaneously: (1) effect on relational justice–feedback acceptance relationship and (2) effect on the strength of LMX as a mediator on relational justice–feedback acceptance relationship. Our results of Study 2 have provided partial support in the above respect. That is, supervisory trust moderates the relational justice–feedback acceptance relationship, but it does not moderate the strength of LMX as a mediator on the relational justice–feedback acceptance relationship. Regarding the former, it is notable that under the fair condition, when relational justice was perceived high, low supervisory trust appeared to have a significant moderating role in the relational justice–feedback acceptance relationship. Substantiating this finding, under the unfair condition when relational justice was perceived low, high supervisory trust appeared to have a significant moderating role.
The above results support the core assumption of SET that before entering a collegial relationship, especially the vertical one, employees tend to analyze its benefits and costs. Hence, when they engage in that relationship, they keep on pursuing the objective of securing the utmost benefits with the least costs (Miles, 2012). Trust in the supervisor is an important factor in the above relations. It makes sense to expect whether employees are already earning benefits of their relationship with their supervisor, e.g., high relational justice, and they need supervisory trust the least. And, if they feel deprived of the same benefits, perceiving low relational justice, alternatively they will bank upon supervisory trust the most. More importantly, exchange relationships especially the relational ones are dynamic. That is, on the timeline, when employees feel benefited due to their relations with their supervisors, they tend to trust them more, and on the contrary when employees feel to have incurred costs due to their relations with supervisors their trust dwindles (Miles, 2012). Such ups and downs continue to appear in exchange relationships between them over time.
Our findings reveal a nonsignificant moderating effect of supervisory trust on the strength of LMX as a mediator on the relational justice–feedback acceptance relationship. Here, we would refer again to the explanation about the core assumption of SET provided by Miles (2012) that particularly in relational exchanges, payoffs vary both from supervisor to supervisor, as well as with the same supervisor over time. Although our study had a repeated measure design, we realize that still there exists room for assessing a much longer relationship. Besides, per the design of our study, the supervisory trust could moderate a relational justice–feedback acceptance relationship because both these variables are specific to events, e.g., PA. And, the supervisory trust could not moderate LMX as a mediator on the above relationship because LMX is often demonstrated beyond events, requiring maintenance of mature relationships across multiple events.
Implications
Our study has implications for both PA theory and practice. Toward theoretical advancement, findings of our study tellingly suggest more focus on the relational exchange element of SET. Relational exchange is congruent with ongoing conversations about the future of performance management (PM) system. That is, in the on-going debate on “getting rid of performance ratings” (Adler et al., 2016), which in the past half-decade has turned into an exasperation that “performance evaluation will not die, but it should” (Murphy, 2020), PA theory and practice necessitate a way to go beyond performance ratings. Hence, in order to put the above agenda into action, PA theory and practice have started shifting their focus from PA ratings to PA feedback. For instance, with the purpose of making their PM system more effective, Adobe has developed a toolkit, namely “check-in,” which has been downloaded by over 500 companies. On a brief note, “Adobe’s Check-in Toolkit” provides a three-phase PM system (expectation-feedback-development), in which performance feedback plays a pivotal role (Stone et al., 2019).
Similarly, Deloitte Consulting has overhauled its PM process, placing at least once-a-week check-ins as the foremost activity. Like Dell and Microsoft, IBM Corp. has also replaced her annual rating system with quarterly performance feedback (Stone et al., 2019). While witnessing such a growing shift from performance ratings to performance feedback across organizations, a question arises: What to do if PA feedback fails? The extant PA literature has already started to suggest that most of its recipients do not consider performance feedback useful and, hence, do not accept it (Murphy, 2020). Obvious reasons for this include employees’ concerns over justice perceptions, especially pertaining to rater–ratee relations (Cunha et al., 2018).
Being mindful of the above, the main motive of this study was to encourage PA theorists and practitioners to lay more emphasis on performance partnership than performance evaluation. As introduced by a global pharmaceutical giant, Bristol Myers Squibb, performance partnership is an alternative performance management system. Unlike a traditional PA process, in this system managers are not engaged in performance ratings, annual performance review meetings, pay increase decisions, etc.; instead managers and their employees hold regular meetings throughout the year. In these meetings, together they set and review performance expectations and goals. Employees do not have to wait for a formal year-end feedback from their managers, rather more readily, they receive timely performance feedback, as and when needed. As a result of performance partnership, employees become participants, managers become coaches, and both solve performance problems together. Hence, positive relationship between managers and employees being the central feature of performance partnership strengthens performance feedback approach (Mathis & Jackson, 2010). Putting this research agenda forward, this study not only endorses PA feedback, but also suggests a relational approach to performance feedback which is likely to increase acceptance of feedback by its recipients, that is, by establishing a link between relational justice and PA feedback acceptance, as perceptions of injustice potentially inhibit employees’ propensity to accept performance feedback (Murphy, 2020).
It is not always possible to rate performance objectively, and therefore, raters rely on their subjective judgements while writing appraisals. Moreover, it is unavoidable that the PA process involves emotions. Our idea to establish a performance partnership may help organizations form a good working environment in which rater and ratee both can pursue organizational goals. Furthermore, sometimes raters may avoid giving poor ratings and negative feedback to evade conflicts. We expect that performance partnership may help both raters and ratees understand each other, which can make it easy for ratees to know rater expectations and respond to them in an appropriate manner.
While utilizing findings of our study managers can realize that if ratees’ perceptions of relational justice are improved, ratees can be motivated to consider their managers performance partners instead of performance appraisers. This can be achieved by two means. The first pertains to use of fairness anchors—“the first impressions of how fair authorities are”—for improving employees’ relational justice perceptions. That, while starting every event, e.g., a performance feedback episode, managers may employ fairness anchors by giving the first impression to employees that their manager is fair (Colquitt et al., 2018, p. 159).
The second is about technology intervention, especially to decrease subjectivity of PA and increase PA effectiveness. The extant literature suggests that HR analytics helps reduce the subjectivity of the PA process (Stone et al., 2019) which may increase the effectiveness of the practice. Of note is that, for employing business/HR analytics in PM context, PM literature has introduced the concept of performance management analytics (PMAs) to PA theorists and managers. PMA refers to the use of data and analytical methods designed to effectively control key performance drivers and provide ongoing performance feedback to employees (Schläfke et al., 2013). Moreover, in support of supervisory feedback, social media-based peer feedback, also known as “crowdsourced feedback,” can be employed though social networking apps or websites (Stone et al., 2019).
We advocate performance partnership also because it can help in employee on-boarding in two ways. Firstly, on-boarding, as a process of transition of new employees from being an outsider to be an insider, can encourage new employees to acclimatize with the organizational procedures and be at ease with its members. That is, the sooner employees are on-board, the earlier they will start contributing to organizational goals. Secondly, on-boarding is not only applicable to new employees, continuing employees can also be set to cascade the organizational goals to departmental goals, and then, to employee goals while working as partner of other organizational members.
Raters are considered a frontline force of a PA system (Iqbal et al., 2015). Results of our study can be useful for them. Initial rater–ratee interactions lay the foundations for the quality of their LMX relationship (Nahrgang & Seo, 2015), and raters are the ones who can initiate performance partnership by employing relationship management. Also, in societies like Pakistan where performance orientation is medium to low (Nadeem & de Luque, 2018), raters can be trained to build interactive working environment and to stimulate social activities that help in boosting supervisory trust. Toward building interactive working environments, organizations may impart sensitivity training to their managers (Robbins & Coulter, 2018). In order to effectively impart a sensitivity training, organizations may take their managers away from their workplaces and put them in unstructured interactions among them. These open interactions are likely to provide them with insights into their own as well as their interactional partners’ behaviors, which will help them learn that how their behaviors are seen by others. This sensitization encourages them to improve their interpersonal relationships with their employees. Such a congenial atmosphere in any workplace helps in strengthening quality relationship and thus aids in feedback acceptance, which is considered to make the PA system successful. Nevertheless, we do not suggest a complete erosion of performance ratings, as these can help organizations maintain a record of employee performance.
Limitations and Directions for Future Research
The contribution of the present study may be viewed considering a few limitations. The study gathered data at one point in time for Study 1. As such, our cross-sectional design precluded us from drawing inferences of causality. Therefore, to corroborate our findings we have carried out Study 2, a scenario-based experiment. Notably, we tested only basic and mediation hypotheses using data collected for Study 1. Using the data collected for Study 2, we tested all hypotheses including the moderated mediation hypothesis. Another limitation of the present study is that the measurement of LMX was seized from the viewpoint of member/ratee only. The present study hence focuses on how ratees perceive their relationships with raters, whereas in future studies, an additional insight might be given by viewing the perceptions of both, that is, rater and ratee. The dyadic approach will help in analyzing the results more comprehensively, by considering the rater’s views and perceptions during feedback provision. Regarding feedback acceptance, we realize that omission of the valence of feedback (positive vs negative) has limited our findings, as interplay between high vs low relational justice, high vs low LMX, and positive vs negative feedback could have provided more clarity, especially under the tenets of relational exchanges. At last, we also realize that PA activities often take place as regular events in organizations. Therefore, we urge for future researchers either to restrict range of data or control certain aspects of PA, e.g., frequency of events, degree of formality of feedback.
Conclusion
Performance feedback is a necessity of all PA stakeholders, including the rater, the ratee, and the organization. Organizations want ratees to accept their performance feedback so that they remain focused on organizational goals. Toward this end, the present study suggests organizations to employ a relational approach. The relational approach propagates that for ratees to accept performance feedback, the respective rater and the PA system (or organization) demonstrate relational justice. For this purpose, it is functional for them to develop a high-quality relationship with ratees and solidify a high level of ratee trust in the rater. The relational approach is expected to help managers develop a performance partnership. The present study was designed to provide empirical evidence for this idea. We more specifically tested whether (1) ratee relational justice perceptions predict their feedback acceptance; (2) LMX mediates the above relationship; and (3) supervisory trust has moderated mediation effect on the above relationship through LMX. Results support the first two relationships, and the third one could only get a partial support. The study concluded that ratees tend to accept performance feedback when they perceive the rater and the PA system to operate with high relational justice.
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Baloch, Z., Iqbal, M.Z., Ikramullah, M. et al. Getting Ratees to Accept Performance Feedback: A Relational Approach. Soc Just Res 34, 285–316 (2021). https://doi.org/10.1007/s11211-021-00370-3
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DOI: https://doi.org/10.1007/s11211-021-00370-3