Impact of Performance Appraisal Justice on the Effectiveness of Pay for Performance Systems After Civil Service Reform
The present study comprehensively examined how human resources (HR) directors in six U.S. state governments with drastic levels of civil service reform assess their states' pay for performance effectiveness in terms of the performance appraisal justice. It was found that the effectiveness of pay for performance is influenced by perceived fairness of performance appraisal. More specifically, this study found that perceived politicization of performance appraisal was negatively and significantly associated with pay for performance effectiveness. This study also found that perceived fairness of appraisal criteria was positively and significantly associated with pay for performance effectiveness. In addition, this study shows that the effectiveness of pay for performance may be affected by some demographic characteristics (e.g. age and gender) and state differences. In particular, drastic levels of civil service reform significantly and positively influenced the effectiveness of pay for performance, but insignificantly affected performance appraisal fairness. These results provide scholars and practitioners in the public sector with meaningful strategies for civil service reform.