Leader-member exchange, group- and individual-level procedural justice and reactions to performance appraisals

Previous research has established that relationships with authority figures and procedural justice perceptions are important in terms of the way in which employees react to organizational procedures that affect them. What is less clear are the reasons why exchange quality with authorities is related to perceptions of process fairness and the role of procedural justice climate in this process. Results indicate that individual-level perceptions of procedural justice, but not performance ratings, partially mediate the relationship between exchange quality and reactions to performance appraisals, and that procedural justice climate is positively related to perceptions of procedural justice and appraisal reactions. These results support a more relational than instrumental view of justice perceptions in organizational procedures bound by exchange quality with an authority figure. Our study suggests that it is essential for managers to actively monitor and manage employee perceptions of process fairness at the group and individual levels. © 2015 Wiley Periodicals, Inc.

How can HRM promote organizational innovation

Our work investigating managerial practices in UK manufacturing organisations has shown that people management practices play an important role in promoting innovation. Having developed an instrument to analyse innovation (defined by West and Farr in 1990 as “the intentional introduction and application in a job, work team or organisation of ideas, processes, products or procedures which are new, and designed to benefit the job, the work team or the organisation”), we were able to give each of the 30 organisations in our sample a score of between one and seven to capture innovation in a range of domains. This instrument took into account the magnitude of the innovation in terms of the number of people involved in its implementation, and how new and different it was. We found that much innovation involves relatively minor, ongoing improvements, rather than major change. To achieve sustained innovation, organisations must be able to draw upon the skills and knowledge of employees at all levels of the business. So which HRM practices are most likely to promote a positive learning environment? We developed a scale to take into account three facets of HRM that shape the learning environment and predict the extent to which individuals can gain the skills to promote innovation. First, organisations should have a vision statement capturing their approach to learning and development and communicating to staff the importance that they attach to these processes. Second, they must implement and endorse mentoring schemes. Last, they should consider offering staff the opportunity to have regular career development meetings. Where a positive learning climate exists, organisations tend to be more innovative. The results also show that organisations that make explicit the link between appraisal and remuneration perform relatively less well in innovation terms than those whose appraisal systems have no relationship with pay. Many have argued (for example, Lawler,1995) that pay-for-performance schemes provide a “line of sight” between performance and reward, thereby enabling individuals to make appropriate decisions about where best to direct the effort. Our findings do not imply that performance-related pay is ill advised in all circumstances, but we suggest that organisations should exercise caution before introducing such schemes. People are central to innovation, and this study suggests that high innovation can be achieved when people are empowered to make changes at local levels. HRM has an important, perhaps crucial, role to play in creating an environment that enables people to develop the skills and confidence necessary to affect change. Key points: Organisational innovation is an important determinant of competitive performance and advancement, enabling organisations to anticipate and respond to the challenges of globalisation. HRM has an important, perhaps crucial, role to play in promoting organisational innovation – to the extent that it creates a positive environment for learning and removes barriers that may inhibit creative performance (for example, linking appraisal to remuneration).