Mahfud Sholihin

Fairness in performance evaluation and its behavioural consequences

Abstract A recent paper in Accounting and Business Research by Lau et al. (2008) offers systematic evidence to explain whether managers’ perceptions on fairness of performance evaluation procedures affect attitudes such as job satisfaction; and if it does, the different behavioural processes involved. Our paper re‐examines Lau et al.’s model and hypotheses to assess the external validity of their findings, based on a very different sample of managers. Drawing on recent organisational justice literature, it further develops the model and examines the potential interaction effects of fairness of performance evaluation procedures and other variables on job satisfaction. Finally, it extends the outcome variable to include manager performance. Using survey responses from 165 managers, supported by 24 interviews, drawn from three major organisations in the manufacturing and financial services sectors, we find that Lau et al.’s results on the indirect effects of fairness of performance evaluation procedures on job satisfaction are generalisable to other organisational settings and managerial levels. However, using their model we do not find support for the outcome‐based effects through distributive fairness. Developing a revised model we observe that the effects of distributive fairness on job satisfaction are indirect via organisational commitment. When the model is further developed to incorporate performance as the outcome variable, we observe similar findings.

ORGANISATIONAL COMMITMENT IN THE POLICE SERVICE: EXPLORING THE EFFECTS OF PERFORMANCE MEASURES, PROCEDURAL JUSTICE AND INTERPERSONAL TRUST

This study aims to investigate whether, and how, the use of performance measures, procedural justice, and interpersonal trust interact to affect organisational commitment of police officers. Drawing on a survey based on a sample of 57 senior officers within a single police force, we find that the use of performance measures, procedural justice, and interpersonal trust are positively associated with organisational commitment. Further analysis reveals that trust between officer and superior mediates the relationship between the use of non-financial measures and organisational commitment, but procedural justice does not have a mediating effect on commitment. These findings are further explored through selected interviews with respondents.

The impact of social and environmental information on managers’ decisions: Experimental evidence from Indonesia

Purpose - – The purpose of this paper is to examine whether managers consider social and environmental information in evaluating projects. Design/methodology/approach - – Built on the stakeholder theory, this study hypothesises that managers consider social and environmental information in evaluating their projects. To test the hypotheses, this study employs experimental design. Findings - – The authors find evidence that managers consider social and environmental information in evaluating their projects. Research limitations/implications - – This study finds that social and environmental information is relevant for managerial decision making, particularly in project evaluation. Practical implications - – Social and environmental information is considered relevant for project evaluation decision. Hence, managers should be provided those information. Originality/value - – To the best of the knowledge, this is the first accounting study which examines the effect of social and environmental information on managers’ decisions, particularly in the Asian context using experimental approach. Previous studies only examined the effect social and environmental information on external stakeholders, such as investors.