Employee empowerment, performance appraisal quality and performance
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Employee empowerment, performance appraisal quality and performance Kevin Baird1 · Amy Tung1 · Sophia Su1 Accepted: 12 October 2020 © Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract This study provides an empirical insight into the mediating role of the quality of performance appraisal systems, assessed using four quality dimensions (trust, clarity, communication and fairness), on the association between the level of employee empowerment of lower level managers and their performance, assessed in respect to their business unit’s performance. Data were collected from 203 Australian lower level managers using an online survey. The findings reveal that while employee empowerment is positively associated with all four dimensions of the quality of the performance appraisal system, one specific dimension, trust, mediates the association between employee empowerment and business unit performance. Specifically, trust is found to mediate the effect of employee empowerment on both financial and non-financial business unit performance. These findings highlight the importance of enhancing employee empowerment and improving the quality of performance appraisal systems, in particular the level of trust. This study provides an initial empirical insight into whether ‘real autonomy’ is provided by focusing on the extent to which empowerment extends to other aspects of employees’ organisational experience, specifically their performance appraisal system, and the subsequent impact on performance. Keywords Employee empowerment · Performance appraisal system · Performance
* Sophia Su [email protected] Kevin Baird [email protected] Amy Tung [email protected] 1
Macquarie University, Sydney, Australia
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1 Introduction Employee empowerment refers to “the delegation of power and responsibility from higher levels in the organisational hierarchy to lower level employees, especially the power to make decisions” (Baird and Wang 2010, 577). Previous literature on employee empowerment has emphasised the antecedents of employee empowerment (Baird and Wang 2010), and the benefits of employee empowerment (Appelbaum et al. 2013; Biron and Bamberger 2010; Greasley et al. 2005; Mathieu et al. 2006) including its impact on organisational performance (Bordin et al. 2006; Ozaralli 2003). However, other studies raise concerns that the benefits of empowerment, including the positive impact on organisational performance, may not be realised as the balance of power is maintained by top management (Spreitzer and Doneson 2008). Similarly, Argyris (1998) suggests that empowerment is superficial, with control maintained by top management. This study attempts to provide an empirical insight into the debate concerning the effectiveness of employee empowerment by examining the mediating role of performance appraisal quality (trust, clarity, communication and fairness), an important mechanism through which employee empowerment is operationalised (Kennedy 1995), on the association between l
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