The purpose of this study was to audit employee
perceptions of the Sentara Health System performance
appraisal system in a merit pay setting. To accomplish
this, the study investigated variables having a positive
relationship on employee perception of performance appraisal
acceptability, fairness and accuracy. The study had three
objectives: (1) integrate the current body of literature to
develop variables that adequately describe employee
perception of appraisal systems, (2) integrate these
variables into several hypotheses that are consistent with
current literature, and (3) test the hypotheses using
Pearson product moment correlations.
Nine variables hypothesized as depicting aspects of
employee perceptions were conceptualized, and multiple
indicators were developed for each variable. A
questionnaire containing these items was randomly
distributed to 300 employees throughout a large health care
system.
Results indicate that performance appraisal
acceptability, fairness and accuracy had a positive
relationship with supervisor trust, supervisor knowledge of
performance, interview information, interview atmosphere,
performance standard acceptability, participation in
development, performance reward link and merit pay
acceptability. All the hypotheses had significant positive
correlations (≤.01). These findings were discussed in
terms of the study limitations, suggested future research
and implications for the organization studied, as well as
other organizations with merit pay programs.
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