Is shooting for fairness always beneficial? The influence of promotion fairness on employees' cognitive and emotional reactions to promotion failure

Abstract Promotions, as a part of organizational incentive and reward systems, can motivate employees to perform well and to increase commitment to their firms. But very little is known about why and when promotion failure influences employees' subsequent responses. Integrating social‐cognitive theory and the cognitive appraisal theory of emotion in justice literature, we investigated the effect of promotion failure on employees' work engagement through cognitive and emotional processes and the moderating effects of perceived promotion fairness. Employing two survey studies (Study 1 and Study 2) and an experimental study (Study 3), we found that: (1) promotion failure was negatively related to self‐efficacy and positively associated with anger; (2) promotion failure was negatively related to work engagement through reduced self‐efficacy and elevated anger; (3) promotion perceived to be fair amplified the negative effect of promotion failure on employee self‐efficacy but mitigated its influence on anger; (4) promotion fairness perception strengthened the indirect negative relationship between promotion failure and work engagement through self‐efficacy but weakened this indirect relationship via anger. Our work contributes to promotion and justice literature and enlightens practitioners about how to manage promotion practice.