The impact of justice perceptions of performance appraisal practices on job satisfaction and intention to stay: the mediating role of job engagement

Purpose This study examines the direct impact of justice perceptions of performance appraisal practices (procedural, distributive, interpersonal and informational justice) on job satisfaction, intention to stay and job engagement. Further, it investigates the effect of job engagement on job satisfaction and intention to stay. Moreover, the study tests the mediating role of job engagement on the impact of justice perceptions of performance appraisal practices on job satisfaction and intention to stay. Design/methodology/approach A total of 650 self-report structured questionnaires were distributed among the employees of 50 information technology companies, and 503 samples were received. Partial least square-structural equation modeling was used to test the hypothesized model. Findings This study revealed that justice perception of performance appraisal practices positively affects job satisfaction, intention to stay and job engagement. In addition, job engagement positively affects job satisfaction and intention to stay. Further, job engagement significantly transfers the impact of justice perceptions of performance appraisal practices on job satisfaction and intention to stay, thus confirming the mediating role of job engagement. However, the significant direct impact of justice perceptions of performance appraisal practices on job satisfaction and intention to stay in the presence of a mediator, i.e. job engagement, revealed partial mediation. Research limitations/implications The findings of this study augment the social exchange theory by explicating that an individual who perceives justice in performance appraisal practices is likely to have greater job engagement, which ultimately leads to higher job satisfaction and intention to stay. This study filled the research gap by examining the role of four justice components of performance appraisal practices on job satisfaction and intention to stay and the mediating role of job engagement in transferring the impact of justice perceptions of performance appraisal practices on job satisfaction and intention to stay. Practical implications This study showed the importance of four justice components of performance appraisal practices in enhancing employee job engagement. Hence, this study would motivate information technology companies to maintain fairness in performance appraisal practices to enhance employee job engagement and ultimately increase job satisfaction and intention to stay. Originality/value This study is one of its kind that tested the direct impact of comprehensive justice components (procedural, distributive, interpersonal and informational justice) of performance appraisal practices on job satisfaction and intention to stay. In addition, this is a unique study that examined the mediating effect of job engagement on the impact of justice perceptions of performance appraisal practices on job satisfaction and intention to stay.