The role of leadership perceptions in performance appraisal participation

Purpose - This study aims to explore followers’ perceptions of leaders as predictors of performance appraisal (PA) participation and subsequent outcomes. Prior research has acknowledged the role of Leader–Member Exchange (LMX) quality in predicting PA participation. This study sought to add to this literature by investigating the effects of LMX dimensions (loyalty, affect, contribution and respect) and the effect of perceived leader prototypicality on PA participation and subsequent outcomes. Design/methodology/approach - The hypothesized model proposed that the LMX dimensions and leader prototypicality would predict PA participation, and the effect of PA participation on job and reward satisfaction would be mediated through PA satisfaction. Structure equation modeling using maximum likelihood estimation was used to test these hypotheses in a sample of 216 employees at a public utility company. Findings - Although results indicated partial support for the proposed mediated model, they also indicated more complex relationships. Leader prototypicality was related to PA participation, none of the four LMX dimensions had the predicted positive effect on PA participation, though they were differentially and directly related to PA satisfaction and job satisfaction. Research limitations/implications - Employees’ perceptions of leader prototypicality is important in engaging employee participation in the PA process, and more important to participation than was the quality of the LMX relationship. The extent to which employees participate in and subsequently experience higher levels of satisfaction with the PA process may be a reflection of how employees perceive their leader. And participation in and satisfaction with the PA process lead to increased reward and job satisfaction. Future research should incorporate supervisor perspectives of these relationships and use longitudinal design to better infer causality. Practical implications - Employee perceptions of leader prototypicality are important for encouraging their participation in the PA process, which has implications for reward and job satisfaction. Therefore, supervisors would benefit from understanding the traits (such as sensitivity, confidence and intelligence) that affect their subordinates’ leadership perceptions, and should be trained on successfully demonstrate those traits. Further, exchange relationships built on loyalty and respect affected PA satisfaction directly, which also positively affected job and reward satisfaction. Thus, supervisors should be trained to build trust- and respect-based relationships with employees. Originality/value - The results of this study make significant contributions to the understanding of the antecedents of employee participation in and satisfaction with the PA process. The data suggest that the effect of perceived leader prototypicality on job and reward satisfaction is mediated through PA participation. Because implicit leadership theory has not previously been studied in the PA context, this new finding makes an important contribution to the PA literature. Further, by taking a multidimensional approach to LMX, these results indicated that the dimensions of loyalty and respect were related to PA satisfaction directly, but not through PA participation.