Talent categorization & justice perception: an empirical study.

AuthorChowdhury, Arup Roy

In a large manufacturing setup employees are categorized either as learner (low performer), competent (average performer) or leader (high performer) by their superiors during annual performance appraisal. This paper investigates and analyzes as to how this categorization and perception as frozen out during yearly talent reviews affects outcomes on (a)individual mindset in human resource parlance with respect to job satisfaction, turnover intention and job engagement and (b) justice perception. The study has used the empirical method of analysis and field based research to examine the concepts and based on the findings concludes that talent differentiation has an impact on individual mindset and justice perception.

Introduction

Every year, after the conclusion of performance appraisal cycle a series of heartburn gets evidenced amongst the employees. All of a sudden the pre appraisal vibrant ambience and enthusiastic employees turn into a gloomy group and pale/withdrawn faces are testimony to this fact. The same was the scenario in a large manufacturing setup where the study was carried out. Here employees are categorized either as learner, competent or leader during annual talent review as per PMS guidelines referred in Tables 1 and 2. It is in the aforesaid context this paper analyzes as to how this categorization and perception as frozen during yearly talent reviews affects: (a) individual mindset as an outcome in human resource parlance with respect to job satisfaction, turnover intention and job engagement and (b) organizational justice perception.

Williams and Levy (2000) observed that the manner in which talent categorization process is carried out in an organization significantly influences employee mindset towards work, their superiors, peers and operating system. Hence individual perceptions and their mindset with respect to different aspects of talent categorization process may be of utmost importance to organizational performance in the long run. Various researches carried out in the past suggest that talent differentiation has an impact on job satisfaction (MacBeath, 2006); low attrition rate (Di Romualdo, 2009; Tansley, 2007; Yapp, 2009); employee engagement (Di Romualdo, 2009; Gandossy & Kao, 2004). Available literature has also taken a cue from the self-efficacy theory of Bandura to explain the impact of talent categorization on employees' job satisfaction, intention to quit and employee engagement. The theory explains the psychological impact arising out of talent categorization (Bandura, 1997).

Research Question

RQ1: Does talent categorization of individual as leader, competent and learner during end year appraisal have a differential impact on individual mindset dimensions with respect to job satisfaction, turnover intention and work engagement?

RQ 2: Does talent categorization of individual as leader, competent and learner during end year appraisal have an impact on the outcome of his/her perception on organizational justice dimensions?

Individual Mindset & Justice Perception

Human beings are emotional in nature. Hence, irrespective of whether we encounter issues at home/social life or at workplace with superior/peer, the outcome leaves an impact on our mindset. The moment employees are ranked as superior/ mediocre at the end of the year, the bone of contention begins on the objectivity of assessment by superior.

Erdogan (2002) argued that employee emotions, their mindset and justice perceptions are important determinants to ascertain effectiveness of talent differentiation process. Boyd and Kyle (2004) have tried to find out the impact of procedural, distributive and interactional justice by assessing employee perceptions on talent categorization. A correlation between justice perception and individual mindset may be justified by studying the antecedents and consequences of justice perceptions on individual mindset as an outcome of talent categorization (Erdogan, 2002). However, very few research studies are carried out till date to investigate the influence of justice perceptions on employee mindset (Jawahar, 2007).

Procedural Justice

An organizational system may be considered as procedurally fair if: (a) there exists consistency, uniformity and transparency in laid down organizational procedures; (b) the process owners, implementers are neutral and impartial and (c) there exists an ambience of equal opportunity. Application of "due process" metaphor by Folger (1992) emphasized on attributes like adequate opportunity, fair hearing and judgment based on evidence to describe a procedurally fair appraisal system.

Distributive Justice

Tang and Sarsfield-Baldwin (1996) emphasized that organizational systems having high level of distributive justice reflected greater job satisfaction. Literature suggests that performance appraisal system has taken a cue from Adams' equity theory (Adams, 1965) which suggests that individuals may feel dejected if there is a mismatch between efforts put in by them vis-a-vis the outcome. Haar and Chester (2009) stated that in case individual perceives distributive inequity, intention to quit the organization crops up in his/her mind.

Interactional Justice

It is said in workplace parlance that half of the issues get resolved if there is an amicable interpersonal effectiveness between members working in the organization. Injustice parlance this may be referred as interactional justice. Greenberg (1993) suggested that, employees are affected by, the sensitivity shown by their superibrs, peers, subordinates and other stakeholders.

Objective of the Study

To evaluate the impact of talent categorization on individual mindset and organizational justice perception in a manufacturing set up and to find out the significant attributes of organizational justice dimensions having maximum influence on the perceptions of employees rated as leader, competent or learner.

Method of Study

The study has focused on talent categorization of employees working in a manufacturing organization. Management approval was taken for conducting the research study and appraisal data was collected with the condition that it will be used for research study only. Organization name as well as employees' names will be kept confidential. Appraisal data of last three years were collected for randomly selected individuals for the purpose of categorizing them as per the existing norms of talent classification of the organization.

Sample

Pre-test and post-test data were collected through survey on the following aspects:

  1. Annual performance rating and talent categorization (learner/ competent/ leader) of 150 employees.

  2. Variables such as Job satisfaction, Job engagement, Employees' turnover intention are measured on a five point Likert scale i.e. "1= Strongly Disagree, 2= Disagree, 3= Neutral, 4= Agree, 5= Strongly Agree".

The survey questionnaires were sent to a total of 187 employees. Responses were received from 150 employees which was around 80.2 % of initial sample considered for the survey (Table 3).

The survey was conducted during Oct'12 - Mar'13. Pre-test data was collected in Oct'12 prior to annual appraisal of FY' 13, and post- test data was collected in Mar' 13 in FY' 13. Survey questionnaires were distributed to same set of employees categorized as leaders/competent/learners for pre-test as well as post-test.

Hypotheses

Basic framework for study is given in fig. 1. The hypotheses taken for the study are stated as:

Hypothesis 1: Employees rated as leaders in PMS will be positively related to job satisfaction, intention to quit and job engagement than those rated as competent or learners.

Hypothesis 2: Employees rated as leaders in PM, S, will perceive positively towards procedural, distributive and interactional justice than those rated as competent or learners.

Hypothesis 3: Amongst attributes of organizational justice dimensions, performance feedback and awareness on organizational policies/processes will significantly influence the perceptions of employees rated as leader, competent or learner.

[FIGURE 1 OMITTED]

Measures

Job satisfaction was measured with items adapted from Neuberger and Allerbeck (1978) and Tsui, Egan and O'Reilly III (1992). The adapted instrument consisted of 10 items. Sample items include, "I am...

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