Influence of performance evaluation rating segmentation on motivation and fairness perceptions

This study investigated the impact of rating segmentation (i.e., the number of alternative appraisal categories available for rating employee performance) on motivation and perceptions of fairness. Participants were 305 student volunteers who performed a catalog search task. A 2 x 4 factorial design with 2 performance rating systems-low segmentation (3 categories) and moderate segmentation (5 categories)--and 4 performance levels was used. Overall, the results indicated that the 5-category system resulted in higher self-efficacy regarding participants' ability to reach the next higher rating category. higher goals for rating improvement, and higher rating improvements than the 3-category system. The effects of rating system and performance rating on rating improvement were partially mediated by self-efficacy and personal goals. The rating system and the performance rating affected perceptions of distributive and procedural justice.