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Employees' psychological ownership and self-efficacy as mediators between performance appraisal purpose and proactive behavior.

In the current business environment of increased economic competition and accelerated product innovation in China, employees need to change their former passive, short-term, and static behavior patterns (Zhao, Zhao, Zhou, & Haibo, 2011). Companies also need staff to be flexible, to take initiative in response to being set tasks, and to take risks, all of which are proactive behaviors. Proactive behavior has three core elements--initiative, prospective, and change (Zhao et al., 2011)--and is a pattern of behavior whereby employees focus on the future and actively seek change (Bindl & Parker, 2010). Depending on the organizational level, employees' proactive behavior can be described as either personal (directed at facilitating the achievement of one's personal or career goals), interpersonal (directed at the workgroup/colleagues), or organizational (directed at the organization; Griffin, Neal, & Parker, 2007). Proactive behavior can be seen by managers and academics as an important driver of innovation and stimulates positive energy in employees. Currently, in studies on factors influencing proactive behavior, the main focus has been on individual factors, such as demographic variables, knowledge, and ability, or situational factors related to concerns such as work autonomy, job control, leadership, and trust.

The performance appraisal purpose is an important guarantee for the successful implementation of a performance appraisal. The performance appraisal purpose refers to the employee's perception of the ultimate use of an organizational performance appraisal tool (Cleveland, Murphy, & Williams, 1989). The main performance appraisal purposes are evaluative or developmental (Kuvaas, 2007; Meyer, Kay, & French, 1965). The aim of an evaluative performance appraisal is to establish salary level, task assignment, and promotion prospects of the employee. In an evaluative performance appraisal the focus is on the assessment of the employee's past job performance, and the emphasis is mutuality by comparing employees based on management's control purposes. In contrast, the aim of a developmental performance appraisal is to assess the shortcomings and inadequacies in the employee, and to remedy these deficiencies through staff training, and enhancing the ability and improving the job performance of the employee (George & Jones, 1999). The focus is on the employee's future performance, with the emphasis on assessment of the individual and his or her learning and training needs. Currently, in the research on performance appraisal purpose the focus has mainly been on definition of the concept and delineation of dimension level. There is, as yet, a lack of systematic research on the effect of performance appraisal purpose on employee proactive behavior. Therefore, in this study our aim was to explore the mechanisms of the impact and effect of performance appraisal purpose on employee proactive behavior, and to analyze the intermediary roles of psychological ownership and self-efficacy between the type of performance appraisal method used and employee proactive behavior.

Performance Appraisal Purpose and Employee Proactive Behavior

According to social exchange theory, individual behavior is associated with the pay and benefits in the process of social interaction within the organization (Wang & Wang, 2011). When organizations implement an evaluative performance appraisal, employees perceive that their relationship with the organization is a type of economic-interest exchange relationship. And the evaluative performance appraisal has a significant negative impact on the employees' work satisfaction and their perception of relationships with colleagues (Chen, Wu, & Leung, 2011). When organizations implement developmental performance appraisals, the employees and the organization develop a better and more productive relationship (Takeuchi, Lepak, Wang, & Takeuchi, 2007). The developmental performance appraisal is in favor of the formation of a trustworthy and cooperative organizational climate (Collins & Smith, 2006).

Although the evaluative and developmental performance appraisal methods are closely linked, these two performance appraisal purpose orientations have different effects on the attitude and behavior of staff (Chiang & Birtch, 2010). In studies on employees' innovative behavior, the evaluative performance appraisal has been found to have a negative effect on employees' innovative behavior, but it has been found that the developmental performance appraisal can promote employees' innovative behavior (Yin, 2012). Hence, we proposed the following hypotheses.

Hypothesis 1a: Evaluative performance appraisal will have a negative influence on employee proactive behavior.

Hypothesis 1b: Developmental performance appraisal will have a positive influence on employee proactive behavior.

Mediating Role of Psychological Ownership and Self-Efficacy

According to cognitive motivational theory, the cognitive motivation of proactive behavior involves value, willingness, targets, and ability beliefs (Zhao et al., 2011). In an organization, the establishment of psychological ownership leads to employees feeling that the organization reminds the employees of home. Psychological ownership is a state in which individuals feel as though the target of the ownership--material or immaterial in nature--or a piece of it, is theirs (Pierce, Kostova, & Dirks, 2001; Pierce, Rubenfeld, & Morgan, 2001). Wagner (2000) pointed out that, compared to organizational commitment and job satisfaction, psychological ownership has a stronger predictable influence on employee attitudes and behavior. Thus, psychological ownership may promote employees' proactive behavior. In addition, similar to the employee's degree of job satisfaction, the perception of psychological ownership may be affected by performance appraisal purpose.

During attribution activities, individuals who have strong self-efficacy tend to attribute success to their own ability and effort, and tend to attribute failure to their lack of skills and effort. This way of thinking, in turn, encourages people to become more motivated and to improve their behavioral skills development, contributing to success in the activity (Gao, 2000). Hence, self-efficacy may also promote employees' proactive behavior. At the same time, employees' motivation changes with their self-efficacy; if an employee's self-efficacy is strong, the motivation for action becomes greater, if it is weak, the employee's motivation to act reduces. Therefore, we proposed the following hypotheses:

Hypothesis 2: Psychological ownership will have an intermediary role between performance appraisal purpose and employee proactive behavior.

Hypothesis 3: Self-efficacy will have an intermediary role between performance appraisal purpose and employee proactive behavior.

Hypothesis 4: Self-efficacy will have a significantly positive effect on employee psychological ownership.


Participants and Procedure

In this study, the measurement of the variables was mainly taken from data collected in a survey that we conducted between March and May 2014. The main research locations were the areas of Hefei, Shenzhen, Wuhan, and Jinan in China. The respondents to the survey were employees who had been working for more than one year in enterprises in these areas. We distributed the survey forms by email and also in hard copy, and the respondents completed the survey anonymously, to reduce employee concerns. Of the 700 survey forms we distributed, 540 were returned, of which 512 (73.1%) were usable for data analysis,

In this sample, 69% were men and 31% were women. The proportion of those with a bachelor's degree or diploma and below was 36.3% and those with a master's degree or doctorate made up 49.4% and 14.3% of the sample, respectively. General staff accounted for 45.6% of the sample, technical staff accounted for 16.4%, and general managers and senior managers accounted for 24.4% and 13.6%, respectively. The average age was 29.3 years (SD = 0.8) and 6.6 years was the average period of tenure (SD = 1.4).


To measure the effect of the two performance appraisal purposes, we used a nine-item scale designed by Wen and Liao (2010). There are four items for evaluative performance appraisal (e.g., "The performance evaluation result is the assessment of my past performance."), and there are five items for developmental performance appraisal (e.g., "Performance evaluation results will help me to identify my training needs."). The evaluative and developmental performance appraisal scales had a Cronbach's alpha of .756 and .773.

We used a seven-item perception scale, developed by Chu and Liu (2005), to measure psychological ownership. A sample item is "I think the organizational problem is my issue." The scale had a Cronbach's alpha of .901.

To measure self-efficacy, we adopted the General Self-Efficacy Scale (GSES), which has 10 items (Speier & Frese, 1997). A sample item is: "If I try to do so, I will always be able to solve problems at work." The scale had a Cronbach's alpha of .894.

We used a 12-item perception scale, developed by Belschak and Den Hartog (2010), to measure employee proactive behavior. Organizational, interpersonal, and personal proactive behavior are the three types of behavior assessed, with each being measured with four items. A sample item is: "I will take the initiative to propose solutions to organizational problems." The scale had a Cronbach's alpha of .940.

All items were rated on a 5-point Likert scale with response options ranging from 1 = strongly disagree to 5 = strongly agree. We considered gender, age, educational level, tenure, and position as control variables.

Data Analysis

Data were analyzed using AMOS version 17.0. We tested the path of the structural analysis model using a structural equation model. We performed structural equation modeling analyses to examine the impact of the two performance appraisal purposes, and the levels of employee psychological ownership, self-efficacy, and proactive behavior.


The structural equation modeling analysis results are shown in Figure 1 where it can be see that the evaluative performance appraisal had no direct influence on employees' proactive behavior, but had a significant negative influence on their psychological ownership. Thus a negative indirect influence of evaluative performance appraisal on employee proactive behavior through psychological ownership was observed. The direct impact of the developmental performance appraisal on employee proactive behavior was significant. Developmental performance appraisal had a significantly positive influence on both employees' psychological ownership and self-efficacy. Therefore, there was a positive indirect influence of developmental performance appraisal on proactive behavior through psychological ownership and self-efficacy. Specifically, psychological ownership played an intermediary role between both evaluative and developmental performance appraisal and employees' proactive behavior. Self-efficacy played an intermediary role between developmental performance appraisal and employees' proactive behavior. Therefore, hypotheses H1a, H1b, and H2 were supported, and H3 was supported in part.

Psychological ownership and self-efficacy both had a significant positive influence on employees' proactive behavior, and employees' self-efficacy had a significant positive influence on their psychological ownership. Therefore, H4 was supported.


Our aim was to explore the mechanisms of the impact and effect of performance appraisal purpose on employees' proactive behavior. The results show that the use of an evaluative performance appraisal method had a negative effect on employees' proactive behavior, whereas use of a developmental performance appraisal method had a positive influence on it. Developmental performance appraisals are intended to improve employees' working attitudes, increase employees' experience through subsequent actions taken and courses arranged, enhance employees' knowledge and skills, and further enhance employees' job satisfaction (Boswell & Boudreau, 2002), whereas an evaluative performance appraisal could cause employees' dissatisfaction (Murphy & Cleveland, 1995). Our research findings are consistent with those of the scholars cited in the previous sentence, as we found that in an evaluative performance appraisal the focus is only on the assessment of employees' past performance, the implementation of the mandatory system is emphasized, and there is a lack of concern for employees' reactions and attitude. This kind of rigid management style will limit employees' autonomy and enthusiasm. The actions taken to address the needs identified in the developmental performance appraisal, on the other hand, were found to promote proactive behavior among those employees by improving their performance and upgrading their knowledge and skills.

As an organizational management practice, psychological ownership can improve employees' self-investment, enhance employees' job satisfaction, and promote employees' organizational citizenship behavior--one kind of individual behavior that is not directly prescribed but favors the organization. (Bernhard & O'Driscoll, 2011). Therefore, we analyzed the intermediary role of psychological ownership between performance appraisal purpose and employee proactive behavior, and the results showed that psychological ownership had an intermediary role between performance appraisal purpose and employee proactive behavior. At the same time, we found that both individual motivation and behavior changed with that individual's level of self-efficacy. We found that strong self-efficacy encouraged individuals to improve their level of motivation and develop behavioral skills, thus contributing to the success of activities such as organizational citizenship behavior and innovative behavior (Zhao et al., 2011). The focus of the developmental performance evaluation method is on the identification of defects and shortcomings in employees, so that employees' knowledge and skills can be enhanced, further helping to improve employees' self-efficacy. Therefore, we found that employee self-efficacy had a mediating role between developmental performance appraisal and that employee's proactive behavior, as well as having a positive effect on his or her psychological ownership.

In this study we have enriched the theory of, and empirical research about, performance appraisal purpose and employee proactive behavior. A limitation in our study was that the impact of performance appraisal purpose on employee proactive behavior was analyzed from a cognitive perspective and at an individual level. Second, the data were derived from employees' self-reports, thus reducing the reliability of the result. Therefore, in future studies, the research perspective and level can be further broadened to explore the role of other individual factors (e.g., autonomy, collectivism) and external environmental factors (e.g., environmental uncertainty, organizational culture) on performance appraisal purpose and employee proactive behavior, and the diversity of the data sources should be increased.


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Huazhong University of Science and Technology

Min Qiu, Bei Hu, Xu Zhang, and Yucai Li, School of Management, Huazhong University of Science and Technology.

The authors wish to acknowledge the funding support for this study by the Natural Science Foundation of China--Reference 71232001.

Correspondence concerning this article should be addressed to: Min Qiu, School of Management, Huazhong University of Science and Technology, No.1037 Luoyu Road, Wuhan 430074, People's Republic of China. Email:
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Author:Qiu, Min; Hu, Bei; Zhang, Xu; Li, Yucai
Publication:Social Behavior and Personality: An International Journal
Article Type:Report
Date:Aug 1, 2015
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