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Abstract
We investigated the effects of environmental
uncertainty, decentralization of decisions rights,
and the use of subjective performance measures on
managers’ perceptions of outcome controllability
and performance evaluation fairness. Based
on a survey of 339 middle- and upper- level
managers, our results suggest that environmental
uncertainty adversely affects perceptions of
outcome controllability and that this effect
is not moderated by the decentralization of
decision rights. Our results also show a positive
association between perceived controllability
and performance evaluation fairness. Although
we found no direct effect of the use of subjective
performance measures on perceived performance
evaluation fairness, it appears to moderate the
positive effect of perceived controllability on
fairness. We also show that the positive effect
of the use of subjective measures may depend
on contextual and job-related factors. The
overall results underscore the need to consider
the organizational context (environmental
uncertainty and decentralization of decision
rights) to investigate how performance measures
affect perceived controllability and fairness.
Because perceived controllability and fairness
affect individual attitudes and behaviors within
an organization, our results have important
implications for the design and use of performance
evaluation systems.
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