Luận văn thạc sĩ UEH performance appraisal fairness, work engagement, and intent to leave, the study

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

------------------------------

Do Thi Tuyet Nhung

PERFORMANCE APPRAISAL

FAIRNESS, WORK ENGAGEMENT,

AND INTENT TO LEAVE:

THE STUDY OF EMPLOYEES

IN THE PRIVATE SECTOR

MASTER OF BUSINESS (Honours)

Ho Chi Minh City - Year 2014

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UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

------------------------------

DO THI TUYET NHUNG

PERFORMANCE APPRAISAL

FAIRNESS, WORK ENGAGEMENT,

AND INTENT TO LEAVE:

THE STUDY OF EMPLOYEES

IN THE PRIVATE SECTOR

ID: 21110013

MASTER OF BUSINESS (Honours)

SUPERVISOR: Nguyen Huu Lam, Dr.

Ho Chi Minh City – Year 2014

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i

ACKNOWLEDGE

I would like to express my gratitude to supervisor Dr. Nguyen Huu Lam for his

guidance, support, motivation, and understanding in all the time of my research.

Besides my supervisor, I would like to thank ISB committee for their encouragement,

and insightful comments.

I would like to thank managers in HR Share and Care group and my classmates

at ISB.MBus 2.3 for their sharing honestly in item generation and other phases. They

have provided important comments for my questionnaire as well as data analysis

methods. Especially, I am debted to my classmate Thai Van Trung Hieu for his

supporting and sharing about SEM analysis. In addition, I would like to thank

participants in my investigation without charge.

In my daily work, I have been blessed with my chiefs and staffs at the Joton

JSC for all their supports. Especially, I am obliged to my direct chief Mr. Hoang Minh

Anh for his support and my subordinate Ms Nguyen Thi Hoang Anh for her assistant

at work for me to finish thesis conveniently.

Finally, I would like to give my special thanks to my family whose love helped

me to complete this work.

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ii

ABSTRACT

While Vietnam builds the Socio-Economic Development Strategy 2011-2020

with paying attention to human resource management and development, many

organizations concern performance management and talent management in which

performance appraisal, work engagement, and intent to leave are important concepts.

The study is conducted to identify whether perceived performance appraisal fairness

can help employees to enhance their engagement at work as well as whether engaged

employees can reduce their intent to leave organizations. A sample of 170 employees

from 15 organizations in the private sector was used to test hypotheses relating to

these three concepts. The results indicated that perceived performance appraisal

fairness affected positively on work engagement and work engagement influenced

negatively to intent to leave in Vietnam context. Generally, the present study suggests

important guidelines for private organizations to ensure fairness of performance

appraisal system; thereby, it can help to enhance work engagement and manage

employee turnover by controlling intent to leave.

Key words: performance appraisal fairness, work engagement, intent to leave

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iii

TABLE OF CONTENTS

AKNOWLEDGE......................................................................................................... i

ABSTRACT............................................................................................................... ii

TABLE OF CONTENTS........................................................................................... iii

LIST OF TABLES ..................................................................................................... v

LIST OF FIRGURES ................................................................................................ vi

LIST OF ABBREVIATIONS................................................................................... vii

Chapter 1: INTRODUCTION..................................................................................... 1

1.1. Research Background ....................................................................................... 1

1.2. Research Problem............................................................................................. 3

1.3. Research Objectives ......................................................................................... 6

1.4. Scope and Contribution of the Study ................................................................ 6

1.5. Thesis Structure ............................................................................................... 7

Chapter 2: LITERATURE REVIEW .......................................................................... 8

2.1. Perception of Performance Appraisal Fairness.................................................. 8

2.1.1. Performance Appraisal Overall.................................................................. 8

2.1.2. Fairness of Performance Appraisal System .............................................. 11

2.2. Work Engagement.......................................................................................... 14

2.3. Intent to Leave................................................................................................ 16

2.4. Perceived Performance Appraisal Fairness and Work Engagement................. 18

2.5. Work Engagement and Intent to Leave........................................................... 20

2.6. The conceptual model and hypotheses of the research .................................... 20

Chapter 3: RESEARCH METHODOLOGY............................................................. 22

3.1. Research design.............................................................................................. 22

3.1.1. Research Method...................................................................................... 22

3.1.2. Research Process ..................................................................................... 23

3.1.3. Population and Sampling Method............................................................. 24

3.1.4. Measurement Instruments......................................................................... 25

3.1.5.Coding ...................................................................................................... 27

3.1.6. Sample Size .............................................................................................. 27

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3.1.7. Data Collection ....................................................................................... 28

3.1.8. Data Analysis Method .............................................................................. 28

3.2. Item Generation.............................................................................................. 33

3.3. Pilot Study...................................................................................................... 34

3.4. Main Study..................................................................................................... 36

Chapter 4: RESULTS AND DISCUSSIONS............................................................ 38

4.1. Participants’ Demographic ............................................................................. 38

4.2. Assessment of Scales...................................................................................... 39

4.2.1. Assessment of Scale by Cronbach’s Alpha Cofficient............................... 40

4.2.2. Assessment of Scale by Exploratory Factor Analysis................................ 41

4.2.3. Assessment of Scale by Confirmatory Factor Analysis.............................. 42

4.3. Saturated Measurement Model ....................................................................... 45

4.4. Structural Model............................................................................................. 48

4.4.1. Maximum Likelihood Method ................................................................... 48

4.4.2. Bootstrap Method..................................................................................... 50

4.5. Testing the Hypotheses................................................................................... 51

4.6. Discussions for Findings................................................................................. 52

Chapter 5: FINDINGS AND IMPLICATIONS ........................................................ 55

5.1. Conclusions ................................................................................................... 55

5.2. Management Implications............................................................................... 56

5.3. Limitations and Directions for Further Researches ......................................... 57

REFERENCES

APPENDICES

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v

LIST OF TABLES

Table 4.1: Characteristics of the participants ............................................................ 38

Table 4.2: Correlation between constructs of perceived performance appraisal fairness 44

Table 4.3: Correlation between research concepts .................................................... 46

Table 4.4: Results of reliability and average variance extracted ............................... 47

Table 4.5: Result of regression weights..................................................................... 49

Table 4.6: Regression weights by maximum likelihood and bootstrap ...................... 50

Table 4.7: Results of testing hypotheses ................................................................... 52

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vi

LIST OF FIGURES

Figure 2.1: Performance appraisal process................................................................ 10

Figure 2.2: Greenberg's Taxonomy of Justice Perceptions Applied to Performance

Appraisal ............................................................................................... 13

Figure 2.3: The conceptual model............................................................................. 21

Figure 3.1: Research process ................................................................................... 23

Figure 4.1: CFA for perceived performance appraisal fairness scale ......................... 43

Figure 4.2: CFA for work engagement and intent to leave scale ............................... 45

Figure 4.3: CFA for saturated measurement model................................................... 47

Figure 4.4: Result of structural equation modeling.................................................... 49

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