Employee Performance Appraisal Formalization and Change in SME Employee Intentions to Quit

Carrie A. Belsito, Christopher R. Reutzel

Abstract


This study examines the influence of employee performance appraisal (PA) formalization on changes in small to medium sized enterprise (SME) employee intentions to quit (ITQ).  Specifically, this study builds upon extant research on human resource management within SMEs, employee performance appraisals, and social exchange theory (SET) to consider the influence of PA procedural justice, changes in trust in leadership (TIL), and organizational commitment (OC) arising from PA formalization in effecting change in SME employee ITQ.  Results of this study suggest that the formalization of PA reduce SME employee ITQ.  Consistent with social exchange theory, study results also suggest that employee perceptions of PA procedural justice, change in TIL, and change in OC are negatively related to ITQ.  Finally, study results suggest that change in TIL mediates the effect of PA procedural justice on ITQ. 


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 University of Houston-Clear Lake