PERFORMANCE APPRAISAL AND INNOVATIVE WORK BEHAVIORS

Employees’ proactive behaviors aimed at generating, disseminating and implementing new ideas in the workplace are key strategic assets for organizations in the current competitive environment. Despite its utmost important role in ensuring the alignment between individuals’ goals and behaviors and the organization’s strategic goals, to the best of our knowledge extant empirical research has neglected to investigate how the debated HRM practice of performance appraisal may contribute to employees’ innovative work behaviors. Thus, drawing on the insights provided by the signaling theory of HRM (Bowen and Ostroff, 2004), our research aims at exploring the relationship between the employees’ perception on the main characteristics of the performance appraisal system - in terms of ‘how’ the appraisal may be conducted and ‘what’ may be evaluated - and the effectiveness of this system in promoting individual work-related innovation. We carried out a survey on 865 employees working in large, multinational firms located in Italy operating in several sectors. Our findings suggest that formality of performance appraisal does not have a positive impact on employees’ perception that appraisal boosts individual innovative work behaviors. Furthermore, even though we found that performance appraisal focused on employees’ results - instead of behaviors - affects positively its perceived positive impact on work-related innovation, our results show a stronger perceived positive relationship between the appraisal of new competences developed by employees and their innovative work behaviors. These results provide a twofold contribution. On the one hand, they add to the recent debate on the effectiveness of traditional formal appraisal processes. On the other hand, our results contribute to extant literature on the importance of employees’ perception of HRM practices as determinants of individual creativity and innovation in organizations.