SOCIAL BEHAVIOR AND PERSONALITY, 2015, 43(7), 1101–1110

© Society for Personality Research

http://dx.doi.org/10.2224/sbp.2015.43.7.1101

EMPLOYEES’ PSYCHOLOGICAL OWNERSHIP AND

SELF-EFFICACY AS MEDIATORS BETWEEN PERFORMANCE
APPRAISAL PURPOSE AND PROACTIVE BEHAVIOR

MIN QIU, BEI HU, XU ZHANG, AND YUCAI LI

Huazhong University of Science and Technology

We analyzed the impact of performance appraisal purpose on employees’ proactive behavior,

and explored the roles of psychological ownership and self-efficacy as mediators in this
relationship. We conducted a survey with 512 employees of enterprises in 4 cities in China.
The results of analysis of the data collected showed that an evaluative performance appraisal
had a negative influence on the employees’ proactive behavior whereas a developmental
performance appraisal had a positive influence. Psychological ownership and self-efficacy
were found to have an intermediary role between performance appraisal purpose and the
employees’ proactive behavior. Self-efficacy had a significant positive effect on psychological
ownership. Implications of these results for theory and management practice are discussed.

Keywords: evaluative performance appraisal, developmental performance appraisal, proactive

behavior, psychological ownership, self-efficacy, employees.

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

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: 627427503@qq.com

1101
1102 EMPLOYEES AND PERFORMANCE APPRAISAL

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
 EMPLOYEES AND PERFORMANCE APPRAISAL 1103
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
1104 EMPLOYEES AND PERFORMANCE APPRAISAL

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.

Method

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).

Measures
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,
 EMPLOYEES AND PERFORMANCE APPRAISAL 1105
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.

Results

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.
 1106

Psychological
ownership
.30***

-.11**
.28*** .28*** Personal
.14*** proactive behavior
EPA .63*** .18***
.29***

Interpersonal
.25*** proactive behavior

DPA .21***
.37***
Organizational
proactive behavior
.49***
.20***
Self-efficacy
EMPLOYEES AND PERFORMANCE APPRAISAL

Figure 1. Performance appraisal purposes – proactive behavior structural equation model.

Note. EPA = evaluative performance appraisal; DPA = developmental performance appraisal; *** p < .001; ** p < .01. 2/df = 2.85; goodness-of-fit index
= .886; adjusted goodness-of-fit index = .845; comparative fit index = .882; root mean square error of approximation = .064.
 EMPLOYEES AND PERFORMANCE APPRAISAL 1107
Discussion

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.
1108 EMPLOYEES AND PERFORMANCE APPRAISAL

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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