Scholars suggest that successful public organizations must utilize management tools such as performance appraisals as a means to improve measurement and to bolster effectiveness of employees. While a performance appraisal is considered a key element of any performance management system, scholars are beginning to find that the success of any performance appraisal system is primarily determined by the employees’ perception of fairness. Given the ubiquitous nature of performance management systems in the public sector, one of the biggest challenges of human resource management is maintaining both an effective and a fair performance appraisal system. Yet, the previous literature has overlooked key factors that affect employees’ perception of performance appraisal fairness, particularly goal setting and property theories. In this study, we examine the impact of goal setting on public employees’ perception on performance appraisal fairness.

Recent studies on performance management suggest that managing employees’ perception of performance appraisal fairness is more important than any other structural factors (i.e., performance appraisal tools, performance appraisal frequency, etc.). This study aims to examine the impact of goal properties, including individual-level goal properties (goal difficulty, goal importance, and goal specificity) and managerial-level goal specificity on U.S. federal employees’ perceptions of performance appraisal fairness. Using the 2012 Federal Employee Viewpoint Survey (FEVS) data, this study finds that both individual-level goal properties (i.e., goal difficulty, goal importance, and goal specificity) and managerial-level goal specificity have a positive and statistically significant impact on public employees’ perception of performance appraisal fairness. Interestingly, managerial-level goal specificity has a larger impact on public employees’ perception of performance appraisal fairness than any of the other control variables (e.g., job satisfaction, intrinsic motivation, and demographic characteristics). As a research implication, this study will contribute to further understanding of performance appraisal fairness in the public sector in terms of highlighting the role of the goal properties at both the individual-level and managerial-level.