The Mediating Effects of Feedback and Procedural Justice on the Relationship between Formal Performance Evaluation System and Trust between  Superior and Subordinate Managers

Ria Nelly Sari; Rita Anugerah; Yusralaini Yusralaini; Herra Gusrifan

Authors

Ria Nelly Sari Department of Accounting, Faculty of Economics, Universitas Riau, Kampus Bina Widya, KM 12,5 SP Panam, Pekanbaru 28293, Riau, Indonesia
Rita Anugerah Department of Accounting, Faculty of Economics, Universitas Riau, Kampus Bina Widya, KM 12,5 SP Panam, Pekanbaru 28293, Riau, Indonesia
Yusralaini Yusralaini Department of Accounting, Faculty of Economics, Universitas Riau, Kampus Bina Widya, KM 12,5 SP Panam, Pekanbaru 28293, Riau, Indonesia
Herra Gusrifan Department of Accounting, Faculty of Economics, Universitas Riau, Kampus Bina Widya, KM 12,5 SP Panam, Pekanbaru 28293, Riau, Indonesia

Abstract

Trust is an important aspect of social interaction, especially in the workplace. Trust between superiors and subordinates may allow increasing cooperation and information dissemination between subordinates and superiors. Eventhough the superior has trust in his/her subordinates, trust alone is not enough to ensure that the work will reach the target without further scrutiny. Therefore, a monitoring and evaluation mechanism should exist to formally monitor the performance of subordinates. With the performance evaluation, the extent to which performance is achieved can be compared to the set target. This study examines the mediating effect of feedback and procedural justice on the relationship between formal performance evaluation system and trust between superior and subordinate managers. We argue that the application of formal performance evaluation system will enhance trust between superior and subordinate managers through feedback and procedural justice.Using Partial Least Squares (PLS) as an analitycal method, 93 responses from managers of Banks in Pekanbaru, Riau, Indonesia, were analyzed. The findings of this study appear to support the significant role of feedback and procedural justice on trust between superior and subordinate.

DOI: 10.5901/mjss.2013.v4n10p497