Asia Pacific Journal of Human Resources (2022) , doi:10.1111/1744-7941.12327 Performance appraisal quality and employee performance: the boundary conditions of human resource strength and religiosity Sumbal Babar NUST Business School, National University of Sciences and Technology, Islamabad, Pakistan, sumbal.phd17nbs@student.nust.edu.pk Asfia Obaid NUST Business School, National University of Sciences and Technology, Islamabad, Pakistan Karin Sanders UNSW Business School, University of New South Wales, Sydney, Australia Hussain Tariq KFUPM Business School, Interdisciplinary Research Center for Finance and Digital Economy (IRC-FDE), King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia, hussain.tariq@kfupm.edu.sa This study aims to provide new insights on the boundary condition effects of human resource (HR) strength, based on the covariation principle of the attribution theory and job demand resource model. HR strength is defined as the features of an HR system that send signals to employees, allowing them to understand the desired responses and behaviors in the relationship between performance appraisal quality (PAQ) (clarity, regularity and openness) and employees’ proficient, adaptive and proactive performance. Additionally, employees’ religiosity is examined as a boundary condition of the effect of perceived HR strength. The findings of a two-wave, multi-actor study (N = 391 employees and 61 managers) highlight that the relationship between PAQ and employee performance is strongest when it is embedded within a strong HR system (perceived HR strength) and low religiosity, or within low perceived HR strength and high religiosity conditions. Keywords: HR strength, JD-R, Pakistan, performance appraisal quality, religiosity Key points 1 The concept of human resource (HR) strength remains central to the HRM process perspective. 2 HR strength proves important in improving performance appraisal quality and enhancing employee performance. 3 Stronger HR systems send clear and unambiguous signals to the values and priorities of the organization. 4 Religiosity has emerged as an important personal resource for enhancing employee motivation and performance. Correspondence: Sumbal Babar, NUST Business School, National University of Sciences and Technology, Sector H-12, Islamabad, 44100, Pakistan; e-mail: sumbal.phd17nbs@student. nust.edu.pk Accepted for publication 9 April 2022. Ó 2022 Australian Human Resources Institute (AHRI). Asia Pacific Journal of Human Resources Introduction The quality of performance appraisal (PA), defined as a frequent source of providing feedback with clarity, regularity and openness (Sanders, Dorenbosch and de Reuver 2008), is increasingly regarded as an essential element of the performance management of employees (DeNisi, Murphy, Varma and Budhwar 2021). It has also become a general expression for various activities related to assessing employees’ performance, skills development and the distribution of rewards to ultimately improve performance (DeNisi and Kluger 2000; Fletcher 2001; Wilson and Western 2000). At the same time, research shows that PA has a significant impact on work-related attitudes (e.g. Bednall, Sanders and Runhaar 2014; Brown and Benson 2005; Su and Baird 2017) and employee performance (Bratton and Gold 1999; DeNisi and Murphy 2017; Taylor and Pierce 1999). Still, some questions remain on the effect of PA quality, which needs further attention. Although earlier research has focused on the direct effects of PA quality, we lack knowledge on the boundary conditions of the effect of PA quality on employee outcomes. This knowledge is essential to understand because the quality of PA provides more opportunities for improvement and efficiency in employees’ performance in comparison to other conditions. This paper pays attention to Bowen and Ostroff’s (2004) framework of human resource (HR) strength. This framework is based on the covariation principle of the attribution theory (Kelley 1967, 1973), which predicts that HR practices will have a stronger effect when they are perceived as distinctive, consistent and consensual (i.e. high perceived HR strength). Previous research shows that HR strength is important to explain the relationship between various HR practices and employees’ outcomes (Bednall, Sanders and Yang 2022; Katou, Budhwar and Patel 2014; Sanders, Dorenbosch and de Reuver 2008). However, we lack insights into the boundary conditions of the moderating effect of HR strength (Bednall, Sanders and Yang 2022). In an attempt to solve this gap, scholars have focused on internal organizational predictors such as HR event valence (Chacko 2019), high-performance work systems (HPWS; Katou et al. 2021; Sanders, Bednall and Yang 2021; Van de Voorde and Beijer 2015), family motivation (Kitt and Sanders 2021) and individual HR practices (Farndale and Sanders 2017; Li, Frenkel and Sanders 2011). However, these studies have found that employees respond differently to the same HR practices, leading researchers to speculate that few cultural factors are outside the control of organizations and become responsible for the effect of perceived HR strength (Hewett et al. 2018; Bednall et al. 2021; Kitt and Sanders 2021). Despite a strong consensus that cultural factors play a significant role in defining HR practices in many societies, the topic of religiosity, a dominant part of the culture, has not recently emerged (Cooke 2018). Thus, Lynn, Naughton and VanderVeen (2011) argued that religiosity could significantly impact employees’ behavior to a great extent. Therefore, it is asserted that religiosity, defined as an individual’s religious beliefs and values that keep them motivated in their work practices (Lynn, Naughton and VanderVeen 2009), could be considered an important non-work-related imprinting factor as well as a 2 Ó 2022 Australian Human Resources Institute (AHRI). Sumbal Babar et al. personal resource that affects the moderating impact of perceived HR strength. Imprinting factors are the familial influences, hereditary values and non-work contextual factors that can influence how people observe, interpret and attribute HR activities at their workplace (Kitt and Sanders 2021). Consequently, we assert that religiosity can be a resource for employees who might build meaningful and motivational insights with work-related outcomes (Babar, Obaid and Tariq 2020; Pandey and Singh 2019; Rana and Malik 2017). Generally, HR research has neglected the potential link between religious views, management practices and organizational outcomes in the context of Pakistan (Abu Bakar, Cooke and Muenjohn 2016; Bowra et al. 2012; Mellahi and Budhwar 2010; Rana and Malik 2017). However, there are a few exceptions (e.g. Bowra et al. 2012; Farrukh, Wei Ying and Abdallah Ahmed 2016; Osman-Gani, Hashim and Ismail 2013; Hassan, Bin Nadeem and Akhter 2016), which reported religious employees perceived their job positively and higher performance outcomes. They also highlight it enabled them to remain motivated and peaceful in their business life. Therefore, in this paper, we focus on religiosity as an imprinting factor, which is an underlying psychological mechanism in perceiving motivation in the work context (Bakker and Dermotti 2017; Barrick et al. 2013; Han and Oh 2020), as well as a boundary condition for the effect of perceived HR strength. It is expected that perceived HR strength and religiosity can explain the strength of the relationship between PA quality and employee performance (Cook and Crossman 2004). Thus, it is imperative to include personal job resources in organizational research in the Asian context (Abu Bakar, Cooke and Muenjohn 2016), particularly in Pakistan. Furthermore, a few areas are considered more vital in which the study of religion should be conducted, and one of those areas is HR strength and its impact on performance in the Pakistani context (Riaz, Townsend and Woods 2020). Due to a lack of interest, the inclusion of religion in organizational studies is a substantial research gap that connects religiosity and HR strength with employee performance. Thus, this study attempts to gain more insights into the effects of religiosity and HR strength on employee performance. Religiosity is used as a boundary condition to account for differences among employees in different Telecom companies in Pakistan (Moschis and Ong 2011; Riaz, Townsend and Woods 2020). It is crucial to research the boundary condition effect of religiosity, as it significantly influences managers’ conduct (Kashif, Zarkada and Thurasamy 2017), making employees more motivated to get clarity of the HR practices. Thus, this research contributes by examining the double moderation roles of HR strength and religiosity in the PAQ-performance relationship in the context of Pakistan. To explain these boundary conditions, we draw on the job demand resource model (JD-R) (Bakker and Demerouti 2017; Bakker, Nachreine and Schaufeli 2001). This model focuses on job demands (i.e. psychological and social aspects that require sustained cognitive behavior associated with certain psychological costs) and job resources (i.e. working conditions that become resources for employees). Specifically, the psychological and social aspects of the job may reduce job demands and the associated costs in enhancing the performance of employees (Abu Bakar, Cooke and Muenjohn 2016; Bakker and Dermotti 2007; Demerouti et al. 2001). Although psychological aspects are important in the JD-R Ó 2022 Australian Human Resources Institute (AHRI). 3 Asia Pacific Journal of Human Resources model, limited attention has been given to how these psychological aspects (Abu Bakar, Cooke and Muenjohn 2016; Bakker and Dermotti 2007) jointly influence the effects of perceived HR strength. Altogether, this study contributes to the research on HR, perceived HR strength and religion in the following ways. First, this study builds on the covariation principles of attribution theory (Kelley 1973) in the linkage between performance appraisal quality (PAQ) and employee performance. It contributes by examining the moderation effect of perceived HR strength on the relationship between PAQ and employee performance. It is expected that perceived HR strength will unambiguously provide employees with awareness and insight into the meaning of HR practices when it is highly distinctive, consistent and consensual (Bednall, Sanders and Runhaar 2014; Bednall, Sanders and Yang 2022; Ostroff and Bowen 2016). Also, by highlighting the gaps in previous research, this study examines the boundary conditions of the effect of perceived HR strength in the Pakistani context. Secondly, this study aims to acquire more insight into the importance employees assign to religiosity while performing at work. Through its practice, processes and beliefs, we argue that religion can influence individual perceptions, attitudes and behavior (Lynn, Naughton and VanderVeen 2009). Thus, this study contributes to the literature on religion by treating religiosity as a personal resource of salience in various cultures, particularly in Pakistan. Notably, by using the lens of the JD-R model, attention is paid to the personal resources of individuals (i.e. psychological states), which affects jobholders’ motivation and performance (Bakker, Demerouti and Euwema 2005). Therefore, this study tests this effect and extends and connects the theories of perceived HR strength and JD-R to consider HR strength and religiosity as important personal resources. It is argued that perceived HR strength is affected by employees who believe religiosity as a strength and might perceive self-development (i.e. a sense of being refreshed spiritually), work enhancement and determination to do work, all of which trigger performance. Finally, this study contributes to the literature by testing the hypotheses through a two-wave, multi-actor data set collected in an Islamic country, Pakistan. Based on the previous literature, most research on religiosity has been carried out in Christian and western countries (for reviews, please see Tracey 2012; Heliot et al. 2020). Thus, this study aims to add to the existing literature by focusing on a specific Asian Muslim country, that is, Pakistan. Arguably, religiosity influence can be considered predominant in Pakistan, wherein 96.28% of the population is Muslim (Pakistan Bureau of Statistics n.d.). Hence, religiosity will be expected to influence employee perceptions of HR strength using coping, calling, motivation and meaningfulness in work (Khilji 2003; Lynn, Naughton and VanderVeen 2009). Pakistan is expected to be an exemplary country where principles of religion are practiced openly. Therefore, by introducing ‘religiosity’ as a personal job resource at work in the Islamic community, JD-R theory is extended to a new context (i.e. the Islamic community). The theoretical model of our study is shown in Figure 1. 4 Ó 2022 Australian Human Resources Institute (AHRI). Sumbal Babar et al. HR process Perceived HR strength Religiosity HR content Performance appraisal quality Employee performance Figure 1 The proposed model Theoretical elaboration and hypotheses HRM and employee performance Given the significance of employee performance as a job behavior, it is considered the most crucial employee outcome in management theory and research (Eatough, Chang, Miloslavic and Johnson 2011; LePine et al. 2016; Naseer et al. 2020; Pak and Kim 2018). Griffin, Neal and Parker (2007) defined employee performance as proficient behavior of an employee formally meeting job requirements, proactive behavior of the employee in taking self-directed actions and adaptive behavior to cope with changes at work. We argue that these behaviors are highly effective at work when HR practices are communicated to employees through clear and distinct signaling mechanisms (Bednall, Sanders and Runhaar 2014). From an organizational perspective, the organization’s performance is the function of the sum of the individual performances of its employees (Paauwe 2009). Therefore, this is critical for a holistic understanding of factors influencing work performance at organizational and individual levels (Audenaert et al. 2019; Cooper et al. 2019; Guest 2011; Tuckey, Brewer and Williamson 2002). The link between PAQ and employee performance Bednall, Sanders and Runhaar (2014) defined PAQ in terms of clarity, regularity and openness as an antecedent of improvement in employee performance. Clarity refers to understanding the PAQ process and its purpose in clear terms, whereas regularity refers to providing feedback at regular intervals when judging performance for improved execution. Openness is the level of communication wherein the supervisor provides feedback on the PA that can account for an employee’s task efficiency (Brown, Hyatt and Benson 2010; Curzi et al. 2019; DeNisi and Murphy 2017; DeNisi and Sonesh 2010). When managers deliver certain HR practices (i.e. PA) with clarity, regularity and completeness, it encourages insightful feedback results in proactiveness and proficiency in employee performance (Macneil 2001). Previous studies (Rasheed, Yousaf and Noor 2011) indicate that when discussions are not open, it weakens the signaling system, which does not result in employees’ expected level of performance. Ikramullah et al. (2016) argue that openly delivered feedback and rationalized performance ratings enhance the effectiveness of Ó 2022 Australian Human Resources Institute (AHRI). 5 Asia Pacific Journal of Human Resources employee performance (Kluger and DeNisi 1996; Obaid 2013; Selvarajan, Singh and Solansky 2018). Therefore, by clearly defining the performance matrices by managers, high-quality PA may lead to improved performance in terms of effectiveness, adaptiveness and proactiveness (Selvarajan and Cloninger 2012). The first hypothesis of this study is formulated as follows: Hypothesis 1: Performance appraisal quality is positively related to employee performance. Bringing perceived HR strength into the model Based on the covariation principle of attribution theory (Kelley 1967, 1973), Bowen and Ostroff (2004) defined a strong HR system as high in distinctiveness, consistency and consensus. Relying on the theoretical model of situational strength by Mischel (1977), Bowen and Ostroff propose that a ‘strong’ HR system conveys clear signals about the organization’s expectations, and employees interpret these signals accordingly. Conversely, employees interpret signals idiosyncratically, making the HR system weak. The organization’s goals must be clearly defined and communicated to employees to stimulate performance (Chacko and Conway 2019). Consequently, when perceived HR strength is high, it will increase the effects of PAQ, which enhances employee performance. Research shows high HR strength is more likely to improve performance (Sanders and Yang 2016; Alfes et al. 2019). Bednall, Sanders and Runhaar (2014) observed that PAQ was associated positively with innovative behavior, and the relationship was strongly positive when employees perceived the HR system as more consistent, distinctive and consensual. In this study, PAQ and perceived HR strength are in sync and convey a clear message about management’s expectations and what is required from employees (Bowen and Ostroff 2016; Sanders et al. 2018; Wang et al. 2020). Notably, it is argued that perceived HR strength is considered a resource and relates to the JD-R framework due to distinctive, consistent and consensual information. Previous studies have not highlighted this significant gap to consider HR strength as a resource. Thus, this study is the first to consider perceived HR strength as a personal resource of the employees by aligning it with the JD-R theory. We contend that when the HR system is perceived as highly consistent, distinctive and consensual by employees, they attribute HR practices to management and try to implement these practices intended by management (Sanders, Shipton and Gomes 2014; Katou, Budhwar and Patel 2021; Sanders, Bednall and Yang 2021). Conversely, when the HR practices’ distinctiveness, consistency and consensus are low, employee understanding becomes less clear about management intentions and expectations, and HR practices will become less efficient. The following hypothesis is thus formulated: Hypothesis 2: Perceived HR strength moderates the relationship between PAQ and employee performance, such that the relationship is stronger when HR strength is high rather than low. 6 Ó 2022 Australian Human Resources Institute (AHRI). Sumbal Babar et al. Religiosity as an employee’s personal resource and an imprinting factor The JD-R model (Bakker and Demerouti 2017) describes the psychological states of experiencing meaningful work (i.e. employees considering their job meaningful and motivational). Hence, seeking responsibility in work outcomes due to religious perspectives motivates employees and develops self-awareness, positively affecting performance. Though psychological aspects are key in the JD-R model, limited empirical support has been found for religiosity as a psychological aspect in perceiving meaningfulness and motivation in work (Abu Bakar, Cooke and Muenjohn 2016; Bakker and Dermotti 2007; Lin, Hong, Xiao and Lian 2020). The research context of this study is Pakistan, where an employee’s upbringing from childhood is based on principles of religious beliefs. Hence, it is argued that religiosity pursues meaning in work and serves as a source of motivation to perform well (Lynn, Naughton and VanderVeen 2009). It somewhat reflects the religious beliefs and teachings of an Islamic community (Braam and Koeing 2019). For instance, a person’s religiosity is their internal strength in portraying their personal identity to form meaning in their work (Kashif et al. 2017; Gallego-Alvarez, RodrıguezDomınguez and Martın Vallejo 2020; Hart and Brady 2005; Nadeem and Mumtaz 2018). Similarly, Voydanoff (2001) asserts that domains such as recreational activities, family, religious and social involvements are part of the non-work domain (Greenhaus and Parasuraman 1987; Sarkar 2019; Sekaran 1986). Theoretically, religiosity is significant at work because it provides a unique lens through which employees ascribe meaning to their day-to-day work events (Granqvist, Mikulincer and Shaver 2010; Kearns and Tyler 2020). For instance, high religiosity increases the meaning derived from work, favorably impacting employee outcomes (Bickerton et al. 2014; Kearns and Tyler 2020). Studies highlight that employees who follow work ethics, frequently pray (Berggren and Bjørnskov 2011; Hassan et al. 2019), seek coping and calling (see Lynn 2011; Lynn, Naughton and VanderVeen 2009) are found to be motivated and seek meaningfulness in their work performance. In the Pakistani context, the beliefs mentioned above are synchronized with the religious teachings of Islam as well (Osman-Gani, Hashim and Ismail 2013; Usman et al. 2017). It is contended that these religious beliefs influence employees’ perceptions of seeking meaningfulness which keeps them motivated (Babar, Obaid and Tariq 2020). In this way, people who are intrinsically dedicated to their religion benefit from an implicit kind of self-regulation that allows them to seek high standards while maintaining their well-being (Koole, McCullough, Kuhl, and Roelofsma 2010). Moreover, this study asserts that employees who consider their religiosity a strength pursue meaning in their work, which helps them combat difficulties at work. Due to personal resources as a religiosity, employees remain motivated to understand transparent HR practices. Consequently, it is predicted that religiosity will illustrate the impact of perceived HR strength in providing PAQ and improving employee performance. The following hypotheses are thus formulated accordingly: Ó 2022 Australian Human Resources Institute (AHRI). 7 Asia Pacific Journal of Human Resources Hypothesis 3: Religiosity will moderate the effect of perceived HR strength on the relationship between PAQ and employee performance, such that the effect of perceived HR strength is stronger when religiosity is high rather than low. Methodology Sample and procedures This study gathered time-lagged and multi-source (employees and their reporting managers) data from five telecom companies in major cities of Pakistan. The telecommunication industry is a prime example of an industry where competition is accelerated. Data were randomly collected from employees and managers working in various managerial positions. The reporting managers of employees were responsible for communicating feedback on their performance. This study collected multi-source data by distributing separate questionnaires to the employees and managers for controlling potential common source biases (Podsakoff and Organ 1986). Moreover, the surveys were distributed at two-time points (i.e. 1-month intervals) to minimize common method concerns (Johnson, Rosen and Djurdjevic 2011). Data were collected before and after the PAs were conducted in these telecom companies. Managers were asked to rate employee performance at Time 1 and Time 2 (Wright et al. 2005), while employees were asked to rate the PAQ, perceived HR strength and religiosity. At the same time, we controlled for Time 1 performance ratings and used only Time 2 employee performance ratings (Wright et al. 2005). Before collecting data from employees, participants were assured that confidentiality would be maintained regarding the performance ratings assigned by their supervisors. Surveys were distributed to 74 managers and their 550 subordinates. Incomplete data were omitted and only matched data were included: data collected from current managers and their employees at Time 1 (68 supervisors and 410 employees). Final data, including Time 2 ratings, involved 61 supervisors and 391 employees with a response rate of 81% at the supervisor level and 75% at the subordinate level, respectively. Among the participating managers, 82% were male, with an average age of 38.08 years (SD = 7.87). Among the participating employees, 77% were male, with an average age of 37 years (SD = 8.7), and average tenure with the current supervisor was 3.80 months (SD = 3.70). Measures Performance appraisal quality Performance appraisal quality was assessed using a three-item scale developed by Sanders, Dorenbosch and de Reuver (2008). An example item is ‘My supervisor keeps open communication with me in my job’. Respondents were asked to rate the items on a 6-point Likert scale as 1 = ‘strongly disagree’ to 6 = ‘strongly agree’. 8 Ó 2022 Australian Human Resources Institute (AHRI). Sumbal Babar et al. Employee performance For Time 1 and Time 2, employee performance was assessed by the managers using a nine-item scale developed by Griffin, Neal and Parker (2007), with three sub-dimensions. The sample items for task proficiency, task adaptability and task proactivity were ‘This employee ensured their tasks were completed properly’, ‘This employee coped with changes in the way they had to do the core tasks’ and ‘This employee communicated effectively with their co-workers’, respectively. Respondents were asked to rate the items on a 6-point Likert scale as 1 = ‘strongly disagree’ to 6 = ‘strongly agree’. Perceived HR strength Seventeen items were adapted from Delmotte, De Winne and Sels (2012) for measuring perceived HR strength through three dimensions, namely distinctiveness, with sample item as ‘When one asks the HR department for help, they provide clear answers’; consistency, with sample item as ‘The HR instruments for staff appraisal succeed in reinforcing the desired behaviours’; and consensus, with sample item as ‘Employees consider promotion as fair in this organization’. Respondents were asked to rate the items on a 6-point Likert scale as 1 = ‘strongly disagree’ to 6 = ‘strongly agree’. Religiosity Religiosity was assessed through seven items adapted from the Lynn, Naughton and VanderVeen (2009) scale. A sample item is ‘I pursue excellence in my work because of my faith’, which was rated on a 6-point Likert scale as 1 = ‘strongly disagree’ to 6 = ‘strongly agree’. A subset of items from Lynn, Naughton and VanderVeen’s (2009) 15-item scale was used. Religiosity assesses the integration of an individual’s religious faith at work. More particularly, this study selected seven items by three content experts and deemed them to represent the meaning and motivations linked with coping, calling and meaningfulness as divine calls. Seven out of 15 items were selected, and three items were further removed due to low reliability. These items included: 1) ‘I view my work as a mission from Allah’; 2) ‘I sense Allah’s presence while I work’; and 3) ‘I see my work as a partnership with Allah’. The seven items were averaged to create a mean religious calling, coping and meaning scale. The reliability of the seven-item scale was reported as a = 0.84, while previously Lynn, Naughton and VanderVeen (2009, 2011) reported it as a = 0.77 and 0.75. The other items differed conceptually and were related to interactions with co-workers in the religiosity scale. Thus, we did not include these items in our scale. These items included the following: ‘I view my co-workers as made in the image of God’; ‘I sacrificially love the people I work with’; and ‘My co-workers know I am a person of faith’. Control variables Control variables were selected and examined statistically based on theoretical support from previous literature (Becker 2005; Bernerth and Aguinis 2016). To determine the effect of demographic variables on the employee performance Time 2 (i.e. dependent variable), we controlled for characteristics such as age in years, gender, employee–manager’s Ó 2022 Australian Human Resources Institute (AHRI). 9 Asia Pacific Journal of Human Resources tenure. Whereas, to control for employee performance Time 1, we followed the procedure mentioned in the study (Wright et al. 2005) who controlled for the performance ratings at Time 1 in a similar manner. In the studies of Ng and Feldman (2009, 2010) and (Guan and Frenkel 2018) they also controlled for employee performance ratings to rule out the effect of manager’s unique rating style. RESULTS Testing the measurement model A confirmatory factor analysis (CFA) was conducted using AMOS 23.0 to evaluate the variables’ distinctiveness for testing the measurement model. The model for this study consists of items for the four latent variables (i.e. PAQ, religiosity, perceived HR strength and employee performance). Table 1 shows that the four-factor model (v2/df = 2.54, CFI = 0.94, TLI = 0.92, RMSEA = 0.047) fits the data best. Moreover, the four-factor model demonstrated better results than the three other alternative models. Thus, the distinctiveness of the variables in this study was demonstrated. Table 2 shows the reliability and correlations among all variables of the study. As seen in Table 2, PAQ (r = 0.22, p < 0.05), perceived HR strength (r = 0.24, p < 0.01), and religiosity (r = 0.08, p < 0.01) were positively related to employee performance. Religiosity was positively related with employee performance (r = 0.09, p < 0.01). Hypothesis testing For testing the hypotheses of this study, hierarchical regression analysis was performed by using STATA 14.0. In model 1, employee performance was regressed on all control variables to the empty model. Employee’s age was positively related to employee performance (b = 0.39, p < 0.05). At the same time, gender and manager tenure were not significantly related to employee performance. Next, the main effect of PAQ in model 2 of Table 3 was added to test hypothesis 1. In hypothesis 1, we hypothesized that PAQ is positively related to employee performance. The findings presented in Table 3 illustrate a significantly positive relationship between PAQ and employee performance (b = 0.13, p < 0.01). Hence hypothesis 1 was supported. Before testing the study’s second hypothesis, we mean-centred the variables’ PAQ and perceived HR strength before computing the interaction terms to reduce multicollinearity issues (Aiken and West 1991). In hypothesis 2, we hypothesized that perceived HR strength moderates the relationship between PAQ and employee performance. For testing the moderation hypothesis, the main effect of perceived HR strength and its interaction (HRS * PAQ) were added to model 2 (for results, see model 3). Findings show that perceived HR strength (b = 0.24, p < 0.01, model 2) was positively related to employee performance after controlling for gender, age and experience. Moreover, a significant twoway interaction moderation effect (b = 0.11, p < 0.05, model 3) was reported, supporting hypothesis 2. Model 3 of Table 3 showed that the association between PAQ and employee 10 Ó 2022 Australian Human Resources Institute (AHRI). Sumbal Babar et al. Table 1 Results of confirmatory factor analyses Model Variables v2/df IFI TLI CFI RMSEA One-factor model Two-factor model Three-factor model Four-factor model EP + PAQ + REL + HRS EP; PAQ + REL + HRS EP; PAQ; REL + HRS EP; PAQ; REL; HRS 4.98 3.55 2.34 1.09 .743 .801 .833 .930 .721 .787 .874 .925 .734 .800 .882 .930 .089 .079 .061 .047 Baseline model n = 391. TLI = Tucker-Lewis’s index; IFI = incremental fit index; CFI = comparative fit index; PAQ = performance appraisal quality; HRS = human resource strength; REL = religiosity; EP = employee performance. performance was significant when perceived HR strength was distinctive, consistent and consensual. Thus, hypothesis 2 was supported. The graph of this interaction is plotted in Figure 2. The findings of the interaction graph indicated a positive relationship between PAQ and employee performance for both high and low perceived HR strength. The positive slope was stronger for high HR strength (b = 0.48, p < 0.05) than for low HR strength, as presented in Figure 2. In hypothesis 3, we hypothesized a three-way interactive relationship between PAQ, perceived HR strength and religiosity with employee performance. The findings presented in model 5 of Table 3 show that the three-way interactive relationship was significant with employee performance but in the opposite direction after considering all main effects and two-way interactions added in model 4 (see model 5 for results, b = 0.40, p < 0.05). Figure 3 plots the three-way interactive association. Therefore, hypothesis 3 was not supported. Results showed that religiosity does not directly impact employee performance. Rather, religiosity and perceived HR strength function as boundary conditions in buffering employee performance. Figure 3 illustrates that the effects of perceived HR strength and religiosity likely compensate for each other. It shows the low perceived HR strength/high religiosity and high perceived HR strength /low religiosity combinations have a positive effect (b = 0.48, p < 0.05). When perceived HR strength is high, religiosity is less important and vice versa for the relationship between PAQ and employee performance. For plotting the significant interactions graphically, simple slopes analyses were conducted by using values of 1 SD (standard deviation) below the mean and 1 SD above the mean of both the moderators (Zhong, Wayne and Liden 2016; Aiken and West 1991). Therefore, these results (b = 0.48, p < 0.05) show a compensation perspective since the PAQ influences the performance of employees with lower religiosity whose perceptions about HR strength are high (or the other way around). In comparison, the combinations of high/high (b = 0.18, ns) and low/low (b = 0.12, ns) do not strengthen the relationship between PAQ and employee performance. Ó 2022 Australian Human Resources Institute (AHRI). 11 12 Performance appraisal quality Religiosity Perceived HR strength Employee performance (T2) Employee performance (T1) Manager tenure Gender manager Gender employee Age of manager Age of employee 3.08 2.57 3.18 2.87 2.72 4.84 1.46 1.54 38.9 37.2 Mean .71 .57 .78 .89 .81 3.0 0.4 0.4 7.8 8.7 SD (.88) .288* .475** .179** .145** .008 .066 .027 .090 .074 1. (.83) .161** .198* .086* .068 .004 .016 .10* .10 2. (.92) .233** .212** .020 .019 .028 .011 .003 3. (.94) .231* .114* .106* .020 .003 .110 4. (.91) .052 .195** .049 .031 .112 5. .041 .008 .002 .09 .06 6. .025 .014 .63** .014 7. .022 .16* .213 8. N = 61 managers and 391 employees; Significance at: *p < 0.05; **p < 0.01. Values in parentheses in diagonal are reliabilities. Gender: 1 = female, 2 = male, PAQ = performance appraisal quality, REL = religiosity. 1 2 3 4 5 6 7 8 9 10 Variable Table 2 Descriptive statistics and correlations for the study variables .121 .132 9. .014 10. Asia Pacific Journal of Human Resources Ó 2022 Australian Human Resources Institute (AHRI). Sumbal Babar et al. Table 3 Regression results of employees’ performance Variables Employee performance Time 2 Model 1 Model 2 Model 3 Model 4 Model 5 .011 (.118) .396* (.236) .088 (.371) .112* (.071) .132* (.071) .269*** (.0823) .259 (0.172) .0365 (.113) .399* (.227) .148 (.358) .118* (.079) .504** (.218) .244*** (.173) .324 (0.162) .0523 (.113) .414* (.227) .099 (.358) .123* (.081) .563 (.347) .246*** (.173) .401* (1.696) .0541 (.114) .393* (.228) .108 (.359) .117* (.068) .492*** (.711) .274*** (.173) .403** (1.619) .0650 (.113) .387* (.227) .061 (.358) .111* (.070) .117* (.064) .114* (.065) .057* (.191) .126* (.065) .151** (.545) .893 (.972) 391 .302 .167 440.4 4.041 .416** (.188) .852 (.967) 391 .312 .176 437.7 4.135 Main effects PAQ (H1) Perceived HR strength Religiosity Gender of employee; 1 if male Age of employee Manager tenure Employee performance Time 1 Two-way interaction PAQ 9 HRS (H2) PAQ 9 religiosity Three-way interaction PAQ 9 religiosity 9 HRS (H3) Constant Observation R2 Adjusted R2 Log-likelihood F-statistics of model fit 1.193 (.986) 391 .231 .0988 459.4 9.070 1.015 (.956) 391 .293 .164 443 5.328 .794 (.961) 391 .300 .170 441 5.066 ***p < 0.01, **p < 0.05, *p < 0.1 (standard errors are in parentheses). PAQ = Performance appraisal quality; HRS = human resource strength; REL = religiosity; EP = employee performance. Discussion This study provides several implications for organizations that face challenges to improve employee performance. The findings of this study suggested that PAQ (HR content) and perceived HR strength (HR process) positively impact employee performance. PAQ with high clarity, openness and regularity, along with the moderating influence of HR strength Ó 2022 Australian Human Resources Institute (AHRI). 13 Asia Pacific Journal of Human Resources Low PERCEIVED HR STRENGTH High PERCEIVED HR STRENGTH EMPLOYEE PERFORMANCE 5 4.5 4 3.5 3 2.5 2 1.5 1 LOW PERFORMANCE APPRAISAL QUALITY HIGH PERFORMANCE APPRAISAL QUALITY Figure 2 Employee performance as a function of performance appraisal quality and perceived HR strength 5 EMPLOYEE PERFORMANCE 4.5 4 (1) High PERCEIVED HR STRENGTH, High RELIGIOSITY 3.5 (2) High PERCEIVED HR STRENGTH, Low RELIGIOSITY 3 (3) Low PERCEIVED HR STRENGTH, High RELIGIOSITY 2.5 (4) Low PERCEIVED HR STRENGTH, Low RELIGIOSITY 2 1.5 1 LOW PERFORMANCE APPRAISAL QUALITY HIGH PERFORMANCE APPRAISAL QUALITY Figure 3 Employee performance as a function of performance appraisal quality, perceived HR strength and religiosity. 14 Ó 2022 Australian Human Resources Institute (AHRI). Sumbal Babar et al. (i.e. high distinctiveness, high consistency and high consensus), appears to increase employee performance in terms of proficiency, adaptability and proactivity. These positive effects of PAQ and perceived HR strength are aligned with Kelley’s (1973) covariation principles and Bowen and Ostroff’s (2004) model. Results showed that religiosity (b = 0.32, ns, model 3) did not directly impact employee performance; rather, it was based on the combined rationale of the covariation principles of the attribution theory (Kelley 1967, 1973). Furthermore, the JD-R, religiosity and perceived HR strength function as boundary condition effects in buffering employee performance. Based on previously reported literature (e.g. Heliot et al. 2020), most of the research on religiosity has been carried out in Christian and western countries. Thus, this research aims to add to the existing literature by focusing on a specific Asian Muslim country – Pakistan. It is argued that spirituality and religiosity are considered well-known factors that can increase commitment, job satisfaction and employee performance (Bal and K€ okalan 2021; Farrukh et al. 2021; Mathew, Prashar, Ramanathan, Pandey and Parsad 2019). More specifically, people with a higher religiosity showed stronger positive attitudes such as internal motivation and meaningfulness, were found to be more satisfied and committed to their organizations (Darto, Setyadi, Riyadi and Hariyadi 2015; Ghazzawi, Smith and Cao 2016), and showed higher performance (Behere, Das, Yadav and Behere 2013; Hassan, Bin Nadeem and Akhter 2016). Thus, it is contended that religious teachings and values make employees understand the importance of the job meaningfully. Therefore, our study contributes to the extant literature on religiosity in Pakistan, as this topic is still not covered fully. Interestingly, a positive relationship between religiosity, work and performance was expected in Lynn’s (2009) seminal paper (Walker 2013). However, the results were insignificant, and Lynn’s and Walker’s observations were not supported. Therefore, integrating work and religiosity showed lower rather than higher levels of self-reported performance. Another explanation is that in a society where religiosity appears very important, highly religious employees may expect more favorable performance ratings (i.e. as opposed to their actual performance) from their managers (Riaz, Townsend and Woods 2020). It is thus argued that employees’ personal resources (i.e. being religious) adversely impact their performance; instead of considering their work as meaningful and becoming more motivated, employees may start expecting favors, which might change religiousness into a weakness rather than a strength in the context of an Islamic community. It also illustrates a three-way interactive relationship that shows a logical and systematic results through a compensation effect. By examining the results of the three-way interaction, the low/high and high/low combinations were found to have a positive effect, such that the effects appeared to compensate for each other; when perceived HR strength was high, religiosity was less important and vice versa. Therefore, the results of this study are explained from a compensation perspective as follows: appraisal quality influences the performance of less religious employees compared to higher religious employees whose perceptions about HR strength are higher. Ó 2022 Australian Human Resources Institute (AHRI). 15 Asia Pacific Journal of Human Resources Theoretical implications This empirical research is unique in many ways, and it contributes to knowledge and understanding in three significant ways. First, understanding the importance of specific HR practices (i.e. PAQ) within Pakistan fills a gap in the literature on the importance to examine quality (i.e. clarity, regularity and openness) dimensions in assessing the PA of employees (Bednall, Sanders and Runhaar 2014; Sanders, Dorenbosch and de Reuver 2008). Although earlier research has focused on the direct effects of PAQ (Brown et al. 2010), we lack knowledge on the boundary condition effects of PAQ on employee outcomes. Secondly, the mechanism of how JD-R is linked with Bowen and Ostroff’s (2004) model was assessed by testing the effects of religiosity on perceived HR strength’s boundary conditions. According to the JD-R theory, an employee’s performance could be enhanced by optimizing job conditions as a crucial psychological state. Thus, this study aims to contribute to the JD-R by associating personal job resources as a crucial psychological state (i.e. psychological mechanisms, such as an employee’s personal resource of religiosity that keeps employees motivated in their work) that lead to achieving efficient job performance. In the HRM-performance link, employees’ complex psychological states should be considered while evaluating employees’ personal job resources. Thirdly, by considering religiosity as a personal resource, this study contributes to the existing literature on religion and supports Abu Bakar, Cooke and Muenjohn’s (2016) study by extending the JD-R theory into a new context: an Islamic community. This study examined personal job resources as a moderator in the relationship between PAQ and employee performance. Personal job resources have often been tested as mediating mechanisms between HR content and outcome variables, such as organizational citizenship behaviors (OCB), job commitment, job satisfaction and turnover (Gillet and Vandenberghe 2014; Piccolo and Colquitt 2006). In contrast, this study argues that personal job resources could be tested as a moderator because it is considered a situational factor in organizations that should be more dependent on formal job descriptions and, more importantly, dependent on the job’s nature (Bakker et al. 2017). There is, though, existing research supporting this presumption that job resources are regarded as an important condition of performance evaluations rather than a causal mechanism (Kraemer et al. 2008). Lastly, PA evaluations can efficiently improve job performance when religiosity (as a source of motivation and meaningfulness in work) is deficient in the fewer job resources. This study extends the findings of previous studies (Abu Bakar, Cooke and Muenjohn 2016) regarding how personal job resources – in this case, religiosity – alter the individual meaningfulness of work and job performance in the Islamic community. Practical implications The findings support the signaling perspective of the HRM system, which might help managers ensure a consistent, distinctive and consensus-driven message at work to improve employee performance. HR practitioners should consider non-work-related 16 Ó 2022 Australian Human Resources Institute (AHRI). Sumbal Babar et al. factors such as the personal resources of employees when conveying HR signals and designing HR systems. HR strength appears to play a more significant role in stimulating proactive behavior and positive employee reactions. The study also raises organizational awareness about multi-cultural organizations in which religiosity might not be considered an integral part of HRM, although it could have a positive impact on performance (Fernet et al. 2015; Lysova et al. 2019). Therefore, religiosity could play a role in a country like Pakistan when it is considered an employee’s resource and positively impacts their behavior. Unfortunately, the expression of religiosity is deliberately suppressed in most countries. Open expression of employees’ religiosity might result in positive work outcomes (Walker, Smither and DeBode 2012). Given the growing research, employees’ religious beliefs could positively impact their motivation and performance in the workplace (Hassan et al. 2016; Osman-Gani, Hashim and Ismail 2013). So, given the high religiosity within Pakistan, perceived HR strength is considered less important. Consequently, organizations must consider the personal resources of employees to make them work efficiently. This research also highlights how individual capacity motivates for greater organizational good and effectively promotes an individual’s in-role performance (Han and Oh 2020). Modern societies have become materially abundant, and people tend to be interested in working for organizations that supply services with ‘meaning’ and ‘motivation’. Thus, organizations must pay more attention to employees’ religiousness to distinguish themselves in the workplace by providing employees with self-worth and meaning to work (Moon et al. 2018; Shachar et al. 2011). Managers should pay particular attention to the importance of personal factors (e.g. religiosity) in enhancing individuals’ performance. Therefore, PA evaluation should not be the only reason for employees to work harder. Based on the moderating role of religiosity, which is a source of perceived meaningfulness, between PAQ and employee performance, meaningfulness is expected to provide instant motivation that enhances performance. Thus, organizations might consider religiosity an important factor that affects meaningfulness at work and a crucial indicator to ensure performance evaluations, which clarify the perceived HR strength and positively impacts employee performance. Limitations and future research directions This research collected data in two waves using a time-lagged design with a 1-month interval gap to strengthen the research design. However, several limitations should be addressed and should serve to guide future researchers. First, this study exclusively focused on individual-level perceptions of employees and managers and organizationlevel variables were not included. Thus, future research should also consider unit and organizational levels. Second, although the impact of a personal resource, imprinting factor (as a non-work-domain) on the effect of HR strength was examined in the Pakistani context, the impact of other core variables with traditional Pakistani imprinting factors were not studied. For instance, spirituality as a personal resource and family structures as an imprinting factor might influence the relationships analyzed in this study. In the Ó 2022 Australian Human Resources Institute (AHRI). 17 Asia Pacific Journal of Human Resources future, researchers may investigate the impact of different variables in demonstrating the uniqueness of the Pakistani context and culture. Third, the three-way interactive effect could not be replicated with another data set due to time limitations. Future researchers could replicate the model for further generalizability of results. Fourth, the Islamic notion of ‘religiosity’ is only generalizable to the Islamic community. Hence, the results of this study are not expected to be generalizable to non-religious countries (please see Birnbaum, Farh, and Wong 1986; DeVaro, Li and Brookshire 2007). Lastly, we highlight that most studies adopt quantitative designs and methods to investigate religious impact on an individual’s values and behavior (e.g. Abu Bakar, Cooke and Muenjohn 2016; Lynn, Naughton and VanderVeen 2011; Parboteeah, Paik and Cullen 2009; Osman-Gani, Hashim and Ismail 2013). Thus, future researchers are encouraged to explore the influence of religiosity qualitatively in Pakistan and other Muslim Asian countries from an HRM perspective. Conclusion This study evaluates a personal job resource – religiosity – and how this factor may enhance the three-way interactive effect between PAQ, perceived HR strength and religiosity on employee performance. It contributes to and supports Bowen and Ostroff’s (2004) framework explaining the interplay between PAQ, perceived HR strength and religiosity on employee performance. It contributes to the existing literature by factoring in the HR strength, which provides unambiguousness in employees’ perceptions of PAQ when employees clearly interpret what is expected from them. The findings of this research support the HRM system’s signaling perspective, which might help managers ensure distinctive, consistent and consensus-driven messages at work to improve work performance. Thus, better support could be provided to the employees by the organization through a greater understanding of what motivates religious employees at work in getting clear instructions about HR practices. Funding This research does not receive any funding from any organization. Author contributions All the authors and co-authors contribute collectively to the research design and implementation. The author(s) read and approved the final manuscript. Data availability statement The datasets used during this research are available from the corresponding author on reasonable request. 18 Ó 2022 Australian Human Resources Institute (AHRI). Sumbal Babar et al. Sumbal Babar is a PhD candidate in Business Administration at the NUST Business School, National University of Sciences and Technology. Her research focuses on the HR process approach, in particular the impact of employees’ perceptions, understanding and attributions of HR on their behaviors. Asfia Obaid is an Associate Professor in Management and Head of Department of Management and Human Resource at NUST Business School, National University of Sciences and Technology, Islamabad, Pakistan. She received her PhD in Business Administration from Manchester Business School, University of Manchester, UK. She has made contributions to knowledge through various avenues that include delivering training sessions, consulting with organizations on industry-specific problems, publishing of research articles, conducting research grant projects. Her core areas of interest include Strategic HR, Compensation and Performance Management. Karin Sanders (PhD) is a Professor of Human Resource Management (HRM) and Organizational Behavior at UNSW Business School, UNSW Sydney, Australia. Her work has been published in journals such as Human Resource Management, Human Resource Management Journal, Journal of Vocational Behavior, Academy of Management Learning & Education, Organization Studies and Organization Science. Her research activities focus on the antecedents and consequences of employees’ understanding and attribution of HRM. Hussain Tariq is an Assistant Professor of Management at KFUPM Business School, and a member of Interdisciplinary Research Center for Finance and Digital Economy (IRC-FDE), King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia. He worked as an Assistant Professor of Management at NUST Business School, National University of Sciences and Technology, Pakistan, and also completed his post doc from the University of Science and Technology of China, China. He received his PhD in organizational behavior and human resource management from the School of Management, University of Science & Technology of China. He has published his work in Applied Psychology, Personnel Review, Employee Relations, Journal of Knowledge Management, Business Ethics, Journal of Service and Practice amongst others. His current research focuses on the root of destructive leader behaviors, structures and practices that enhance teamwork and collective motivations in organizations. 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