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Using a contingency model of the effectiveness of performance appraisal interviews as a framework, examines the extent to which employee job performance and employee relations with their superior moderate the impact of goal setting in the interviews on the important outcomes: employees′ reactions to the interview and their degree of work motivation among 135 non‐managerial employees in a medium‐sized manufacturing company. Hierarchical regression analysis indicated that the impact of goal setting was stronger among poor performers than among good performers, and among employees who had good relations with their superiors than among those whose relations were relatively poor. Advances reasons for these and suggests implications for improving appraisals.

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