PurposeThe present study aims to show the role of performance appraisal in the motivating and compensating of academic staff. The goal of the paper is achieved through comparing performance appraisal and compensation policies and systems in the University of Tartu. One of the aims is also to find out the level of satisfaction of the academic staff with the appraisal and compensation systems in two faculties of the University of Tartu.Design/methodology/approachResearch was carried out on the academic staff at the faculty of Economics and Business Administration (hereafter FEBA) and the Faculty of Education (hereafter FE) at Tartu University. It is based on the analysis of quantitative and qualitative research methods. The author carried out document analysis and two original and anonymous questionnaires. In order to achieve this aim, 125 lecturers were questioned, from whom 52 percent returned their filled in questionnaires. In addition to that, qualitative data from five semi‐structured interviews with senior management and lecturers, incorporating individual interviews were analyzed.FindingsFirstly, results showed that the performance appraisal and compensation system (pay‐for‐performance system) has guaranteed a highly motivated core of staff. Secondly, teaching loads and research activities of the academic staff have increased over the years. Faculties need to establish performance appraisal and compensation systems in order to show clearly defined causality between compensation and performance of academic staff. A good and well functioning performance appraisal system would help the educators to make their mark in the organizational setting of their faculty.Research limitations/implicationsIn addition to suggestions for improvement, limitations of the results will be addressed. The survey was carried out in two faculties at the University of Tartu. Unfortunately, the survey yielded only 65 usable responses, thus it could be claimed that the dataset is too small for making any conclusive generalizations. However, when taking into consideration that the survey was anonymous, the author believes that a 52 per cent response rate can be considered a very good result. Another limitation involves the dynamic nature of appraisal systems. Since, the appraisal procedures are still being developed, the systems described might now be out of date.Originality/valueThe present paper is valuable as it is the first one to examine the role of performance appraisal and compensation (pay‐for‐performance) systems in Estonian and Baltic Universities.

The aim of the research is to identify options for developing performance management (PM) of the academic staff (AS) based on the example of Estonian universities (economics faculties). We want to find out more about PA and its interaction with other elements of performance-the effectiveness of teaching and research are studied. The analysis includes a review on how the PM system has developed over time, ascertaining special features with respect to the economic crisis. Methods included three questionnairebased surveys of AS carried out in 2013, interviews with nine academic leaders and seven focus group interviews were conducted. Qualitative methods involved the analysis of documentation universities, interviews and participatory observations within a case study. A detailed PA system enables the AS to achieve higher results specifically during periods of restructuring and change at universities, but causes a negative impact for quality and motivation of AS in times of crisis. During the stage of further development of the faculties, it would be necessary to pay more attention to qualitative indicators and reduce the number of quantitative indicators. It is necessary to develop the PM to be applied in conjunction with other management instruments (qualitative management, personnel management).

PurposeThe purpose of this paper is to identify how the design of a performance appraisal system (PAS) affects the perceived justice of academic employees (AE) about their performance appraisal (PA) and how this is associated with organizational effectiveness in terms of organizational leadership (OL).Design/methodology/approachThe study subjects are two economic faculties of two Estonian public universities. The data for the study were collected using the PA Survey with a total of 82 AEs, OL Capability Questionnaire with a total of 72 AEs and the organizations' documents to analyze PAS. Assessment and analysis of the data included: the measurement of PAS design; the measurement of perceived justice from PA; the measurement of organizational leadership capability; analysis of the results gained from studying perceived justice from different PAS designs and organizational effectiveness in terms of OL.FindingsUltimately, the study reveals that PAS design affects academic employees' perception of distributive justice and organizational external effectiveness in terms of OL but does not affect academic employees' perception of procedural justice and organizational internal effectiveness in terms of OL.Research limitations/implicationsThis study suggests that organizational effectiveness depends on perceived justice of employees from the design of PAS. However, the results of this study are valid in the arrangements of academic jobs in universities and in similar or close context of Estonian culture.Originality/valueThis paper demonstrates the role of PAS design in conditions of intellectual job arrangement in universities with its influence on organizational effectiveness in the context of OL.

PurposeVirtual work presents new challenges for managers compared to using ordinary, face‐to‐face work practices. The purpose of this paper is to show how different virtual work types are related to different challenges that require different managerial and co‐operation approaches.Design/methodology/approachEmpirical data were gathered during a period of two years using a questionnaire (3,156 respondents from 323 companies representing different Estonian service sector branches) and interviewing.FindingsThe paper concludes that a higher level of work virtuality leads to a lower level of work satisfaction, mainly due to inappropriate management techniques and problems related to information and communication technology‐mediated communication.Research limitations/implicationsThe sample consists of only service sector organizations, limiting generalization of the results to the practice of manufacturing companies.Practical implicationsThe results will help managers of service organizations to prepare and choose appropriate management techniques for working with virtual workforce.Originality/valueThe paper shows that service sector organizations operate with different degrees of virtuality that lead to different challenges and consequently require different management techniques.

Purpose -The purpose of this paper is to analyze the relationship between Thomas-Kilmann's Conflict Management Modes (CMM) and Fiedler's Leadership Style (LS) measures, both in the data, and from the theoretical perspective. Based on the conceptual similarities, the authors first propose the existence of a relationship between Thomas-Kilmann's CMM and Fiedler's LS measures, then establish the presence of the relationship, based on a dataset of Estonian managers. Design/methodology/approach -The authors use a unique dataset of 343 leaders and specialists from different Estonian organizations, on both Thomas-Kilmann's CMM and Fiedler's Least Preferred Co-worker test. The data were analyzed by multivariate methods. Findings -The results indicate that leaders who are task-oriented, according to Fiedler's model, tend to use more competing as the dominant CMM, while relationship-oriented leaders are more accommodating. The authors also analyze the effect of individual characteristics, finding that younger managers are more task-oriented while older ones are typically relationship-oriented and conflict avoiding; women are more collaborative and less conflict avoiding, and men tend to use the accommodating mode more than women. Surprisingly, women tend to be more competitive. Originality/value -This is the first study to establish a relationship between Fiedler's Leadership Style and Thomas-Kilmann's Conflict Mode Instrument. This relationship can potentially be used for assessing the reliability and validity of measurements. The particular shape of it may be used to analyze the links between conflicts, relationships and assertiveness. Additionally, the paper provides an empirical analysis of conflict management habits and leadership styles of Estonian managers.