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Background: It is evident from Western literature that performance appraisal (PA) results in innovation. However, evidence of empirical research on the different models on the PA-innovation link is seemingly lacking within the South African environment. The South African context may be unique, given the legislative framework within which PA is administered.Aim: To provide clarity on the specific PA-innovation models within the South African context.Setting: The PA-innovation relationship is contextualised within the South African context, across more than 50 organisations and more than 3000 randomly selected employees.Methods: A quantitative research approach was adopted, using a cross-sectional survey design as the study involved 3180 employees from 53 organisations. Seven variables were included in the model, namely PA, individual innovative behaviour (IIB), proactive personality (PP), transformational leadership (TL), corporate entrepreneurship (CE), work engagement (WE) and affective commitment (AC).Results: The results reveal that PA directly influences innovation. The PA-innovation relationship is mediated by WE and AC, with WE having the most significant effect. Furthermore, TL and CE moderate the PA-innovation relationship, with TL having the strongest effect and CE having almost no effect. Additionally, PP does not moderate the PAinnovation relationship. Managing employees with TL practices and instilling WE may be at the root of innovation in organisations.Conclusion: The research contributes to the body of knowledge on the PA-innovation link, and the outcomes of this study are expected to be of value to all stakeholders and may assist managers to appropriately assign resources to particular organisational variables, thereby enhancing innovation within organisations. This evidence-based information would help managers to increase innovative behaviour, performance, competitive advantage, organisational success, growth and organisational survival.

The significance of performance appraisal for innovation, in selected South African organisations