ST ANTONY’S COLLEGE PERUVANTHANAM

EFFECT OF PERFORMANCE APPRAISAL ON EMPLOYEE

PERFORMANCE

REVIEW OF LITERATURE
 REVIEW OF LITERATURE
1. (Ayomikun Idowu, 2017)This study sought to investigate effectiveness of performance
appraisal systems and its effect on employee motivation. The study‘s main objectives
pertained to establishing the moderating role of performance appraisal as a motivation
tool as well as potential challenges. The study findings show the presence of significant
positive outcomes when the organization uses performance appraisal as a motivation
tool. Further, the study finds that the use of more than one appraisal techniques helps
yield greater satisfaction and consequently higher motivational levels.

2. (Liza Estino Daoanis, 2012)Performance appraisal is a vital tool to measure the

frameworks set by any organization to its employees. It is utilized to track individual
contribution and performance against organizational goals and to identify individual
strengths and opportunities for future improvements and assessed whether
organizational goals are achieved or serves as basis for the company’s future planning
and development. This study examined the status of the performance appraisal system
of Mass Construction Company and its implication to employee’s performance. The
respondents of this study were tenured employees. The purposive sampling technique
was used in the selection of respondents. Quantitative and qualitative method of
research was utilized in the gathering of data. Interviews, focus group discussion and
survey questionnaires were the main instrument used in this study.

3. (Osabiya Babatunde Joseph, 2014)The study is an evaluation of effectiveness of

performance appraisal as a tool to measure employee productivity in organizations. The
study revealed that employees are usually appraised by their immediate supervisors. As
regards the frequency promotion in the organization, both the managers and officers
asserted that there was a valid, laid down pattern for promotion and that this was at the
management discretion. Often, managers allow biasing factors like rate, sex, tribe
appearance and personal likeness or hatred to influence their rating. Unless the ratings
are based on actual job performances, the evaluation will continue to be devoid of the
objective that is often required in a fair performance appraisal system.

4. (Rosa Cintrón, 2014)Although there is substantial literature on the use of performance

appraisal in the for-profit sector, there is little literature available concerning the
appraisal of staff positions in American higher education. This study provides a detailed
look in a population of 108 colleges and universities. Dissatisfaction was found with the
appraisal process due to (a) lack of leadership support, (b) supervisors not being held
accountable for the timely completion of appraisals, and (c) the lack of training provided
supervisors for doing performance appraisals well.

5. (Imtiaz Ahmed, 2013)Managers encounter many decisions that require the simultaneous
use of different types of data in their decision‐making process. A critical decision area for
managers is the performance evaluation of personnel, whether individually or as a
member of a team. Performance evaluation is critically essential for the effective

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 management of the human resource of an organization and evaluation of staff that help
develop individuals, improve organizational performance, and feed into business
planning.

6. (Muhammad Faseeh ullah khan, 2013)In many organizations, reward decisions depend
on subjective performance evaluations. However, evaluating an employee's
performance is often difficult. In this paper, we develop a model in which the employee
is uncertain about his own performance and about the manager's ability to assess him.
The manager gives an employee a performance appraisal with a view of affecting the
employee's self perception, and the employee's perception of the manager's ability to
assess performance. In this study how performance appraisals affect the employee's
future performance. The predictions of this model are consistent with various empirical
findings. These comprise (i) the observation that managers tend to give positive
appraisals, (ii) the finding that on average positive appraisals motivate more than
negative appraisals, and (iii) the observation that the effects of appraisals depend on the
employee's perception of the manager's ability to assess performance accurately.

7. (OKEKE M. N., 2019)The study examined the effect of performance management on

employee productivity using selected large organizations in South East, Nigeria.
Specifically the study examined the extent to which 360 degree feedback appraisal,
performance evaluation, and self-assessment and performance review influence
employee productivity. Relevant theoretical and empirical literatures were reviewed.
The study was anchored on Equity Theory. Descriptive survey research design was
adopted in this study. The population of the study was 2081 and the sample size was
366 using Taro-Yamane’s formula. Simple percentages, descriptive statistics, and
Multiple Regression Analysis (MRA) were used in testing the hypotheses. Findings
from the analysis showed that 360 degree feedback appraisal had a significant
influence on employee productivity, performance evaluation had a significant effect
on employee productivity, Self-assessment had no significant influence on employee
productivity and performance review had a significant effect on employee
productivity. Based on the findings, the study concluded that performance
management has significant effect on employee productivity in the Nigeria banking
industry.

8. (Akinbowale, 2014)Performance appraisal policy has been viewed by organizations and

human resources practitioners as an effective tool for human resources management.
However, effective performance appraisal policy remains a practical challenge to
managers and employees because of cognitive, motivational and behavioral factors.
There are various methods of performance appraisal. In fact, each organization may
have its own unique policy and method of appraisal. In one organization, it may be
continuing and informal where personal opinion of a superior about his/her
subordinates may be the basis of appraisal. In another, it may be well-defined and a
particular policy and approach may be followed by all managers. Usually the method of
performance appraisal dictates the time and effort spent by both supervisors and
employees and determines which areas of performance are emphasized. Ideally, a
performance appraisal policy should be objective, accurate and easy to perform.

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9. (Farzad Fakhimi, 2013)The aim of conducting the present study is investigating the
relationship between satisfaction with performance appraisal and some behavioral
indices (work performance, affective attachment to the organization, motivation
improvement and willingness to quit job) of employees in Bank Refah. This study is of
applied type which has been conducted with descriptive-survey method. The data in this
study have been collected from 269 employees in the headquarters offices of Bank
Refah and data collection has been done using correlation and regression method and
by SPSS software. The results indicate that satisfaction with performance appraisal is
regarded as an important index in improving the effectiveness of this function of
management and it will have outcomes such as motivation improvement, reduction in
willingness to quit job, increasing affective commitment of employees and improvement
in work performance.

10. (Raghunathan & Sastry, 2018)The organizations can however control how employees
perform their jobs. In addition, performance management research shows that a
significant number of employees tend to have the desire to perform their jobs well as
part of their individual goals as well as a demonstration of loyalty towards the
organization. By adopting latest research objectives, pertained to establishing the
moderating role of performance appraisal as a motivation tool as well as potential
challenges and findings show the presence of significant positive outcomes when the
organization uses performance appraisal as a motivation tool. Further, which the study
finds that the use of more than one appraisal techniques helps yield greater satisfaction
and consequently to higher motivational levels. The Researcher in this study relates to
the assessment of the relationship between employee performance evaluations to
assess the moderate role of motivation.

11. (Javidmehr Mahmoud, 2015)Individual performance evaluation (PE) provides a link

between individual performance and organizational performance. PE is of considerable
importance in human resource management (HRM). Lack of evaluation in various
organizational dimensions, such as evaluation of resources and facilities, employees, and
organizational goals and strategies is considered a serious disadvantage of organizations.
Moreover, lack of evaluation in a system is regarded as lack of communication with
internal and external environments which leads to organizational senility and,
ultimately, death. In this paper a meta-analysis is used to review literature from various
sources available on performance appraisal and influences of bias and errors in
evaluation in Sabzevar. The results showed that PE system can result in improvement of
the performance of both employees and organizations. Decrease in errors and bias can
bring about employee performance improvement as well as an increase in satisfaction
with and efficiency of evaluation system.

12. (Lalita Mishra, 2013)The research study is based upon the employee appraisal system in
Hong Kong and shanghais Banking Corporation which is formerly known as HSBC Bank.
The industry which is considered for this research study is financial services industry
which is important to know in the present scenario of developed and developing
nations. HSBC is a very big corporation which is one of the best financial service
providers across the world Hong Kong and shanghais Banking Corporation is basically

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 working on a large scale and they always support their internal employees in every sense
of the organization. The major factor of growth of the company is the employee
satisfaction and therefore, this research study is being conducted for the similar reason
of employee appraisal system. The aspect of human resources is the most important and
vital part of banking and service sector. The well efficient work force is needed in the
industry so as to grow in the competitive world.

13. (A Selvarasu, 2014)The Performance appraisal is one of the most important human
resource management practices as it yields critical decisions integral to various human
resource actions and outcomes. The purpose of this paper is to explore the relationship
between perceptions of performance appraisal fairness and employee engagement in
the business organization context. The survey found that many companies find it
challenging to measure engagement and tie its impact to financial results: fewer than 50
percent of companies said that they are effectively measuring employee engagement
against business performance metrics like customer satisfaction or increased market
share. A significant gap appeared between the views of executive managers and middle
managers in this area. Top executives seemed much more optimistic about the levels of
employee engagement in their companies, making them seem out of touch with middle
management’s sense of their front line workers’ engagement.

14. (Shahzileh & Aghajan, 2015)Every organization for its survival and growth requires
committed and qualified employees. Managers for the decisions such as the promotion,
salary increase, appointment, fire, and replacement require evaluating the
performances of their employees. With the assist of an appropriate performance
appraisal system, companies will be able to overcome the problems related to
employees' weak performances and can prepare plans for their performance
improvement. In this paper based on the prior researches and studies, first the
performance appraisal system, its objectives, content and process will be reviewed and
then, the most recognized methods of performance appraisal and the effectiveness of
performance appraisal system will be explained. And finally the performance appraisal
system of an Iranian company will be examined and some improvement
recommendations will be suggested.

15. (Asad khan, 2018)The purpose of this research is to investigate the relationship of
performance appraisal and fairness of performance appraisal with employee job
performance to get empirical findings of such relationship in higher education
institutions of Pakistan. This study is comprised of a survey based questionnaire. The
data was collected from 150 respondents of public sector universities of Khyber
Pakhtunkhwa via self-administered questionnaire. A sum of 300 questionnaires was
distributed among the faculty members of the public sector universities of Khyber
Pakhtunkhwa, Pakistan out of which 150 were returned back so the response rate is
50%. Results of this study showed that there was significant and positive relationship
between performance appraisal, fairness and employee job performance in public sector
universities of Khyber Pakhtunkhwa, Pakistan.

16. ( Patrick Kampkötter, 2016)The research in this article is focused on formal performance
appraisals (PA), one of the most important human resource management practices in

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 firms. In detail, the study analyzes the effect of PAs on employees’ overall job
satisfaction. This study able to differentiate between appraisals that are linked to
monetary outcomes, such as bonus payments and promotions, and appraisals that have
no monetary consequences. Building on a representative, longitudinal sample of around
10,500 German employees, this apply fixed effects regressions that allow us to more
closely estimate the causal effect of appraisals on job satisfaction compared to previous
cross-sectional studies. Find a significantly positive effect of PAs on job satisfaction,
which is primarily driven by appraisals linked to monetary outcomes. The results
demonstrate that PAs linked to monetary outcomes are a powerful HR management
tool that is appreciated by employees.

17. (Mark Cook , 1995)Argues that the conventional validation paradigm, which uses
subjective performance or appraisal ratings as criteria, may be of doubtful validity.
Discusses research into performance appraisal which documents four sets of problems
which may reduce the usefulness of performance ratings as criteria. These problems
include biases, politicking, impression management and undeserved reputation.
Describes the inaccuracies to which these problems give rise and concludes that instead
of selecting the right people for management, selection methods validated against
appraisal will simply perpetuate an unsatisfactory status quo.

18. (Banner & Graber, 1985)The improvement of performance appraisal systems is a matter
of sharing a social definition of performance appraisal that is congruent with the original
intent decided by the organization. The management development professional can aid
the process by being educated about appraisal systems, analyzing the potential benefits
to the organization, and accepting that all appraisers need training. To help performance
appraisal reach its fullest potential, management development professionals need to be
political strategists, appraisal system experts, trainers, salespeople and catalysts, in
combination.

19. (Joyce Emma , 2015)The study was conducted to investigate staff’s perception on the
effectiveness of the annual assessment system and examine the motivation status of
staff after assessment. Convenience sampling technique was used to select some senior
members and senior staff who were drawn from the various administrative departments
within the University. The Statistical Package for Social Sciences (SPSS) was used to help
analyze the primary data collected. The paper concludes that performance appraisal,
likewise performance management at the University Of Cape Coast, lacks policy
direction. Without the use of guiding principles for monitoring performance and
appraising staff, it is possible that many people are actually not performing and
therefore assessments at UCC suffer a variety of judgment errors and biases due to
subjective appraisals.

20. (Mathison & Vinja, 2010)The purpose of this paper is to call for relevance—a challenge
to move from theory to actual practice. Eighty-one practicing managers representing
some 23 companies were asked to both assess their ongoing annual assessment and to
evaluate a new model of assessment introduced in the present paper. The findings
suggest that in the first decade of the 21st century, considerable skepticism remains

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 over almost any model used in the performance review, and this includes skepticism
concerning the newly introduced model.

21. (RUSU, AVASILCAI, & HUȚU, 2016)Recent studies highlight the importance of employee
performance appraisal in the context of strategic human resources management,
outlining the role of organizational context. Accordingly, the paper presents an
employee performance appraisal conceptual framework including the role of contextual
factors, where strategic human resources management plays a key role. Moreover, the
model includes two sets of procedural and representative basic performance criteria, as
well as a new category of profile performance criteria as the foundation for developing
flexible, customized and meaningful employee performance appraisal systems and
processes aimed at improving individual and organizational overall performance.

22. (Dijk & Michal, 2015)Performance appraisal (PA) refers to the methods and processes
used by organizations to assess the level of performance of their employees and to
provide them with a feedback. This process can be used for both developmental and
administrative purposes. The research on PA includes examination of the psychometric
aspects of the appraisal tools, the cognitive process and the biases involved, and the
social context. Although PA is an important tool for managing employees, managers, and
workers are rarely satisfied with it. Therefore, clearly defining the purposes of the PA
and addressing the employees’ reactions are essential to the success of the PA.

23. (SUALIHU, 2014)The need for effective performance appraisal in institutions has been
emphasized in recent times. This study therefore investigated the effectiveness of
performance appraisal systems in KNUST. The study found out that the institution has in
place an appraisal system, and this was largely acknowledged by all categories of
respondents: junior and senior members. The study noted that there are key
performance criteria that have been developed and clearly identified in the appraisal
system. Findings showed that to a large extent the criteria have been developed in
consultation with workers and appraisers. Further, respondents indicated general
understanding and support from the various stakeholders on the institution’s appraisal
system. The study found out that most employees show cooperation in the appraisal
process. Again, most staff believes that feedback reflects their performance. Further,
most staff believe the appraisal system is relevant and do not consider the appraisal
process a waste of time.

24. (Shaharyar, 2014)This manuscript is an attempt of the researchers to highlight the

significance of performance appraisal in the organizations and business world. Appraisal
is one of the most significant and effective tool that can lead an organization to vanquish
their ultimate goals by improving the efficiency and effectiveness of the employees.
Performance appraisal helps managers to identify the gap between desired and actual
performance and in case of deficiency; it can be removed by imparting required training.
Fair performance evaluation and proper training motivates employees that results in
improved performance and achieve organizational competitiveness. Keywords:
Performance Appraisal, Employee Performance.

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25. (Md. Nurun Nabi, 2017)Employees are the heart of any organization. For any
organization to operate smoothly and without any interruption, employee cooperation
cannot be replaced with anything else. It is of utmost importance that the employees of
an organization not only have a good relationship with the top management, but also,
they maintain a healthy and professional relationship with their coworkers. The
following study is a self-conducted research on how motivational tools impact the
performance of employee for betterment. The study also focused on de-motivation
factors affecting employee performance negatively. A sample of individuals was selected
and was interviewed with self-administrated questionnaire to obtain primary data.