International Journal of Trend in Research and Development, Volume 5(6), ISSN: 2394-9333

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A Study of Performance Appraisal and Employee‟s
Performance by Measuring the Latest Role of
Motivation in an Organization
1
Dr.Raghunathan and 2N Subbu Krishna Sastry,
1
Professor & HOD, 2BSC (PME) BBA MBA(HRM) MA(Eng) Mcom, Mphil, (Ph.D)
1
Department of Business Administration Government Arts College (Automous), Coimbatore, Tamilnadu, India
2
Research Scholar Bharathiar University Coimbatore, Tamilnadu, India

Abstract: The Employee performance is the strength of functions. In order to integrate findings in the area,
organization and Employee performance has traditionally been performance proposed a comprehensive framework including
accorded prime focus by human resource managers. As a six categories, namely, appraisal purposes, appraises
result, a number of performance appraisal techniques have personnel, appraisal criteria, appraisal methods, appraisal
over time been devised to help establish employee„s timings, and appraisal feedback.
performance. In the contemporary times, the use of
Implication /Limitation:
performance appraisals has been extended beyond the rating of
the employee„s performance to aspects such as motivation. In a short period of time the employees are aware about the
Accordingly, by the sought to investigate effectiveness of various policies are implemented by the company and also it
performance appraisal systems and its effect on employee gain goodwill in the minds of employees. Is suggested that the
motivation. company should introduce new methods to provide good
services promptly and efficiently at the time of employees‟
Performance appraisal is a widely discussed concept in the
measures, mainly focus on performance of the employee
field of performance management. The importance accorded to
among executives, and their opinion efficiently and effectively.
performance appraisal systems in part arises from the nature of
the current business environment, which is marked by the Practical implication:
need to achieve organisational goals as well as remain
If Organization achieves higher performance levels, they
relevant in intensely competitive markets through superior
should preferably belong to a chain and increase their
employee performance. The organisations can however control
category, and management should focus on “best” HRM
how employees perform their jobs. In addition, performance
practices opting inventing researched Performance appraisal
management research shows that a significant number of
employees tend to have the desire to perform their jobs well as policies for the employees as new focus.
part of their individual goals as well as a demonstration of Originality / Value:
loyalty towards the organisation.
Performance appraisal is the systematic assessment by merit
By adopting latest research objectives, pertained to factors of the behavior and /or ability of workers in their work
establishing the moderating role of performance appraisal as a and a means whereby each worker may be rewarded a
motivation tool as well as potential challenges and findings percentage in addition to his wage according to his assessed
show the presence of significant positive outcomes when the merit value.
organisation uses performance appraisal as a motivation tool.
Further, which the study finds that the use of more than one II. INTRODUCTION
appraisal techniques helps yield greater satisfaction and Performance appraisal plays a key role to measure the
consequently to higher motivational levels.The Researcher in employee‟s performance and help the organization to check
this study relates to the assessment of the relationship between the progress towards the desired goals and objectives (Ijbmr,
employee performance evaluations to assess the moderate role 2012). Now organizations are using performance appraisal as a
of motivation. strategic approach by coordinating the human resource
Keywords: Performance Appraisal And Management functions and business policies. They are focuses on it as it is a
Appraisal Compensation. Performance Management, broad term that covering number of activities like examines
Employee Appraisal, Human Resource. employees, improve abilities, maintain performance and
allocate rewards(Fakharyan,Jalilvand, and Dini, 2012).
I. DESIGN Performance appraisal help aligns individual goals and
Selected workers can find performance appraisals to be objectives with the organization goals. The system engages,
motivates employees and thereby directs them toward
threatening or intimidating. However, with good Design and
achieving the strategic goals of the organization (Verhulp,
planning, performance appraisals can be rewarding and
2006).
constructive for workers and managers / supervisors. When
performance appraisals are clearly linked with recognition and Good organization performance refers to the employee‟s
Rewards, there are also likely to be benefits for workers‟ performance. Satisfactory performance of employees does not
motivation, productivity and retention. happen automatically. Managerial standards, Knowledge and
Skill, Commitment and Performance appraisalseffecting
Findings:
employee‟s performance. But we are focusing on performance
In practice performance appraisal systems cover a wide range appraisal. The history of performance appraisal is quite brief.
of these aspects, and seldom have exactly the same nature and Its roots can be traced in the early 20th century to Taylor‟s

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 International Journal of Trend in Research and Development, Volume 5(6), ISSN: 2394-9333
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pioneering time and motion studies. The performance appraisal evaluation of work performance, appraisal really dates from
system start in practiced mainly in the 1940s and with the help the time of the Second World War - not more than 60years
of this system, merit rating was used for the first time near the ago. Yet in a broader sense, the practice of appraisal is a very
Second World War as a method of justifying an employee‟s ancient art. In the scale of things historical, it might well lay
wages (Lillian & Sitati,2011). There are number of banks in claim to being the world's second oldest profession.
Pakistan that using the performance management system for Performance appraisal measures the qualitative and
making better their employee‟s performance because it leads to quantitative aspects of job performance. Performance appraisal
achieve organizational performance. However performance is an integral part of HRM and HRM deals with personnel is
appraisal is very important process but it deemed to be people. “People” is the important and valuable resource that
the“weak point” of managing human force (Pulakios, 2009). every organization or institution has in the form of its
Therefore performance appraisal is important to manage employees. Dynamic people can build dynamic organization.
employee‟s work effectively. (Armstrong, 2001) tells Effective employees can contribute to the effectiveness of the
performance as behavior – the way in which organization‟s organization. HRM has multiple goals, which include
teams and individuals get work done.(Mooney, 2009) employee‟s competency development, employee motivation
suggested that performance is not only related to results but it development and organization development. Employees
also relates with activities and behaviors of employeesthat they require a variety of competencies, knowledge, attitude, skills in
adopted to achieve their given goals. (Dessler, 2005) define technical area; Managerial areas, behavioral and human
performance appraisal as “comparing the employee‟s present relations areas and conceptual area to perform different tasks
and past performance to his/her performance standards”. or functions required by their jobs.
(Grubb,2007) says performance appraisalis a procedure to
There is a basic human tendency to make judgments about
evaluate how individual personnel are performing and how
those one is working with, as well as about oneself."
they can improve their performance and contribute to overall
Appraisal, it seems, is both inevitable and universal. In the
organizational performance. (Beach, 2001) Performance
absence of a carefully structured system of appraisal, people
appraisal is the systematic evacuation of employees according
will tend to judge the work performance of others, including
to their job and potential development. (Pınar Güngör, 2011)
subordinates, naturally, informally and arbitrarily. The human
says “Motivation is the ability of person to modify his/her
inclination to judge can create serious motivational, ethical and
behavior”. Motivation is a driven force that leads and directed
legal problems in the workplace. Without a structured
a person toward some specific goals. After employee selection,
appraisal system, there is little chance of ensuring that the
probably the most powerful tool managers have to examine
judgments made will be lawful, fair, defensible and accurate.
employee‟s performance and getting results is the performance
Performance appraisal systems began as simple methods of
appraisal. (Todd Grubb, 2007). Performance appraisal involves
income justification. That is, appraisal was used to decide
an employee knowing what is expected of him and remain
whether or not the salary or wage of an individual employee
focused with the help of the supervisor, tells them how well
was justified. Earlier, motivational researchers were aware that
they have done that motivates the employees toward the good
different people with roughly equal work abilities could be
performance(Casio, 2003). Performance management system
paid the same amount of money and yet have quite different
is the process that strongly involves assurance and
levels of motivation and performance .These observations been
participation of employees within the organization and that
confirmed in empirical studies. Pay rates were important, yes;
determine the organizational results.The evaluation system
but they were not the only element that had an impact on
identifies the gap of performance(if any). This gap is the
employee performance. It was found that other issues, such as
problem that occurs when performance does not meet the
morale and self-esteem, could also have a major influence.
standards that are set by the organization. The feedback system
tells the employee about the quality of his or her work III. LITERATURE REVIEW
performance (NCN report HR Department‟2010). Performance
appraisal can enhance the benefits for the organization, There has been large number of researchs in past several
decades on performance appraisal (Bretz, Milkovich & Read,
butapparently it is not delivering the benefits in many cases
1992; Fisher, 1989). Performance appraisal sounds simple but
(John Mooney, 2009). Most of the organizations usually
researches tell us that it is commonly used in performance
include performance appraisal they cannot take the benefits
feedback and identify individual employee‟s strengths and
from that becausethere lay a hugedifference between the
anticipations and experiences in the present system (Elverfeldt, weaknesses (Ruddin, 2005). The use of performance appraisal
2005). system by business and industry has been counted between 74
to 89 percent (Murphy & Cleveland, 1991). Performance
HRM aim at constantly the competency requirements of appraisal systems are used for different purposes in which
different individual to perform the job assigned to them, include Human resource decisions, evaluation and feedback
effectively and provides opportunities for developing these (Cleveland, Murphy & Williams, 1989). The different work
competencies. As HRM deals with humans it is necessary to that was dominated by psychologists that concentrated on the
keep a check on their performance after regular interval of psychometric characteristics of appraisal for supervisors in
time given jobs, it is necessary to corrective actions term or their performance evaluation (Milkovich & Wigor, 1991).
there is need to appraisal their performance. The process of Psychologist focused on employee‟s reaction to appraisal and
appraising for doing their work effectively is known as sharedview in which performance appraisal take place (Levy,
performance appraisal system. It is very essential to understand 2000; Levy & Williams, 2004). Nasud argued that evaluation
and improve the employee‟s performance appraisal is the basis structure is important tool that recover the value of employees
for HRD. It was viewed that performance appraisal was useful performance (Nasud, 1999). Performance appraisal establishes
to decide upon employee promotion/transfer, salary reward system that will combine the effort of leaders and the
determination and the like. Its roots in the early 20th century worker of organization to the commongoals of their
can be traced to Taylor‟s pioneering Time and motion studies. organizations (Cleveland, Murphy, & William, 1989). For
As a distinct and formal management procedure used in the achieving high performance goal of organization performance

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 International Journal of Trend in Research and Development, Volume 5(6), ISSN: 2394-9333
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appraisal is very important component of human resource Performance appraisal emphasizes on the performance
management. The information gathered and performance variables not on personal traits (Smither, 1998). (Kane, 1995)
appraisal provide basis for recruitment and selection, training argued that performance should be measured in term of the
and development of existing staff, and motivating and work related behavior.Murphy in 1991 argued that analyzing
maintaining a quality human resource through correct and performance through personal characteristics has
proper rewarding of their performance (Lillian, Mathooko, & differentdisadvantages. (Jankoz, 2004) argued that the validity
Sitati ,2011). Performance appraisal is often including and reliability of attribute based performance appraisal are
performance management system. Performance management greater suspected as the perception of superior officer maybe
systems manage and align all the organization, resources in biased. (Squires and Adler, 1998) appraisal based on traits of
order to achieve the highest possible performance (martin, employee has little value. (Malos, 1998) concluded that fair
1998). (McMaster, 1994; Williams, 2002) argued that appraisal is based on job related behaviors not traits of persons.
performance management involve determining the strategic Employees must believe that in performance appraisals there is
objective, establish team goals, plan of performance great opportunity for them (Weick, 2001). Without fairness the
developed, Analyze the performance (by using appraisal performance appraisal system, rewards, motivations and
system) identified need of development and Assign rewards. developments create negative impact and frustration (Gilliland
The different techniques are used for performance appraisal and Langdon, 1998). & Motivation: Motivation is an element
that is can be divided as Traditional and non-traditional form. that retains and manages employee manners and behaivior
The traditional form of appraisal is also known as “Free Form (Steers and Porter, 1987). (Porter and Miles,1974) argued that
Method” it is just involved the overseeing and description of in job the employees need freedom for success and work
employee performance by his boss or superior (IJBMR, 2012). environment traits rewards create motivation. Motivation acts
From the last few years the non-traditional form of appraisal is as driving force that leads employees towards its goals (Grant,
common in practices (Coens and Jenkins, 2000; Lawler, 2000). 2008). Motivated employees are highly involved and engaged
(Dorfman, 1986; Locke &Latham, 1984; Latham & Wexley, in their job and try to make their performance best(Guay,
1981) Mostly these techniques are used in throughout world 2000; Vansteenkiste, 2007). Self-driven and freedom oriented
for appraisal method. 1. Assessment center 2. Behaviorally qualities are mostly found in motivated employees (Grant,
anchored rating scales (BARS) 3. Human resource accounting 2008). Motivated people are highly committed and have few
method 4. 360 Degree Performance Appraisals 5. Management desires (KAMAL et al. 2005). In South Africa performance
by objectives (MBO). appraisal is used to help public servants to know about what is
expected to them, increased their motivation, describe their
Assessment centre involves the informal events, tests and
performance and improve their performance (Erasmus,
assignment that are given to the group of employees to
Schenk, Westhuizen and Wessels, 2005). Organizations
evaluate their competencies (Ijbmr, 2012). Behaviorally
needed motivated employees to survive in a highly competitive
Anchored Rating Scales is new method that is consist of
world. Managers must be able to understand what motivate to
predetermine critical areas of performance or it is set of
employees however this function is very complex because that
behavior statements that describe important job qualities what
motivates employee today may not tomorrow (Kovach, 1987).
is good and what is bad (Dargham, 2000).Human resource
Motivated employees are those who work according to the
accounting method the performance of employee is evaluated
clearly define goals and take their actions to achieve that
in term of contribution and cost of employees(Ijbmr,
goals(McShane & Von Glinow 2003). Motivation is the
2012).(Sharma, 2012)360 degree involves the feedback of
perception of an individual that describe the intensity of his or
employee‟s performance by anyone who has contact with
her behavior (Petri & Go-vern, 2004).Performance Appraisal
employee in organization. In 360 degree includeSelf-appraisal,
helps employees to motivate by clearly define their objectives
Superior appraisal, Subordinate appraisal, Peer appraisal.
and by setting future direction with providing training to fulfill
These methods are less structured then the traditional method
the objective performance(Bach, 2005). Justice theory related
which is less focuses on the rankings and ratings and more
with the acts of being just and fair with everyone.(Roch and
emphasis on arranging meetings between employees and
Shanock, 2006) use all four justice dimensions in their
supervisor (Sharma, 2012).
framework by considering all are related to social relationship
Employee‟s Performance: High employee‟s performances lead either these relationship with the organization or with the
an organization and have greater opportunities for employees supervisor.
then those who have low performance (Vans cotter, 2000).
1. Procedural justice 2. Distributive justice 3. Interpersonal
“Performance is related to that organization hires the person to
justice 4. informational justice In this study we draw this
do and do well”(Campbell 1993). Performance is not only
framework for applying it especially in performance appraisal
related to the actins but also involves judgment and evaluation
context. This context related to explaining employees have
process (Ilgen & Schneider, 1991). The activities that can be
perception of fairness about appraisal system. (Rosenzweig
examined and measurable are reflected as performance
and Nohria, 1994) Procedural justice perceptions include the
(Campbell, 1993). Organizations need highly performance of
fair relative weighting in the basic elements of the performance
its employees so that organization can meet their goals and can
appraisal system. There are three important procedures that are
able to achieve the competitive advantage (Frese,
prominent in appraisal system that is assigning rate, set criteria
2002).(Borman and Motowidlo, 1993) differentiate between
and looking for appeals. (Silverman and Wexley, 1984) argued
work and performance. Work related to the person abilities
that developing the behavioral anchored rating scales
through which employee performed activities which is
aresatisfactorythen the interview system of appraisal process.
contributed by the technical core. Performance not related to
Distributive justice perception is related to the equity theories
the technical core characteristics but it cares about the
believes that distribution are fair. Rater may feel motivated to
organization psychological environment and social
conform about the other norms like equity, want, or social
environment in that organization achieve its objectives. It
status which maybe seem unfairpractice to those who are being
involves behaviors such as helping colleagues or being a
rated (Leventhal, 1980). Personal goals of rater like
reliable member of the organization (Frese, 2002).

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 International Journal of Trend in Research and Development, Volume 5(6), ISSN: 2394-9333
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motivations, teach, avoid conflict or gain personal favor. him give feedback to employees and motivates him too (Casio,
Employee may take appraisal fair if they thought that rater is 2003). Positive feedback tells employee that his work done
trying to motivate them and want to improve their capabilities. well and also illustrates what is needed to improved. The good
And employees also can take appraisal unfair on the basis of appraisal and supervisor must communicate to employee that
conflicts,avoidance, favoritism and politics.Interpersonal how the performance of them can improved and motivates him
justice is related to the rater fair behavior with the employee (Lillian, Mathooko & Sitati, 2012).
that is being evacuated.(Greenberg, 1986) argued that
OBJECTIVES OF PERFORMANCE APPRAISAL
employees are very sensitive about the behavior of directors
and representatives in the organization.Informational 1 The Salary increase Performance appraisal plays a role in
justiceinvolves the fair explanations of performance making decision about salary increase which, Normally salary
anticipations, standards, response andreasons of decisions. In increase of an employee depends performing his job status.
the context of performance appraisal the most common thing is Pay may be disclose how well an employee is attaining
setting goals and standards and feedback (Kamencu, 2011 performance at their individual level and how much he should
be compensated by way of salary increase for an employee.
In this study we examined the role of implicit person theory in
theviewof a manager‟s performance judgments. Performance 2. In allotment of Promotion Performance appraisal plays
appraisal is the source that gives sense to employees that they significant role where promotion is based on merit and
are being valuable and recognize as an organizational team.Lee seniority. Performance appraisal discloses how an employee is
& Bruvol, (2003) argued that thought that has been develop working in his present job and what his strong and weak points
through the performance evaluation system that performance is are. which rates, it can be decided whether he can be promoted
being evaluated for the development of employees than to the next higher position.
employees will compensate it to increase their level of
performance. On the basis of justice theory many analyzers 3. Training and Development Performance appraisal tries to
distinguish between distributive and procedural justice when identify the strengths and weakness of an employee on his
they are reviewing about the organizational justice. Moorman, present job, for overcoming weakness of employees.
(1991) suggested that Distributive justice is related to
thejustice in results and outcomes that employees get and 4. Pressure on Employees Performance appraisal puts a sort of
procedural justice related to the real fairness in the system that pressure on employees for better performance. If the
apply for defining results. Rahim et al, (2001) different studies employees are conscious that they are being appraised in
reveal that in organizational justice distributive and procedural respect of certain factors and their future largely depends on
justice have exclusive and shared relations with organization. such appraisal.
Boss, (2001) argued Employees those feel that the results of
performance appraisal is unfair they often leave the 5. Identifying systemic factors that are barriers to, or
organization and their morale and involvement will let down. facilitators of, effective performance.
And it will change their behavior in wrong doings for taking
revenge from the organization Hypotheses1: There is the 6. To confirm the services of probationary employees upon
significant relationship exist between performance appraisal their completing the probationary period satisfactorily, to
and employees performance. Attentions that are giving improve communication. Performance appraisal provides a
toemployee‟son emotional base are stimulate employees format for dialogue between the superior and the subordinate,
towards the main objectives of the organization and it will and improves understanding of personal goals and concerns.
become main cause of coordination of employee‟s in
organization(Lathman, 2003). Wood,(1974) analyses the 7. To determine whether HR programmes such as selection,
relation amongemployee‟s behavior, motivation in job and training and transfer have been effective or not by considering
performance in sample using 290 semi-skilled and skilled performance appraisal aspect in it.
workers. The conclusion was that highly involved employees
were basically oriented toward their jobs and did not have IV. METHODOLOGY
clear satisfaction with organization evaluation of performance.
The development and administrative work are taken into
(Egwuridi, 1981) investigated motivation among Nigerian
consideration. According to the universal compensation
employees high and low occupation using them as sample. He
scheme, the employed staff staff will be paid bonuses for very
concluded that low income employees are not confirmed and
good results during the period evaluated, provided with result
high income employees have greater value on basic job
oriented performance in regular work has to be calculated
factors.(Kunz and Pfaff, 2002; Pullins, 2001) investigated that
adding previous achievements.
e motivated salespersons that are motivated by their rewards,
money or promotion are more involve in their work. A. Statement Of The Problem:
Hypotheses2: Motivation positively affects the relationship of
Much of literature dealing with Human Resource Management
performance appraisal and employees performance.
and its issues recognize the importance of performance
2.4Theoretical Framework: The organization goals are divided
appraisal system which occurs in the organization. All
and they incorporate the employee work plan. Performance
organization faces the problem of directing the energies of
appraisal involves what is expected to employees and
their staff to the task of achieving business goals and
employees remain in the focused of supervisor (Casio, 2003).
objectives. In doing so, organization need to devise means to
Evaluation involves employee performance comparison with
influence and channel the behaviors‟ of their employees so as
the objectives that has been described in the beginning of the
to optimize their contributions. Performance appraisals
appraisal period (Lillian, Mathooko & Sitati, 2012).Evaluation
constitute one of the major management tools employed in this
tells about the performance of employee that which employees
process. The continuous evolution of organization towards the
have met their goals. Regular assessment make able to
changes creates a great impact in the life of the business still,
employees to focus his attention on that what is expected to
the business leaders are relying on the capacity of the people

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 International Journal of Trend in Research and Development, Volume 5(6), ISSN: 2394-9333
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and their performance towards their job and roles in the employees during the performance appraisal period. It will be
organization. Whether a profitable or non – profitable better if the management provides incentives to employees so
organization, the people has been essential resources in the it will boost in their work and productivity and also extend the
organization. Various strategies had been effectively used for probation period up to 2 years. Separate rating committee to be
the employee according to their different needs and areas that fixed during the appraisal period. So that there is no rating
needs to sustain. However, there is a little attention given in biases and personal prejudice will occur. The performance
enhancing the employee performance appraisal system. The rating is very helpful for management to provide employee
present study was under taken to clarify certain questions counseling during the appraisal. Performance appraisal is
related to the care phase of performance appraisal through purely based on appraisal system and the rating helps to fix
regular assessment of progress toward goals focuses the increment for workers make them retained in the organization.
attention and efforts of an employee or a team. Supervisors should maintain cordial relationship with workers
and offers recognitions of the employee's efforts and provide
B. Scope Of The Study
guidance to workers.
This study provide appraisal feedback to employees and
RESULTS & DISCUSSION
thereby serve as reflecting mirror for personal and career
development and allow the management to take effective Performance is what is expected to be delivered by an
decision against drawbacks for the well being of the individual or a set of individuals within a time frame. What is
employee's development to improve employee work expected to be delivered could be stated in terms of results or
performance as helping management to realize and use their efforts, tasks and quality, with specification of conditions
full potential in carrying out their firms mission. This study under which it is to be delivered, Feeding forward coaching
helps to know the level of importance of appraisal system.The has the power to turn everyday employees into engaged
payroll and compensation decision, training and development Employee's at workplace and which coaching inspires
needs, promotion, demotions transfer which including job employees stability to give extra discretionary effort drive
analysis and providing superior support, assistance and excellent results in the competitive atmosphere.The
counseling giving strength to job performance & personal documentation that you maintained during the performance
qualities of an employee in organization. review period serves you well as you prepare for an
employee's performance review
C. Need Of The Study
Never get into a performance review without any preparation.
This study helps building progress towards organizational
If any failure is expected or found,which will miss key
goals, that helps the superior to have a proper judgement to
opportunities for feedback and improvement, and the
extract work with their subordinates.which ensure
employee will not feel encouraged about his successes for a
organizational effectiveness through correcting the employee
long term commitment in an organization.
for standard and improved performance and suggesting the
changes in employee behavior,providing information about the References
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