Examine
Relationship between Employees Satisfaction on Performance Appraisal System
with Fairness of the System
Ms. Supriya Mahajan1*, Ms. Saloni Raheja2
1M.Phil Research Scholar, Department of
Management, Lovely Professional University, Phagwara
2M.Phil
Researcher, Department of Commerce, Lovely Professional University, Phagwara
*Corresponding Author E-mail: mahajansupi@gmail.com., saloni.rahejaa@gmail.com
ABSTRACT:
Performance Appraisal Systems one of the
important component of human resource management. This component also plays a
very important role in the job satisfaction of employee. It is a system which
is used to evaluate the performance of an Employee in the organisation.
This is the evaluation system on the basis of which employees salary is
increased or decreased, their promotion or demotion is done. The organisation may be some institution, company, industry or
any firm. This study completely based on the Performance Appraisal System. The
main purpose of the study is to measure satisfaction of Employee with
Performance Appraisal System and to find out the relationship between Employee
satisfaction on Performance Appraisal System with Fairness of the system. The organisation in this study is educational institutes of Jalandhar. The Employees in the study are the faculty
members of the educational institutes. A sample of 200 respondents is taken to
conduct the study. Correlation technique is used to find out the relationship
between Employee satisfaction on Performance Appraisal System with Fairness of
the system. The findings show that
maximum number of respondents (faculty members) is satisfied with their
Performance Appraisal System. The findings also revealed that there is a
positive relationship between Employee satisfaction on Performance Appraisal
System with Fairness of the system. Some suggestions have been made on the
basis of the findings of the study.
KEY WORDS: Performance Appraisal System,
Employee Satisfaction, Job Satisfaction, Fairness of the System
Performance
Appraisal System plays a very important role in the organisation. This is a system which is used
to evaluate the performance of an Employee in the organisation.
We hear the word evaluation in the case of students when the faculty members
evaluate their performance on the basis of test, assignments, exams and their
participation in extra circular activities. That means a faculty use so many
criteria to evaluate the performance of students in the class. Now in the organisation point of view the Employees working in the organisation get promotion demotion, Employee’s salary is
decreased or increased on what basis these things happens how the higher
authority know that which Employee of the organisation is best or poor what system or criteria they
follow that system is called Performance Appraisal System.
The system which is used to evaluate the performance of an
Employee in the organisation is called Performance
Appraisal System. Like in school a faculty member evaluate the performance of a
student through exams, assignments, test etc. in the same way there are some
methods of Performance Appraisal System which are used in the organisation to evaluate the performance of an Employee. It
depends upon the organisation which method they use
to evaluate the performance of an Employee. The organisation
is the not only a company it may be a factory an institution, a firm.
Performance Appraisal System also plays a very important role in
the job satisfaction of Employee. If the Employee is not satisfied with their
Performance Appraisal System then he or she may leave the organisation.
Dissatisfaction occurs with Performance Appraisal System when Employee feels
that there is something wrong in their evaluation system and it is obvious when
Employee is not satisfied with their evaluation system they leave the job. The
reason of leaving is that on the basis of this evaluation system employees salary is increased or decreased they get promotion or demotion,
some increase in their incentives if these things are not properly done in the organisation then the Employee leaves their job. That means
the evaluation system or Performance Appraisal System of the organisation is not fair.
When the Employee feels that they do their best in the job but they
are not getting proper output that’s the reason of dissatisfaction. When
Employee feels that there is some partial behaviour done by the Rater (who
evaluate the performance) on the basis of religion, cast, gender etc. that is
also the reason of dissatisfaction. When the Employee feels that they are not
getting proper feedback of their performance from the rater that is also the
one of the reason of dissatisfaction. So it is very important for the organisation that their appraisal system should be fair so
Employees are satisfied with their job
Employee wants fair dealing in Performance Appraisal System which
is an important component of organisation’s Human
resource management. Understanding Fairness in performance appraisal practices
is important for organisation because it completely
link with Employee’s job satisfaction and organisational
commitment.
REVIEW OF
LITERATURE:
Mahdieh Darezereshki (2013) Examine the role of performance
appraisal quality on one important human resource management function that is
job satisfaction. In this study performance appraisal quality is used as
independent variable whereas job satisfaction is dependent variable. By using
data of 133 employees of multinational companies of Malaysia employee
experience of performance appraisal were identified. To find out the relation
between performance appraisal quality and job satisfaction the tool which is
used is regression analysis. The result indicate that the employee with high
quality performance appraisal experiences were more likely to be satisfied with
their job.
Mensah et.al
(2012) focused on employees perceptions of performance appraisal biases or
Errors, and examined the implications for developing and implementing an
effective appraisal system. The results of the study indicate that employees
perceive that the Performance Appraisal System of the institution is affected
by subjectivity, and is influenced by some major Errors. The findings have
serious managerial implications for training, motivation and provision of resources
for effective performance appraisal.
Jack N. Kondrasuk
(2012) Conducted research to ascertain all problems that are occurring with
present Performance Appraisal Systems. A list of 76 performance appraisal
problems was reduced to 4 general categories and find out that Performance
Appraisal Systems are improved by rectifying common shortcomings (e.g. reducing
biases, training those involved, using formats with research substantiation).
However, the most important changes required 1) clarifying the goals of
performance appraisal, 2) focusing on both results and behaviour appraisals, 3)
adding an appraisal category, 4) better timing, and 5) better involving
constituencies.
Saqib et al.
(2012) wants to compare the performance appraisal practices undertaken in the
government offices in Pakistan with various methods of performance appraisal
methods discussed in the contemporary academic research. It is satisfactory to
know that government offices in Pakistan are applying some of the contemporary
performance appraisal methods like Adjective Rating Scale, Management by
Objectives, and Narrative Method in a traditional way which reminds of the
British colonial legacy.
Frieda Siaguru
(2011) examined the current Performance Appraisal Systems of some private
sector organizations in Papua New Guinea with the aim to provide a description
of the primary purposes of Performance Appraisal Systems, how these systems are
implemented and, any difficulties experienced in implementing the Performance
Appraisal Systems. The findings of this study are important for at least
two reasons. Firstly, it contributes to descriptive information on performance
appraisal, in non–western developing countries and also provides an important
building block for further studies. Secondly, an understanding of the current
Performance Appraisal Systems and their difficulties may provide some guidance
for human resource managers in developing new appraisal systems and making
appropriate improvements to current systems particularly, in the country’s context.
Ikramullah et al.
(2011) wants to explore appraisees’/ratees’ Fairness perceptions of Performance Appraisal
System (PAS) in the civil service of Pakistan and find out that that appraises’
perceive the system fair as diagnosed by four factors of justice. Moreover,
high interpersonal justice and distributive justice also revealed issues with
the system. However, on few aspects of the system, appraises’ have mentioned
their neutral responses.
Suhaimi Sudin (2011)
explored employees' satisfaction
consist of satisfaction with the last performance appraisal ratings,
satisfaction toward supervisor in relation with appraisal process and
satisfaction toward the Performance Appraisal System Relationships. The
findings showed that distributive and informational justice are significantly related to satisfaction
with the last appraisal ratings; distributive, interpersonal and informational
justice are significantly related to satisfaction with supervision; and
distributive and informational justice are related to satisfaction toward the
Performance Appraisal System. It also showed that distributive, interpersonal
and informational justices are related to overall employees' satisfaction.
Sarminah Samad (2011) in his study wants to investigate the
relationship between independent variable i.e
Organisational commitment, Job satisfaction and demographic variables with
dependent variable employee’s perception on performance appraisal. The result
showed that organisational commitment, job satisfaction and demographic
variables are the important factors in determining employee’s perception on
performance appraisal of managers in Malaysian commercial bank.
Selvarajan et al.
(2011) examine the relationship between performance appraisal characteristics
(Performance appraisal purpose, appraisal source and feedback richness) and
employee perception of appraisal accuracy and appraisal Fairness in the Mexican
context. Further this study examine the relationship between perceived accuracy
and perceived Fairness on appraisal satisfaction and motivation to improve
performance in the future and find out that multisource performance appraisal
in the Mexican Context were positively related to perception of distributive,
procedural and interactive Fairness. It also find that performance appraisal
from multisource in the Mexican Context were also negatively related to
perceived accuracy of appraisal. This study also suggest that appraisal that
are feedback rich are perceive as fact in terms of procedural and interactive
justice dimensions by the Mexican employees.
Shah et al. (2011) investigates Fairness
perception of Performance Appraisal System among supervisory
(appraisers/appraises) and non-supervisory (appraisees)
in the civil service of Pakistan. The result indicate that there was
significant difference of Fairness perception among supervisory and
non-supervisory working in two public sector department and supervisory
employees perceive system fairer as compared to non-supervisory employees.
Migiro (2011)
appraise the Performance Appraisal System in the bank of Botswana. This study
uses the qualitative research design. Sample of the study was drawn from a
population of 417 employees working in all nine departments of this bank. The
result of the study indicates that the system is used to identify employee for
promotion and to decide salary reward. It was also found out that the reward
system does not show a positive reflection of performance system outcomes.
Saeed et al.
(2011) investigates the employee’s perception about the outcomes Performance
Appraisal System and identifies the factors which can harm the successful
implementation of performance appraisal and finds that the employees are aware
about the useful outcomes of the performance appraisal but they lack knowledge
in implementing an effective performance appraisal.
Agbola et al.
(2010) investigates the effectiveness of the Performance Appraisal System of
the Ghana public health and find out that appraisal process ineffective and
employees highly dissatisfied with the system.
Ahmad et al. (2010) examines the effect of
performance appraisal on employee turnover intention. This research focuses on
two elements or political motive influencing employee turnover intention i.e.
motivational motive and punishment motive and conclude that there is a positive
relationship between the independent variable (motivational motive and
punishment motive) with dependent variable (employee turnover intention).
Birte Asmu (2008) investigates how one of the crucial and most
delicate activities in performance appraisal interviews, namely, giving
critical feedback, is conducted. The
results indicate that there is an orientation to critical feedback as a
socially problematic action despite the institutional character of the talk.
Doleh and Veir (2007) explore the attitudes of human resource
managers working in the Jordanian private and public organizations towards the
functions of their Performance Appraisal Systems, and to the ways in which
Performance Appraisal Systems are implemented. Major research findings of this
empirical study include that Performance Appraisal Systems had a moderate
impact on the four functions of Performance Appraisal Systems. These functions
were grouped as: (1) between-individuals comparisons; (2) within-individuals comparisons;
(3) systems maintenance; and (4) documentation. The results of the study
revealed that private organizations’ performance appraisal had significantly
greater impact than their counterparts in the public sector on promotion,
retention/termination, lay-offs, identifying individual training needs,
transfers and assignments. This study also indicated that performance
appraisals were conducted once a year, and the appraise managers were primarily
responsible for conducting performance appraisals.
Chu (2002) proposed a comprehensive
framework of performance appraisal including six categories, namely, appraisal
purposes, appraisal personnel, appraisal criteria, appraisal methods, appraisal
timing and appraisal feedback.
Jeffrey (2000) developed a conceptual
framework for examining employee’s reaction to performance monitoring. The
framework incorporates attitudinal and motivational effects of performance
monitoring on monitored employees and discuss effects of performance monitoring
on performance feedback and performance appraisal. The framework is used to
organize a review of research literature relevant to employee reactions to
electronic and non-electronic performance monitoring. The article includes
specific propositions for additional research and general directions for future
research in performance monitoring.
Jobber et.al (1993) confirmed that a large
organisation tends to adopt quantitative criteria; more formalized appraisal
methods and predetermined performance standards, while a small organisation is
apt to use qualitative and informal appraisal methods. Although these studies
did not make direct comparison between service and marketing industries, their
result can explain the fact that there is a link between organisational
characteristics and functions of Performance Appraisal System.
Manning (1988) identify a variation to
more common appraisal methods. The author suggests a self-evaluation component
be added to the standard supervisor review. This is then compare and contrasted
with the evaluation completed by the supervisor. The results potentially lead
the employee and supervisor to more meaningful discussion. He emphasize that
this evaluation process always result in an engaging discussion between the
employee and manager. The author also suggest that an appraisal that does not
include a meaningful discussion between the manager and supervisor potentially
crudes the usefulness and effectiveness of the process.
Evans (1987) states that it is essential
to create work climate that is conductive to productive appraisal. This must
start at chief executive’s office and being transmitted downward through the
agency. It must include an appraisal system that is understood by all members
of the organisation, be linked to established job performance standards and
used not to enhance only productivity of organisation, but the individual
employee as well.
NEED AND SCOPE OF
THE STUDY:
Fairness in Performance Appraisal System
is very important for the organisation. If the system of the organisation is
not fair that means employee is not satisfied with their appraisal system which
leads to the result of leaving the job by the employee. That means increase in
Employee Attrition. The main reason of doing this study is increase in Employee
Attrition.
OBJECTIVES OF THE
STUDY:
To measure the satisfaction level of
faculty members with respect to Performance Appraisal System of their
institutes.
To find out the relationship between Employee Satisfaction on Performance
Appraisal System with Fairness of the System
HYPOTHESES:
The hypotheses has made according to the
second objective of the study i.e.
H0 – There will be no
significant relationship between Employee Satisfaction on Performance Appraisal
System with Fairness of the System
H1 -- There will be a significant
relationship between Employee Satisfaction on Performance Appraisal System with
Fairness of the System
RESEARCH
METHODOLOGY:
Sources of data:
For this study both primary as well as
secondary data was used. The primary data for the study has been collected with
the help of faculty members by using well-structured questionnaire and
secondary data was collected from books, journals and various websites.
Research Design:
Descriptive Research Design has been used
to achieve the objectives of the study.
Sampling Size:
For this study, 200 employees have been
taken as the sample. The sample has been collected from four educational
institutes. Here employees are the faculty members of the educational
institutes.
Sampling Technique:
Convenience sampling technique has been
used in this study. Selection of faculty members and institutes is done
according to convenience sampling technique.
RESULT AND DISCUSSION:
This section contains the analysis of data
collected during the survey. Data is analysed by using MS-Excel and SPSS. Data
so collected is being interpreted as per the objectives of the study.
The first objective of the study is to
measure the satisfaction level of faculty members with Performance Appraisal
System of their institutes.
The above table shows that out of 200
respondents 3 respondents are strongly disagree with the statement that they
are satisfied with their appraisal System. 16 respondents are those who are
disagree with the statement. 12 respondents having neutral response with the
statement whereas 157 respondents are those who are agree and 12 are those who
are strongly agree with the statement that they are satisfied with their
appraisal System. That means maximum no. of respondents having positive
response. Maximum no of respondents feel that they are satisfied with their
Performance Appraisal System.
Now the second objective is to measure the
relationship between Employee Satisfaction on Performance Appraisal System with
Fairness of the System. Correlation technique is used to achieve this
objective. The hypothesis based on this objective is
H0 – There will be no
significant relationship between Employee Satisfaction on Performance Appraisal
System with Fairness of the System
H1 -- There will be a
significant relationship between Employee Satisfaction on Performance Appraisal
System with Fairness of the System
To achieve this objective firstly the
Fairness average of the responses of the respondent has been taken. After
taking average all the respondents has one value of Fairness.
Table 1
Shows the Employee Satisfaction with Performance Appraisal System of their
institutes.
|
I Am Satisfied With My Current Performance Appraisal
System |
|||||
|
|
|
Frequency |
Percent |
Valid Percent |
Cumulative Percent |
|
Valid |
Strongly Disagree |
3 |
1.5 |
1.5 |
1.5 |
|
Disagree |
16 |
8.0 |
8.0 |
9.5 |
|
|
Neutral |
12 |
6.0 |
6.0 |
15.5 |
|
|
Agree |
157 |
78.5 |
78.5 |
94.0 |
|
|
Strongly Agree |
12 |
6.0 |
6.0 |
100.0 |
|
|
Total |
200 |
100.0 |
100.0 |
|
|
Table 2
is the example of responses of 10 respondents to show that how these
calculations was done on excel sheet.
Here
FAP1 to FAP12 represents the 12 statements which is related to Fairness of
Performance Appraisal System.
After
finding the Fairness average SPSS is used to find out the relation between
Employee Satisfaction on Performance Appraisal System with that of Fairness of
the System.
Table 3
Shows the Correlation between Employee Satisfaction on Performance Appraisal
System with Fairness ofthe System
|
Correlations |
|||
|
|
|
I am
satisfied with my current Performance Appraisal System |
Fairness
average |
|
I am
satisfied with my current Performance Appraisal System |
Pearson
Correlation |
1 |
.655** |
|
Sig.
(2-tailed) |
|
.000 |
|
|
N |
200 |
200 |
|
|
Fairness
average |
Pearson
Correlation |
.655** |
1 |
|
Sig.
(2-tailed) |
.000 |
|
|
|
N |
200 |
200 |
|
|
**.
Correlation is significant at the 0.01 level (2-tailed). |
|
||
The above table 3 shows that there is a
significant relationship between Employee Satisfaction on Performance Appraisal
System with Fairness of the System. The value of correlation “r” is .655 which
is positive that shows that there is a positive correlation between Employee
Satisfaction on Performance Appraisal System with Fairness of the System. That
means Performance Appraisal System should be fair so that employees are
satisfied with their appraisal System. This correlation also shows that
employees are satisfied with their Performance Appraisal System when their
System is fair and there is no partial behaviour is done on the basis of the
System.
FINDINGS:
The findings shows that maximum no. of
respondents are satisfied with their Performance Appraisal System.
The findings also revealed that there is a
significant relationship between Employee Satisfaction on Performance Appraisal
System with Fairness of the System.
SUGGESTIONS:
Some suggestion has been made based on
findings of the study. Few of the faculty members feel that they are not
satisfied with their appraisal System. The institutes have to make some
strategies so that the faculty members are satisfied with their appraisal
System. Firstly institute should know
why their faculty members are dissatisfied with their appraisal System .The
reason of dissatisfaction may be they are not getting proper output or
according to them their System is not fair the reason of dissatisfaction may be
any but the institute has to make some strategies so that the dissatisfied
faculty members also feel satisfied with their appraisal System. For example if
the employee feel that they are not getting proper incentives according to
their work in this case institute has to provide incentives to the employee
according to their performance, another reason may be employees are not getting proper feedback of
their performance from their rater in this case institute has to solve this
problem of rater’s error. So by using strategies
according to the reason all the employees feel satisfied with their Performance
Appraisal System.
CONCLUSION:
The study concludes that Performance
Appraisal System is one of the important component of job satisfaction. So the
satisfaction of employee with Performance Appraisal System is very important.
Employees are only satisfied with their System if the System is fair free from
errors and they are getting proper output according to their performance. That
means satisfaction with appraisal system depend on the Fairness of the system.
Study also concludes that there is a relationship between Employee Satisfaction
on Performance Appraisal System and Fairness of the system. If the System is
fair employees are satisfied with their appraisal System and they are also
satisfied with their job that means they feel good with their present job and
which results decrease in Employee Attrition. So it can be concluded that
Fairness of the Performance Appraisal System is also very important for
organisation.
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Received on 09.12.2013 Modified on 25.12.2013
Accepted on 27.12.2013 © A&V Publication all right reserved
Asian J. Management 5(1):
January–March, 2014 page 49-54