Business proposalTITLE

What is the impact of performance appraisal on the employers performance ?

INTRODUCTION

The process by which a manager or consultant (1) examines and evaluates an employee's work behavior by comparing it with preset standards, (2) documents the results of the comparison, and (3) uses the results to provide feedback to the employee to show where improvements are needed and why? Performance appraisals are employed to determine who needs what training, and who will be promoted, demoted, retained, or fired .This kind of appraisal , if conducted on regular basis , can bring a positive change in an employee behavior and can lead to the productivity .

Background

“Maximizing performance is a priority for most organization for today ”(Bob Cardy ,1997)

Employees job performance is an important issue for all employers .However satisfactory performance does not happen automatically therefore it is more associated with good performance management system .

A performance management system consists of the process used to identify, encourage , measure , evaluate ,improve and reward employee performance at work .So performance appraisal has been done to evaluate their performance .Such appraisal is also called employee rating , employee evaluation ,performance review and results appraisal.\

Performance appraisal look at how organizations have to be organized and systematic in their approach, so that they can extract the exact performance from their employees which can help them, to create a balance between performance and achieving organizational objectives. This explains how performance appraisal helps us to evaluate and assess the employees on a common ground and helps to establish training and development program for the employee to grow in the organization. It also helps, to understand how performance appraisal helps in other personnel decisions like

promotion, salary increments.performance appraisal has two general uses in an organization and these roles often are potential conflicts. One role is to measure performance for the purpose of rewarding or otherwise making administrative decisions about employees. Promotions or layoffs might hinge on these ratings, often making difficult for managers to do . Another role is the development of individuals potential .In that role emphasis is on identifying potential and planning employees growth opportunities and direction. Last, the performance appraisal process can be improved if companies use a more comprehensive rating approach known as the 360 degree approach (Becton, Portis, & Schraeder, 2007). In this process, companies use multiple raters to rate the effectiveness of employees.

Normally the employees work in office from 9 to 5.Normally they have to do the same task daily so the employees get prey to boredom. and their motivational level might not be achieved which ultimately cause the reduction of the organizational productivity .To avoid this, if their work is linked with intrinsic reward s it can bring a positive change in the behaviour of employees These intrinsic reward would ultimately achieve the requisite performance level of the employees as they would inclined towards the completion of the preset standards and goals .But question spring up that ,who would get benefit For this supervisor or employer have to evaluate the employees performance from time to time

OBJECTIVE OF RESEARCH

The study sort to find out the relationship between performance appraisal and employee motivation in a national bank of Pakistan Specifically , the study would be based on methods of appraisal used by NBP and the level of employee involvement in the appraisal process . The study will also examine the affect of employee involvement and the manager / subordinate relationship in the appraisal process. Besides the study would also focus negative responses from employees being appraised . The main objective of the research is to know that whether appraisal is an effective tool in motivating employees at work place or they can cause employees to recoil, spreading insecurity, self-consciousness and fear. If it really leads to increase in productivity ,what are the factors that can really motivate the employees and what should be avoided to?

This study assess the subsequent impact on employee attitudes and behaviors.and he;pful ion answering following questions

Research questions

Does a performance appraisal of an employee can be helpful in achieving motivation of employees?

Does the performance appraisal of employees can be helpful in achieving departmental and orgizatinal goals ?

Does the performance appraisal affect the manager subordinate relationship ?

HYPOTHESIS TESTING

H 0=performance appraisal cannot boost up the motivation level of an employee

H1= Performance appraisal can boost up the motivation level of an employee

H0=Performance appraisal doesn’t helpful in achieving departmental and organizational goals

H1 = Performance appraisal does helpful in achieving departmental and organizational goals

Research methodology

The process used to collect information and data for the purpose of making business decisions. The methodology may include publication research, interviews, surveys and other research techniques, and could include both present and historical information The choosing of research methodology depends on the nature of study topic (Creswell, 1994 ).

Denzin and Lincoln ( 2000 ) say that, Qualitative research generates the socially constructed nature of reality, the intimate relationship between the researcher and what is studied, and the situational constraints that shape

inquiry. They seek answers to questions that stress how social experience is created and given meaning. In contrast, quantitative studies emphasize the measurement and analysis of casual relationships between variables, and not processes .Qualitative research thus has a humanistic element to it, whereas Quantitative research is grounded in mathematical and statistical knowledge.(Gephart,2004) Qualitative research is a representation of peoples mind and, it is interpretative and highly inductive. (Van Maanen, 1998) Another interesting difference between the two methods is, that quantitativetechniques require the researcher to produce and verify hypothesis and reduce entities into simple variables for the benefit of understanding and generalizing. it assumes that all occurrences are independent events that have no connection to the surrounding environment. On the other hand, qualitative research attempts to prove and understand phenomena rather than explaining the cause and effect relationship .Further, it believes that all occurrences are linked in some way to the surrounding environment.(Easterby smith et al,2002

Why multi strategy research ?o For this research I prefer to take multi strategy research to

collect data.This is an approach to professional research that combines the collection and analysis of quantitative and qualitative data.Research that ‘integrates quantitative and qualitative research within a single project’ -- i.e. research combining research methods across different (quantitative and qualitative)research strategies’

o (Bryman 2001: 444).  

The use of multiple strategies to enhance construct validity is now routinely advocated by most methodologists. In short, mixing or integrating research strategies (qualitative and/or quantitative) in any and all research undertaking is now considered a common feature of all good research.

According to Neumans (1994) both the quantitative and qualitative methodologies would be effective and result oriented while conducting the above research .

What are more benefits

DATA COLLECTION METHOD

Primary and secondary data gathering method will be used to collect from both techniques

Primary data is unvarnished information about the results of an experiment or observation. It is like the eyewitness testimony at a trial. No one has tarnished it by adding their own opinion or bias so it can form the basis of objective conclusions. Primary data technique is very easy to collect data It is normally collected through experiments, surveys, questionnaires, focus groups, interviews and taking measurements

For this research first of all , In-depth personal interviews that ranges from (structured to unstructured)of NBP employees at different levels will be conducted.

Then I would also prefer to go for focus group discussion technique as the combined responses of the group working together will be more insightful than talking to them individually.

In Second stage , secondary research method is used to gather data.

Secondary research is mainly collected through the sources that include books, journals, census data, biographies, articles and databases. For this I would contact the HRM department of NBP to get the relevant data of employees pertaining their performances .

POPULATION

The target population for the study comprised all employees of NBP Lahore region .

SAMPLE

However, all the Employees of 6 branches of NBP will be chosen as a sample who get appraised on annual basis .This sample will present the larger population of employees i.e. in all branches of Lahore Region . Branches chosen are

The reasons behind their selection are the proximity and convenience for researcher

DATA ANALYSIS

Once the data is collected it has been analyzed by using statistical methodologies

The qualitative data obtained through interviews and questionnaires can be analyzed on the basis of personal or individual experiences

The quantitative data obtained through Employess data base can be analyzed by using statistical methodologies such as means , graphs and figures

Literature reviews

The concept of performance appraisal is to appraise the employees

According to Stephan and Dorfman (1989) outcomes of effective performance appraisal are improvement in the accuracy of employee performance and establishing relationship between performance on tasks and clear potential for reward.

Dobbins, Cardy and Platzvieno (1990) told five outcomes i.e. use of evaluations as feed back to improve performance , reduced employee turnover ,increased motivation ,existence of feelings of equity among employees , linkage between performance and rewards.

Nelson Nelson (2000) adds that Performance Appraisal largely helps the employee to have a focused and fixed approach towards the target goal. He elaborates that appraisal system acts like a boosting factor for the employee to do his job well. It recognizes the employee's capabilities in order to achieve the given objective and function. It also helps in knowing the shortcomings of the employees and acts like an important element, for career development and planning.

Performance appraisal can be improved if companies use a more comprehensive rating approach known as 360 degree approach ( Becton, Portis & Schraeder ,2007)

require Rewarding and promoting effective performance in organizations, as well as identifying ineffective performers for developmental programs or other personnel actions, are essential to effective to human resource management (Pulakos, 2003).

The ability to conduct performance appraisals relies on the ability to assess an employee’s performance in a fair and accurate manner. Evaluating employee performance is a difficult task. Once the supervisor understands the nature of the job and the sources of information, the information needs to be collected in a systematic way, provided as feedback, and integrated into the organization’s performance management process for use in making compensation, job placement, and training decisions and assignments (London, 2003).

However there are some scholors who criticized the method as Chinese philosopher criticized the practices of the “Imperial Rater”because he rated workers according to how well he liked them, not based on how well they performed their duties (Murphy & Cleveland, 1995).

Sisson (1948) proposed that we adopt a methodology commonly used in personality measurement to performance appraisal .He demonstrated techniques for determining two descriptive items which were equally desirable and undesirable , but only one of which has been determined to discriminate between good and poor performers on the job.

DeCottis and Petits (1978) greatest proposed that adequacy of appraisal instrument , and the presence of clear standards could influence rater motivation to provide accurate appraisals

Performance of employee can be defined as behaviour or outcome instead of attributes ( Smith 1976, Farr and Landy ,1983 James 1973)

A PERFORMANCE appraisal system is totally ineffective in practice due to dearth of approval from the end users (Robert , 1990)

Performance management, in its broadest context, is a managerial process that links corporate objectives, performance standards and evaluation, to which the performance review, or performance appraisal, are often applied (Pickett, 2003

Three broad areas are identified in the literature as

morecloselyrelating to performance appraisal. Firstly, the

development of appraisal instruments to accurately and objectively

measure human performance (Tznier, Joanies & Murphy, 2001).

Secondly, a focus on supervisor and employee characteristics and

their potential bias on performance appraisal ratings (Dewberry,

2001). The third area concentrates on the uses and types of

performance appraisal systems within organisations (Scott &

Einstein, 2001). 

 

Approaches to performance appraisal range from relatively simple

techniques, such as ranking and traits rating, to the more complex

method of behaviorally anchored scales Tyson & York, 2000).

Techniques also vary with regard to temporal emphasis, either

focusing on the past through rating and ranking, or using

management by objectives to provide a future focus.

 Performance appraisal process and its outcome can affect an employee's motivation.Employee's performance is seen as most directly as a consequence of the employee'sability and his motivation to perform. (Cummings and Swabs,

1973, pp. 46)

(Fletcher and Bailey 2003) state that 360 degree feedback gives a great scope tocommend and criticize on their sub ordinates performance. It also helps in building upthe competency of the organizations framework and objective. It aids in increasing self awareness as self-assessment corresponds to subordinates perception.

Bartol,Durham and Poon (2001) investigated the impact of alternative appraisal categories available for rating employee performance (rating segmentation) on motivation and perception of fairness . The researchers found that the rating system and the performance rating itself affected perceptions of distributive justice .

If employees are not happy with the existing appraisal system, they would be unwilling to take a full part in it , which in turn would lead to lower productivity( Wright and Cheung 2005)Weightman (1996) focuses on the individual when citing the purposes of performance appraisal , suggesting it can be used for many reasons ,including , reward, discipline ,coaching ,counseling ,raising morale ,measuring achievement of targets and outputs ,identifying development opportunities,appraisal reactions such as satisfaction, acceptability, and motivation to use feedback, are cited as an important trend in the appraisal research during the past ten years in a recent review of that literature (Levy and Williams, 2004).

Drenth (1984), evaluation is a sensitive matter, often eliciting negative psychological responses such as resistance, denial, aggression, or

discouragement, particularly if the assessment is negative. Thus high perceptions of evaluative performance appraisal use may result in negative feelings about the appraisal.

Employee satisfaction with performance appraisal would be positively related to work performance (Pettijohn et al., 2001a; Roberts and Reed, 1996).Performance appraisal process and its outcome can affect an employee's motivation.Employee's performance is seen as most directly as a consequence of the employee'sability and his motivation to perform. (Cummings and Swabs, 1973, pp. 46)

Attitudes toward the appraiser are important, particularly because the person providing the performance appraisal is often the employee's supervisor (Milkovich and Boudreau, 1997). The feelings created during the performance appraisal may endure and affect the employee-supervisor relationship in general (Wendy R. Boswelljohn W. Boudreau, 2000). These authors considered that evaluation may create negative feelings toward the appraiser (the immediate supervisor) and could arguably be detrimental to the relationship. This may be particularly true if the employee receives a low PA rating or perceives injustice.

TIME SCALE

Presentation of Proposal---------------------------------------------3 August, 2011Written Proposal of Project (Draft) -------------------------------16 August, 2011 Written Proposal of Project (Final) -------------------------------18 August, 2011Data and Information Collection-----------------------------------September, 2011 Conducting Interviews with Stakeholders-------------------------October, 2011Data Collection Analysis---------------------------------------------November, 2011Writing Final Dissertation--------------------------------------------December, 2011Submission of Dissertation-------------------------------------------18 December, 2011

QUESTIONNAIRE

This questionnaire is designed to find the relation between work performance and performance appraisal. Keeping in mind the tool of performance appraisal while answering the questions mentioned below.

1. What is your gender?

A) Male B) Female

2. Specify your experience?

1)1 to 2 years 2)2 to 3 years 3)3 to 4 years 4)4 to 5 years 5) More Than 5 years.

3. What is the degree of expectation from me so that I can participate in the effective

goal setting of an organisation?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

4. Provides clear goals I can direct attention to (GS)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

5. Give me the feedback I receive agrees with what I have actually achieved

(FB)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

6. Provides me with information about organizational goals (GS)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

7. Helps me priorities between different work activities (GS)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

8. The feedback I receive helps me understand the organization’s strategy (FB)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

9. Helps me understand the organization’s vision and strategy (GS)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

10. Provides clear and direct information about my standing in relation to the goals

of my department (FB)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

11. Provides recognition when I perform well (FB)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

12. I can see clear coherence between my own work and the performance of my

department (GS)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

13. The tasks that I do at work are enjoyable (IM)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

14. My job is so interesting that it is a motivation in itself (IM)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

15. My job is meaningful (IM)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

16. The tasks that I do at work are themselves representing a driving power in my job

(IM)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

17. I feel lucky being paid for a job I like this much (IM)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

18. The job is like a hobby to me (IM)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

19. I enjoy discussing my organization with people outside it (AC)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

20. I often perform better than what can be expected (WP)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

21. I almost always perform better than what can be characterized as acceptable

performance (WP)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

22. The quality of my work is top notch (WP)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

23. I often expend extra effort in carrying out my job (WP)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

24. I have a greater need than most people to make decisions on the basis of my own

independent thinking (AO)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

25. I seek out situations that provide room for independent decision-making (AO)?Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

26. I am more independent than most people (AO)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

27. I do not feel a strong sense of belonging to my organization (AC)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

28. I do not feel “emotionally attached” to this organization (AC)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

29. I do not feel like “part of the family” at my organization (AC)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

30. I try to work as hard as possible (WP)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

31. It is very important for me to do well at work (WP)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

32. I really feel as if this organization’s problems are my own (AC)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

33. The opportunity to determine my own schedule is not important for me (AO)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

34. Freedom to make my own decisions is not important for me (AO)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

35. I do not have a great need for self-determination in what I do (AO)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

36. If I believe that something is wrong I speak out, regardless of who I’m talking to

(AO)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

37. I am able to say what I mean regardless of the situation I’m in (AO)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

38. I think I could easily become as attached to another organization as I am to this

one (AC)?

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

1 2 3 4 5

Thank You

FB = feedback; GS = goal setting; IM = intrinsic motivation; WP = work performance; AC = affective commitment; AO = autonomy orientation