Effect of Performance Appraisal Techniques On Job Satisfaction
Effect of Performance Appraisal Techniques On Job Satisfaction
Effect of Performance Appraisal Techniques On Job Satisfaction
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Specific Goals
Developmental Use
Individual needs
Performance feedback
Transfers and Placements
Strengths and Development needs
Salary
Promotion
Retention / Termination
Recognition
Lay offs
Poor Performers identification
Organizational Maintenance
HR Planning
Training Needs
Organizational Goal achievements
Goal Identification
HR Systems Evaluation
Reinforcement of organizational needs
Documentation
Validation Research
For HR Decisions
Legal Requirements
To determine if employees are actually satisfied with the work they do, organizations
frequently conduct surveys to measure employees' level of job satisfaction and identify areas -on boarding, job training, employee incentive programs, etc -- for improvement and job
enrichment. Because job satisfaction varies for each individual, management teams employ
several different strategies in order to help the majority of employees within an organization
feel satisfied with their place in the company. Job satisfaction may refer either to a person or a
group. Job satisfaction may be understood in the context of the employee's extent of
satisfaction in general in his total life situation. Ask a man why he works & the chances are he
will tell you, to make money" certainly, the need to earn a living is the most powerful single
reason why people work, though, as we see other/oh factors are also important. The
attractiveness of any one job factor such as wages is a consequence of the extent to which
other job satisfaction or expectations are being fulfilled at a time. When a worker enjoys
steady job, paying good wages, he is understandably more concerned about the treatment he
gets from his supervisors, the degree of independence & whether his job is interesting. But
when he loses his high-paid job, he is more concerned about regaining steady well-paid
employment. People in organizations have many needs, all of which are competing. Some
people are mainly drawn achievements others are concerned primarily with security and so
on. Despite these individual differences, an effective manager would not presume to decide
which motives are important to his employees. If he has to understand, predict & control
behavior, he must know what his employees really want from their jobs.
Factors Affecting Job Satisfaction
Company Policies - Policies that are clear, fair and applied equally to all employees will
decrease dissatisfaction. Therefore, fairness and clarity are important and can go a long way
in improving employee attitude. For example, if a company has a policy for lunch breaks that
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Working Conditions - Keeping up to date facilities and equipment and making sure
employees have adequate personal workspace can decrease dissatisfaction. A cramped
employee is a frustrated employee plus faulty equipment provides frustration in trying to get
work done.
Achievement - Making sure employees are in the proper positions to utilize their talents
may enhance satisfaction. When employees are in the proper role and feel a sense of
achievement and challenge, their talents will be in line with the goals best suited for them.
Recognition - Taking the time to acknowledge a job well done can increase the likelihood
of employee satisfaction. Positive and constructive feedback boosts an employee's morale and
keeps them working in the right direction.
Autonomy - Giving employees the freedom of ownership of their work may help raise
satisfaction. Job satisfaction may result when an individual knows they are responsible for the
outcome of their work.
Advancement - Allowing employees, who show high performance and loyalty, room to
advance will help ensure satisfaction. A new title and sense of responsibility can often increase
job satisfaction in an employee.
Job Security - Especially in times of economic uncertainty, job security is a very high
factor in determining an employee's job satisfaction. Giving an employee the assurance that
their job is secure will most likely increase job satisfaction.
The amount of research regarding the topic impact of performance appraisal techniques
on job satisfaction is vast. However the limitation much of this research to the advancement of
the practice of performance appraisal is generally acknowledged (Latham and Lee, 1986). Prior
to the early 1980s the majority of theoretical and empirical studies focused on improving the
psychometric characteristics of the rating instrument in an effort to reduce the subjectivity
inherent in performance rating(Feldman, 1981).
The literature as well as the direction of recent research indicates that the employees
reactions towards performance appraisal variables such as fairness and satisfaction will
continue to play a role in the evaluation of performance appraisal system as well as job
satisfaction of employees. The relationship between the justice perceptions and reactions to
the performance appraisal affects the job satisfaction of employees. The relationship between
the justice perceptions and reactions to the performance appraisal have been theorized and
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Performance appraisal affects the job satisfaction. The relationship between job
satisfaction and performance appraisal has been the concern of many studies. For the long
term effectiveness of the organizational system employees satisfactory perception towards
performance appraisals are important (Longenecker and Nykodym, 1996).
If the employees are not satisfied with the performance appraisals, they will not see the
added value and as a result they will not satisfy with the job (Dobbins and Cardy, 1990). Some
other studies suggested that performance appraisal is a key factor leading job satisfaction
(Maussavi and Ashbaugh, 1995; Murphy and Cleveland, 1995).
Performance appraisal helps in improving performance and building both job satisfaction
and organizational commitment. Alternatively this helps in lowering down the turnover levels
(Babin and Boles, 1996). Bard Kuvaas (2006) observed positive findings regarding job
satisfaction with performance appraisal, that those employees who are satisfied that how
performance appraisal is conducted have higher job satisfaction and lower turnover
intentions.
Researches which had been done in the year 1980s were found the most dominating one
which contributed the appraisal system in a great deal. The researches of 1980 also helped
out to clarify some presumed assumptions regarding the performance appraisal just like the
work of Murphy (1982). Research has included the measure of employee attitude towards the
system of performance appraisal and its acceptance. Stratton and Alexander (1987) found
that perceptions of appeal procedures were positively related to evaluations of supervisors,
trust in management and job satisfaction and negatively related to turnover and conflict.
Objective of Study
The objectives of the study are as follows1. To know the impact of performance appraisal techniques on job satisfaction.
2. To know the perception of the employees regarding performance appraisal and job
satisfaction.
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Research Approach
Survey Method
Research instrument
Questionnaire
Contact Method
- Books
- Magazines and Journals
- Survey in the form of Questionnaire.
- Discussions with executives and workers.
Sampling Method
Probability Sampling is used in the study
Hypothesis
H0- There is no significant relationship between performance appraisal techniques and
job satisfaction.
H1- There is no significant relationship between performance appraisal and job
satisfaction.
TOOL- Chi square test
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Valid
Frequency
Percent
Valid Percent
Cumulative
Percent
25-30
8.0
8.0
8.0
30-40
13
26.0
26.0
34.0
40-50
12
24.0
24.0
58.0
50 above
21
42.0
42.0
100.0
Total
50
100.0
100.0
Interpretation: 42% of employees are between 50 above age group, 26% are between 40-50 age
group, 24% between of 40-50 and 8% are between 25-30 age group.
length of service
Valid
Frequency
Percent
Valid Percent
Cumulative
Percent
2-5 years
8.0
8.0
8.0
5-10 years
4.0
4.0
12.0
above 10 years
44
88.0
88.0
100.0
Total
50
100.0
100.0
Interpretation- 88% of employees are having above 10 years of length of service, 8% are having
2-5 years of service and 4% are having 5-10 years of service.
satisfaction with technique
Valid
Frequency
Percent
Valid
Percent
Cumulative Percent
Yes
45
90.0
90.0
90.0
no
10.0
10.0
100.0
50
100.0
100.0
Total
peers,
and
27
54.0
54.0
54.0
20
40.0
40.0
94.0
Other
6.0
6.0
100.0
Total
50
100.0
100.0
Interpretation- 54% of the employees think thank that appraisal by superiors, subordinates
and peers is the most effective technique of performance appraisal, 40% of the employees
think that joint goal setting with management is the best way.
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age
classification
Total
other
25-30
wise30-40
13
40-50
12
12
21
27
20
50
16.588a
.011
50 above
Total
Pearson Chi-Square
Interpretation- The employees above 50 age group accepted that the appraisal by peers,
superiors and subordinate is the most effective technique of performance appraisal.
interrelated with job satisfaction
Valid
Frequency
Percent
Valid Percent
Cumulative
Percent
yes
41
82.0
82.0
82.0
no
16.0
16.0
98.0
can't say
2.0
2.0
100.0
50
100.0
100.0
Total
Interpretation-82% of the employees said that performance appraisal and job satisfaction are
related with each other whereas 16% of the employees think that performance appraisal and
job satisfaction are not related with each other and 2% says that they cant say about it
frequency of performance appraisal technique
Valid
Frequency
Percent
Valid Percent
Cumulative
Percent
once
43
86.0
86.0
86.0
twice
14.0
14.0
100.0
Total
50
100.0
100.0
Interpretation-86% of the employees say that performance appraisal is conducted once a year
whereas 14% say that twice a year.
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Valid
Frequency
Percent
Valid Percent
Cumulative
Percent
yes
28
56.0
56.0
56.0
no
22
44.0
44.0
100.0
Total
50
100.0
100.0
Valid
Frequency
Percent
Valid Percent
Cumulative
Percent
Yes
40
80.0
80.0
80.0
No
10
20.0
20.0
100.0
Total
50
100.0
100.0
Interpretation- 80% of the employees thinks that performance appraisal techniques provide
job satisfaction whereas 20% does not think so.
length of service * provide job satisfaction Crosstabulation
provide job satisfaction
lengh of service
yes
no
2-5 years
5-10 years
37
44
40
10
50
8.523a
.014
above 10 years
Total
Pearson Chi-Square
Total
Interpretation: The employees who work in organization above 10 years said that there is a
job satisfaction in the organization. The calculated value is 8.523 which is more than the table
value, so null hypothesis is rejected.
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Percent
Valid Percent
Cumulative
Percent
30
60.0
60.0
60.0
promotion
12.0
12.0
72.0
job satisfaction
10.0
10.0
82.0
motivation
18.0
18.0
100.0
50
100.0
100.0
evaluation of employees
Valid
Total
Interpretation- 60% of the employees think that performance appraisal is the evaluation of
employees, 12% think that it is promotion, 10% employees think that is job satisfaction,
whereas 12% of employees think that performance appraisal is motivation.
prejudice performance appraisal
Valid
Frequency
Percent
Valid Percent
Cumulative
Percent
yes
15
30.0
30.0
30.0
no
35
70.0
70.0
100.0
Total
50
100.0
100.0
Interpretation- 70% of the employees think that the top management does not display any
perceivable prejudice in performance appraisal whereas 30% thinks that there is prejudice by
top management in performance appraisal.
job satisfaction
Valid
Frequency
Percent
Valid Percent
Cumulative
Percent
yes
48
96.0
96.0
96.0
no
4.0
4.0
100.0
50
100.0
100.0
Total
Interpretation- 96% of the employees is satisfied with the job whereas 4% are not.
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length of service
Total
yes
no
2-5 years
5-10 years
40
46
.593a
4
4
2
44
50
.743
above 10 years
Total
Pearson Chi-Square
Interpretation- Employees who are working in the organization for more than 10 years said
that performance appraisal provides growth opportunity.
length of service * quality of work life Cross tabulation
Count
quality of work life
length of service
yes
no
2-5 years
5-10 years
42
46
10.474a
2
4
2
44
50
.005
above 10 years
Total
Pearson Chi-Square
Total
Interpretation- Employees who work above 10 years accepted that performance appraisal
techniques provide quality of work life. Here, the calculated value is 10.47 which is higher
than table value this null hypothesis is rejected.
Findings
1. Most of the employees are satisfied with the performance appraisal techniques used in the
organisation and they think that performance appraisal is interrelated with job satisfaction.
2. Some of the employees want improvements in performance appraisal techniques used in
ONGC.
3. Most of the employees feel that performance appraisal techniques provide job satisfaction.
4. Most of the employees do not feel biasness in performance appraisal.
5. Some employees think that top level management is bias in performance appraisal.
6. Some of the employees feel biasness in performance appraisal system and suggested some
measures to avoid biasness. Measures like- intermediate appraisals should be disclosed,
introduction of 360digree feedback system, transparent PAR remarks and grading at each
level.
7. Most of the employees say that variation in grade makes difference for the annual
performance payment.
8. Most of the employees think that performance appraisal helps in providing an atmosphere
to share each others burden.
9. Almost all employees are satisfied with the job in organisation.
10. Most of the employees feel that performance appraisal provide them growth opportunity
and Quality of Work Life as well.
Limitations
1. Availability of Time was major constraint duration allotted to us to cover such a vast topic
like Performance Appraisal. It is impossible to arrive at hundred percent correct conclusions.
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Conclusion
It is observed that there is a significant relationship between performance appraisal technique
and job satisfaction. Most of the employees are satisfied with the performance appraisal
techniques used in the organisation and they think that performance appraisal is interrelated
with job satisfaction. The employees feel that performance appraisal provides them growth
opportunity and Quality of Work Life as well.
Some of the employees feel biasness in performance appraisal system and suggested some
measures to avoid biasness. Various measures like intermediate appraisals should be
disclosed, introduction of the 360digree feedback system, transparent PAR remarks and
grading at each level to make performance appraisal transparent. Higher and attractive
performance related pay should be there..Functional responsibility should be clearly fixed so
the appraisal could be clearly conducted.
Recommendations
1. Some of the employees feel biasness in performance appraisal system and suggested some
measures to avoid biasness. Measures like- intermediate appraisals should be disclosed,
transparent PAR remarks and grading at each level.
2. Introduction of 360 degree feedback system.
3. Higher and attractive performance related pay should be there.
4. Functional responsibility should be clearly fixed so the appraisal could be clearly
conducted.
5. Nature of projects and some significant outcomes should be used for fixing KRAs and
KPIAs.
6. Performance appraisal techniques should used to analyse the performance with the work
which was carried out by the individual for the organisation but not for the the boss.
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