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International Research Journal of Modernization in Engineering Technology and Science

( Peer-Reviewed, Open Access, Fully Refereed International Journal )
Volume:04/Issue:03/March-2022 Impact Factor- 6.752 www.irjmets.com
A RESEARCH ON IMPACT OF PERFORMANCE APPRAISAL ON
EMPLOYEE PRODUCTIVITY
Prof. Sugandha Sinha*1, Aishwarya Antapurkar*2, Pritesh Saharan*3
*1,2,3Parul University, Vadodara, Gujarat, India.
ABSTRACT
This research study is to understand the “Impact of performance appraisal on employee’s productivity”. The
general objective of the study was to determine the effect of performance appraisal on employee motivation
using a survey of Faculty responses in different departments of Parul University, Vadodara. The study is done to
establish specific objectives: To understand the relationship between performance appraisal and employee
productivity,to establish the extent to which performance appraisal process affects employee productivity and
motivation, to determine the extent to which appraisers affect staff motivation and to determine the challenges
in appraising employee performance.
The study adopted a descriptive research design. The population of interest consists of 2000 employees of the
university. A sample size of 50 was selected form different departments, age brackets, gender and experience in
order to cover maximum diversity in a short amount of time. Data was collection using structured
questionnaires. The data was analysed after collecting responses through questionnaire and then it was
translated into pie charts and excel tables. The data was then analysed to understand the corelation between
employee motivation, employee productivity and performance appraisal The data was presented using bar
charts. Lastly, conclusions were drawn on the basis of the analysis.
Keywords: Performance Appraisal, Employee Productivity, Employee Motivation.
I. INTRODUCTION
Human Resources are an important part of any organization. Each employee performs a set of roles and
responsibilities which contributes in organization’s overall success. Performance appraisal should ideally act as
unbiased evaluation of employees’ performance and thus improve employee motivation, engagement, and
productivity. However, at times organizations fail to use performance appraisal effectively and don’t see these
benefits.
A performance appraisal is the systematic and periodic assessment that assesses an employee’s job
performance and productivity concerning certain pre-established criteria, expectations and organizational
objectives. The performance assessment includes both the core competencies required by the organization and
also the competencies specific to the employee’s job. Employee performances assessment should be well
documented and evaluated as a part of career development and regular review in the organization through
performance appraisal.
Since performance appraisal process is directly linked with performance evaluation it is also directly linked
with employee motivation. If the core idea behind performance appraisal process is not delivered, there can be
negative repercussions and can also demotivate the employees. It also helps to maintain records in order to
determine compensation packages, salaries structure, wages raises, incentives etc., to identify the strengths and
weaknesses of employees to place right person on right job and to maintain and understand the potential
present in an employee for further growth and development.
Hence, for an organization to achieve its desired goals and objectives, every employee from the CEO to the
junior-most level of employee should be motivated to positively contribute to the organization. Performance,
under-performance, and non-performance of each employee will reflect in the overall organizational
performance. To ensure that organizational performance is not affected, employees should be satisfied,
engaged and motivated. Adopting an proper and continuous Performance Management System can enable
organizations to drive these benefits regularly.
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1.1 Methods Of Performance Appraisal
Fig 1: Methods of Performance Appraisal
1.2 Problem Statement

Performance appraisal offers a good opportunity to properly recognize employee’s contributions and
achievements to the organization, and to make sure that a strong relationship is established and maintained
between reward and productivity. It is essential in an organization because it helps creates an environment
that allows open communication, and also helps in clarifying goals and expectations. It helps brings about
progressive feedback and proper counsel in order to improve employee productivity. Nevertheless, it has been
observed that performance appraisal system though has many advantages but sometimes it can act as a
demotivator and also affects employees’ morale and promotes low productivity. Therefore, the research study
investigated the effect of performance appraisal on employees’ performance and productivity in the university
and what factors act as a demotivator and affect productivity.
1.3 Objectives Of This Project
 To understand the relationship between performance appraisal and employee productivity.
 To study different appraisal methods and its effectiveness.
 to establish the extent to which performance appraisal process affects employee motivation
 to determine the extent to which appraisers affect staff motivation
 to determine the challenges in appraising employee performance.
1.4 Scope Of Study
The study will focus on a studying impact of performance appraisal on employee productivity by analysing the
impact in an educational university. To understand better, comparison will be done between different
departments however, the scope will be limited to a single university and hence no university to university
comparison will be there. The target employees will be the faculties, the supporting staff, the administration
department etc. The study will focus on a sample group of 100 employees and the conclusion will be drawn on
the basis of responses.
II. LITERATURE REVIEW
There has been many researches in the past several decades on performance appraisal system (Bretz,
Milkovich & Read, 1992; Fisher, 1989). Performance appraisal sounds easy but researches tell us that it is
commonly used in performance feedback, performance evaluation and identify employee’s strengths and
weaknesses (Ruddin, 2005). The application of performance appraisal system by the entire industry has been
estimated between 74 to 89 percent (Murphy & Cleveland, 1991). Performance appraisal systems are used for
different purposes which include Human resource decisions, feedback and evaluation (Cleveland, Murphy &
Williams, 1989).

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Employees' reactions to appraisals and the sharedview in which performance appraisals take place were the
attention of psychologists (Levy, 2000; Levy & Williams, 2004). According to Nasud, an assessment framework
is a vital instrument for determining the worth of an employee's performance (Nasud, 1999). Performance
appraisal develops a reward system that combines the efforts of leaders and employees to achieve the
organization's common goals (Cleveland, Murphy, & William, 1989).
The data acquired and performance evaluations serve as a foundation for hiring and firing, training and
development of current employees, and inspiring and sustaining a high-quality workforce by appropriately
rewarding their efforts (Lillian, Mathooko, & Sitati ,2011). Performance management systems are frequently
included in performance appraisals. Performance management systems coordinate and manage all aspects of
an organization's resources in order to obtain the best results possible (martin, 1998). According to (McMaster,
1994; Williams, 2002), performance management entails selecting the strategic purpose, establishing team
goals, developing a performance plan, analysing performance (using an appraisal system), identifying
development needs, and assigning rewards.
A study conducted by (Dr. Atakilt Halifom Siyum,2020) on Impact of Performance Appraisal on Employee
Productivity in Private and Public Hospitals in Tigray, Ethiopia suggested that Performance appraisal has
gradually more become part of a strategic approach to integrating HR activities and business policies and helps
assess employees and develop their capability, improve performance and distribute rewards Impact of
performance appraisal on employee’s performance
Hodgetts (2002) divides the performance appraisal methodology into four steps. Establishing performance
criteria, determining individual performance, comparing performance to standards, and evaluating
performance based on the comparison are all part of a performance appraisal system.
The most controversial yet an indispensable HR tool that has drawn the concentration of the researchers and
practitioners (Murphy & Cleveland, 1991; Neely, et al., 2000) is undoubtedly ‘Performance Appraisal’. In spite
of its’ conflicting uses (Cleveland, Murphy, & William, 1989), performance appraisal is widely used to measure
and manage employee performance in all kinds of organization, large or small (Locker & Teel, 1988; Murphy &
Cleveland, 1991). Despite all the criticisms related to its’ accounting nature (Bourne, Mills, Wilcox, & Platts,
2000), rater bias (Murphy & Balzer, 1989; Smither & Reilly, 1987) and rater training (Borman, 1979), rater
agreement on the usage of performance appraisal (Murphy K. R., Balzer, Kellem, & Armstrong, 1982), it is used
by the HR professionals (Judge & Ferris, 1993) for promotional decisions, salary administration, (Cleveland,
Murphy, & William, 1989) training and development.
III. RESEARCH METHODLOGY
This section explains the research methodology and techniques used to conduct the study. The research type is
described in the first part of this section, followed by a description of the study design and the research plan
The study's population was outlined in the second section. The collection of responses will be limited to 3
departments of the university to maintain diversity and the sample will be chosen to include all age groups,
genders and work experience years The sample strategy and sample size utilized in this study are mentioned in
the third section of the research methodology. The section also discusses different sources through which the
primary data will be collected The data collection instrument utilized surrounding the questionnaire are
explained in the fourth section, followed by the research technique used to obtain the data, and finally the data
analysis used in this study will be discussed in the fifth section.
3.1 Research design
The research design is the strategy that will be used to achieve the research goals or hypotheses. It is the
master plan that details the strategies and procedures for gathering and analysing the necessary data. Because
the study aimed to get responses from a large number of people, it employed a quantitative research design
method. The study obtained responses from the sample using a quantitative research method.
The descriptive research design was adopted in this study. For data gathering, it uses a sample survey method,
as well as numerous statistical tools and methodologies for data analysis.

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3.2 Research plan
To identify the factors that motivates employees and impact performance appraisal on the same for which data
using statistical tools like analysis based on questionnaire and interviews will be done.
3.3 Research Frame
The population involves employees of Parul university. The study will focus on a studying impact of
performance appraisal on employee productivity by analysing the impact in an university. To understand
better, comparison will be done between different departments however, the scope will be limited to a single
university and hence no university to university comparison will be there. The target employees will be the
faculties, the supporting staff, the administration department etc. The study will focus on a sample group of 50
employees and the conclusion will be drawn on the basis of responses.
3.4 Sample size and Sampling unit
The sample size will be restricted to 50 faculties and staff members of Parul University. Responses will be
collected form 3 departments to maintain diversity of the study.
3.5 Data collection method
Questionnaires were the most effective way of data collection tool for the survey of this study. Standardised
questionnaires helped to investigate a widely distributed population. The advantage of this approach was that
the researcher can collect data from a controlled number of variables or unlimited number of variables. The
respondents were expected to provide answers to the open-ended questions.
The questionnaire is spilt into three sections each targeting to analyses different factors as per the predefined
objectives of this project. The sources of primary data were questionnaire, survey and observation and the
sources of secondary data were books, journals and websites.
3.6 Research Procedures
Pilot questionnaire were prepared and administered to 15 respondents to ensure the objectivity and clarity of
the items. The questionnaires had been pre-examined and any recommendations for development encountered
at some stage in the piloting technique had been included withinside the final questionnaire. Final
questionnaire was distributed to the respondents via google form. This enhanced the speed of data collection.
The answers to questionnaire were further analysed to draw observations and conclusions
3.7 Scope of the study
The study is conducted in a specific university (Parul University) and with a limited sample size.
3.8 Analysis tools
Percentage analysis method. Percentage method is most common method used. It helps the researcher to make
a comparison with or series of data and also to describe the relationship in comparative relative terms.
IV. ANALYSIS AND INTERPRETATION
The responses were collected form 3 different departments of Parul university.
 Architecture department
 Bachelors of business administration
 CDC department
The questionnaire was circulated and responses were collected from 50 respondents. (62% female 38% male)
Based on the responses collected, the data was analyzed:
 72% of faculties were in the age bracket of 20 – 40 yrs.

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Fig 2: Age groups of the respondents

 74 % of faculties were having less than 10 years of work experience.
Fig 3: Appraisal methods used for evaluation

 76% believed that performance appraisal has helped them to set & achieve meaningful goals,
 84% believed that performance Appraisal help to provide an atmosphere where all are encouraged to share
one another issues regarding work.
V. OBSERVATION AND CONCLUSION
The data was analysed after collecting responses through questionnaire and then it was translated into pie
charts and excel tables. The data was then analysed to understand the corelation between employee
motivation, employee productivity and performance appraisal The data was presented using bar charts.
Lastly, conclusions were drawn on the basis of the analysis.
Observation 1:
360 degree is the most used performance appraisal method (56%) followed by MOB (46 %).
Maximum employees (48% believe that it acts as a motivator however 42% feels that sometimes it acts as a
motivator and sometimes it doesn’t.
Conclusion 1:
This shows that 360 degree performance appraisal method is acceptable by the employees since only 10%
employees said that it doesn’t act as a motivator.
This shows that there is still a scope for improvement in the performance appraisal system and 360 degree can
be clubbed with MOB to get better results.

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SOURCE: Primary Study

Observation 2:
64% of employees believe that performance appraisal system is done to evaluate the employee performance
and identify the problem and yet 30% of them believe that it motivates the employee.
However, 10% of employees are demotivated by the performance appraisal system.
Conclusion 2:
Seminars can be conducted to make employee about what performance appraisal is? How it can help the
employee? And what is the prime reason of the process? And reviews and feedbacks can be taken from the
employees.

Observation 3:
66% of the employees agree that performance appraisal helps to set and achieve goals and also helps to change
an employee’s behaviour towards work in a positive manner.

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Conclusion 3:
This shows that the entire appraisal system may not motivate all the employees but it still has a positive impact
on the employee performance.

Observation 4:
Maximum employees believe that performance appraiser has an impact on the performance appraisal system.
They also believe that the appraiser comes with a pre-conceived mindset about an employee which creates
biasness.
Conclusion 4:
There can be AI conducted rounds and anonymous report submission process along with other processes. This
will give a fair chance to all.

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Observation 5:
Remuneration acts as the most important factor for motivation. However, with experience employees are more
satisfied with performance appreciation and work life balance than remuneration.
Conclusion 5:
During initial career years remuneration acts as the prime motivator however once the first 3 needs (as per
Maslow’s hierarchy of needs) are fulfilled, employee wants to fulfil his self esteem needs.
Motivating Factors
10
9
8
7
6
5
4
3
2
1
0
Remuneration Work culture Performance Work life balance
appreciation and
recognition
20-30 yrs 31-40 yrs 41-50 yrs above 51 yrs

All the above observation helps to prove that Performance Appraisal helps to Motivate employee and
helps to improve productivity.
VI. MANAGERIAL IMPLICATIONS
The study concluded that firms should review their employees on a regular basis based on accomplishments,
organisational goals, used targets, and time management in order to boost employee productivity. Since the
study is primary study, the conclusions can be applied in any organization.
Some of the interpretations were as follows:
 Employees are not always sure about why the employee performance appraisal is conducted and hence they
aren’t positively motivated by the process. It is the responsibility of the management to ensure that
employees are aware of the entire back-end process of performance appraisal and also about why it is done
and what are the criteria against which they will be evaluated.
 The objective of performance appraisal should be clear to both employees and the appraiser and a
transparent appraisal process is required to motivate the employee. Employees believe that the appraiser
has a deep impact on the entire process. This may demotivate the employees if they believe that the process
was biased.
 The study also suggests that the prime motivator during the initial years of career is remuneration.
However, one the employee crosses 31 years of age, work-life balance acts as a major motivator. A full-time
counsellor to act as a mediator between the management and employee should be employed to understand
the needs and problems the employee is facing in his/her professional as well as in personal life.
 Once the employee crosses 50 years of age, recognition and appreciation acts as a motivator above
remuneration.
 Along with performance appraisal system, it is important to have a career development programme which
will help the employee to see their career trajectory.
 Lastly, the research study concludes that implementation of management by objectives as performance
appraisal was statistically important in appraising employee’s performance.

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VII. REFERENCES
[1] The Effect Of Performance Appraisal On Employee Motivation: A Survey Of Slum Based Non-
Governmental Organizations In Nairobi By Natalie Chimwemwe Chaponda
[2] Impact Of Performance Appraisal On Employee’s Performance Involving the Moderating Role Of
Motivation By Nadeem Iqbal
[3] Impact Of Performance Appraisal On Employee Productivity In Private And Public Hospitals In Tigray,
Ethiopia By Dr. Atakilt Halifom Siyum
[4] Effectiveness Of Performance Appraisal System And Its Effect On Employee Motivation By Ayomikun
Idowu
[5] The Impact of Employee Motivation on Organizational Commitment by Dia Zeglat
[6] https://www.ahri.com.au/resources/ahriassist/performance-management/performance-appraisal/
[7] https://hbr.org/1976/07/appraisal-of-what-performance
[8] https://fellow.app/blog/management/employee-productivity-the-ultimate-guide-for-managers/
[9] https://www.investopedia.com/what-is-a-performance-appraisal-4586834
[10] https://www.shrm.org/resourcesandtools/tools-and-
samples/toolkits/pages/managingemployeeperformance.aspx

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e-ISSN: 2582-5208

International Research Journal of Modernization in Engineering Technology and Science

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Fig 1: Methods of Performance Appraisal

1.2 Problem Statement

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Fig 2: Age groups of the respondents

Fig 3: Appraisal methods used for evaluation

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SOURCE: Primary Study

SOURCE: Primary Study

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SOURCE: Primary Study

SOURCE: Primary Study

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SOURCE: Primary Study

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