PERFORMANCE APPRAISAL: ITS EFFECT ON EMPLOYEE MOTIVATION

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International Journal of Business and Economy (IJBEC) eISSN: 2682-8359 [Vol. 1 No. 3 December 2019]

Journal website: http://myjms.mohe.gov.my/index.php/ijbec

PERFORMANCE APPRAISAL: ITS EFFECT ON EMPLOYEE MOTIVATION

Elaine May T. Fabiosa^1* and Ave Z. Danganan²

1 2 College of Business Administration and Accountancy, St. Michael’s College of Iligan, Iligan City, PHILIPPINES

*Corresponding author: klangfabiosa@gmail.com Article Information:

Article history:

Received date : 14 September 2019 Revised date : 19 November 2019 Accepted date : 6 December 2019 Published date : 30 December 2019 To cite this document:

Fabiosa, E., & Danganan, A. (2019).

PERFORMANCE APPRAISAL: ITS EFFECT ON EMPLOYEE

MOTIVATION. International Journal Of Business And Economy, 1(3), 1-8.

Abstract: This study is ascertained to know the performance appraisal and its effect on employee motivation of private tertiary faculty in Iligan City. This study made use of correlational-descriptive design to provide good analysis and interpretation of the results. The researcher utilized the standard questionnaires of Catherine Muriuki on her study about effect of performance appraisal on employee motivation at ministry. In the analysis of data of this study, frequency and percentage, weighted mean, t-test and f-test, and correlational analysis were employed. Results of studies revealed that motivation can be specified as a management process, which encourage people to work better for the general benefit of the organization, by providing them rewards, which are based on their unfulfilled needs. Effective performance management action is an important tool for employee motivation for positive performance. The intervention program for this study which is focused on extrinsic and intrinsic rewards that will help motivate the employees in a particular institution to work hard and try their best to achieve the goals which are set out by the business.

Findings also validated that when employees are motivated then they will perform and work accordingly and it means that when the institution has system of motivating their educators then expectedly will accomplish and perform to the fullest as loyalty return to their institution.

Keywords: Performance Appraisal, Employee Motivation, Rewards.

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1. Introduction

Issues in affecting motivation range from inadequate tools to achieve company goals to a simple lack of employer acknowledgment of worker achievements and employees like to see performance that exceeds organizational standards rewarded. Everyone has basic needs in order to feel good about their life and this also applies to their work. If these needs are met according to the employee's expectations, the motivation to grow also increases, to get the best out of yourself and the situation.

Employees' motivation is linked to the different basic needs which are all connected to one another, including certainty, solidarity and growth. Motivated employees can lead to increased productivity and allow an organization to achieve higher levels of output (Noordzij, 2013) .

When employees have goals, they tend to be more motivated if they also receive feedback about their progress and their output. Feedback may occur throughout the workday, but many organizations also have a formal, companywide process of providing feedback to employees. A performance appraisal is a way and a process in which an evaluator will evaluate the performance of each employee. More specifically, during a performance appraisal period, evaluator observe, interact with the employees, and evaluate a its performance. Performance appraisals can be important tools to give employees feedback and aid in their development. Yet feedback is only one reason why companies perform appraisals. In companies, appraisals are used to distribute rewards such as bonuses, annual pay raises, and promotions. Appraisals have the power to motivate employees because they provide a number of interconnected benefits like enhancing personal development, performance evaluations are motivational for employees who are looking to enhance their personal learning, growth, and development. Performance appraisals are similarly motivational for employees whose needs are centred on achievement, goal attainment, and sensing personal effectiveness, respect, and trust.

This study is to help the researcher know the effectiveness of performance appraisal and its effect on employee this will help also for company to improve and to maintain and assess the potential present in a person for further growth and development.

To make this study into reality, the researcher will make and implement an intervention program that could be used to know the effectiveness of Performance Appraisal to employees of private tertiary school in Iligan. This research is being conducted on the first semester of Academic Year 2018-2019.

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2. Methods

In this study, the researcher is using the descriptive correlational research. Descriptive research is designed to create a snapshot of the current thoughts, feelings, or behaviour of individuals in contrast to descriptive research, which is designed primarily to provide static pictures in contrast to descriptive research, correlational research involves the measurement of two or more relevant variables and an assessment of the relationship between or among those variables. Questionnaire- checklist on performance appraisal and employee motivation were employed to obtain the data needed.

This study was conducted in Iligan City where the five private tertiary institutions namely; St.

Michael’s College, Iligan Medical Center and Adventist Medical Center College are situated. The respondents of the study were 82 full time tertiary faculty of the three (3) private tertiary schools in Iligan City during the school year 2018-2019. Purposive sampling procedure as the selected employee of the different private tertiary school are given the chance to be the respondents of this study. Purposive sampling is a sampling technique in which researcher relies on his or her own judgment when choosing members of population to participate in the study.

3. Result and Discussion

Table 1. Performance Appraisal

Factors (Performance Appraisal) Mean SD Descriptive Equivalent

Performance Planning 4.27 .484 Very Satisfactory

Managing and Reviewing Performance 4.08 .606 Very Satisfactory

Performance Monitoring 4.06 .567 Very Satisfactory

Performance Assessment 3.92 .732 Very Satisfactory

Rewarding Performance 3.62 .794 Very Satisfactory

Outstanding- 5.00-4.50, Very Satisfactory 4.49-3.50, Satisfactory 3.49-2.50, Fair 2.49-1.50, Poor 1.49-1.00

Table 1 shows the summary of the respondent’s perceived degree of Performance Appraisal System, the highest factor of performance appraisal is Performance Planning with a mean of 4.27 while Rewarding Performance has the lowest mean (3.62) among the factors.

The result implied that among the factors of performance appraisal system, Performance Planning got the highest mean which means that performance planning is a systematic and structured approach to successfully achieve the desired goals of an individual or team throughout the assessment year.

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Rewarding Performance got the lowest mean. The elements of reward management within a business organization are all the things that they use to attract potential employees into their business which includes salary, bonuses, incentive pay, benefits and employee growth opportunities such as professional development and training opportunities. A reward system is beneficial not only to the employee but also to the organisation. The employee will feel more motivated to work harder. By having a reward system in place, the employee will feel more committed to their work and their productivity will increase (Essays, 2018). Employee reward systems refer to programs set up by a company to reward performance and motivate employees on individual and/or group levels. They are normally considered separate from salary but may be monetary in nature or otherwise have a cost to the company. While previously considered the domain of large companies, small businesses have also begun employing them as a tool to lure top employees in a competitive job market as well as to increase employee performance (Grimaldi, 2005).

Table 2. Summary of the Respondents’ Degree Motivation

Factors (Motivation) Mean SD Descriptive Equivalent

Organization Culture 3.92 0.761 Moderately Motivated

Management and Leadership Style 3.86 0.683 Moderately Motivated

Learning and Development 4.05 0.648 Moderately Motivated

Career Planning and Development 3.95 0.655 Moderately Motivated

Reward Systems 3.55 0.800 Moderately Motivated

Extremely Motivated 5.00-4.50, Moderately Motivated 4.49-3.50, Slightly Motivated 3.49-2.50, Moderately Unmotivated 2.49-1.50, Not at all 1.49-1.00

Table 2 shows the summary of the respondent’s perceived degree of employee motivation, the highest factor of performance appraisal is Learning and Development with a mean of 4.27 while Reward System has the lowest mean (3.62) among the factors.

Learning and development, a subset of HR, aims to improve group and individual performance by increasing and honing skills and knowledge. Learning and development, often called training and development, forms part of an organisation’s talent management strategy and is designed to align group and individual goals and performance with the organisation’s overall vision and goals (Nasibov, 2015).

However, reward system got the lowest mean. Matching the reward system with the level of performance for each job assigned in organization is known as reward management. To make effective reward management, an organization has to prepare an appropriate reward system.

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This implies that a reward system will motivate employees by reaching targets and organizational goals in exchange for rewards. A reward system is great at motivating employees, employees become less committed to work not because of their low pay structure, but for the lack of recognition.

Both types of rewarding system should be ensured for higher motivation, retention, engagement and job satisfaction.

Table 3: Motivation-Performance Appraisal Correlation Coefficient

Motivation Performance Appraisal Correlation

Coefficient p-value

Organization Culture

Performance Planning .717^** <.001

Managing and Reviewing

Performance .784^** <.001

Performance Monitoring .764^** <.001

Performance Assessment .732^** <.001

Rewarding Performance .669^** <.001

Management and Leadership Style

Learning and Development

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Motivation Performance Appraisal Correlation

Coefficient p-value

Career Planning and Development

Reward Systems

Table 3 shows the Correlation Coefficient result of Performance Appraisal and Employee Motivation.

This result showed that when employees are motivated, then they will perform accordingly well.

This means that when an educational institution has systems of motivating their educators, then expectedly they will perform to the fullest as loyalty return to their institution.

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3.1 Intervention Program

Implementing a program that meets employer and employee needs affects overall business success (Mayhew, 2017).

Table 4: Proposed Intervention Program

Activities/Methods Objectives Person Responsible Means of Verification Intrinsic Rewards

Recognition

Acknowledging the hard work and accomplishments of the individuals and teams within your organization by recognizing them on public and giving of certificates

- Vice President for Administration - Vice President for

Academics - College Dean

A supervisor must nominate one of his or her employees and conduct proper deliberation for that employee

Words of Praise from Supervisor/Head

Positive experience or 'uplift' that can increase employees' morale, motivation and engagement, and

renew their

commitment to their manager and the organisation

Academics - Dean

A supervisor must nominate one of his or her employees and conduct proper deliberation for that employee

Extrinsic Rewards

Certificate of Recognition/

Accomplishment

A gift certificate is more memorable, and creates a lasting reminder.

- College Dean

Training and Development

Employees who receive the necessary training are more able to perform in their job.

Academics - College Dean

Provide training to employees for free

Employee reward and recognition programs are one method of motivating employees to change work habits and key behaviours to benefit a small business. Reward systems refer to programs set up by a company to reward performance and motivate employees on individual.

This intervention program will help motivate the employees in particular institution to work hard and try their best to achieve the goals which are set out by the business. Intrinsic and Extrinsic rewards is being analysed for this program, Intrinsic Rewards is an intangible award of recognition, a sense of achievement, or a conscious satisfaction while Extrinsic rewards is an award that is tangible or physically given to you for accomplishing something.

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4. Conclusion

A good employee performance is necessary for the organization, since an organisation’s success is dependent upon the employee’s creativity, innovation and commitment. An effective performance management action is an important tool for employee motivation for optimal performance. However, it is not an enough condition for effective performance management. Motivation can be specified as a management process, which encourage employees to work better for the overall benefit of the organization. The most important issue with any performance management system is how critically it is taken and how devotedly it is used by managers and employees.

5. Recommendations

From the findings of the study the following recommendations are formulated:

5.1 Employee

They must be aware of their performance inside the organization and help themselves develop their skills and career on their own way and by accepting any recommendation and evaluation from his/her immediate head. Employees should always strive to do good job and help organization achieve the goals

5.2 Employer

They must be conduct better planning so that they increase daily motivation and performance of employees in dynamic work environments. Planning of work is the most important and efficient way to complete the task given by their supervisor. Every company needs a strategic reward system for employees. In order to reap benefits such as increased productivity, the entrepreneur designing a reward program must identify company or group goals to be reached and the behaviors or performance.

References

Essays, UK (November 2018), “Importance of Reward Management Business”. Retrieved from https://www.ukessays.com/essays/business/the-importance-of-reward-management business- essay.php?vref=1

Feigenbum, Eric (2018). “Training and Development is to Motivate Employee”. Retrieved from https://smallbusiness.chron.com/training-motivate-employees-13656.html

Grimaldi, Lisa (August 2005). "Study proves recognition pays off." Meetings & Conventions.

Retrieved from https://www.hrzone.com/about-hrzone

Gleeson, B (2017). “How Important Is Culture Fit For Employee Retention?”

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Nasibov, A (2015). “Impact of Employee Motivation on Performance Productivity”. Retrieved from https://www.linkedin.com/pulse/impact-employee-motivation-performance-productivity- anar-nesibov

Noordzij, L (2013). “What is Employee Motivation”. Retrieved from https://www.effectory.com/knowledge/themes/what-is-employee-motivation/