Performance Appraisal System Analysis

This assignment requires a detailed analysis of the performance appraisal system used by Marks and Spencer's. It involves answering questions about the process, its impact on employees, frequency of appraisals, and challenges faced by the organization. The analysis should provide insights into how the system can be improved to enhance employee satisfaction and performance.

Running head: IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE
Impact of Performance Appraisal on Employee Performance
Name of the Student:
Name of the University:
Author’s Note:

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 1
Executive Summary
The entire research work is divided into five key chapters. In the first chapter the
overview of the research topic along with the research aims, objectives and the research aims are
provided. In other words the first chapter provides an overall outlook of the entire dissertation.
The second chapter had focused on reviewing the wide range of literature based on the topic
“Impact of performance appraisal on employee performance”. This has helped the researcher to
get an in depth understanding of the research issue. The third chapter provides the overview of
the research methodologies adopted in the research work. Chapter four is focused on analyzing
the data gathered for substantiating the research hypothesis while the last and final chapter
provides a broad conclusion and a few plausible recommendations.

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 2
Acknowledgement
The research conducted by me has been one of the enriching experiences of my life. This
research helped me in gaining enhancing experience by providing me the understanding to
skilfully carry out the research. The research helped me in overcoming the drawbacks by facing
them skilfully. However, this would not have been possible with the help and encouragement I
received from my professor. I also received the encouragement from my peers and all the people
who helped me carry out the research. I would like to thank my supervisor
_______________________________ for the constant support and encouragement to carry out
the research. It would not be right if I do not thank my academic guides who have constantly
assisted me in the research. I would also like to thank by friends who helped and encouraged me
for the research. Finally, I would like to thanks the customers who participated in the survey that
was conducted to gain primary data. The support of all these people has been enhancing and
inspiring throughout the research process.
Heartfelt thanks and warmest wishes,
Yours Sincerely,

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 3
Table of Contents
Chapter 1..........................................................................................................................................6
1.0 Introduction................................................................................................................................6
1.1 Background of the Organisation............................................................................................6
1.2 Problem Statement.................................................................................................................7
1.3 Research Rationale................................................................................................................7
1.4 Aims of the Research.............................................................................................................8
1.5 Objectives of the Research....................................................................................................8
1.6 Research Questions................................................................................................................9
1.7 Structure of the Dissertation......................................................................................................9
Chapter: 2.......................................................................................................................................10
2.0 Literature Review....................................................................................................................10
2.1 Concept of Performance Appraisal......................................................................................10
2.1.1 Process..........................................................................................................................12
2.1.2 Assessing Systematically..............................................................................................12
2.1.3 Key Objective...............................................................................................................12
2.1.4 Scientific and Periodic Evaluation:..............................................................................12
2.2 Process of Performance Appraisal.......................................................................................12
2.2.1 Establishing the Performance Standards......................................................................14
2.3 Responsibility of Performance Appraisal............................................................................16

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 4
2.3.1 Supervisor.....................................................................................................................16
2.3.2. Subordinates................................................................................................................17
2.3.3 Peer Groups and team Members...................................................................................17
2.3.4 Customer Appraisal......................................................................................................18
2.4 Methods of Performance Appraisal.....................................................................................18
2.4.1 360 Degree Feedback Method of Evaluation...............................................................18
2.4.2 Rating Scale Method.........................................................................................................19
2.4.3 Critical Incident Method...............................................................................................19
2.5 Concept of Employee Performance.....................................................................................19
2.6 Factors Affecting Employee Performance...........................................................................20
2.6.1 Leadership.....................................................................................................................21
2.6.2 Coaching.......................................................................................................................21
2.6.3 Performance appraisal..................................................................................................21
2.6.4 Motivation.....................................................................................................................22
2.6.5 Training.........................................................................................................................22
2.7 Role of Performance Appraisal in Improving Employee Performance...............................23
2.7.1 Commitment of the Employees....................................................................................24
2.7.2 Skills of the Employees................................................................................................25
Chapter: 3.......................................................................................................................................26
3.0 Research Method.....................................................................................................................26

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 5
3.1 Introduction..........................................................................................................................26
3.2 Research Approach..............................................................................................................26
3.3 Research Design..................................................................................................................27
3.4 Sampling Method.................................................................................................................29
3.5 Data Collection Method.......................................................................................................29
3.6 Techniques of Data Analysis...............................................................................................30
3.7 Accessibility Issues..............................................................................................................30
3.8 Ethical Issues.......................................................................................................................31
Chapter 4:.......................................................................................................................................32
4.0 Findings and Analysis..............................................................................................................32
Chapter: 5.......................................................................................................................................40
5.0 Conclusion and Recommendation...........................................................................................40
Reference List................................................................................................................................43
Appendix-1....................................................................................................................................50

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 6
Chapter 1
1.0 Introduction
Performance appraisal is considered among one of the key material of the performance
management system that incorporates various measurements within the organisations.
Performance appraisal could be considered as the most important process if and only if the
organisation is willing to derive maximum advantage of its most valuable asset, which is the
employees (Harrington and Lee, 2015). Therefore, it can be stated that if the organisations are
willing to obtain the human capital advantage they should make sure to implement as appropriate
performance appraisal system within their human resource management structure. As argued by
LePine et al., (2016) performance appraisal can leave an effective impact over the performance
of the employees. In other words, performance appraisal is an effective tool for identifying the
skills and competencies of the employees. This helps the organisation to recognise those skills
and competencies and thereby rewarding them for their hard work. This in turn motivates the
employees and marks and impact on their performance (Zhong et al., 2016). This research work
has shed light on the detailed process through which performance appraisal system affects the
performance of the employees of Marks and Spencer.
1.1 Background of the Organisation
Marks and Spencer PLC was formed in the year 1884 by a Polish refugee Michael Marks
and its first stall was opened in Leeds. Presently the company can be identified as one of the
largest retailers in the United Kingdom. It owns 300 Marks and Spencer’s stores in the United
Kingdom alone (Annualreport.marksandspencer.com, 2017). These stores generally sell
footwear, gift items, apparels, food and home furnishing products among which most of the

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 7
products are labelled St Michael Brand which is a private brand of M & S. The company also
owns more than 100 exclusive Marks and Spencer stores in Europe, Canada and Hong Kong and
at the same time it also franchises 85 M & S stores in Europe, Bahamas, Middle East and
Australia. Marks and Spencer also operates in the food industry and 60% of its UK business
turnover is generated from the food industry. The Marks and Spencer first spread its wings in the
food market during 1931 selling the canned foods and produces. Currently the company sells
food products through 942 UK based stores that includes 253 company owned and 383 franchise
food only stores (Annualreport.marksandspencer.com, 2017). The company has depicted a
significant growth rate since the past few years and is expected that it will further flourish in near
future.
1.2 Problem Statement
This specific research work is concentrated on determining the impact of employee
appraisal system on the performance of the employees of Marks and Spencer. Marks and
Spencer has always implemented a succinct performance appraisal system and the employees of
M & S are also found to be performing as efficiently as possible leading to a drastic success of
the organisation. However, investigating the relationship between the performance appraisal
system and employee performance may in turn help the organization to enhance its employee
performance.
1.3 Research Rationale
The research is concentrated on the issue of determining the impact of performance
appraisal on the performance and productivity of an employee. In the era of globalization and

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with the emergence of ever increasing competitiveness almost all the organisations are striving to
sustain the market profitably (Iqbal et al., 2015). In order to do so the organisations are required
to increase their productivity and profitability. The most effective way of increasing the
productivity of an organisation is to motivate and drive their employees efficiently. As the
previous researches suggest if there is an effective performance appraisal process in place then
an organisation will certainly be able to enhance the performance of its employees (Ohme and
Zacher, 2015). Hence the impact of performance appraisal over the performance of the
employees is considered as the key issues of the research.
As market competitiveness is increasing over time and it can easily be inferred that it will
further increase in near future, organisations are always required to be prepared to cope with
such situation (Budworth et al., 2015. Therefore, enhancing the employee performance through
an effective performance appraisal system is considered as a major issue of research now. This
research work will investigate the key factors of performance appraisal and its role in the
performance management system. Later on the research work has minutely focused on
determining the impact of performance appraisal over the performance of the employees.
1.4 Aims of the Research
The aim of the research was to determine the key impact of performance appraisal system
on the performance of the employee. It attempted to review whether the system affects the
employee performance positively or negatively. As well as the research also aimed at
determining the most effective performance appraisal method through which employees could be
influenced more.
1.5 Objectives of the Research

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The objectives of the research can be summarized as follows,
 To get a detailed overview of the performance appraisal system of Marks and Spencer
 To determine the key factors of the performance appraisal system of Marks and Spencer
 To determine the factors affecting the employee performance in Marks and Spencer
 To determine how and in which direction employee performance is affected by
performance appraisal system in Marks and Spencer
1.6 Research Questions
The key questions of the research can be stated as follows
 What is performance appraisal system?
 What are the factors or elements of performance appraisal system of Marks and Spencer?
 What are the factors affecting employee performance in Marks and Spencer?
 How employee performance is affected by performance appraisal system in Marks and
Spencer?
1.7 Structure of the Dissertation
Figure 1: Dissertation Structure

Introduction
Conclusion and
Recommendations
Literature Review
Research Methodology
Findings and Analysis
IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 10
Figure 1: Dissertation Structure
(Source: Created by Author)
Chapter: 2
2.0 Literature Review
2.1 Concept of Performance Appraisal

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Performance appraisal is characterized as a formal system designated for reviewing and
evaluating the performance of an individual or team. A noteworthy point in the definition is the
use of the word “Formal” this is because the managers usually evaluate the performance of
individual on a continuing basis (Zhong et al., 2016).
Performance appraisal is an essential component of the performance management system.
As argued by Cascio (2018), performance appraisal is a component of the performance
management system it is important in a sense that it directly reflects the strategic plan of the
organization. However, the evaluation of the performance of a team is also essential if teams
exist within an organization, in most of the organizations performance appraisal focuses only on
evaluating the performance of individual employees. Irrespective of the emphasis an effective
performance appraisal system in turn enumerates the accomplishments of the employees and
thereby designs an effective plan for development, goals and setting up objectives (Kehoe and
Wright, 2013).
A group of researchers have observed that performance appraisal have often been
regarded as a negative or disliked activity. Managers dislike giving performance appraisal while
employees do not like receiving them. As per the data obtained through a survey it has been
observed that 80 percent of the employees were not satisfied with their performance appraisal.
Despite of all these facts performance appraisal system is still in its place because it serves
several purposes and improved performance and efficiency of the employees are crucial in
today’s competitive market environment. Therefore following the words of Pichler (2012),
deserting the only process that is concerned about performance and focuses on employees would
never be an effective decision.
The conventional performance appraisal system possesses the following characteristic features.

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 12
2.1.1 Process
Performance appraisal in only a systematic approach rather it can be identified as a
process that incorporates several steps.
2.1.2 Assessing Systematically
Employee’s strengths and weaknesses are assessed systematically on the basis of a given
task through performance appraisal system (Anitha, 2014).
2.1.3 Key Objective
The basic objective of the performance appraisal system is to know how well an
employee is doing within the organization and what are the key areas which are needed to be
improved.
2.1.4 Scientific and Periodic Evaluation:
A scientifically justified and similar approach is adopted for evaluating the performance of every
employee. On the other hand, the evaluation process is also periodic which means the evaluation
will take place in periodic intervals (Grant, 2012).
2.2 Process of Performance Appraisal
The figure below depicts the process of performance appraisal briefly. As it can be
observed that the first point of performance appraisal process is to identifying specific goals of
performance. It has been argued that an appraisal system evidently will not be able to serve each
of the desired purposes. Henceforth, the management should effectively identify the specific
goals which are most important and can be achieved realistically (Posthuma et al., 2013). For
instance there are certain organizations which focus on development of employees while the
other firms may stress on pay adjustments. Enacting too many performance appraisal system will

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 13
not work as the management expects too much from a single system and does not determine
what it is willing to achieve through the system.
Figure 2: Process of Performance Appraisal

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(Source: Perry et al., 2012)
Next step of the process concentrates on setting up performance standards and
communication those desired performance standards to the concerned people. Then the task is
performed and the supervisor responsible performs the appraisal. At the end of the process of
appraisal the employees and the supervisor review the report of work performance and evaluates
the report against the previously stated performance standards (Wong and Laschinger, 2013).
This specific review helps to determine whether the employees have met the performance
standards, determining the key areas of deficiency and thereby designing a strategic plan through
those deficiencies could be mitigated. At this point of time the goals are set and communicated
for the next period of evaluation and the same process is repeated (Jenter and Kanaan, 2015).
2.2.1 Establishing the Performance Standards
There is an old saying that “What gets watched, gets done”. Hence it can be stated that
the management should design the performance standards as efficiently as possible as it is the
key to achieving corporate goals. The most common criteria of appraisal are traits, behavior, goal
achievement, competencies and potential of improvement.
Traits
A few traits of the employees for instance the appearance, attitude and initiatives are the
basis on which evaluation is performed. However, Buller and McEvoy (2012), argued that most
these rigorously used qualities are subjective and may not be defined or unrelated to job
performance. In such a case inappropriate evaluation may follow and give rise to legal
complications. On the other hand, there are certain traits which are useful in relating to job
performance. Hence using these traits may be useful for the organizations. Traits like judgment,

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 15
adaptability, appearance and attitude could be considered as the useful traits while the connection
between these traits and job performance is established (Cerasoli et al., 2014).
Behaviors
When it becomes difficult to outcome of an individual’s task, organizations may opt for
evaluating the task related behavior of the employee. For instance the most suitable behavior to
evaluate the performance of a manager would be leadership style (Chen et al., 2014). In the
context of the individual employees who are working in a team, developing other employees,
teamwork and cooperation might seem to be appropriate. Desired behavior of the employees
could be considered as appropriate, this is because if these are recognized and rewarded the
employees are more likely to repeat these activities (Daley, 2012).
Competencies
Competencies may incorporate a wide range of knowledge, traits, behavioral activities
and skillsets that may seem to be technical in nature and related to interpersonal skills.
Some of the managers have argued that cultural competencies like integrity and ethics
can be used for jobs of all kinds. Some competencies are there as well which are specific to jobs.
For instance the competency of analytical thinking or achievement orientation can be considered
as essential for professional jobs (Bakker et al., 2012).
Goal Achievement
If an organization considers the end to be more important than the means, the factors of
goal achievement becomes an important factor that should be evaluated. The established
outcomes should certainly be within the control of the team or the individuals and certainly be

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 16
those results which in turn leads the firm towards success (Rummler and Brache, 2012). At the
upper level the goals would be associated with the financial aspects of the organization such as
profits and losses or maintaining cash flow and maintaining the position in the market. At the
lower level the employees of the organization should be concerned about mitigating the needs of
the consumers by enhancing the quality of the products and improving aftersales services.
2.3 Responsibility of Performance Appraisal
In most of the cases the human resource management department is held responsible for
effectively designing and implementing the performance appraisal program. However, it has
been argued that the line managers should always play an important role from the beginning to
the end of the performance appraisal process (Muogbo, 2013). These are the individuals who
conduct the process of appraisal and they should certainly participate in the program in order to
make it successful.
2.3.1 Supervisor
From a logical viewpoint the immediate supervisor of an employee is considered to be
the most appropriate person to evaluate the performance of the employees. The supervisor will
always be in an advantageous position to oversee the job performance of the employees and the
supervisor is also held responsible for managing a particular unit at the workplace (Thornton and
Byham, 2013). It is a matter of fact that whenever another person is designated with the
responsibility of evaluating the performance of the employees the supervisor’s authority may get
undermined. Providing training to the subordinates and developing the employees are the most
important elements of every manager’s job. At the same point of time employee development
and appraisal programs are generally related closely.

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On the other side of the spectrum, it can be said that the immediate supervisor may
emphasize over certain aspects of the employees and neglect the others. Van De Voorde et al.,
(2012), stated that managers are often known to be manipulative towards the evaluation process
for increasing pay and ensuring promotions.
2.3.2. Subordinates
Evaluation by the subordinates has historically been considered as an inefficient
approach. However, a change in this thinking has been observed nowadays. Some of the
organizations have expressed the view that evaluation of the managers by the subordinates is
sometimes needed and it is feasible as well (Franco-Santos et al., 2012). The justification behind
this is that the subordinates are always in an excellent position to observe the managerial
capabilities of their superiors. Researchers believe that this approach concerns the supervisors to
evaluate the needs of the work groups effectively and discharge better management services.
2.3.3 Peer Groups and team Members
Using peers for the process of performance appraisal is beneficial in a sense that they
close work with the employees evaluated and may possess undistorted views on the performance
of those employees especially when they are working in a group (Phillips, 2012). Presently the
organizations are increasingly using the team members for performance appraisal.
The key problem of performance appraisal through peers is that they may reflect
reluctance to criticize the people with whom they work closely. On the other hand, if the
employee is in odds with the other employee he or she may not provide the correct feedback
which will in turn give rise to an unfair evaluation (Fricker et al., 2012).

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2.3.4 Customer Appraisal
A firm’s degree of success is widely determined by the behavior of the customers. Hence
many firms trust the view that it will be fruitful to obtain performance input from these valuable
sources. Mainly the organizations use this approach as it makes the employees responsible,
increases commitment towards the customers and promotes organizational change (Bititci et al.,
2012).
2.4 Methods of Performance Appraisal
There are numerous methods of performance appraisal and the managers are free to select
one over the other. Mainly the selection of performance appraisal method depends on its sole
purpose. If the major focus in on sorting and selecting people for training, promotion and pay
increase a traditional method of appraisal like rating scale would be appropriate (Jiang et al.,
2012). Collaborative methods that include obtaining opinion from the employees may be more
appropriate for developing employees. The major methods of performance appraisal are stated
below,
2.4.1 360 Degree Feedback Method of Evaluation
The 360 Degree Feedback Method of evaluation is popular for performance appraisal in
various organizations and it involves collecting in inputs from different levels within the firm or
from sources outside the firm (Andreeva and Kianto, 2012). The traditional method of
performance appraisal that provides the employees with feedbacks only from the supervisors is
not similar to the 360 Degree method. In this particular method people who are all around the
employee to be rated would provide feedback which may include the senior managers, team

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 19
members, peers, supervisors or subordinates. It has been observed that almost 90 per cent of the
Fortune 500 companies use the 360 degree method of performance appraisal.
2.4.2 Rating Scale Method
The rating scale method is a widely used method of performance appraisal in which the
employees are rated on the basis of some predefined factors.
Under this approach the evaluators note their inputs regarding the employee performance
on a scale. The scale generally includes numerous categories at least 5 to 7 which are defined by
some adjectives like outstanding, needs improvement and meets expectation (McDavid et al.,
2012). Though the system sometimes provide an overall rating the method also uses different
performance criterion as well.
2.4.3 Critical Incident Method
Under the critical incident method of performance appraisal written records are
maintained for highly favorable and unfavorable employee actions at work (Briscoe et al., 2012).
Whenever a critical action affects the organizational performance either positively or negatively
the manager notes it down. At the end of the process of appraisal the evaluator uses these
documents along with the other data for effectively evaluating the employee performance.
2.5 Concept of Employee Performance
Organizations are established with the purpose to achieve certain objectives. These are
the objectives which can effectively be achieved by utilizing the resources like human capital,
machines, money and other materials. As pointed out by Menezes et al., (2012), the productivity
and operability of an organization depends on the people working with it. Hence employees can

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 20
be considered as the most important factor for achieving organizational objectives. Therefore it
can be stated that employees are important resource to the organization and they are required to
be trained and developed in order to ensure effective achievability of the organizational goals
and objectives. Performance is strictly associated with the quality, quantity and timeliness of
output, attendance rate on the job as well as efficiency of the completed work. As opined by
author the definition of performance does not incorporate the result of employee behavior but
only the behavior of the employees. It is solely concerned about what the employees do and not
about what they produce or the outcomes of their work. Employee performance can be
considered from the perspective of three major factors which are “declarative knowledge”,
“motivation” and “procedural knowledge” (Noe et al., 2014).
Hodge (2018), pointed out five human resource management factors which in turn affects
the performance of an employee. These factors are establishing a competitive compensation,
recruitment package, performance appraisal, training and development and maintaining morale.
On the other hand, Tims et al., (2013), opined that recruitment and selection process, placement
process, performance appraisal and training compensation affect the employee performance
effectively. Hence it can be stated that there is a prompt relationship between the process of
performance appraisal and employee performance.
2.6 Factors Affecting Employee Performance
As pointed out by the researchers there are certain factors which individually or
collectively affect the performance of employees either in a positive and negative manner.

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 21
2.6.1 Leadership
Leadership is a process or system through which an individual manipulates a group of
individuals towards achieving a shared goal. The leadership style is simply a combination of
behaviour and attribute of a leader that gives rise to certain patterns while dealing with the
followers. The leadership style prevailing within an organization may possess a positive or
negative effect over the employee performance (Bernardin and Wiatrowski, 2013).
2.6.2 Coaching
Presently coaching is considered as an important factor for improving the employee
performance. It is a two way communication process that identifies what needs further
improvement and determines the process of improving that particular area (Jiang et al., 2012).
Furthermore, the coaches effectively identifies the behaviors and beliefs that hinders the
employee performance. On an added notion it can be stated that coaching is something that is
used for assisting someone to improve performance.
2.6.3 Performance appraisal
The process of evaluating the performance of an employee is an interactive process
where the manager puts forward his or her input on employee performance and the employee
gets the chance to know what he or she has performed throughout (Pichler, 2012). Managers or
supervisors are generally held responsible for designing a plan with the employees and clearly
communicating the expected outcomes to the employees as well. The more engaging the process
will be the performance of the employees will improve. The evaluation system must be clear and
concise so as to influence the employee performance in a positive manner.

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 22
2.6.4 Motivation
Motivation is a crucial factor for improved job performance a demotivated or poorly
motivated workforce will in turn be costly to the organization in terms of high employee
turnover rate, increased expenses and excessive use of management’s time. Hence the
management must be well aware about the factors that stimulates their staff in a way that
resources are efficiently allocated and no dissatisfaction arises among the employee. As stated by
Elnaga and Imran (2013), motivation can be described as being proactive with the employees
who are better performers and in those cases motivation is quintessential or their performance
may decline. On the other hand, motivation is considered as a prerequisite factor while dealing
with the employees who are identified as low performers. Else these employees will drag down
the overall result of the organization with their low productivity and they will also not leave the
organization (Abdulkadir et al., 2012).
From the organizational perspective a highly motivated workforce is crucial as the
wishful participation of the workforce will drive the profitability of the organization. In other
words motivation is defined as the activity of educating the employees so that they can
efficiently channelize their efforts towards the organizational boundaries and enhancing the
overall performance even beyond the said boundary. As pointed out by Salleh et al., (2013), a
highly motivated workforce will in turn give rise to better understanding, commitment towards
the organization and implementation of knowledge and skills. There are six key elements of
motivation which are rewards, profit, pay, promotion, sharing, job enrichment and recognition.
2.6.5 Training
Training is characterized as the development process of the employees through which
their performance is improved. Training is somewhat a planned and systematic activity that in

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 23
turn enhances the skill, knowledge and competence level of the employees and enables them to
work effectively. There are sufficient literature that substantiates the fact that training can
evidently influence the performance of an employee in a positive manner. According to Boachie-
Mensah and Seidu (2012), the competence level of the employees changes in accordance with
the effective training procedures. Training has been identified as the process that gives rise to
performance related benefits to the employees and for the organization as well through
influencing the employees positively by developing the skills, knowledge and competencies of
the employees (Kooij et al., 2013).
It has always been argued that most of the managers provide training to the employees
for three broad purposes which are described as follows,
 In order to enhance the performance or the level of productivity of the employees.
 In order to increase the overall organizational productivity and achieving the goals of the
organization.
 So as to invest sufficient capital on the employees so that they can support and safeguard
the organization in competitive and turbulent business environment.
On an added notion it is noteworthy to mention that there are mainly three types of
training methods which are namely, TNA or Training Needs Assessment, contents and delivery
approaches of training and On the Job Training or OJT (Farndale and Kelliher, 2013).
2.7 Role of Performance Appraisal in Improving Employee Performance
The performance appraisal system in turn affects the overall performance of an employee
by influencing a few key employee attributes and these impacts taken together influences the

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 24
performance of the employee as a whole. The impact of performance appraisal over the key
attributes are explained as below,
2.7.1 Commitment of the Employees
The fully committed employees feels that they are sharing a strong bond with the
organization. This positively influences the employees and in turn makes them willing to
perform better. It has been always argued that whether happiness is the only variable that
determines whether the employees are committed towards the job or not (Caillier, 2014).
However, later on a group of researchers came up with the idea that there exists several other
factors as well which affects the level of commitment of an employee towards an organization or
a specific job. Although it is a substantiated and established fact that the more autonomy and
responsibility that a job offers to an employee the less monotonous will be the job and employees
attached to those jobs are likely to be committed towards their roles and responsibilities
(Hameed, et al., 2014).
There are empirical studies which suggests that the performance appraisal system of an
organization affects the commitment level of the employees in both positive and negative
manner. If the efforts of the employees are correctly recognized and the employees are rewarded
for their performance it is quite likely that the employees will feel motivated and will perform
better. On the other hand, an inefficient performance appraisal system will not be able to identify
the efforts and inputs of the employees and these will left unrecognized. This in turn affects the
level of commitment and motivation of the employees and they do not feel inspired to perform
well. Hence, following West and Dawson (2012), it can be stated that whenever the employees
get any incentive for their better performance through the appraisal system they feel motivated to

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 25
perform well in future as well. This as a result increases the overall performance of the
organization.
2.7.2 Skills of the Employees
Organizations generally hire new employees in order to acquire some specific skillsets
and capabilities or for enriching the organizational culture. This in turn helps the organization to
maintain the sanctity of the workplace by establishing an effective, professional and proactive
working environment. In most of the cases the key skills of the employees are often associated
with the way people work and communicate or coordinate with each other (Espinilla et al.,
2013).
In this context it can be stated that performance management can be considered as an
effective method of rewarding the employees who have performed well. However, it is also
necessary to emphasize over the skill development of the employees as well. Identifying and
developing the employee’s skills is quintessential for any organization which is willing to
improve its overall performance. In relation to this performance appraisal system is quite
important as this process helps to evaluate the skills and competencies of the employees (DeNisi
and Smith, 2014). An ineffective and inefficient appraisal system could not be able to evaluate
the skills and competencies of the employees and as a result the overall development program
would be ineffective. Henceforth it is necessary to ensure a proper performance appraisal
program which will be able to determine and evaluate the areas or skills of the employees which
needs further development and the development program would be designed in accord. As a
result of this it can be expected that the performance of the employees will improve.
In order to summarize the findings of this chapter it can be stated that performance
appraisal and the performance of the employees are intricately related with each other. The better

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 26
and efficient the appraisal system will be the more motivated and enhanced the workforce will
be.
Chapter: 3
3.0 Research Method
3.1 Introduction
This chapter will help the reader to develop a brief understanding about the pattern of the
research work and how the research has been conducted. After a person has gone through this
chapter he or she will be able to understand the key steps that have been undertaken in order to
obtain the desired outcome of the research. The type of research approach adopted, types of
sampling method used along with the research design which has been selected are explained with
justification in this methodology chapter.
3.2 Research Approach
In order to achieve the desired outcome a research work may involve adoption of several
different techniques (Certo, 2015). In the context of the present research work pragmatic
research approach is used because this approach has helped the research to investigate every
corner of the research issue in great detail. The pragmatic research approach takes into
consideration a mixed method which helps to achieve the desired outcome in an appropriate
manner. The current research work is focused on determining the impact of performance
appraisal program on employee performance. There are two types of research approaches which
can be adopted and these are namely, positivism and interpretivism.

Research Approach
Positivism Interpretivism
IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 27
Positivism takes into account the relevant facts and figures available relevant to the
research topic while interpretivism concentrates largely over the opinions and feelings of people
(BNS and HV, 2013). As in this case the opinions of the managers of Marks and Spencer are
considered. The pragmatic research approach takes into both of this approach which ensures that
the research work is based on the empirical as well as qualitative data.
Figure 3: Research Approach
(Source: Created by Author)
The main two alternative research approaches are namely inductive and deductive
research approach. Under the inductive research approach information is accrued from various
sources and a new theoretical framework is invented (Neuman, 2013). On the other hand, under
the deductive approach the research work is conducted on the basis of the previously established
theories and thereby the desired outcome is achieved. The current research work will strictly
follow the deductive approach.
3.3 Research Design

Research Design
Exploratory Explanatory Descriptive
IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 28
There prevails mainly three types of research design which are namely, explanatory
research design, explanatory research design and descriptive research design.
Figure 4: Research Design
(Source: Created by Author)
Explanatory research design is adopted when the research does not possess a pre
designed hypothesis. In such a case the researcher does not take help of a predesigned hypothesis
and carries out the research as the data is retrieved (Taylor et al., 2015).
Certain research works are there which are conducted on the basis of the idea that a few
happenings in the world is due to the law of nature. These types of research works are termed as
exploratory research (Flick, 2015).
On the contrary to these, some research works take into account the opinions of the
participants and perform a primary and secondary research to substantiate or refute the
previously designed hypothesis. These are termed as the descriptive research works (Mackey and
Gass, 2013).

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 29
As the current research work already possesses a pre-defined hypothesis it will certainly
follow the descriptive research design. In this case the number of participants is also known to
the researcher and hence the descriptive design would be perfect for this research work.
3.4 Sampling Method
There are mainly two types of sampling techniques which are probability sampling and
non-probability sampling.
While carrying out research on the basis of a social issue or a concept strictly aligned
with the society or cultural aspects, the number of participants in the data collection process is
evidently not known to the researcher (Lewis, 2015). The researcher starts to retrieve data from
the respondents as soon as the research begins. It may be a case that there are large number of
respondents or only a few people are there. This specific sampling type is termed as the
probability sampling as the number of respondents is not known from the beginning and that is
solely based on probability.
On the other hand, there are research work where the person responsible for carrying the
research work known exactly the number of participants and the amount of data that would be
required to substantiate or refute the research hypothesis. In this cases the non-probability
sampling technique is used (Cicourel, 2016).
The preset research work will take into account non-probability sampling that is it will be
conducted on the basis of non-probability sampling. Three managers of Marks and Spencer will
be interviewed so as to obtain an idea about the impact of performance appraisal system on
employee performance. At first the willing participants will be provided with a consent form and
if they fill up the consent form final questionnaires will be sent to them via E-mail. They will be

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 30
given a time period of 7 days to complete the questionnaire and afterwards the filled in responses
will be collected.
3.5 Data Collection Method
Two types of data are mainly collected in order to complete a research work, primary
data and secondary data (Silverman, 2016). The primary data in this case will be collected in the
form of feedback from the managers of the organization. Feedback will be collected from 3
managers who will express their views and opinions regarding the impact of performance
appraisal on employee performance. The performance appraisal method of Marks and Spencer
will also be evaluated accordingly as per their feedbacks. The data that will be collected from
published journal articles, books and various online sources will be considered as the secondary
data. The relevant theories of performance appraisal and employee performance will be
discussed as an integral part of the secondary research which will help the organization to design
a specific performance appraisal system through which the performance of the employees will be
enhanced.
This research will solely be based on the qualitative data collected from the managers of
the organization. The primary data will be collected in the form of questionnaire responses. The
method of collection has been mentioned in the previous section.
3.6 Techniques of Data Analysis
The qualitative data will be analyzed with the help of narrative analysis. Information that
will be accrued through the primary research will be evaluated and explained in the research
work. In addition to that the secondary data collected through reviewing various journal articles

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 31
and books will also be analyzed through narrative analysis and will help to substantiate the
findings of the current research work.
3.7 Accessibility Issues
The participants of the current research work are the managers of Marks and Spencer
who are responsible for managing the operations and functionality of the organization. The
managers may not always be willing to respond to the questions they may be busy or engrossed
in their work. Hence the researcher will first ask the managers whether they are willing to take
part in the data collection process or not. If they agree to take part in the process then they were
asked to fill up a consent form and then they are provided with the original survey questionnaire.
No respondents were pressurized to provide their inputs and this ensured the quality of the data
obtained.
In the context of the secondary data it is necessary to mention that not all the articles
were accessible from the online sources. In most of the websites access was limited and needed
to pay a high amount to get access to the articles or online publications. In such instances the
researcher may have overlooked certain information.
3.8 Ethical Issues
As mentioned by author the researcher should always maintain a specific ethical
consideration while conducting the research and collecting the data. The participants should not
be forced to provide feedback or responses. The participants should not be threatened to provide
the desired feedbacks rather, the researcher should willingly accept whatever feedback the
respondent provides. This ensures the reliability and trust ability of the research work. The

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 32
respondents were also asked to fill up the response form within 7 days. This was done with the
purpose to provide the respondents a proper environment. Moreover, the responses collected
should be kept confidential and should not be disclosed to anyone for any purpose.
In the context of secondary data collection it can be stated that the researcher has not
considered any case studies or journals which are older than 10 years. All the works dome by
other researchers or authors are cited accordingly within the work. No academic malpractice has
been performed on the part of the researcher while collecting and interpreting the secondary data.
Chapter 4:
4.0 Findings and Analysis
Q1. What is the process used to assess performance appraisals at Mark’s and Spencer’s?
Response of 1st Manager:
The behaviorally anchored rating scale method is used for performance appraisal at
Marks and Spencer.
Response of 2nd Manager:
The second manager also stated the same.
Response of 3rd Manager:
The third manager stated the same.
It is quite evident that Marks and Spencer uses the behaviorally anchored
Q2. Does the process of performance appraisal have a positive impact on the performance of
the employees?

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 33
Response of 1st Manager:
The first manager stated that the process performance appraisal followed by Marks and
Spencer affects the level of motivation of the employees and hence it can be regarded as an
effective and efficient system. The process is capable enough to assess the employee’s
performance and reward them or punish them accordingly. As a result of which the employees
always remain aware about these processes and try put their best in the work.
Response of 2nd Manager:
The second manager responded that there is no appraisal system which can be regarded
as the best. Each and every system possesses its advantages and drawbacks. There are many
instances where the employees are not happy with the appraisal. However, their performances
were revalued twice to evaluate whether they have really performed well or not. On an overall
sense it can be stated that performance appraisal influences the performance of an employee in a
positive manner.
Response of 3rd Manager:
The third manager just stated that according to his opinion performance appraisal of
Marks and Spencer is up to the mark. According to him, overall impact of the system positively
affects the performance of the employees.
The understanding that can be developed from the opinions of all the managers is that
performance appraisal may affect the performance of the employees. Provided that of the
performance appraisal system is designed in a systematic way it will positively influence the
employee performance or else hinder the employee performance.

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 34
Q3. How would rate the performance appraisal process followed by Mark’s and Spencer’s?
Response of 1st Manager:
The first manager stated that if he is asked to rate the rate the performance appraisal
process of the company in a scale of 1 to 10, he will give it a score of 7. This is because he
founds the system to be efficient enough in identifying and evaluating the performance of the
employees and providing them with the required rewards for their better performance.
Response of 2nd Manager:
The 2nd manager was asked the same question and he replied that he will rate the system
with a score of 6. This is because he stated the system depicted certain incapability which needed
further amendments. It failed to identify and substantiate the findings related to the performance
of the employees.
Response of 3rd Manager:
The 3rd manager stated that he will rank the system with a score of 8 because he thinks
that the system is quite efficient. The employees are happy with the appraisal process and
frequency.
From the opinion of these three managers it has become crystal clear that nearly all of them are
almost satisfied with the performance appraisal system of Marks and Spencer. However, some
minimal development could be incorporate within the process to enhance the satisfaction level
furthermore.
Q4. How do the employees feel after being appraised? Do the employees feel confident?
Response of 1st Manager:

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 35
According to the 1st manager the employees generally feel confident after being
appraised. This is because when the hard work and dedication of an employee towards his or her
work is recognized they feel appreciated and important for the organization. This gives them a
sense of satisfaction.
Certainly these activities boost the employees with satisfaction and hence gives rise to a
feeling of confidence. However, whenever an employee is found to be underperforming and has
not received the appraisal may feel demotivated though they are themselves responsible for such
an event.
Response of 2nd Manager:
The 2nd manager completely expressed the same view compared to that of the first
manager. However, he just mentioned that the appraisal system of the organization should be so
designed that it can effectively evaluate the performance of an employee which in turn increases
the satisfaction level of the employees.
Response of 3rd Manager:
The 3rd manager stated that the level of satisfaction or the factors that gives rise to
satisfaction may vary on the basis of the preferences and personal attributes of the employees.
However, from the overall scenario he has observed that most of the employees are satisfied with
the appraisal process while some of them are not. This smaller proportion of the employees are
not satisfied because they have not performed well as a result of which their performance
appraisal did not provided with better results.
This manager also agreed that the employees feel confident after the appraisal and
believe to perform better in order to get appraised again.

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 36
From the responses of the managers it is quite evident that the employees are satisfied
with the performance appraisal system of Marks and Spencer and after the appraisal they feel
confident. This sense of confidence will motivate them further to perform well.
Q5. What is the frequency of appraisals of the employees? Do you believe that the frequency
of appraisal is suitable?
Response of 1st Manager:
The frequency of appraisal in Marks of Spencer is annual. As per the opinion of the first
manager this is not the appropriate frequency of appraisal. The most suitable frequency is to
conduct the process twice a year.
Response of 2nd Manager:
The 2nd manager also expressed the same view and stated that conducting the appraisal
process twice in a year will in turn motivate the employees in a better way. This is because if an
employee found that his or her co-worker got appraised for their better performance this will also
provide them with a sudden motivation to perform and achieve the appraisal benchmark. In a
long term this motivational factor may get lost.
Response of 3rd Manager:
The manager stated that the frequency of performance appraisal system of Marks and
Spencer is perfect. According to him is it is changed employees will strive to achieve the highest
mark which will create a tremendous level of competition within the organization and ultimately
there is a chance that the employees will lose their focus.
Q6. Do you believe that the employees in your organization are satisfied with their work?

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 37
Response of 1st Manager:
The first manager stated that most of the employees are satisfied with their work.
Response of 2nd Manager:
The feedback of the second manager was same as the first manager.
Response of 3rd Manager:
The third manager stated that the employees who shirk their work generally are
dissatisfied with their work.
Summarizing the feedbacks it can be stated that most of the employees are satisfied with
their work at Marks and Spencer.
Q7. How are the results of performance appraisals evaluated by the organization?
Response of 1st Manager:
Marks and Spencer generally makes use of a rating scale for evaluating the results of
performance appraisal. This means at the first stage of the appraisal process the employees are
informed about the expectations of the management and the desired level of performance. After
the said time period their performance is evaluated on the basis of the pre decided benchmark
criteria. If the performance meets or surpasses the desired performance level then and only then
employees receive the appraisal benefits.
Response of 2nd Manager:
This manager also stated that Marks and Spencer uses a Rating scale method for
evaluating results of the performance appraisal of the employees. on an added notion, he added

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 38
that the immediate supervisor or the first line managers always try to monitor ad guide the
employees so that they can achieve the desired standard of performance. In certain cases they
also provide the employees with a track of their weekly progress report so that they can improve
their performance if they are lagging.
Response of 3rd Manager:
The third manager also expressed the same view as the first and second manager. He
stated that the company maintains a proper hierarchical structure specifically in the context of
appraisal system. The decision of appraisal and evaluation is done by the people positioned
higher while the people in the lower position of the hierarchy are responsible for coordinating
and communicating the expected performance criteria and providing weekly performance
feedback on the employee’s performance.
The idea that can be developed from the above discussion depicts the management of
Marks and Spencer effectively evaluates the results of the performance appraisal and that is done
by a marking scale.
Q8. Do you believe that fairness / impartiality is maintained in the performance appraisal
process?
Response of 1st Manager:
The 1st manager stated that the appraisal process of Marks and Spencer is flawless and
unbiased. While conducting the process it is ensured that no employees are favored over the
other on the basis of personal relationships. Moreover, in certain cases it has been observed that
employees are favored on the basis of gender, caste or creed. However, Marks and Spencer

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 39
encompasses all these factors and establishes a strict supervision over the performance evaluators
so as to ensure that there is no discrepancy in the entire process.
Response of 2nd Manager:
The second manager opined that in certain cases there may be discrepancy on the part of
the managers who provide feedback about the performance of the employees. Sometimes they
provide positive feedback if their performance is determined by the performance of his or her
fellow team member.
Response of 3rd Manager:
The third manager completely agreed with the fact that impartiality is maintained in
Marks and Spencer while carrying out the performance appraisal process.
The conclusion that can be drawn from the feedbacks of the managers that Marks and Spencer
maintains and carries out an unbiased performance appraisal process.
Q9. What are the challenges being faced by the organization in the present performance
appraisal system?
Response of 1st Manager:
The first and foremost challenge as pointed out by this manager is the problem of
inexperienced appraiser. He traced out the fact that in several instances the person who is held
responsible for evaluating the performance of the employees are less experienced which may
cause inefficiency in the process.
Response of 2nd Manager:

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 40
The second manager also pointed out the fact of inexperienced assessor and along with
that he mentioned that sometimes the employees do not find the rewards to be satisfactory. He
also added that it is difficult to satisfy all the employees they will also succeed in finding out a
loophole in the process.
Response of 3rd Manager:
The third manager expressed the view that the organization is not experiencing any
difficulties in the present performance appraisal process.
As a whole the deduction that has been derived from these opinions suggest that the
performance appraisal procedure is efficient enough and is not facing any issues apart from the
problem related to inexperienced appraisers.
Q10. Do you believe that the performance appraisal system can be improved? If yes, how?
Response of 1st Manager:
The first manager stated that the performance appraisal system can further be improved if
the organization starts using the Paired Comparison Method of appraisal.
Response of 2nd Manager:
The second manager just stated that no further improvements are needed.
Response of 3rd Manager:
The third manager also thinks that no improvements are needed in the present system

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 41
Chapter: 5
5.0 Conclusion and Recommendation
The overall concluding remarks that can be derived from the aforesaid study is that
performance appraisal significantly affects the performance of the employees either in a positive
or in a negative manner. An overview of the performance appraisal method used by Marks and
Spencer have been provided. It has been observed that the organization mainly follows the
traditional method of ranking scale is being used by the organization. In order to do so the
researcher has conducted an in depth review of the literature available in this regard. This has
helped to generate and gather substantial information about the methods of performance
appraisal and its impact on the performance of the employees. While conducting the study it has
also been observed that the process of performance appraisal may affect the performance of the
employees in both ways it may be a positive manner or in a negative manner. A suitable and well
efficient appraisal system will motivate the employees and hence improves their performance.
On the other hand, if the appraisal system fails to identify the effort of the employees or their
expertise it will certainly demotivate them. Moreover, a biased appraisal method also harms the
sentiments of the employees and thereby reduces their ability to perform efficiently.
On the basis of the above analysis a few recommendations can be provided with the
expectation that it would help marks and Spencer to flourish in near future.
 The present appraisal method adopted by Marks and Spencer’s is appropriate although it
can try to improvise the system by incorporating a few additional criteria of performance
evaluation.

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 42
 Marks and Spencer should certainly ensure that the performance who is acting as the
assessor is experienced enough to evaluate the performance of a group of efficient
employees.
 Appropriate supervision of the complete assessment process should also be taken into
consideration. An appropriate supervision will ensure the absence of disparity.
 Marks and Spenser should also try effectively to maintain its current standard of
performance appraisal system and collect the feedback of the various members so that if
ant additional inputs can be provided within the system.
These recommendations are designed on the basis of the analysis of the feedbacks
collected from the managers and on the basis of the literature review. It is expected that of the
organization follows all of these it would certainly be helpful to ensure successful operability of
its business.

IMPACT PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE 43
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Appendix-1
Questionnaire
Q1. What is the process used to assess performance appraisals at Mark’s and Spencer’s.
Q2. Does the process of performance appraisal have a positive impact on the performance of the
employees?
Q3. How would rate the performance appraisal process followed by Mark’s and Spencer’s.
Q4. How do the employees feel after being appraised? Do the employees feel confident?
Q5. What is the frequency of appraisals of the employees? Do you believe that the frequency of
appraisal is suitable?
Q6. Do you believe that the employees in your organization are satisfied with their work?
Q7. How are the results of performance appraisals evaluated by the organization?
Q8. Do you believe that fairness / impartiality is maintained in the performance appraisal
process?
Q9. What are the challenges being faced by the organization in the present performance appraisal
system?
Q10. Do you believe that the performance appraisal system can be improved? If yes, how?