The Impact of Performance Appraisal on Employee Loyalty

The provided assignment is an in-depth analysis of the performance appraisal system (PAS) and its impact on employee loyalty in the context of Toyota Motor Corporation. The questionnaire covers various aspects of PAS, including its effectiveness, techniques used for measuring performance, and strategies for enhancing job satisfaction. The study aims to explore the relationship between fair performance appraisal and employee loyalty, as well as the role of promotion, remuneration, and training in making employees loyal towards the brand.

RESEARCH PROJECT
(Role of performance appraisal system and its impact on employee
loyalty)

Table of Contents
CHAPTER 1: INTRODUCTION....................................................................................................1
1.1 Research outline....................................................................................................................1
1.2 Factors contribute to research project selection....................................................................2
1.4 Research project specification...............................................................................................2
1.5 Research plan........................................................................................................................2
CHAPTER 2: LITERATURE REVIEW.........................................................................................3
1.3 Critical review.......................................................................................................................3
CHAPTER 3: RESEARCH METHODOLOGY.............................................................................4
2.1 Research methods..................................................................................................................4
2.2 Proposed research investigation............................................................................................6
CHAPTER 4: DATA FINDING, ANALYSIS................................................................................6
2.3 & 3.2 Recording of data and Interpretation..........................................................................6
3.1 Research evaluation techniques..........................................................................................12
CHAPTER 5:CONCLUSION,RECOMMENDATIONS AND LIMITATIONS.........................13
3.3 Recommendations...............................................................................................................13
4.1 Media presentation..............................................................................................................13
Conclusion.................................................................................................................................13
REFERENCES..............................................................................................................................14
APPENDIX....................................................................................................................................16

CHAPTER 1: INTRODUCTION
1.1 Research outline
Background of study
Performance appraisal are considered as essential aspect of human resource management.
Managers review performance of each employee and accordingly provide them growth
opportunities in business. It impacts on motivation, loyalty and satisfaction level of employee
significantly. This is technique that supports management in identifying essential factors that can
enhance productivity of workers and can help in retaining skilled people in workplace for longer
duration. There are several factors that impact on performance of staff members. Internal
components are such as attitude of managers, relationship with other employees etc. On other
hand external factors such as changes in technologies, poor wages etc. that impact on overall
performance of individual to great extent (The effects of performance appraisal system on
employees’ performance in the Tanzanian community radios:a case of selected radios in dar es
salaam, 2013). The main objective of applying performance appraisal system (PAS) in
organization is to utilize skills of person effectively and make them loyal towards the brand.
Present study will discuss role of PAS in Qbic hotel and its impact on employee loyalty.
Furthermore, it will describe different performance appraisal system that are implemented in
organization. Research will explain various methods that would be suitable for conducting this
research in systematic manner. Proper justification for each selected tool will be given in the
project. In addition, data will be analysed by using thematic analysis tool.
Aim and Objectives
Aim
“To investigate role of performance appraisal system and its impact on employee loyalty: A
study on Qbic hotel”.
Objectives
 To understand conceptual framework of performance appraisal system
 To identify different performance appraisal system that are implemented in organization
 To analysis relationship between performance appraisal and employee loyalty To suggest ways to enhance employee loyalty by implementing effective performance
appraisal strategy in Qbic hotel.
Research questions
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 What is the meaning of performance appraisal system?
 What are the different performance appraisal system that are implemented in
organization? Explain relationship between performance appraisal and employee loyalty?
Scope of research
This study will be beneficial for hotel industry and will help in enhancing loyalty of
workers of the companies. By this way firms will be able to identify effectiveness of
performance appraisal system and its benefits in order to make the person loyal towards brand.
This would be beneficial for other researchers because by this way other scholar will get brief
idea about subject and they will be able to conduct study on same topic in the future ( The Effect
of Performance Evaluation on Employee's Job Satisfaction in Pakistan International Airlines
Corporation, 2013).
1.2 Factors contribute to research project selection
This is an interesting area and researcher has experience of working in hotel company.
Thus, individual has selected this topic for further research. In addition, this is management topic
and has been provided by university thus, scholar has chosen this area for research. There are
huge studies that have been prepared on same topic. Thus, there are sufficient data available on
this matter that has motivated researcher to select this topic for investigation.
1.4 Research project specification
In order to conduct research on role of performance appraisal system and its impact on
employee loyalty scholar will take support of descriptive research design. This would be better in
finding in-depth detail about subject matter. Scholar will apply primary data collection sources
and questionnaire technique for gathering information about performance appraisals system in
Qbic hotel company and how it affects employee loyalty. Furthermore, it would be qualitative
research and individual will apply thematic analysis tool for analysing data and investigating fact
about subject matter.
1.5 Research plan
1st
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Introduction
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of the topic,
framing aim
and
objectives
Review of
previous
literatures
Selection of
research
methodology
Data
collection
and analysis
of data
Drawing
conclusion
CHAPTER 2: LITERATURE REVIEW
1.3 Critical review
According to the perception of Brachium (1988) performance can be defined as
action which often results into some consequences. As per the view of Bianchi, Bovaird and
Loeffler,( 2017) performance appraisal is completely based on the skills as well as capability of
manager or leader to assess workers performance. According to the opinion of Patton (1973)
performance appraisal system can be considered to be as a powerful tool which assist employees
in improving their performance at workplace (Zumitzavan and Michie, 2015). It also supports
workers in identifying the area of improvement. Author Randell (1973) states that performance
evaluation is important for supporting an individual in performance within an enterprise. As per
the perception of Taylor and Wilsted (1974) performance evaluation system is recognised as
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Judgement Policies designed by human resource manager in an enterprise for analysing as well
as monitoring the performance of workers (Asare and Conger, 2018).
According to the thought of Bedeian (1976) task of developing effective performance
appraisal systems is one of the most complex procedure performed by the administration in an
organisation. As per the view of Armstrong (2000) who stated that techniques or methods
adopted by manager or leader for evaluation's the performance has major effect on the
employees' behaviour as well as performance within the company (Den Hartog,Boselie and
Paauwe, 2004). He also said that it is required by manager or leader to deal with the expectation
of worker and accomplishments while managing performance.
According to Noe et al. (2006) performance management or evaluation can be defined as
the procedure through which managers ensure that worker' activities and outputs are appropriate.
As per the thinking of Beer and Ruh (1976) Performance Management is utilised by many of the
companies operating in hospitality sector for improving their business performance. Grote (2002)
has stated that performance appraisal is considered to be as formal management tool which
assist manager or leader in measuring the quality of work done by employee (Fletcher, 2001).
According to Karol (1996) effective performance management system helps management in
encouraging employees to increase their level of commitment and retain their job for long time.
CHAPTER 3: RESEARCH METHODOLOGY
2.1 Research methods
Research approach: It presents plan and procedure which can be used for the collection,
analysis and interpretation of data set. In this, out of two, inductive approach has been used for
making assessment of such qualitative issue. Hence, referring qualitative aspects new theoretical
framework related to performance appraisal system and employee loyalty.
Data collection: Primary and secondary are the main two sources which can be used by
the researcher for data collection. Data which is specifically gathered for meeting research
objectives through the means of observation, focus group, survey etc. known as primary. In
contrast to this, data that has already been gathered, analysed and published by others termed as
secondary (Flick, 2015.). Hence, for ascertaining the influence of performance appraisal on
employee loyalty primary data has been gathered through conducting survey on 15 personnel of
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Qbic. Further, previously published articles as well as books in relation to performance appraisal
and employee loyalty also have been evaluated to gather secondary data set.
Sampling: Researcher can select sample by using either probabilistic or non-probabilistic
sampling technique. Hence, in the current investigation, for assessing the role of performance
appraisal in the context of employee loyalty 15 employees of Qbic have been selected.
Data analysis: Selection of suitable data analysis technique is highly needed for
presenting the fair view of concerned issue. Hence, at the time of making selection of data
analysis technique scholar should keep in mind the type of investigation. Thus, on the basis of
qualitative research type, thematic perception test technique has been undertaken. By preparing
themes as per questionnaire research issue has been evaluated.
Research Philosophy : It defines the values , beliefs , perception of the different authors
as well as scholar about the research topic. It also includes the concepts as well as assumption
made by researcher for collecting the data or information relevant to the topic of investigation.
Research Philosophy is considered to be as an important of investigation plan. As it assist
researcher in identifying the type of information required to be gathered. Investigation
philosophy also help researcher in reaching to the conclusion. Among various research
philosophies such as interpretive , epistemology etc. (Edgeman,Bourne, Bititci and Nudurupati,
2017)In present study investigator has planned to use the positivism research philosophy in
research process. This specific research philosophy has been selected as it support scholar
interpreting the reason for the judgement made by them. It will also help researcher in
developing the understanding about the basis on which answers have been provided by
participants.
Research design : A research design is a systematic approach that a researcher uses to
conduct research activity in systematic manner. It assists investigator in identifying the root
cause of problem. Research design defines the study type. It can also be considered to be as a
strategy utilised by researcher in order to accomplish desired outcomes (Iqbal,Akbar and
Budhwar,2014). Research design provides the detail about the methods or techniques which will
be used by scholar for collecting , analysing , recording and presenting the information or data.
There are various types of research design these are exploratory, experimental, etc. In present
study, researcher has used the descriptive research design. This specific research design has
helped investigator in depicting the participants in accurate manner.
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2.2 Proposed research investigation
Research type: In research, types can be distinguished in terms of qualitative and
quantitative. Hence, qualitative research may be served as an enquiry method which assists in
developing understanding about human and social sciences. On the other side, quantitative
evaluation includes statistical, logical and mathematical techniques which assist in determining
suitable solution from numeric data set (Kearney, 2018.). For analysing the role of performance
appraisal system and its impact on employee loyalty, in the context of Qbic, qualitative
investigation has been conducted. Thus, by evaluating and studying qualitative aspects' solution
has been presented.
CHAPTER 4: DATA FINDING, ANALYSIS
2.3 & 3.2 Recording of data and Interpretation
Theme 1: Time length of working in organization
Less than one year 1
Between 1-2 year 4
Between 2-4 years 8
More than 5 years 2
Interpretation: From the above data it can be interpreted that 8 out of 15 respondents are
working in hotel between 2-4 years. On other hand 4 out of 15 answerers have viewed that they
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are working in Qbic between 1-2 year. From the above data it can be interpreted that maximum
ssspeople are working in the organisation between 2-4 years. They have great experience of this
company.
Theme 2: Qbic operates a formal performance appraisal system
Yes 10
No 5
Interpretation: from the above detail it can be interpreted that 10 out of 15 answerers have
viewed that hotel does not implement formal performance appraisal system in organization. On
other hand 5 out of 15 respondents have said that entity follow formal PAS system. It can be
interpreted that entity has sound formal performance appraisal system that supports in meeting
with needs of workers.
Theme 3: Technique implement by Qbic for measuring performance of employees
Observation 1
Checklist 1
360 degree appraisal method 7
Ranking 6
7

Interpretation: From the above data it is identified that 7 out of 15 respondents have viewed
that hotel adopts 360 degree appraisal method in order to measure performance of staff members.
On other hand 6 out of 15 participants have replied that firm follows ranking system. From the
above data it can be interpreted that Qbic hotel follows 360 and ranking methods in order to
measure performance of employee and according to their performance manager or leader gives
appraisal to them.
Theme 4: People get performance based pay scale in organization
Yes 3
No 12
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Interpretation: From the above data it is identified that 12 out of 15 participant has viewed that
employee do not get appraisal or pay scale on the bases of their performance. Company has set
procedure of appraisal in which it gives pay scale to each employee equal no matter whether
person in performing well or not. On other hand 3 out of 15 answerers have said that entity gives
appraisal to workers on the basis of their performance. From the above study it can be
interpreted that BIC hotel does not provide appraisal or pay scale to employee as per their
performance, it gives salaries to each worker equally.
Theme 5: Satisfied with performance appraisal system of company
Strongly satisfied 1
Satisfied 4
Dissatisfied 8
Strongly dissatisfied 2
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Interpretation: from the above data it is identified that 4 out of 15 respondents have viewed that
they are satisfied with performance appraisal system of company. On other hand 8 out of 15
answers have replied that they are dissatisfied. From the above data it has been interpreted that
people are not satisfied with appraisal system of company so there is requirement to make
changes in formal PAS system so that employee can be motivated and become loyal towards
brand.
Theme 6: PAS impact on employees' loyalty
Strongly agree 10
Agree 3
Disagree 1
Strongly disagree 1
10

Interpretation: From the above data it can be interpreted that PAS system impact on employees'
loyalty because this makes the person satisfied towards brand. By this way individual put their
hard efforts sot hat goal of entity can be accomplished. This enhances loyalty of staff members.
Theme 7: Fair performance appraisal can enhance job satisfaction of staff members
Yes 12
No 3
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Interpretation: from the above data it can be interpreted that fair performance appraisal system
can support in raising satisfaction level of employees. When people get appraisal on the bases of
their performance then they will feel happy and will put hard efforts in order to achieve goal of
entity.
Theme 8: Strategy of performance appraisal can make employee loyal towards brand
Promotion 6
Remuneration 8
Training 1
Interpretation: from the above data it can be interpretative that 8 out of 15 answers have viewed
that remuneration is the best way that can encourage people and can make them loyal towards
brand. By this way they will put their hard efforts and will perform well in organization.
3.1 Research evaluation techniques
Researcher has selected data from reliable sources. Entire study become able to meet
with objectives. It has identified ways through which PAS method can enhance loyalty of
employee in hotel (Bianchi, Bovaird and Loeffler,2017). Researcher has used questionnaire
technique which was reliable and has supported in gaining valid results.
Researcher has used questionnaire methods this has helped in gaining in-depth detail
about performance appraisal system with reference to Qbic hotel. This is strength of this study.
Furthermore, selection of right number of sample is another strength of this research. 15
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participants are adequate in qualitative researches. But time limitation was major difficulty faced
by scholar. Because it was wide topic and in such limited time it was difficult to complete this
research. In addition, scholar was having limited financial resources that was another weak point
but individual has utilized resources well and has completed study in effective manner.
benefits and limitation of this research
CHAPTER 5:CONCLUSION,RECOMMENDATIONS AND LIMITATIONS
It has been concluded from the research that the performance evaluation technique has
important role to play in organisation. Performance evaluation is very much important
especially in hospitality industry, as employees performance has direct as well as major influence
on the customer services. Performance evaluation is necessary in order for encouraging people to
improve their performance at workplace. It has also been concluded that techniques or
approaches adopted by manager or leader in an enterprise for evaluation the performance has
direct impact on the workers as well as their behaviour. Research has highlighted the different
techniques which can be used by the manager for measuring the performance of employees.
3.3 Recommendations
It has been suggested to human resource manager in an organisation to adopt the new
approaches or techniques for performance management as well as measurement. The another
advice given to company is that management should conduct the internal survey. As this strategy
will assist the manager in identifying the root cause of the challenges or different issues faced by
manager or leader in measuring the performance of employees. It has also been recommended to
human resource manager in an enterprise to establish some parameters for performance
appraisal. As this parameter strategy will assist manager in providing the high level of
satisfaction to employees.
4.1 Media presentation
Conclusion
13

REFERENCES
Asare, E. and Conger, S., 2018. Analyzing the Impact of Strategic Performance Management
Systems and Role Ambiguity on Performance: A Qualitative Approach. In Developments
and Advances in Intelligent Systems and Applications (pp. 15-27). Springer, Cham.
Zumitzavan, V. and Michie, J., 2015. Research Methodology. In Personal Knowledge
Management, Leadership Styles, and Organizational Performance (pp. 27-34). Springer
Singapore.
Kearney, R., 2018. Public sector performance: management, motivation, and measurement.
Rout ledge.
Flick, U., 2015. Introducing research methodology: A beginner's guide to doing a research
project. Sage.
Edge man, R., Borne, M., Bititci, U.S. and Nudurupati, S., 2017. Remastered, reinvented and
reimagined: evolving and merging performance management and measurement paths.
Measuring Business Excellence, 21(3), pp.209-213.
Iqbal,M. Z.,Akbar,S. and Budhwar,P. 2014. Effectiveness of performance appraisal: an
integrated framework.International Journal of Management Reviews, in press
Bianchi, C., Bovaird, T. and Loeffler, E., 2017. Applying a Dynamic Performance Management
Framework to Wicked Issues: How Coproduction Helps to Transform Young People’s
Services in Surrey County Council, UK. International Journal of Public Administration,
40(10). pp.833-846.
Fletcher, C. 2001) Performance appraisal and management: the developing research agenda.
Journal of Occupational and Organizational Psychology. 74.473-487
Den Hartog,N.,Boselie,P. and Paauwe,J. 2004) Performance management: a model and
research agenda.Applied Psychology: An International Review. 53( 4). 556-569.
Online
The effects of performance appraisal systemon employees’ perfomance in the tanzanian
community radios:a case of selected radios in dar es salaam. 2013. [PDF]. Available through
<http://repository.out.ac.tz/840/1/AGATHA_FINAL_REPORT_-_VICKY.pdf>
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The Effect of Performance Evaluation on Employee's Job Satisfaction in Pakistan International
Airlines Corporation. 2013. [PDF]. Available through
<https://mpra.ub.uni-muenchen.de/46415/1/MPRA_paper_46415.pdf>
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APPENDIX
Questionnaire
Name
Age
Gender
Since how long you are working in Toyota Motor Corporation?
 Less than one year
 Between 1-2 year
 Between 2-4 years
 More than 5 years
Does Toyota operate a formal performance appraisal system?
 Yes
 No
Which technique implement by Toyota for measuring performance of employees?
 Observation
 Checklist
 360 degree appraisal method
 Ranking
Do you get performance based pay scale in organization?
 Yes
 No
Are you satisfied with performance appraisal system of company?
 Strongly satisfied
 Satisfied
 Dissatisfied
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 Strongly dissatisfied
Do you agree that PAS impact on employees' loyalty?
 Strongly agree
 Agree
 Disagree
 Strongly disagree
Do you think that fair performance appraisal can enhance job satisfaction of staff members?
 Yes
 No
According to you which strategy of performance appraisal can make employee loyal towards
brand?
 Promotion
 Remuneration
 Training
17