Performance Appraisal System's Impact on Employee Performance at MNPI

This report presents a comprehensive analysis of the impact of performance appraisal systems on employee performance, drawing on survey data and statistical techniques. Chapter 4 focuses on data analysis, including reliability and validity tests (Cronbach’s Alpha, KMO, Bartlett’s test) and frequency representations using SPSS. Statistical methods such as Pearson's correlation and regression analysis are employed to examine the relationship between performance appraisal and employee performance. The findings reveal demographic insights, such as gender and age distribution, and educational qualifications of respondents. The report further explores employee perceptions of performance reviews, including frequency, purpose, and satisfaction levels. Key findings include the positive correlation between performance appraisal and employee motivation, as well as the impact of various factors within the appraisal system on overall employee performance. The report also incorporates interview data from HR professionals, offering insights into organizational practices and objectives related to performance appraisals, ultimately providing recommendations for future research and improvements in performance management systems.

Chapter 4: Data analysis
4.1 Introduction
This chapter critically evaluates the collected data from the survey to develop relevant
findings and analysis. Data reliability and validity has been measured using statistical
techniques such as Cronbach’s Alpha test, Kaiser Meyer Olkin test of sampling adequacy and
Bartlett test of sphericity. The response frequencies have been represented in graphs which
are derived from the SPSS. Statistical analyses such as Pearson’s correlation method and
Regression analysis has been used to perform a trend analysis and measure the relationship
between employee appraisal system and employee performance.
4.2 Quantitative Findings
4.2.1 Gender
Fig 1: Gender
Source: (As created by author)
This question examines the gender of the participants in the given research and the
findings show majority of the respondents are female when compared to the number of male
respondents. It is also shocking to see that the number of female respondent is almost twice
that of the male respondents. It would be interesting to see the difference in perspective
between the two gender regarding performance appraisal systems.

4.2.2 Age
Fig 2: Age
Source: (As created by author)
This question examines the age of the respondents in the research and the results show
that 41.57% of the respondents belong to the age group of 25-34, 26.51% respondents belong
to the age group of 35-44, 22.89% are less than 25 years of age and remaining respondents
are above the age group of 45 years. This clearly shows that majority of the respondents are
below the age group of 34 years. There are representation from different age groups so it
would be interesting to check how their feel about performance appraisal system.

4.2.2 Education Qualification
Fig 3: Educational Qualification
Source: (As created by author)
This question evaluates the educational qualification of the respondents in this
research. The results show that 55.42% of the respondents have completed their diploma,
24.70% have completed their degree, 7.83% have completed their advance diploma, 7.23%
have completed their master’s degree and remaining have completed their post graduate
diploma. Therefore, it is expected that people from different educational backgrounds will
have different perspective on the research topic.

4.2.2 Education Qualification
Fig 4: Length of employment
Source: (As created by author)
The purpose of the question is to examine the tenure of the respondents in this
research. In this study, 37.35% have been working for less than 4 years, 35.54% have been
working for at least 5 years and maximum of 9 years, 21.69% have been working between
10-19 years and 5.42% have been working for more than 20 years.

4.2.3 Impact of performance appraisal system on performance management
Fig 5: performance review
Source: (As created by author)
This above question identifies whether the employees have gone through performance
review or not. The findings show that majority of the employees have gone through a
performance review which amounts to 92.77% of the respondents and remaining have not
been involved in any kind of performance review.
4.2.3 When did you have the performance review last time?

Fig 6: Last performance review
Source: (As created by author)
The question highlights the last performance review time of the participants that have
gone through the process. The majority of the respondents have gone through a performance
review within the last 12 months and the remaining respondents are almost negligible which
shows a clear majority. This is an ideal situation as majority of the participants have gone
through an appraisal which is expected to provide better results in the research.
4.2.4 How often is an appraisal carried out in your department?
Fig 6: Appraisal period
Source: (As created by author)
The purpose of the question is to highlight the number of times appraisal is being
carried out in the respondent’s workplace. The results show that 75.90% of the respondents
suggest that appraisal is yearly in their respective organisation, 20.48% stated that appraisal
happens half yearly in their organisation and remaining are exceptions. This shows that
majority of the organisations follow the structural pattern of having appraisal once every
year.

4.2.5 In your opinion, what does your strive to achieve through performance review?

Fig 7: Employee Motivtion
Source: (As created by author)
This question evaluates the purpose of conducting an appraisal and the respondents
have chosen options that they consider it to be relevant. It can be seen that 81.33% of the
respondents suggested that performance review is the main objective, 74.10% suggested that
training and development needs determination is another important factor, 70.48% suggested
that setting future target is another important factor, 62.65% suggested that promotion and
levelling up is another critical goal for performance evaluation and 50.60 % suggested that
taking disciplinary options another purpose of conducting a performance appraisal. This

shows that there are multiple reasons that appraisal is performed and managers use it for all
around development of the employees.
4.2.6 At the beginning of the PR cycle, were you consulted on:

Fig 8: Consultation
Source: (As created by author)
The question tries to examine whether the employees were consulted on certain
factors before proceeding with the appraisal or not. The results show that majority of the
respondents were consulted on the desired behaviour or outcome, methods of measuring
performance and date and time of appraisal. However, the majority of the respondents were
not consulted on the factors which are parameters for evaluating the respondents. This is a

critical issue for employees as if they are not aware of their job roles and responsibilities,
they will not be able to fulfil their duties effectively.
4.2.7 Do you agree that it is necessary to conduct a performance review?
Fig 9: Necessity of performance review
Source: (As created by author)
This question examines whether there is a need for performance review or not. The
findings of the study shows that 91.57% of the respondents suggested that performance
review is essential component of employee growth.

4.2.7 Please indicate how you feel about PA?

Fig 10: Opinion of Performance Appraisal
Source: (As created by author)
The question examines the opinion of the respondents on different aspect of
performance appraisal. The majority of the respondents suggested that there are aware of the
results that are expected from them. Moreover, it provides feedback on the performance of
the employees in the past year and helps in self-evaluation by identifying strengths and
weaknesses. The respondents also felt that performance appraisal helps in developing plan

for improving performance of the employees. Moreover, Feedback is necessary for
developing individual development program and helps me evaluate the current progress of
the employees. The respondents have also agreed to the fact that it provides opportunity to
discuss all the work problems so that solution to these problems can be addressed. A huge
majority of the respondents feel highly motivated right after a performance review.
Confidentiality of the information shared during the performance review is another important
aspect which has been agreed upon by the participants. The majority of the respondents have
also claimed that performance appraisal is one of the most effective ways of improving
relationship with managers. On the other hand, it is surprising to see that even though
majority of the respondents feel that time spent on performance appraisal is worthwhile,
majority suggests that there is lack of transparency in most of the performance appraisal
program due to its subjective nature.
4.2.8 Are you involved in the process of setting objectives and targets of your
future performance?
Fig 11: Involvement
Source: (As created by author)
The question examines whether the respondents are involved in the process of setting
targets and objectives or not. The results suggest that 86.75% of the respondents agreed to the
fact they were involved in the process of setting targets and objectives.

4.2.9 How do you feel about the set objectives and targets of your future
performance?

Fig 12: Setting future targets and objectives
Source: (As created by author)
The question highlights the way organisations feel about future objectives and
targets. The majority of the respondents suggest that 71.69% of the respondents are satisfied
with their future targets and objectives and they consider these targets and objectives to be
challenging for them. On the other hand, 64.46% of the respondents are satisfied with their
targets and objectives and consider them to be easily achievable. There are significant amount
of respondents that have stated that they are not satisfied with the objectives and targets of the
organisation.

4.2.10 Is your pay, benefit and promotion opportunity based on your performance
ratings?
Fig 12: Pay, benefit and promotion opportunity
Source: (As created by author)
The question aims to identify whether there is parity among pay, benefit and
promotion opportunity in respect to performance rating. The results shows that62.65% of the
respondents have agreed to the research question and 31.33% have disagreed to the research
question. The remaining respondents are not aware of these alignment.

4.2.11 What do you think of your manager as an appraiser?

Fig 13: Motivation of the employee
Source: (As created by author)
The question aims to highlight the opinion of the respondents on their respective
managers. The majority of the participants have agreed to the fact that managers have treated
them fairly and they are open and honest in reviewing the performance of the employees. The
respondents have also agreed to the fact that their respective managers are consistent and
fully skilled in handling performance appraisal. The respondents also stated that their
respective managers are supportive and provide informal feedbacks all the time for improving
the performance.

4.2.12 Please select the one most appropriate to you.
Strongly agree Agreed Undecided Disagree Strongly
DIsagree
0
5
10
15
20
25
30
35
40
45
50 46.39%
38.55%
4.22% 6.02% 4.82%
I am satisfied in my job
I am satisfied in my job
Percent
Strongly
agree Agreed Undecided Disagree Strongly
DIsagree
0
5
10
15
20
25
30
35
40
45
50
43.37%
33.73%
7.83% 9.04% 6.02%
the work i do meaning full to me
the work i do meaning full to me
Percent

Strongly agree Agreed Undecided Disagree
0
10
20
30
40
50
60
49.4%
41.0%
7.8%
1.8%
my job is intresting
my job is intresting
Percent
Strongly agree Agreed Undecided Disagree Strongly
DIsagree
0
5
10
15
20
25
30
35
40
45 39.8% 36.6%
9.6% 7.2% 4.8%
i am well paid for my effort at work
i am well paid for my effort at work
Percent
Strongly agree Agreed Undecided Disagree Strongly
DIsagree
0
5
10
15
20
25
30
35
40
45
38.6% 41.6%
12.7%
5.4% 1.8%
i am treated well by management
i am treated well by management
Percent
Fig 14: Motivation of the employee

4.3 Descriptive statistics
4.4 Distribution of values
4.4.1 Mean
Descriptive Statistics
N Mean Skewness Kurtosis
Statistic Statistic Statistic
Std.
Error Statistic
Std.
Error
p 166 21.0663 1.302 0.188 1.444 0.375
Valid N
(listwise)
166
4.5 Correlation
4.6 Hypothesis Test
4.6.1 Relationship between performance appraisal on employee motivation.
H0 = There is no relationship between performance appraisals on employee motivation.
H01= There is a relationship between performance appraisals on employee motivation
The relationship between two variables of performance appraisal and employee motivation
Which were both analysed the scale was measured through pearson product –moment
correlation coefficient. Based on analysis, there is a moderate relationship between two
variable with the medium positive correlation as r=.344,n=166 and p<.000. Therefore, we can

deduce that performance appraisal system has a major impact on the employee motivation at
the Ministry. For the matter hypothesis 1 is supported.
Correlations
Motivation Apprisal
Motivation Pearson Correlation 1 .344**
Sig. (2-tailed) .000
N 166 166
Apprisal Pearson Correlation .344** 1
Sig. (2-tailed) .000
N 166 166
**. Correlation is significant at the 0.01 level (2-tailed).
4.5 Regression Analysis
The regression analysis aims to measure the impact of performance appraisal on
employee performance. In this model, necessity of conducting performance review is chosen
as the dependent variable and a large number of predictors are chosen which represent the
different factors of effective performance appraisal system. The value of multiple R is .421
which means that there is moderate relationship between the dependent and the independent
variable. The value is relatively less so that predictive capability of the model is low. The
value of R square in the study is .178 which means that the explaining capability of the
independent variables are low and the goodness of fit of the model is also low. However, this
type of results are expected in practical studies due to the human involvement in the research
and 17.8% explaining capability is relatively significant in organisations.
Coefficientsa
Model Unstandardized Coefficients Standardized
Coefficients
t Sig.
B Std. Error Beta

1 (Constant) .681 .105 6.515 .000
greater understanding of
the results expected of
me.
.176 .060 .299 2.958 .004
accurate feedback from
my manager on my past
performance.
-.032 .062 -.072 -.519 .604
knowledge about my
strengths and
weaknesses
-.002 .059 -.003 -.029 .977
develop a plan to
improve my performance.
.079 .069 .159 1.143 .255
Feedback for developing
individual development
program.
.047 .050 .095 .933 .352
Lets me know where I
stand about.
.066 .060 .127 1.111 .268
opportunity to discuss my
work problems and
opportunity.
-.036 .053 -.081 -.675 .500
more motivated after
performance review.
-.089 .068 -.203 -1.309 .193
information obtained from
PA is confidential.
.025 .046 .057 .549 .584
improves the relationship
with manager.
.005 .065 .011 .077 .938
I feel that the time spent
on PA is well worthwhile.
.058 .053 .128 1.095 .275
Highly subjective process
and lacks transparency.
-.023 .040 -.048 -.567 .572
a. Dependent Variable: necessary to conduct a performance review
4.6 Qualitative Analysis
Questions Answers Code
1. Does your organization
conduct PA?
“Yes”
“Yes”
“Yes”
“Yes”
“Yes”
yes

“Yes”
2. What purposes are tried
to be achieved by PA?
“Employee motivation
Self-development
Rewards
Promotion”
“Improve performance
Self-development
Rewards
Promotion”
“Rewards
Promotion”
“Rewards
Promotion
Employee motivation
Increasing performance”
Employee motivation
Self-development
Rewards
Promotion
3. How often is PA carried
out?
“Once a year”
“Once a year”
“Once a year”
“Once a year”
“Once a year”
Once a year
4. What types of
performance review
approaches are used in your
organization?
“Evaluate the employee’s
performance based on the
tasks assigned to each
employee.”
“Evaluate the employee’s
performance based on the
tasks assigned to each
employee.”
“The method civil service is
using performance based on
the tasks assigned to each
employee. This is a method
only using in civil service.”
“performance based on the
tasks assigned to each
employee”
“performance based on the
tasks assigned to each
employee”
“performance based on the
performance based on the
tasks assigned to each
employee

tasks assigned to each
employee”
5. Do you train your raters,
if so how often?
“Once a year”
“Once a year”
“Once a year”
“Once a year”
“Once a year”
“Once a year”
Once a year
Qualitative Findings
1. Does your organization conduct PA?
In this question, all the interviewees have said yes and this means it is a standard for
companies to perform appraisal of their employees.
2. What purposes are tried to be achieved by PA?
Employee motivation, Self-development, Rewards and Promotion are the major
purpose of conducting performance appraisal. Performance appraisal facilitates in
achieving monetary and positional growth within the organisation. By reviewing their
own performance, employees are empowered and they are able to understand their
own weak points and the strengths. On the other hand, rewards and promotions are
ways to keep the employees motivated and put in more effort to improve their
performance level. Rewards and promotion are directly linked with motivation of the
employee and motivational theories suggest that reward is a form of extrinsic
motivation for the employees and promotion or growth at work can be considered as
intrinsic motivation. This shows that by helping the employees to understand their
own liabilities, organisations can guide them towards personal and professional
growth. This is also a form of intrinsic motivation for the employees as they are able
to realise their own progress over a period of time.
3. How often is PA carried out?
The results showed that all the interviewees stated that performance appraisal is
performed once a year and this is a standard practice as it is impossible to measure
growth within a short span of time.

4. What types of performance review approaches are used in your organization?
The coding of the data shows that “performance based on the tasks assigned to each
employee” is the identified theme. The employees have their own sets of key
responsibility areas and the organisation evaluates the way the employees have
performed over those particular criteria. Moreover, the key responsibility areas of
employees holding different job positions would vary. This means that each employee
is evaluated based on their own job role and key responsibilities.
5. Do you train your raters, if so how often?
As per the coded, the raters are trained once a year which shows that the organisation
wants their employees to grow on different levels of hierarchy. Moreover, it is
essential for managers to grow so that they are able to assess the employees fairly and
effectively.
Summary
The qualitative analysis of the data coded from the interviews showed that the
organisation has developed their own performance appraisal system. Employee motivation,
self-development, rewards and promotion are few of the factors that are the prime causes of
performing a performance review. Performance appraisal empowers the employees by
providing them to self-evaluate their performances, this helps them in understanding the areas
they are lacking and the performance expected from them in the past few years. Employee
motivation is a key to improve the performance of the employees and PA acts as a catalyst
for employees and facilitates in pushing their boundaries to the limit. Rewards and Promotion
are external factors of motivation and employees aim to grow within an organisation. PA
helps in evaluating whether the employees are ready for the next level or not. Reward and
promotion acts as a motivating factor for the employees and importance of performance
appraisal in improving the performance of the employees. Yearly appraisal is the common
notion in majority of the organisation and the result corresponds to the data collected from
the survey. Performance appraisal employees vary depending upon the tasks assigned to
them. Therefore, performance evaluation criteria varies depending upon the responsibilities
and duties of the employees which means that the employees have to be clear about the key
responsibility areas to excel and fulfil their performance criteria.

Chapter 5
5.1 Introduction
5.2 Summary of finding and discussions
5.3 implications
5.4 limitations of the research
5.5 conclusions
5.6 final conclution