Learning and Development

Assignment

Annotated bibliography and Synopsis of

Research papers on the topic

“Performance Management System and

the Employee Perceptions”

Rizwana Parween
(18DM171)
 1. Anupriya Singh, Perceptions of Software
Professionals regarding Performance
Management Processes: An Exploratory Study

“In this research paper, the researcher tries to understand the perceptions of
software professionals regarding certain performance management process
dimensions (viz., performance planning, feedback, and employee participation in the
process); system knowledge and justice dimensions (viz., procedural, distributive
and interactional justice with respect to the performance management system) and
their potential inter-relationship. The study was carried out on a sample of 341
software professionals in four software firms in the NCR region. Three survey
instruments, i.e., perception of performance management process dimensions
questionnaire, perceived system knowledge questionnaire, and perception of
organizational justice dimensions questionnaire, were designed and used for the
study. “

“This study has focused on three dimensions of performance management process

namely performance planning, feedback, and employee participation. In addition
to performance planning and feedback this study also includes employee
participation in performance management process as a significant dimension for
study as it has gained significant research attention. “

METHOD

Sample and Data Collection

“This study was exploratory in nature and aimed at understanding the perceptions of
software professionals regarding certain dimensions of the performance
management process, their knowledge about its working, and fairness in the context
of software industry. Performance management, in IT industry, emerges as a
significant HR system which may directly contribute to organizational performance
and effectiveness. Finally, though this industry has been growing in its economic
contribution and relevance, little research has been conducted on managing
performance of knowledge workers in this industry especially in the Indian context
(Agrawal & Thite, 2003). Quantitative data was collected from four software
multinational organizations. In order to meet the objectives of this research, it was
important that the organizations under study had an established PMS. After
reviewing the literature available for various software organizations (both Indian and
foreign) and their websites, the Director (HR)/Vice President (HR) of 10 such
multinational software organizations (both Indian and foreign) in the NCR region
were contacted directly through a formal letter of request seeking permission for the
research. After satisfying themselves about the academic nature of the study, HR
teams of four organizations granted permission for the same. Respondents for the
study were selected using judgmental sampling technique, as the nature of this study
made it important for respondents to have undergone at least one performance
assessment cycle. Therefore, only those employees who had been with their
organization for a period of at least two years, were included in the survey. For the
purpose of data collection, a total of 450 employees were targeted from all the four
organizations. Out of 410 responses received from sample organizations, 341
were usable resulting in a response rate of 75.77 percent. Amongst the respondents,
239 (70%) were males; 157 (46%) were in the age bracket of 26-30; 180 (52.7%)
had a total work experience of eight or more years in the software industry; and 247
(72.4%) were at middle/senior/ top level. “

RESEARCH INSTRUMENTS
Perception of Performance Management Process Dimensions Questionnaire

“This questionnaire was developed by the researcher to understand employee

perceptions regarding certain performance management process dimensions. Since
there was no prior instrument available to specifically measure perceptions of
software professionals with respect to these performance management process
dimensions, a new instrument was developed after reviewing those constructed by
previous researchers in this area. The complete instrument included eighteen items
spread over three performance management process dimensions, namely
performance planning (e.g., ‘I am well aware of my performance goals’); feedback
(e.g., ‘I receive feedback from my supervisor on an ongoing basis’) and employee
participation in performance management process (e.g., ‘I develop my goals/
objectives jointly with my supervisor’). One item in this scale was negatively phrased
and, hence reverse scored. Responses were sought using a 5-point Likert scale
ranging from 1 (strongly disagree) to 5 (strongly agree). Internal consistency of the
scale was tested by computing Cronbach alphas and alpha value was found to be
higher than 0.70 in each dimension. “

Perceived System Knowledge Questionnaire

“The 11-item measure developed by William and Levy (1992) was adapted and used
in the present research study. This scale has been used extensively in research
(William & Levy, 2000) and has an internal consistency of 0.87. The adapted
instrument consisted of 7 items of which three items were reverse scored. Some
sample items included in the scale were – ‘I understand how the performance
management system works in my organization’; ‘I know the criteria used by the
organization to evaluate my performance’; etc. Responses were sought using a 5-
point Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree). Internal
consistency of the scale was re-established by calculating Cronbach alpha which
was found to be 0.77. “

“Perception of Organizational Justice Dimensions Questionnaire

To understand justice perceptions with respect to PMS and its processes, a new
instrument was designed after reviewing existent justice perception scales devised
by previous researchers (e.g., Colquitt, 2001; Keeping & Levy, 2000; Sweeney &
McFarlin, 1993). The scale included items on procedural (e.g., ‘Sufficient time is
spent on interaction in performance review/discussion process’), distributive (e.g., ‘In
general, salary and promotion related decisions that are made by the
supervisors/managers are objective & fair’), and interactional (e.g., ‘While managing
performance, supervisors respect employees’ opinions and feelings’) justice
dimensions. The complete scale consisted fifteen items out of which two items were
negatively phrased and hence reverse scored. Responses were sought using a 5-
point Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree). Cronbach
alphas were found to be higher than 0.67 in each of the three dimensions.

RESULTS

Descriptive Statistics

With respect to performance management process dimensions, mean values of

variables indicated that respondents of all four organizations were quite satisfied with
performance planning (Average Mean = 3.77; SD = 0.82). Mean score for items in
performance planning dimension ranged from 3.59 to 4.24 excluding the reverse
scored item (‘While planning for performance, I tend to focus more on actual project
work and less on self-development goals). More than eighty percent felt that they
reviewed their performance before the appraisal meeting with supervisor and tracked
their performance development plans on a regular basis.Even though a significant
majority (63%) of software professionals disagreed or were ambivalent about their
understanding of how performance ratings were determined, almost an equal
number (65%) of them were sceptical that any training about the performance
management system would be beneficial. This, however, may find reason in their
hectic work schedules and overall perception regarding training on HR aspects.

Average mean score on procedural justice dimension was 3.27 with a standard
deviation of 1.06 (Table 2). Mean scores for all six items in procedural justice ranged
from 3.1 to 3.4. Low mean score could be attributed to presence of ambivalence in
response to each item. A possible reason for large number of ambivalent responses
may be the hesitation/disinclination of appraisees in giving categorical responses
since the questions were likely to have emotional relevance to them. This was
despite the fact that due care was taken while designing survey instruments to avoid
potential disinclination of respondents. From the data gathered, it was difficult to
reach a definitive conclusion on whether software professionals perceived PMS as
procedurally just or unjust (due to ambivalence in responses). However, certain
trends could be observed. More than fifty percent software professionals felt that,
their ‘organization makes supervisors accountable for the rating they give to an
employee’, ‘sufficient time is spent on interaction in performance review/discussion
process’, and ‘performance feedback is well documented’. However, their responses
also indicated a need for regular formal meetings for progress reviews (Mean = 3.1)
and transparency in the process (Mean = 3.1). Results on distributive justice
dimension also indicated mixed perceptions (Average Mean = 2.86; SD = 1.00). For
instance, although, more than forty percent software professionals felt that
‘supervisors give performance rating without any pressure/prejudice’, ‘employee’s
power to negotiate with the supervisor doesn’t influence his/her performance ratings’,
and ‘employees do not get a rating higher than what they deserve’, only thirty-three
percent of them strongly agreed/agreed that salary and promotion related decisions
made by supervisors/managers were objective and fair.

Results revealed that:

• Software professionals of all the four organizations were fairly satisfied with
performance planning and their participation in performance management process;
but only moderately satisfied with feedback.
• Perceived system knowledge of the software professionals was moderate.
• They perceived the performance management systems to be interactionally just to
a large extent, but pointed towards a need for improvement on procedural and
distributive dimensions.

Findings of this research have significant implications for HR practitioners.

Feedback, perceived system knowledge and their participation in performance
management process were found to be significant variables influencing their
perceptions regarding fairness of the system and hence, may need specific attention
especially in the software industry context. Strong inter-relationship was found
amongst all dimensions relating to performance management process; perceived
system knowledge, and justice dimensions pointing towards the significance of an
integrated and systemic approach towards the process and have significant
implications for improving the overall design, implementation, and outcomes of the
performance management system. “

2. Denise P. Holland, A Qualitative Examination of

Employees’ Experiences and perceptions of
Performance Management Systems

“Denise P. Holland examined the impact of performance management systems on

employees’ job satisfaction and morale. The study’s research design was qualitative
using an exploratory methodology. This research model provides the opportunity to
collect first-hand accounts from employees of their experiences. The data collection
consisted of 18 Interviews using Skype and WebEx Conference calls technology.
The participants volunteered from the a senior-level, IT-focused talent development
organization. The rationale for this study was to explore the employee performance
management system from the employees’ perspective. Over 30 years of research of
performance management systems revealed a need for greater research from the
employees’ view. The research also explored understanding the benefits and
shortcoming of current systems, outlined contributing factors to employees’ job
satisfaction and morale to contribute to the research body of knowledge. Having a
better consideration of perceived issues with performance management systems
defined by employees’ experiences, was examined to define future
employee/management developmental programs and training to minimize future
problems. The Research Question 1 was: How do employees’ management,
experiences, and perceptions with annual performance reviews systems affect their
job performance and morale? Subsequent probing Research Questions such as: Do
you feel each of your previous managers used the management system as
intended? Do you or others in your company feel there is a way to manipulate the
performance management system to a personal advantage or detriment? The
findings revealed a general perception from participants that the systems could be
manipulated to a personal or advantage or detriment. This led to a conclusion to
minimize subjectivity and increase administrative controls to avoid future problems
and perceptions of fairness. Future research is recommended to interview more
employees without direct management responsibilities to further add to the research
body of knowledge. “

“Sample

The population for this research consists of employees currently employed with
organizations that have some type of formal performance review system. The
organization must have implemented and used a performance management system.
The type of performance management system can vary such as the standard
performance management system where the manager writes and delivers the review
to the employee each year or a 360 performance review system. The sample frame
for this research consists of selected employees, members of a senior-level, IT
focused talent development organization. The sample was from members in
individual contributor, project management, mid-level, and senior level Information
Technology management roles. The organization’s members meet quarterly at
designated locations to increase information technology and professional knowledge
of its members. The senior leaders and members in other information technology
roles have their meetings at the same locations, but each group meets separately.
They come together for group related and networking activities. Each group
conducts what is known as check-ins and check-outs to bring their fellow members
up to date on the their professional, personal, and educational goals and
accomplishments. The interviews, with participants’ written approvals, will be
recorded. Member checking of the data will be accomplished by the participants’
review of the transcripts for accuracy and validation of the data (Trochim, 2006).
Responses will be entered and analyzed using NVivo. A written synopses of the data
collected and analyzed will be provided to participants. The use of this qualitative
approach will allow for the collection of the perceptions of employees contributing to
research results and the research body of
knowledge. “

“Data Analysis

Unit of analysis is the individual - The qualitative study will analyze employees’
morale and job satisfaction in the study of employees’ experiences’ and perceptions
of performance management systems. This analysis will consist of data collected in
the one-on-one interviews. In the face-to-face interviews, participants will be asked
open-ended type questions to gain input and to answer the research question - How
do employees’ management, experiences, and perceptions with annual performance
review systems affect their job performance and morale?

Forced Distribution

A very common theme was revealed regarding the type of performance

management system used at the participants’ companies. All participants had a
forced distribution system implemented and used to conduction rankings of
employees for their final performance assessment and merit determination. Two
companies used a combination of the forced distribution or a 360-degree review
system. Due to the requirement to force employees into a bell curve to determine
where they actually fell in the ratings pool, this method presented challenges for all
participants, individual contributors and managers/leaders. The did not see the
benefit of the forced distribution system and felt there was too much subjectivity in
the overall determination. In all the corporations the rankings were done at a higher
level of corporate management where those responsible for the final employee
ranking were not directly responsible for managing the employees’ day to day tasks.
These rankings were determined based on the strength of the manager’s ability to go
to bat for the employees in question. The mangers with the strongest abilities in this
area usually came out on top with their employees receiving the higher rankings.
This often resulted in the same employees getting the higher reviews each year.
Unfortunately, the participants did not feel that this was always warranted and
caused great consternation. Large corporations such as Microsoft evaluated their
internal performance management systems using a force distribution and saw a
need to revamp it due to their high turnover and employee morale issues (Conlin et
al., 2007). There were 16 out of 17 participants who mentioned problems with using
a forced distribution system. One had no idea of the system’s shortcomings. Two
participants felt very strongly about the shortcoming were with the user of the tool,
not the tool itself felt very strongly about the shortcoming were with the user of the
tool, not the tool itself.

Summary of Findings

Research Question 1(RQ1): How do employees’ management, experiences, and

perceptions with annual performance review systems affect their job performance
and morale?

Participants offered several recommendations grouped into the followed categories.

One recommended change was to make the performance management system
more user friendly and less subjective. Three respondents recommended providing
greater management training and fixing the people not the system. They felt the tool
was fine, but the lack of management subjectivity, training, and bias created the
issues with process. Three other participants recommended fixing the broken human
resources problem to allow for a broader rating range from 1 to 5 instead of 1 to 3.
This will allow for a greater opportunity Seven more participants recommended
eliminating the forced distribution system all together – the forced ranking did not
work. Six participants recommended making the system fairer with less biases.
Three participants recommended the system could be more user friendly. One
participant would not discuss the recommendation on the call. Seven participants
mentioned the questions were very thorough and had nothing more to add.
Participants also mentioned their good and bad experiences based on their
manager, their communications, and relationship with them. Only one did not see a
real benefit because of the forced distribution system in place. Other participants felt
the system forced employees to excel since they knew they were being compared to
others relative to performance rankings. These participants also stated their system
provided consistency, transparency, and provided a tool to document employee
performance. Two participants felt very strongly about the shortcoming with the user
of the tool, not the tool itself. One Participant had no idea of what to say regarding
the system's shortcomings. 14 participants had many things to say about the
system’s shortcomings. “

3. Taco Elzinga, Behavioral factors influencing

Performance Management Systems’ use

“The researcher’s purpose of this paper was to substantiate conclusions from De

Waal’s case study research about the role of behavioural factors in the use of
performance management systems.

Design/methodology/approach

De Waal’s exploratory research is replicated in four more Dutch organizations. Data

were collected through the use of questionnaires, interviews and document research.
Data of the additional case studies were combined with De Waal’s. Pattern matching
was used to compare all case studies. De Waal’s initial research design was
extended through the inclusion of different levels of matches in the pattern matching
exercise. The main focus of De Waal’s study was on the human element in PMSs:
which behavioral factors influence managers’ use of a PMS? From the literature, De
Waal selected 45 factors that could have a positive or negative impact on the use of
a PMS. These factors were grouped according to the stage they were applicable to:
start, development or use of the PMS. He subsequently selected criteria that would
be indicators for the regular use of a PMS (so called criteria for regular use). In order
to determine the impact of the behavioral factors on the use of a PMS, De Waal
conducted a multiple case study, in which four Dutch organizations, both in the
profit and non-profit sector, were researched in depth.
Data were collected through the use of a questionnaire, interviews and document
research.

If the results from all data were positive, a plus (þ) was given; if the results were all
negative, a minus (2) was given. If the results were not all positive or negative, a
zero (0) was given. As the next step, a final score for each of the stages (start,
development, and use) was determined. This was done by calculating the average of
all scores in a particular stage. If the average was below 20.2, the final score was a
minus (2). For an average above þ0.2, the final score plus (þ) was given. For an
average between 20.2 and þ0.2, the final score was zero (0). A similar procedure
was followed to evaluate whether or not the criteria for regular use were satisfied.
Subsequently, final analysis of the data took place by comparing the case studies
with each other. Pattern matching was used to identify those behavioral factors with
the greatest impact on the use of PMSs.
Results

Data from all eight case studies were combined into one overview and pattern
matching analysis carried out. It turns out that the definition of a match is of key
importance for the number of important behavioral factors one finds. The more
stringent the definition, the less behavioral factors are identified as being important.
The relation between matching criteria and the number of important behavioral
factors appears to be linear. The main conclusion from our analysis is that one
cannot tell how many factors are important for the use of PMSs, because this
depends on how one defines “important” (i.e. which matching criteria one applies).
However, the results of our research make it possible to determine the relative
importance of the behavioral factors. In order to do this, the results have been re-
grouped. The behavioral factors that fullfill the most stringent matching criteria (75
percent) on top, and the factors that only meet 25 percent matching criteria at the
bottom. Behavioral factors that even satisfy the most stringent matching criteria are
the ones where the link with the criteria for regular use is strongest, and hence they
are the ones that are most important for the regular use of performance
management systems.

4. Alan R. Nankervis, Pauline Stanton & Pat Foley,

Exploring the Rhetoric and Reality of
Performance Management Systems and
Organisational Effectiveness

“This paper explores the links between performance management (PM) systems and
organisational effectiveness (OE) from the perspectives of managers in a range of
organisations and industries in Australia. The paper focuses on three key areas –
namely, managers’ views of the organisational context (in particular strategy, vision,
values, and performance alignment); perspectives of their PM systems, practices,
and performance culture; and finally, opinions about the links between their
performance management systems and organisational performance. The study
builds on an extensive literature on the links between strategic human resource
management, employee performance management and organisational performance.
This paper focuses on the views of a range of managers across a variety of
organisations and industries to capture their experience and understanding of
performance management and its contribution to organisational effectiveness. The
paper presents research findings on managerial perceptions rather than strictly
quantifiable linkages between PMS and organisational effectiveness thus, providing
a snapshot of performance management practice in a sample of Australian
organisations.
METHODOLOGY

This study was conducted to elicit the perspectives of a range of (primarily)

generalist managers (line, middle and senior) across a range of industries and
organisations in Australia. Specifically, on their views of performance management in
general and their experience of the practice of performance management in their
organisation were sought, in order to contribute to the ongoing discussion on the
performance management organisational effectiveness conundrum.

Procedure

The study was conducted by survey of Australian line, middle and senior managers
and some HR practitioners utilising online and mail techniques with three existing
databases. The databases included those provided by an industry association, a
consultancy company, and the alumni of an MBA programme in an Australian
university. The researchers did not have direct access to the databases and so were
unable to estimate the exact response rate. However, this was not intended to be a
representative sample, more a snapshot of current practices across a wide range of
organisations, as perceived primarily by their generalist (non HRM) managers. “

Measures

“The questionnaire was comprised of six sections with 130 questions. It was partially
based upon the 2005 CIPD survey conducted in the UK to allow subsequent
comparison, but significant variations and additions were also included. The sections
included organisation and participant details; organisational strategies, values and
culture; views on performance management; the organisation’s current performance
management system; performance management systems in general; and the
outcomes of performance management.
Whilst the study primarily collected quantitative data, there were also some limited
qualitative findings in response to one survey question. The data were analysed
using ANOVA and thematic content analysis techniques. Both forms of data are
presented in the paper, with the qualitative material complementing the quantitative
data. “

“RESULTS

Quantitative Findings

This paper reports on participants’ general perceptions of the overall links between
their PMS and organisational effectiveness. In particular relationships with the six
constructs: vision, values and performance alignment (VVPA); high performance
culture (HPC); performance management views (PMV); performance management
systems (PMS); performance management systems/practices (PMP); and
performance management system effectiveness (PMSE) are reported. The six
constructs were measured with different scales. VVPA and HPC and PMV used a
five point scale, which ranged from one Strongly Disagree to five Strongly Agree with
the mid value of three as Unsure. PMS and PMP used a four point scale ranging
from one Strongly Disagree to four Strongly Agree. PMSE used a four point scale
with end points one Very ineffective to four Very ineffective. All items are reported in
the direction in which they were originally worded, but to test the reliability and for
scale construction some scale items directions were reversed. The six constructs
showed robust reliability with their Cronbach’s alpha ranging from 0.77 to 0.90.

Qualitative Findings

A single qualitative question in the survey requested respondents to identify the

three key issues in performance management systems. Whilst it necessarily elicited
multiple different responses, the main themes which emerged were different for
executives/senior managers, middle managers, line managers and HR
professionals, although there were some shared perspectives. Thus, for executives/
senior managers, the issues most frequently mentioned included can be summarised
as a common understanding of the PMS; adequate training in the need for and use
of the system; and an associated culture of accountability. ‘Common understanding’
encompassed such aspects as specific communication of the purposes and value of
the PMS; ‘buy in’ and commitment at all organisation levels, especially by
management; adequate feedback mechanisms; user friendly systems; linkages
between employee KPIs and organisation goals; and clarity of purpose.
Some examples of such comments follow: ‘open and transparent communication’,
‘acceptance by employees of the system’, ‘recognition that performance
management is not a punitive process, but a process of continuous improvement’,
and ‘integration into the organisational culture…it needs to become part of the
organisational narrative’. More cynical comments included ‘culture eats performance
management every day for breakfast’, ‘scrap them, dismiss the HR department,
scrap the bonus system’, ‘should be abolished’, and ‘it is not a tick box, nor an
opportunity to have a go’.

PMS training was perceived to include not only functional or process details, but also
identification of the mutual benefits of performance management, and shared
recognition that performance management should be a ‘normal everyday event’ or a
‘positive process’; which might be conducted as a several stage process – for
example, ‘one-on-one, class and then follow-up instruction’. Measurement and
accountability aspects mentioned encompassed clear links to organisational
objectives, ‘needs to be able to extract trends across the business, objectives must
be cascading and linked to the business strategy’, realistic goals (‘SMART
principles’), individual employee accountability, and ‘selecting the right KPIs/metrics,
to measure them and assign appropriate weighting to make it clear which are the
most important’. One respondent suggested holding HR managers accountable as
they have ‘the primary responsibility for the conduct of performance management
programs (unit cost relationship with achieving outcomes – identify professional
development’.

Middle manager responses can be summarised as commitment, ownership and

alignment. With respect to commitment, comments such as ‘everyone in the
organisation has to take the process seriously’, ‘support from senior management’,
and ‘a cohesive and understanding management team’ are reflective. The
importance of stakeholder ownership of the PMS was expressed in such suggestions
as ‘consultation (buy in), user friendly system’, ‘ownership from executive
management, ownership and input by staff recognition and developmental plan for
staff’, and ‘stakeholder involvement in the development of the system’. Alignment
was explained through feedback ‘in both directions’, ‘alignment from top to bottom of
goals’, and ‘integration with the vision, values, business plans and HR activities’.
Line managers focused more clearly on operational issues such as user-friendliness,
effective communication about the PMS purposes and processes, and employee
benefits. The need for simple, transparent, and consultative systems was frequently
raised, from the perspectives of both employees and their supervisors – as
examples, ‘it should be a system that is easy to use and is not time demanding’, and
‘effectively and timely reporting systems which matches the culture and maturity of
the organisation… simple to use’. Communication and employee benefits issues
raised included an emphasis on employee motivation, ‘direct feedback to employees
on how they are performing’, and regular HR surveys – ‘PMS should encourage
employee development by encouraging skill and competency enhancement’.

“Middle manager responses can be summarised as commitment, ownership and

alignment. With respect to commitment, comments such as ‘everyone in the
organisation has to take the process seriously’, ‘support from senior management’,
and ‘a cohesive and understanding management team’ are reflective. The
importance of stakeholder ownership of the PMS was expressed in such suggestions
as ‘consultation (buy in), user friendly system’, ‘ownership from executive
management, ownership and input by staff recognition and developmental plan for
staff’, and ‘stakeholder involvement in the development of the system’. Alignment
was explained through feedback ‘in both directions’, ‘alignment from top to bottom of
goals’, and ‘integration with the vision, values, business plans and HR activities’.
Line managers focused more clearly on operational issues such as user-friendliness,
effective communication about the PMS purposes and processes, and employee
benefits. The need for simple, transparent, and consultative systems was frequently
raised, from the perspectives of both employees and their supervisors – as
examples, ‘it should be a system that is easy to use and is not time demanding’, and
‘effectively and timely reporting systems which matches the culture and maturity of
the organisation… simple to use’. Communication and employee benefits issues
raised included an emphasis on employee motivation, ‘direct feedback to employees
on how they are performing’, and regular HR surveys – ‘PMS should encourage
employee development by encouraging skill and competency enhancement’. “

“CONCLUSION

This paper reports on some of the quantitative and qualitative findings from an
Australian research study, which focused on the perceptions of a wide range of
managers (executives/senior managers, middle and line managers, HR
professionals) on the links between performance management and organisational
effectiveness. Whilst the data parallel the findings of many similar studies – in
particular, that the rhetoric of performance management system designers is not
always shared by all organisational stakeholders or reflected in operational realities;
and that linking PMS to organisational effectiveness is often problematic – the paper
contributes to the associated literature by demonstrating the sometimes conflicting
imperatives of different management levels. Thus, executives/senior managers in
this study were the most supportive of a strategic approach to the PMS
organisational effectiveness relationship, followed by HR professionals, whilst middle
and line managers were clearly more focused on operational and implementation
perspectives. Accordingly, executives/senior managers might be characterised as
the sponsors of PMS; HR professionals as their advocates; and middle and line
managers as the end users of such systems and their links to organisational
effectiveness.

The findings from this study are not claimed to represent managerial perceptions of
the performance management–organisational effectiveness conundrum across
Australian industry, due to its sample size and coverage. However, it adds to the
associated stream of literature, by extending an understanding of the contributions of
HRM processes to business outcomes and the diverse views of different managerial
levels. Future studies might extend research to larger or industry specific samples, or
to other HRM processes such as staffing, human resource development, rewards
and retention programmes. “

5. DONG CHUL SHIM, YONG SOO KWON, HYUN

HEE PARK, SUNG WON HWANG, Linking Pay-
For-Performance System with Performance
Improvement: The role of Fairness,
Organisational resources and leader/managerial
engagement

“This study explores the antecedents of successful implementation of the pay-for-

performance system by conducting surveys in 11 different ministries and
administrations of the Korean government. In particular, this study examined the
roles of fairness of performance evaluation, organizational resources, and
leader/managerial engagement. The results suggest that fairness of performance
evaluation and leader/managerial engagement can be important factors in directly
enhancing employees’ perceived performance. Organizational resources were also
found to indirectly improve employees’ perceived performance by enhancing the
fairness of performance evaluations. The results are expected to help public
managers understand how performance management systems can be developed in
government organizations.

Many empirical studies have found a relationship between employees’ perceived

fairness of the performance evaluation and their attitudes and performance. For
example, Taylor, Tracy, Renard, Harrison, and Carroll (1995) found that employees
in a high due process performance appraisal group showed higher job satisfaction
and greater confidence in solving task-related problems. A fair performance
evaluation also enhances organizational productivity in that it decreases employees’
turnover intention while increasing their organizational commitment and pro-social
behaviors (Erdogan,2002). On the other hand, employees may be demotivated and
unsatisfied with the new PPS when the performance evaluation does not result in
corresponding rewards (Kellough & Nigro, 2002; O'Donnell, 1998; Pearce & Perry,
1983). In line with these previous findings, this study examines whether the
perceived fairness of a performance evaluation is an important antecedent of
employees’ performance improvement. The following hypothesis is developed based
on an expectation that employees are more likely to accept feedback from their
performance evaluation and improve their performances when they perceive the
PPS to be fair. Based on this notion, the following hypothesis was developed.

Hypothesis 1. Employees’ performance will be improved under the new pay for
performance system when employees find their new performance evaluation to be
fair.

Hypothesis 2. Employees’ performance will be improved under the new pay-for

performance system when organizational resources are secured to implement PPS.

Hypothesis 3. Employees are more likely to perceive that their new performance
evaluation is fair when their organization secures a high level of organizational
resources to implement a new pay-for-performance system.

Hypothesis 4. Employees’ performance will be improved under the new pay-for

performance system when leaders and managers are fully engaged in developing
the new pay-for-performance system.

Hypothesis 5. Employees are more likely to perceive that their new performance
evaluation is fair when their leaders and managers are fully engaged in developing
the new pay-for-performance system.

Sampling Procedures

The current study was conducted at 11 Korean central government agencies. The
Korean Institute of Public Administration, a research institute, administered the
surveys, and two of the authors of this paper were involved in the project. Among the
11, four agencies were categorized as organizations whose performance
management systems are established, as they participated in BSC projects from the
start and developed exemplary systems (Ministry of Construction and
Transportation, Ministry of Government Administration and Home Affairs, National
Tax Service, Korea Coast Guard). On the other hand, four agencies adopted the
BSC after two years of pilot tests when the current research began (Ministry of
Gender Equality, Military Manpower Administration, Korea Meteorological
Administration, Ministry of Education & Human Resources Development); three other
agencies (Office of the President, Ministry of Commerce, Civil Service Commission)
developed an independent performance management system only recently instead
of adopting the BSC. In this study, the latter seven organizations were categorized
as organizations in the early stages of developing a performance management
system. The sample of total respondents consisted of 1,120 employees from 11
organizations. Of the 1,120 questionnaires that were mailed, 828 were returned
completed and usable. A large majority (86.6%) of the respondents were men,
managers or senior executives (59.1%), and many had a degree higher than an
undergraduate degree (47.4%).

Employees’ rankings provide additional information about job responsibility, with

10.5% of employees ranking higher than third grade (high-ranking workers), and
55.4% of employees ranking below sixth grade (low-ranking worker).

Questionnaire Design and Measurement

Respondents completed a 75-item questionnaire designed to examine various

employee perceptions of organizational context and organizational climate that might
influence the effectiveness of a pay-for-performance system. All items, except
control variables, were measured on a 5 point Likert scale (coded from 1 to 5) based
on the strength of agreement (1=strongly disagree, 2=disagree, 3=neutral, 4=agree,
and 5=strongly agree). Multiple items were used for each variable.

Results
Prior to testing the hypothesized model, this study probed the employees’
perceptions about their new performance management system by examining the
respective survey items. Employees’ opinions about their new performance
management system were found to be mixed. Most of the employees reported that
their management teams and their organization made substantial efforts to
implement the new

PPS. Seventy-nine percent agreed that their leaders had a high level of interest in
the PPS. Likewise, over 70% agreed that their management team encouraged them
to utilize the new PPS and made genuine efforts to institutionalize the new PPS.
However, more than 50% of respondents disagreed that their PPS had fair
processes or fairly resulted in pay and promotion based on the performance
evaluation. Moreover, only 39% of employees reported that their job satisfaction
improved under the new PPS, and only 29% reported that their job performance had
improved under the new performance management systems. Those results were in
line with the results of previous empirical studies (Kellough & Nigro, 2002; Kellough
& Selden, 1997). However, the results reveal the possibility that employees’
perceptions and attitudes could be improved after the new systems are established
with success. When the responses of employees whose organizations had
successfully established a PPS were compared with those of employees whose
organizations recently started to adopt a PPS, the responses were found to be more
positive in the former group. For example, only 39% of employees from the early
stage of the performance management system reported that the performance
appraisal process is fair; whereas 52% of employees in the established stage of the
performance management system considered the process to be fair. The results also
show that employees’ job satisfaction (item 11) is significantly higher in the
established performance management system. Thus, all responses were found to
score higher in the established performance management system
Conclusions

The findings suggest that leaders or the management team might need to perform
various roles in implementing the PPS after it is adopted. For instance, in the early
stages of implementing a performance management system, public managers might
have to act as “change champions” to encourage employees to bring innovative
ideas in order to build more efficient government work processes and provide a
vision for organizational reform. On the other hand, in the later stages, leaders might
need to focus more on successful institutionalization of the pay-for-performance
system. Since a PPS is usually designed from a private-sector perspective, leaders
and top managers should investigate very closely to determine what they should do
to adapt the new system to the requirements of a government organization. In
particular, engagement by top-level leaders will be helpful for lower-level managers
to have political supports and to secure organizational resources that are necessary
to implement the new system. “

6. Dr. Neeraj Kumari, A Study of Performance

Management System in WIPRO

“The study aims to study and analyse Performance Management components and
their usage in Wipro. The study entailed detailed examination of the methods to
measure and enhance performance management system against its objectives.
Exploratory research followed by descriptive research has been used in the study.
Nonprobability convenience sampling has been used in the study. The sample size
is 40. Primary data has been collected using two structured questionnaires. Depth
interview method was used by which answers to the questionnaire were sought. The
performance management system is an integral part of an organization to measure,
motivate, and improve the performance of the entire organization. It also helps to
focus on the goals of the organization towards specific pre-determined objectives for
an organizational culture. The performance of the employees is being analysed
which can indirectly influence the satisfaction of the employee and directly motivates
them to work for the organizational development. The study helps to analyze the
trends in performance management system in Wipro industry and give appropriate
suggestions to improvise the practices taken by it.

Research design: Exploratory research followed by descriptive research has been

used in the study. Descriptive studies are undertaken in many circumstances. When
the researcher is interested in knowing the characteristics of certain groups such as
age, sex, educational level, occupation or income, a descriptive study is necessary.
Descriptive studies are well-structured. It tends to be signed and its approach cannot
be changed every now and then. It is, therefore necessary that the research give
sufficient thought to framing research questions and deciding the types of data to be
collected for their purpose.
Sampling Technique: Non-probability convenience sampling has been used in the
study. Convenience sampling refers to the collection of information from members of
the population who are conveniently available to provide it. It is most often used
during the exploratory phase and is perhaps the best way of getting some basic
information quickly and efficiently.

Sample size: The study has been carried out by collecting information from Wipro by
using simple random sampling. The sample size is 40.

Data collection tools: In the study data has been collected using primary and
secondary methods of data collection. Primary data has been collected using two
structured questionnaires. Depth interview method has been used. Secondary data
has been collected from journals, articles; research magazines and working papers
available in the organization and from Internet. “

Findings
Following are the findings of the study:

• For reducing the biasness in PMS normalization is used mostly.

• Training of the employees is an important part of PMS.
• Retention of the employees is of utmost importance while making policies
regarding PMS in the company.
• If poor performance of an employee is identified, there is a trend of providing
improvement coaching.

Conclusions

“The performance management system is an integral part of an organization to

measure, motivate, and improve the performance of the entire organization. It also
helps to focus on the goals of the organization towards specific predetermined
objectives for an organizational culture. The companies must identify and develop
unique retention strategies to retain the employees. An established formal
communication networking with an informal focus would give the organizations an
additional competitive advantage. “

7. Sitansu Panda, Performance Management

System in a Manufacturing Company- A Study
from Employee Perspective

“In this paper, the four aspects as performance planning, performance appraisal
performance managing and performance monitoring and their relationship with the
PMS of the company has been explored. Different components of Organizational
Effectiveness (OE) have been studied and its relationship with PMS has been
studied. Finally, some tentative measures have been suggested for strengthening
the PMS to have a better result in future. This anonymous study has been conducted
in a manufacturing company. The objectives of this paper have been to identify the
components and procedure involved in Performance Management System of the
company, to explore the relationship between different components of Performance
Management System and PMS and to explore the relationship between Performance
Management System and organizational effectiveness.

Methodology

The study is conducted on the performance management system of Rajput Cements

Company Limited, Dharampur, Madhya Pradesh. The researcher has taken the
views of the employees only which include the technical and clerical staff of the
organization. A specified questionnaire covering different dimensions of performance
management system was administered to forty employees. From the total man
power of 178 which includes managers, supervisors and worker, the workers
performing technical and supportive job constituted the main base of the study. And
more particularly, thirty per cent of such workers provided their viewpoints for this
study. Their view-points were collected; collated and the formulated hypothesis had
been tested by using SPSS. Different journals, magazines, books were reviewed.
Both primary and secondary data were collected.

Hypothesis

The hypotheses taken for this study are as follows:

• H0-1: There is no correlation between performance planning and performance

management system.
• H0-2: There is no significant relationship between performance appraisal and
performance management system.
• H0-3: There is no significant relationship between performance managing and
performance management system.
• H0-4: There is no association between performance monitoring and performance
management system.
• H0-5: There is no significant relationship between performance management
system and organizational effectiveness.

Data Analysis and Interpretation

Based on the responses taken from the employees, the relevant data have been
collated and their correlationship is explored which are given in the following tables.

The above table shows that there is no correlationship among the different
components of Performance Management System (PMS). The correlationship value
(Pearson) for performance planning with PMS is , correlationship value for
performance appraisal with PMS is , the correlationship value for performance
managing with PMS is and performance monitoring with PMS is. All these values are
<0.5. And the null hypotheses (first four sets) are accepted .

Findings and Suggestions

• In focused discussion with the employees they stated their views on the existing
performance management system. About ninety per cent of the respondents opined
favourably on the performance policy of the company. However, many of them were
dissatisfied with the execution of the policy.
• Majority of the respondents commented that there was no proper implementation of
the policy guidelines set for the individual as well as for the organizational growth.
• Top Level especially the reviewing officer and their comments on employees
performance ratings are biased.
• Around three-fourth of the respondents opined that they were least concern with
the Performance Management System of the company as they found no linkage of
the performance appraisal with their promotion.
• Around eighty per cent of the respondents commented about the PMS of the
company as it was devoid of linkage with the incentive and other components of
compensation package. More or less, reward system had no linkage with the
evaluation of their performance.
• Most of the employees criticized that the whimsical way of appraising their
performance by their respective boss did not give any sense for the development of
the company.
• There is lack of open communication with regard to the employee’s performance.
The open discussion with the subordinates, the team members, departmental
members with trust and better culture is the essence of a PMS. However, almost all
the respondents (90%) opined that the company lacks these aspects.
• More than three quarters of the (77%) respondents opined that they did not get
proper feedback from their respective bosses. And least opportunity for reviving their
performance, adjustment to their work related problems were evident.
• Around 60% of the respondents viewed about the improper work load distribution
among the employees.
• In connection with the appraisal, almost all the employees had commented the
system as the existing system provided least scope for rating the self-appraisal.
Although self-appraisal is a component of the appraisal system, it seems such
component is kept as ritual with least area to be evaluated.
•Some respondents were very critical about the ratings awarded by their boss and
while doing so, they least concern with the real performance of the subordinate and
without considering any of the employees difficulties, they gave equal ratings to all
the employees which not only effected their motivation but also lost the confidence
on the entire system.
• In the discussion with the employees they stated that the performance
management system has least linkage with the training programmes to be imparted
to them. The ritual practice of filling the appraisal forms was strongly criticized by
most of the respondents.

Conclusion

The Performance Management System is designed and implemented to excel the

performance of the individual as well as the organization as a whole. This study
reveals that there is no correlation between the components of the performance
management system which needs to be revived and such revival are expected to
yield better results. It should be done with participation of the line management and
performance to be appraised at regular intervals followed by effective counselling.
The existing system can be further studied to explore the problematic issues and
accordingly some HRD measures can be taken to change and develop the system. “
 8. Neetu Yadav, Sushil and Mahim Sagar,
Performance measurement and management
frameworks Research trends of the last two
decades
“Purpose – The purpose of this paper is to provide an integrated framework of
performance management area showcasing research trends in performance
measurement and management frameworks developed and discussed by revisiting
the literature of the last two decades – from 1991 to 2011.

Methodology– This paper provides a comprehensive review (excluding

management control systems) of the performance measurement and management
frameworks/ systems/models developed in the last two decades, which helps to
highlight the research trends related to performance management frameworks. The
methodology for literature review is chronological review where it is divided into two
periods – 1991-2000 and 2001-2011.

Findings – This paper portrays the developments that happened in performance

measurement and management via looking at performance management
frameworks and an analysis that reveals the research trends carried out in the last
two decades, indicating paradigm shifts such as from a financial perspective to an
integrative perspective (era 1991-2000), from an operational perspective to a
strategic perspective, the utilization of systems and simulation techniques (era 2001-
2011), etc. These shifts have led to the development of effective, integrated, and
dynamic performance measurement systems.

Research trends of performance measurement and management frameworks:

1991-2000

“What gets measured gets done” portrays the half-truth of measurement. In the
1990s,the focus shifted to: “how to manage what is measured”. The main objective
of any performance measurement system is to encourage proactive rather than
reactive management (Bititci, 1994). The need for relevant, integrated, balanced,
strategic improvement orientation has been realized in numerous publications
(Johnson and Kaplan, 1987; Drucker, 1990; Russell, 1992). The introduction of new
management techniques like just-in-time ( JIT), business process reengineering
(BPR) and total quality management (TQM) have brought momentum for developing
new performance measurement systems (Johnson, 1992; Watson, 1993). The
incorporation of non-financial measures has been a great topic of interest throughout
the 1990s (Medori and Steeple, 2000). Not only were non-financial measures
considered, the quality of financial measures was also examined (Ittner and Larcker,
1998). Keeping some of these issues in mind, numerous developments were made
in this era. Results and determinants framework (Fitzergald et al., 1991) took a lead
by incorporating leading and lagging indicators of performance. It was based on the
assumptions that there are two types of performance measures in any organization –
one is related to results and other is determinants of results, where they are lagging
indicators whereas determinants are leading indicators. Very specific framework
measures for time-based competition (Azzone et al., 1991) considered some
measures to pursue the strategy of time-based competition, but it failed to
incorporate other non-financial performance measures.

To demonstrate a clear link between performance measures at different hierarchical

levels of business processes and functional levels of any company, a performance
pyramid, i.e. strategic measurement analysis and reporting technique (SMART)
system, was proposed by Lynch and Cross (1991). The development of a framework
starts with defining corporate vision and then translating business unit objectives.
Operational measures and key performance measures are used to bridge the gap
between the top level and operation floor. According to Ghalayini et al. (1997), its
strength is that it integrates corporate objectives with operational indicators but it fails
to provide a mechanism to identify key performance indicators (KPI). Nanni et al.
(1992) introduced the concept of integrated performance measurement where the
emphasis has been put on service-oriented approach rather than product-oriented
methods of traditional management accounting. This work has realized and re-
emphasized to expansion of understanding of field of management accounting and
to integrate it with strategic and operational perspectives to meet the needs of
changing business environment. The introduction of many quality awards is one of
the major reasons for performance measurement revolution (Neely, 1999). The
EFQM award is based on nine criteria related to enablers and results for self-
assessment of any company. The popularity of the award is evident from the fact
that there are around 529,000 references available on the web. So, these quality
awards came up to bring substantial improvements in enterprise performance.

This decade provided revolutionary movements for enterprises to shift towards

measurement and management from merely measurement and control. Researchers
realized that an effective performance management is one which brings an entire
organization in alignment with the purpose of creating business values (Aguilar,
2003; Kaplan and Norton, 2006). Literature has highlighted the application of
quantitative and mathematical modeling techniques for the development of PMS.
There were still many issues which were at the back of the mind of researchers but
not very explicitly highlighted in literature related to PMM. The concern for
stakeholders like customers and employees had been taken care of in many
frameworks but other stakeholders were still not being addressed very well. While
concern for dynamism in this era was part of the research, there was a limited study
on its scope in the future. It has been very well stated that now research related to
PMM has reached the second generation where the diffusion and exploration of
proactive PMS is the agenda. Criticisms and shortcomings of the BSC approach was
also highly discussed in this research and its way forward in the era post 2000 was
examined.

Research trends of performance measurement and management frameworks:

2001-2011
The era post 2000 witnessed the opening up of broader avenues for researchers
who were updating BSC as well as discussing other prime issues related to PMS to
develop effective PMS for any enterprise. As the perspectives shifted from financial
to integrated, some other issues were integrated in performance management
frameworks. The other developments updating BSC approach, as holistic scorecard
(Sureshchandar and Leisten, 2005) extended BSC perspectives by integrating
intellectual capital perspective, employee perspective, and social perspective, and
thus addressed the need to integrate all stakeholders.

Some researchers emphasized to go beyond the BSC approach and looked forward
to new frameworks. Maltz et al. (2003) presented a dynamic multi-dimensional
performance framework which looks at five performance dimensions – financial
performance, customer/market, process, people development and future – and
provides guidance to management in the process of developing useful success
metrics for different situations and environment. The other recent development
looking beyond the scorecard to game-card is flexible strategy game-card (Sushil,
2010) that highlights the dual perspectives of performance, i.e. enterprise
perspective and customer perspective. All major stakeholders are covered under
enterprise perspectives, and as customers are the center point for strategy
development, they are kept as an independent perspective. In view of dynamic
environment and changing economy, these developments emphasize to go beyond
the BSC approach. The only shortcoming highlighted is that there is no empirical
validation available of these frameworks. Looking towards integrated and holistic
approach to performance management, some developments emphasized for
providing structure and theoretical development of holistic PMS. Anderson et al.
(2006) presented a generic framework considering stakeholders, organization,
market, values and culture to integrate diverse areas to play together and lead to
give full effect to organization. performance measurement system(Searcy, 2011)
describes phases of evolution of corporate sustainable PMS. Thus, the concern for
an effective, integrated, holistic, dynamic and sustainable PMS development was on
the agenda for the era post 2000. In this period, BSC was again in the discussion but
this time, the discussion was largely related to update the BSC approach and many
researchers had expanded four perspectives to add all other stakeholders which
were not considered in BSC. Thus, the shift from a set of stakeholders to all
stakeholders can be noted as a major contribution of this era.

Discussions and key learning

The transformations and developments researched in the performance management

framework reveal its multidisciplinary aspects. Researchers have realized the need
to look beyond merely scoring the performance and integrating the whole cycle of
strategic management. The development of an integrated and truly balanced PMM
system has been a transformation in the past one decade spanning 1991-2000,
along with the inclusion of dynamism and multi-stakeholder perspective that have
been widely discussed in 2001-2011 period. The methodological rigor supports in an
effective execution of the performance measurement systems for an enterprise. After
an analysis and understanding of the trends of the PMM frameworks developed in
last two decades, an attempt is made here to classify these frameworks on the basis
of some broad themes.
 1. Classical and dominant PMM frameworks

This theme includes those frameworks that have been very popular in literature as
well as dominantly used by practitioners. Their contributions to the knowledge base
are related to the incorporation of non-financial performance measures, quality, self-
assessment and inclusion of most of the stakeholders. These can be listed as
follows:

. balanced scorecard;
. performance pyramid;
. EFQM – excellence model; and
. performance prism.

2. Holistic and integrated PMM frameworks

As discussed, to fulfill the need for a holistic and integrated framework for enterprise
performance, researchers have highlighted the following developments, which
primarily discuss aligning performance with the future, brining individual performance
with enterprise performance, and integrating operational, functional and strategic
aspects of enterprise performance:
. consistent PMS;
. integrated dynamic performance measurement system;
. dynamic performance measurement system;
. integrated performance measurement framework;
. dynamic multi-dimensional performance framework; and
. holistic performance management framework.

3. Frameworks updating BSC approach

There has been a very wide discussion in literature about incorporating and updating
the BSC approach keeping in mind organizational view, system dynamics
methodology and modelling, fuzzy cognitive maps, intellectual and social
perspectives, etc. The frameworks that update the BSC approach may be listed as:
. Kanji’s business scorecard;
. holistic scorecard;
. total performance scorecard;
. “system dynamics based” BSC; and
. proactive BSC.

4. Context-specific PMM frameworks

This category includes frameworks discussing specific contexts of performance,
such as economic value, social values, quantitative factors, performance value
chain, etc. These PMM frameworks can be further clustered on the basis of
underlying driving factors, as process-based frameworks (input-process-output-
outcome framework, the performance planning value chain); financial performance
drivers (shareholder value, economic value added); criticism of traditional control
mechanism (beyond budgeting).

Context-specific frameworks are:

. measures for time-based competition;
. economic value added;
. input-process-output-outcome framework;
. shareholder value;
. quantitative models for performance measurement systems;
. the action-profit linkage model;
. beyond budgeting; and
. the performance planning value chain.

5. Recently developed PMM frameworks

Here, the frameworks which have been developed in the last three to four years and
discuss about the major issues related to enterprise performance are taken into
account, such as:

. flexible strategy game-card; and

. sustainability performance measurement system.

This study gives a comprehensive view (excluding management control

system/frameworks) of existing performance management frameworks where the
contribution(s) as well as limitation(s) are highlighted. The conclusion drawn from
this study shows many paradigm shifts which have taken place in the research of
PMM frameworks in the last two decades. Shift from financial measures to integrated
measures, operational perspectives to strategic perspectives and consideration of a
set of stakeholders to all stakeholders have been the major visible changes. The
findings from this literature review are validated with the work of Srimai et al. (2011)
who had presented evolutionary paths of performance measurement and showed
four paths of performance measurement – from operations to strategy, measurement
to management, static to dynamic and economic-profit to stakeholder focus. This
study has culled out these trends by specifically concentrating on the developments
in the form of PMM frameworks/systems. This gives a small contribution to the
knowledge base by collectively framing the history of research done in PMM
frameworks in the past two decades. As business environment and conditions are
more rapidly changing, the researchers and practitioners are always involved to look
for future research prospects, giving way to further explore research opportunities
related to PMM. In these last two decades, industrial economies have experienced
structural changes and so as the changes have been experienced in PMM research.
In 1991-2000, the major developments of PMM frameworks were related to
manufacturing operations, and the performance measures were largely related to
productivity, waste, cycle time, response time, cost, quality, delivery time, processes
and technology. Since the shift has taken place from manufacturing to services, new
developments have incorporated some new performance measures, such as
leadership, training, education, innovation, capabilities, knowledge, personal
improvement, etc. which can be seen explicitly in the era post 2000. In the last one
decade, the development and implementation of PMS for public sector is also one of
the major transformations observed in the literature. Thus, shifts in research trends
in PMM framework has been observed as per the structural changes in industrial
economies“
 9. Selden, Sally, PhD; Sowa, Jessica E,
Performance Management and Appraisal in
Human Service Organizations: Management and
Staff Perspectives
“To demonstrate their effectiveness, nonprofit organizations, like public and private
sector organizations, are facing increasing pressure to demonstrate how well they
perform and their plans for future improvement. An essential part of this process of
measuring and fostering effectiveness is managing the performance of
organizational members; typically this is accomplished with performance
management processes, as the ability of nonprofit organizations to meet their goals
is directly dependent upon the ability of the staff to perform effectively in
the management and delivery of services. Performance management systems have
been studied extensively in the public and for-profit sectors but have not been
adequately explored in the nonprofit sector to surface possible sector-specific
challenges. This study addresses this gap in the nonprofit knowledge base by
comparing the utilization of different components of
a performance management system from the perspective of management and
frontline staff. It identifies gaps in the perceptions of management and staff
concerning performance management and identifies five different models
of performance management systems, concluding with lessons for practice.

Nonprofit organizations, like public and private sector organizations are facing
increasing pressure to demonstrate how well they perform and their plans for future
improvement. In recent years, the field has witnessed a surge in attention to the
conceptualization and measurement of organizational performance and
effectiveness. This study addresses this gap in the non-profit knowledge base by
comparing the utilization of different components of a performance
management system from the perspective of management and frontline staff. This
study examines the following components of
a performance management system: performance appraisal, on-going feedback and
coaching, performance management philosophy of development, targeted training
(providing training for performance problems), perception of fairness, and
linking performance and pay, drawing these measures from a review of the human
resource management knowledge base. Anderson stated that research about the
connection between the formal performance appraisal and the informal, on-going
feedback is often neglected in the literature. However, other research has shown that
effective feedback does improve employee performance. In addition, providing
targeted training and the perception of fairness of the evaluation process are likely to
be important to the success of an
organization's performance management system and therefore should play a central
role in the examination of performance management systems. Therefore, this
research examines multiple components of evaluating employees as a part of an
overall system of performance management in order to understand the presence and
efficacy of different pieces of this system in non-profit organizations. This also allows
for conclusions to be drawn as to what could be done for improving
the performance management systems in these non-profit organizations.
Data and Methods

The data used in this article are drawn from the research study, Investigating
Partnerships in Early Childhood Education (I-PIECE), which utilizes a structured,
comparative case study design and multiple data collection methods. The study
includes 22 human service organizations that primarily provide early care and
education services in New York State and the Commonwealth of Virginia, with 11
sites included from each state. The data collection techniques employed included
instruments to collect qualitative and quantitative data: semi-structured, in-depth
interviews, surveys, structured observations, structured assessments of clients, and
document analysis. In constructing the survey, interview, and document analysis
protocols designed to collect the data on the multiple dimensions of the
organizations, employees, and clients being investigated, we first conducted
preliminary ethnographic observations in three pretest organizations in order to gain
an understanding of how these organizations operate, the management structures
prevalent in these organizations, and the particular characteristics of the programs
that they operate and the clients that they serve. In the final study, we received a 100
percent response rate on our organizational survey (n = 22) and frontline staff survey
(n=49). In addition, supporting material is drawn from the semi-structured interviews
conducted with the staff concerning the management practices of the organization.

Findings

The analysis examined the frequency distribution and correlations of different

components of each of the organization's performance management system. As
shown in Table 1, we find that 100 percent of organizations studied indicated that
staff received an annual, performance evaluation and 95 percent of the organizations
developed training plans in conjunction with performance reviews. Substantially
fewer organizations based their compensation decisions on the appraisal process.
Of the organizations surveyed, 36 percent operated a pay-for-performance (salary
increase based on performance) program, 24 percent offered bonuses, and 45.5
percent offered skill-based pay. More often, the assumption of the management in
nonprofit organizations may be that the front-line staff in non-profit organizations are
not as focused on monetary rewards and may be more satisfied with the intrinsic
rewards of their positions. Therefore, it is important to focus on the possibility of
other rewards tied to the performance management system, such as job enrichment
and job enlargement.

Comparing the frontline staff's views, we found that practice differs from the
espoused policy with 79.2 percent of staff in the sample indicating that they received
an annual performance evaluation (see Table 2). Moreover, only 65 percent of the
staff perceived that they received regular coaching and feedback on
their performance. Sixty-five percent of staff perceived that the performance reviews
were implemented with a developmental philosophy.
When performance weaknesses were found, only 47 percent of the staff indicated
that they received training to address the shortcomings. This clearly demonstrates
that staff may not be experiencing the desired impact from
the performance management systems in these organizations. When staff do not
know they have been evaluated, or worse when they believe that the evaluations are
not providing the appropriate developmental assistance, changes need to be made
to the performance management system. On a positive note, approximately 73
percent of staff did perceive that their evaluation process was fair. Staff in
organizations using a development philosophy and providing ongoing feedback had
statistically higher perceptions of the fairness of the evaluation process (r=.60 and
r=.59, respectively). Therefore, this gap in the espoused practice and what the
frontline staff perceives should be considered especially problematic in human
service organizations, as the frontline staff are often the most crucial resource of the
organization and should be receiving the developmental assistance necessary to
keep them current and qualified for their positions.

As shown in Table 2, the linkage between pay and performance appears modest.
Only 18 percent of staff perceived that they received a performance-related salary
increase and 14 percent received a performance-related bonus. This percentage is
lower than that reported by organizations in Table 1. As many non-profit
organizations exist in fiscal strife, it is not terribly surprising that there is not a large
connection between pay and performance and that few of the studied organizations
are able to distribute performance related bonuses or salary increases. However, we
are cautious about drawing strong conclusions concerning the gap between the
espoused policy and practice in relation to performance based pay because
the system is designed so that only high performers are compensated. The gap in
policy and practice may be based on how the organization and employee
operationalize high performance; more work clearly need to be done on investigating
how this common facet of performance management is implemented and/or
operated in nonprofit organizations
Table 3 highlights the differences between the espoused policy and practice, with the
most significant gap between the relationship between training
and performance appraisals. One manager noted that she was supposed to give
formal feedback on a monthly basis to each staff member. However, she said "these
are high standards, but they are not always met, to be honest with you. I've had
months where I only do one or two observations of the whole building. But my goal is
to have one observation, even if it's just an hour observation." Many nonprofit
organizations operate under serious resource constraints; managers often have to
focus on putting out continuous operational "fires" in order to keep their organization
in operation, leaving little time to devote to staff evaluation and feedback.

Table 4 addresses the connection between staff perceptions of the quality of the
appraisal process and the utilization of performance-based pay and key organization
outcomes, job satisfaction, work enjoyment, job commitment, and retention. We
factor analyzed the components of the performance management system, and we
found two factors. The first relates to the performance managementprocess (first four
items in Table 2) and the second factor includes the two items related
to performance-based compensation. We created two additive
indices: performance management (Cronbach alpha=.82, range 1-21)
and performance-based compensation (Cronbach alpha=.47, range 1-9). We find
that individuals who have higher perceptions of
the performance management process are more satisfied with their job (.49), enjoy
their work more (.47), and are committed to their job (.26). Many theories of work
motivation support the positive impact
that performance management and performance-based compensation has on staff
morale and satisfaction. As there are often few extrinsic rewards in nonprofit
organizations, the recognition of one's abilities through a
good performance management system is that much more important for the
workforce in organizations in the nonprofit sector.

Conclusion

“Lesson 1: Espoused performance practice differs from staffs perceptions of those

practices. While organizations may have performance management systems in
place, the practice and meaning of those systems may not resonate with staff. As
those systems have a significant impact on staff development and overall
practice, management should be attentive to ensuring that employees understand
the system and what that system should produce for them.
Second, management should survey employees at least every two years to assess
their perceptions of the performance management system. This information will be
invaluable for making decisions related to the
organization's performance management system.

Lesson 2: Performance management tools are underutilized. While this study does
not employ a large, randomized sample, it is clear from this study that nonprofit
organizations could stand to invest more in their performance management system.
This research demonstrates the importance of thinking
about performance management more broadly than an
annual performance appraisal event. The tools associated
with performance management have been demonstrated to produce positive results
for organizations; nonprofit organizations in particular could use the assistance
provided by these tools vis-à-vis their employees. Finally, adopting a
comprehensive performance management system should create greater
transparency to employees about what management expects from employees and
how their performance contributes directly to the success of the organization.

Lesson 3: Performance management is associated with positive employee

outcomes. As stated, performance management is positively associated with positive
employee outcomes. We found positive linkages
between performance management and turnover, job satisfaction, enjoyment of job,
and commitment to the job.

This paper examines performance management systems in nonprofit human service

organizations. It describes the disparity in espoused practices and staff perceptions
of the performance management systems, highlighting the need for nonprofit
organizations to ensure that employees understand the theory
behind performance management systems and the way in which these systems can
help employees improve in their work. This study concludes with three lessons
learned and recommends that scholars focus their attention on this important part of
nonprofit effectiveness in order to improve both scholarly understanding of
these system and practice in nonprofit organizations. “

10. Sripirabaa, Performance management

systems in an Indian manufacturing sector

“The purpose of this paper, using a model, is to investigate the influence of

partnering
and financial support on the functions of a performance management system. The
capacity of the system to align its functions to help achieve an organization’s
strategic goals is also examined.

Design/methodology/approach – A questionnaire survey elicited responses from

middle-level employees using a validated instrument. The variables included in the
study were based on prevailing practices in performance management, which
include partnering (or collaborating) with professionals external to the organization,
the financial support made available to the system and the alignment of the functions
of a performance management system with the strategic goals of the organization.
The sample comprised 165 respondents selected from six organizations
manufacturing automobile components in Coimbatore, India. Partial least squares, a
structural equation modelling technique, was used to estimate the influence of the
latent variables.

Findings – The results indicated that partnering has a negative significant impact on
the functions of the performance management system; and alignment. Financial
support has a negative impact on alignment, whereas the performance management
system’s overall functions has a significant positive impact on alignment. Likewise,
financial support has positive significant impact on the performance management
system’s functions.
Based on the above review of the salient features of a performance management
system, the main activities of the system are consolidated into the following broad
categories:
. performance management system needs,
. job evaluation,
. performance appraisal process, and
. compensation, rewards and incentives.

Hence, the current study considered the four categories above and the activities
associates within each category as important components that contribute to the
comprehensive function of a performance management system. The following
hypotheses were developed for this study:
H1. Partnering has a positive effect on the functions of a performance management
system.
H2. Financial support has a positive effect on the functions of a performance
management system.
H3. The function of a performance management system has a positive effect on the
alignment of the system’s objectives with the organization’s strategic goals.
H4. Partnering has a positive effect on the alignment of a performance management
system’s objectives with the organization’s strategic goals.
H5. Financial support has a positive effect on the alignment of a performance
management system’s objectives with the organization’s strategic goals.

Methodology
A questionnaire survey method was used to seek responses from middle-level
employees in organizations engaged in manufacturing automobile components in
Coimbatore, India. The variables included in the study tend to be identified with the
prevailing practices in measuring performance management – that is partnering,
financial support and the alignment of the performance management system with the
strategic goals of the organization. Under each variable, questions were included to
reveal the practices adopted by HR managers within the participant’s organization.

Each response was measured using a five-point Likert scale, ranging from 5 strongly
agree to 1 strongly disagree. Data were collected from six companies manufacturing
automobile components. The study adopted purposive sampling in the first phase for
the selection of organizations and later adopted stratified random sampling in each
of the organizations. The middle-level employees in the organizations were stratified
according to departments – finance, marketing, production, quality assurance, plant
engineering and HR. From each stratum, 25 percent of the employees (n ¼ 165)
were selected at random. The data were collected in early 2007 and all surveys were
usable. Among the six firms, 33 questionnaires came from firm A, 32 from B, 39 from
C, 21 from D, 21 from E and 19 from F. Using a preliminary draft questionnaire, a
pilot study was conducted with 36 middle-level employees from the six departments
identified in two organizations; these responses were excluded from the final study.
The conduct of the study ensured criterion oriented validity through literature reviews
(Yabroff et al., 1996 in Guellimin,1995) and content validity through expert opinion
(Hambleton and Rogers, 1991).

Analysis of results and discussion

Model estimation
The study executed the performance management system’s functions and used the
resulting factor scores as variables of the performance management system.
Subsequently, the model incorporated partnering, financial support and alignment as
variables. Boot strapping was done with all the 165 cases and with 500 samples as
re-sampling option (cf. Bollen and Stine, 1992) (sees Table I). The model was
estimated at the 5 percent level of significance. Hence, a t value greater
than 1.96 indicates significant relationships between the variables (paths). The
summary is presented below:

• t value for the path partnering on performance management system function

is _3.0535, implying the negative significant impact of partnering on the
performance management system function. Hence, H1 is rejected.
• t value for the path financial support on performance management system
function is 5.3207, implying a positive significant impact of financial support on
performance management system function. Consequently, H2 is supported.
• t value for the path performance management system function on alignment is
38.6786, which implies that performance management system function has a
positive significant impact on the alignment of performance management
system function’s objectives with the strategic goals of the organization.
Therefore, H3 is supported.
• t value for the path partnering on alignment is _0.7016. This implies negative
impact of partnering on alignment of performance management system’s
objectives with strategic goals. Hence, H4 is rejected.

Conclusion
This study concluded that financial support has a significant positive effect on the
functions of a performance management system, indicating the strategic importance
of extending appropriate levels of financial support to provide incentives, merit-based
pay and performance bonuses. The performance management system’s function
has a significant positive impact on alignment. On the other hand, partnering has a
significant negative impact on the performance management system’s functions.
This highlights that external partnering is not always considered important for the
purposes of the performance appraisal process.

Employees feel that appraisals, being a continuous internal assessment process,

would be more appropriate and relevant when executed by people inside their
organizations. While external stakeholders may appraise employees at particular
times, this process does not paint a complete picture of an employee’s actual
performance across time. Consequently, employees implicitly reject the notion of
external appraisers and therefore the notion of partnering for performance appraisals
is discarded. Partnering per se has negative connotations for the performance
management system and its alignment with the organization’s strategic goals.
The findings suggest that scope exists for additional research on other areas of HR
functions within organizations. In the face of globalization and the ensuing
competition, organizations must strive continually to design and implement HR
practices that are organization specific and employee friendly. In an increasingly
globalized business environment, this is a critical task for HR managers in enterprise
in India and elsewhere. “

11. Dr. Deepali Bhatnagar, Perceived fairness

of employees in Performance Appraisal System:
with reference to Indian Public and Private
Sector Banks
“Understanding fairness or organizational justice in performance appraisal process
and practices is extremely important for organizations because of its relationship with
employees’ job satisfaction and organizational commitment and, subsequently, their
propensity to search for another job. In this paper, Dr. Deepali studied the
relationships of these perceptions to employee reactions indicating satisfaction with
key components of performance appraisal .Based on the above stated literature, the
study draws the following hypothesis:

H1: The perceived fairness in the system positively impacts the Satisfaction of
employees from Performance Appraisal.

Methodology

The data were collected from two banks belonging to public sector and a private
sector. Purposive sampling method was used to select different banks with different
performance appraisal practices. Other public and private sector banks were also
approached for the purpose of data collection; however, final selection of the banks
was made on the basis of the permission granted by the banks to collect information
and data. The total sample of 300 managerial and executive staff members was
taken, 150 questionnaires were circulated among the public sector relevant bank
employees and 150 questionnaires were circulated among the private sector
relevant bank employees. Out of them the response figures was123 public sector
bank employees and 97 private sector bank employees. The total number of
respondents compounded to 220. The response rate was 73.33%.

Measurement of variables

Satisfaction from the Performance appraisal system

Employee satisfaction with the Performance Appraisal system was measured with
four items adapted from Greller (1978). These items include :“I am satisfied with the
evaluation,” “I am satisfied with the feedback I received from my supervisor,” “The
overall process is capable enough to measure all the efforts that I put in my job”.
Respondents rate this parameter using a five point Likert type scale, anchored 1
(strongly disagree) and 5 (strongly agree). The content validity of the scales for use
in this study was further established through use of an expert panel consisting of
human resources department staff, representatives of other departments familiar
with the performance appraisal system.

Perceived Fairness in system

The items and scales utilized in this study to measure perceptions of performance
appraisal fairness are based on Greenberg’s (1993) four-factor model of
organizational justice. The four factors include systemic, configural, informational
and interpersonal aspects of justice. Systemic(structural-procedural) and configural
(structural-distributive) justice perceptions include structural dimensions of
performance appraisal practices .Informational and interpersonal include the social
aspects of performance appraisal. Perceptions of fairness were measured on a five
point scale with 1 = strongly agree; 2 = agree; 3= neither agree nor disagree; 4 =
disagree; and,5 = strongly disagree. Further on the data, Regression Analysis was
conducted.

Implications

The main objective of this study is to explore the relationship between fairness of
performance appraisal system and employee satisfaction toward the system.
Literature on employees’ perception on the fairness in performance appraisals
predicted that fairness is significantly and positively related to satisfaction to
performance appraisal. This study found that specific fairness components proposed
by Greenberg (i.e. Configural, interpersonal and informational justice) are
significantly and positively related to specific component of employee satisfaction
while systemic justice was not found to be related to any of satisfaction variables.
Systemic justice failed to show any relationship with satisfaction variables. One
explanation for this phenomenon is that procedural justice or perception of fairness
of the procedures or the means of appraising employee’s performance is perceived
less important by the respondents as compared to other justice components. This
study found that configural justice is significantly and positively related to satisfaction
with the evaluation of appraisal as well as satisfaction with the quality of feedback.
This is congruent with the previous studies which found that perception of fairness of
allocation of resources or rewards or outcomes that are distributed to employees
(Milkovich andNewman, 2005) may lead to emotional feelings and emotional
behaviours (Greenberg, 1987).Configural justice or perception of fairness of
distribution of outcomes affects employee satisfaction with the performance
appraisal ratings and satisfaction with the supervisor who facilitate the appraisal
process. Informational justice was found to be significantly and positively related to
employee satisfaction with quality of feedback. This finding shed some light to our
understanding of relationship between interactional justice, which consists of
interpersonal justice, and informational justice, and employee satisfaction. Overall,
this study found that fairness of performance appraisal does affect employee’s
satisfaction. “
 12. Herald Monis, Employee Perceptions of
Performance Appraisal System in BPOs
operating in India: An empirical study
“This paper is based on an empirical study of ten ITES-BPO firms operating in India.
The data was collected using both qualitative and quantitative methods from 14 HR
Executives of these ten BPOs and 406 employees constituting 1% of the population
under study. The BPOs in India claim that they have a formal and structured
approach and a clear set of parameters for appraising the performance of the
employees, wherein the performance appraisal system is very ‘system-driven’ or
‘metrics driven’ without any scope for human intervention or subjectivity. The present
study finds that, on an average, the level of satisfaction among the respondents
towards the performance appraisal system is at 71.82 per cent, which implies, on our
scale, that they are satisfied with the performance appraisal system of the BPOs
under study. Regression analysis, using a significance level of 5 per cent, shows that
variables of transparency in the appraisal system, employee participation in
appraisal system, the objectivity in the appraisals, recognition of special initiatives
and efforts at the time of appraisals, the accuracy of the previous appraisals and
viewing appraisals as a motivating tool are significantly influencing the satisfaction of
the respondents towards the performance appraisal system. Interestingly, these
variables are positively associated with the satisfaction, and all the variables used
collectively account for 47.3 per cent of the satisfaction of the respondents towards
the performance appraisal system. This empirical study on the perceptions of the
employees about the performance appraisal system in BPOs operating in India has
the following objectives:

1. To provide an insight into the performance appraisal system being adopted by the
BPO industry in India.
2. To study the HR perspectives with regard to the performance appraisal system of
the BPO industry in India
3. To study and analyze the perceptions of the employees with regard to the
performance appraisal system being practiced by the BPO industry in India
4. To analyze the satisfaction of the employees of the BPOs towards the
performance appraisal system.

THE RESEARCH HYPOTHESIS

The following research hypothesis has been formulated by the researchers:

The employees’ perception about the performance appraisal system influences their
level of satisfaction with performance appraisal system.

RESEARCH METHODOLOGY

The study mainly depended upon the primary data. However, some secondary
sources of data were also consulted for the purpose of gathering background
information supporting the study. Relevant primary data was collected using the
combination of both qualitative (interview) and quantitative (sample survey through
questionnaire) methods. The data was collected from a total of ten ITES-BPO firms
operating in India, which included five Indian MNCs and five foreign MNCs. The
study covered the units of these MNCs located in Bangalore, considered to be the
Silicon Valley of India. Access to these BPO firms was secured through contacts and
through networking technique. Altogether, we collected data from 14 HR executives
and 406 employees. These 406 employees constitute 1 per cent of the population
under study. The awareness about the performance appraisal system is measured
on a scale of ‘yes/no/can’t say’ and the perceptions of the respondents on the twelve
statements are measured on Likert’s (1932) five point scale of ‘strongly
disagree………… strongly agree’, the scale in quantitative terms being: 0 - 20 per
cent: strongly disagree, 21 - 40 per cent: disagree, 41 - 60 per cent: not sure, 61 - 80
per cent: agree, 81 - 100 per cent: strongly agree and the satisfaction of the
respondents towards the performance appraisal system is rated again on Likert’s
(1932) five point scale of ‘highly dissatisfied…………. highly satisfied’, the scale in
Quantitative terms being: 0 - 20 per cent: highly dissatisfied, 21 - 40 per cent:
dissatisfied, 41 - 60 per cent: not sure, 61 - 80 per cent: satisfied, 81 - 100 per cent:
highly satisfied. The result of a multiple regression analysis being made to identify
the variables influencing the satisfaction of the respondents towards the performance
appraisal system is presented..

Factors influencing the satisfaction towards the Performance Appraisal

System:

The regression analysis was made to identify the variables influencing the
satisfaction towards the performance appraisal system of the BPO firms under study.
A significance level of 5 per cent was used for analysis. The result of the regression
analysis shows that the variables of transparency in the appraisal system (p = .003),
employee participation in appraisal system (p =.020), the objectivity in the appraisals
(p = .039), recognition of special initiatives and efforts at the time of appraisals (p =
.025), the accuracy of the previous appraisals (p = .000), and viewing appraisals as a
motivating tool (p = .000) are significantly influencing the satisfaction level of the
respondents towards the performance appraisal system. The variables of duties are
clearly given out (p = .080), I know what is expected of me in the job (p = .191),
timeliness of the appraisals (p = .147), existence of good measures/parameters of
individual or group performance (p = .862), the performance appraisal system is
often invalid, unfair, discriminatory and is based on favouritism (p = .800), and
appraisal systems go in tandem with promotion, reward and transfer policies (p
=.981) have emerged as the insignificant variables. The variables of transparency in
the appraisal system (Standardized Beta Coefficient = .156), employee participation
in appraisal system (Standardized Beta Coefficient = .122), the objectivity in the
appraisal process (Standardized Beta Coefficient = .106), recognition of special
initiatives and efforts at the time of appraisals (Standardized Beta Coefficient = .112),
the accuracy of the previous appraisals (Standardized Beta Coefficient = .179), and
viewing appraisals as a motivating tool (Standardized Beta Coefficient = .189) are
positively associated with satisfaction. The variable of viewing appraisals as a
motivating tool contributes more satisfaction with 18.9 per cent (Standardized Beta
Coefficient = .189), followed by the accuracy of the previous appraisals with 17.9 per
cent (Standardized Beta Coefficient = .179), transparency in the appraisal system
with 15.6 per cent (Standardized Beta Coefficient = .156), employee participation in
the appraisal system with 12.2 per cent (Standardized Beta Coefficient = .122),
recognition of special initiatives and efforts at the time of appraisals with
11.2 per cent (Standardized Beta Coefficient = .112), and the objectivity in the
appraisals with 10.6 per cent (Standardized Beta Coefficient = .106). However, all
the variables collectively account for 47.3 per cent of the satisfaction of the
respondents towards the performance appraisal system.

Although the respondents report positively on the various variables being used to
study their perceptions, there certainly appears to be a scope for improvement in the
existing system within the Indian BPO industry. The present system may be made
simple and supportive of the employees’ personality development and learning, it
may provide a basis for factual feedback for the future development of the
employees. The appraisal needs to be developmental, and not just evaluative. It may
not be confined just to the examination and analysis of the past performance, rather,
it may identify the weaknesses and strengths as well as the opportunities for
improvement and skill development of the employees so that he can develop as a
better performer in the future and may make a career for himself in the industry.
Again, the individual employees may be involved in the process of their goal setting
and also in discussions on his/her career prospects. Perhaps, a more participative
approach in this direction could be beneficial in improving the present performance
appraisal system in the Indian ITES-BPO industry. “

13. HUSSEIN NABIL ISMAIL AND NAZHA GALI,

Relationships among performance appraisal
satisfaction, work–family conflict and job stress

“The purpose of this paper is to examine the relationship between performance

appraisal satisfaction, job stress and work–family conflict. Furthermore, the study
explores the role of job stress as a mediator between satisfaction with performance
appraisal and work–family conflict. The total sample consisted of 120 participants
from different industries. The findings revealed that performance appraisal
satisfaction was negatively correlated with job stress and work–family conflict.
However, job stress fully mediated the relationship between performance appraisal
satisfaction and work–family conflict. Based on the literature review, the following
hypotheses were developed for this study:

Hypothesis 1: Performance appraisal satisfaction is negatively correlated with work-

family conflict.
Hypothesis 2: Performance appraisal satisfaction is negatively correlated with job
stress.
Hypothesis 3: Job stress and work–family conflict are positively correlated.
Hypothesis 4: Job stress will mediate the relationship between performance
appraisal satisfaction and work–family conflict.
Participants and setting
The study took place in a Lebanese context where employees from different
organizations were contacted randomly either by completing an online questionnaire
or by filling out a hard copy of the questionnaire, which were sent to their
organizations. The chosen sample represented employees working in different
organizations (banking sector, academic institutions and consulting firms) in
Lebanon. It encompassed participants from different age groups, gender, marital
status, positions and financial incomes. Managers and key personnel at various local
organizations were asked to assist in informing employees about the e-survey, the
completion of which was voluntary. The sample consisted of 120 respondents in
total. Roughly 37% of the respondents surveyed were aged 25 years or younger,
while the majority of respondents (71%) were between 26 and 40 years old. The
remaining individuals were older than 56. Regarding gender distribution, males
constituted 31% of respondents while 69% were female. In addition, 41% of the
sample was married, while 8% were engaged. The remaining 51% were single.
Concerning their position within firms, 42% of the respondents were managers
(including upper and junior managers) while the rest were regular staff. Furthermore,
36% of the respondents’ annual incomes were between $10,000 and $15,000. The
distributed questionnaire consisted of two main parts. The first part ascertained the
demographic characteristics including gender, age, marital status, position and
financial income. The second part assessed satisfaction with performance
appraisals, job stress and work–family conflict.

DISCUSSION AND IMPLICATIONS

The main objective of this study was to investigate whether appraisal satisfaction
correlates with both job stress and work–family conflict, and whether job stress is a
mediator between appraisal satisfaction and work–family conflict. Based on the
literature, the researcher developed four hypotheses that were tested and the
regression results obtained supported our four hypotheses. In this study, the
relationship between job stress and women was stronger than for males. Women
tended to experience higher stress at work, which may be the result of several
sources including issues of inequality, sexism and discrimination in the workplace
when compared with men. In this study, married people were more prone to
experiencing work–family conflict compared with single individuals. Married couples
are presumed to experience more work–family conflict, given that they may have
increased responsibilities at home that can be interrupted by busy jobs. First, the
findings show that performance appraisal satisfaction is negatively correlated with
job stress. In other words, the results demonstrate that if employees are not satisfied
with the performance appraisal conducted in their organizations, they tend to
experience job stress. Furthermore, results confirm that there is a significant
relationship between job stress and work–family conflict. In particular, job stress can
spill over to the family context Finally, as far as results are concerned, it is implied
that performance appraisal satisfaction does not have a direct relationship with
work–family conflict when stress is included in the model. In other words,
performance appraisal satisfaction has an impact on job stress, which in turn affects
work–family conflict. This provides sufficient evidence for the importance of ensuring
that employees are satisfied with the performance appraisal process in their
organizations, since performance appraisal dissatisfaction results in undesirable
outcomes (i.e., job stress), which consequently result in work– family conflict. “
 14. Hussein N. Ismail, Mayssa Rishani, THE
RELATIONSHIPS AMONG PERFORMANCE
APPRAISAL SATISFACTION, CAREER
DEVELOPMENT AND CREATIVE BEHAVIOR

“The impact of performance appraisal satisfaction on employee attitudes and

behavior is well established in the literature. Employees who are satisfied with
performance appraisals at work are expected to be more satisfied and motivated at
work. However, current research has not empirically established whether
performance appraisal satisfaction leads to creative behavior at work. Creative
behavior is one of the key factors that helps companies to remain competitive in the
market. One of the main objectives of this paper is to investigate the relationship
between performance appraisal satisfaction and creative behavior. Another objective
of this research is to examine the relationship between satisfaction with appraisal
and perceptions of career development which is considered a top priority for many
employees. Regression analysis showed that performance appraisal satisfaction is
positively related to both creative behavior and career development. Moreover, this
study tested the role of career development in the relationship between performance
appraisal satisfaction and creative behavior. The study proposes the following
hypothesis:

Hypothesis 1. PAS is positively related to creative behavior within organizations.

Hypothesis 2. PAS is directly related to positive perceptions of career development.
Hypothesis 3. Employees’ positive perceptions of career development will positively
influence the creative behavior that employees exhibit within the organization.
Hypothesis 4. Positive perceptions of career development act as a mediator between
PAS and creative behavior.

METHODOLOGY

The survey is divided into four sections: demographic, PAS, creative behavior, and
career development. The demographic data showed that 71.1% of respondents were
females and 26.6% were males. A t-test was performed on the main variables
that were used in this study to test for differences between early and late
respondents. Results showed that there were no statistical differences between the
two groups for the main variables of interest in the study.

Measures

Performance appraisal satisfaction: employee PAS was measured using a six-item

scale developed by Kuvaas (2006). The items describe the overall satisfaction with
PA activities within the firm. An example item is, “I am satisfied with the way my
organization provides me with feedback”. Kuvaas (2006) originally attained a good
reliability estimate of 0.86 coefficient alpha for the scale. In the present study, a
similar coefficient alpha was attained: 0.85. Creative behavior: creative behavior was
measured using Scott and Bruce’s (1994) six-item scale.

DISCUSSIONS AND IMPLICATIONS

With respect to the primary hypotheses of this research, the study shows that PAS is
associated with creative behavior at work, thereby lending support to our first
hypothesis. This finding reinforces social exchange theory (Blau 1964), whereby
employees who perceive a satisfactory experience in terms of PA will reciprocate
with higher motivation for engaging in positive behaviors at work. Moreover, the
findings demonstrate PAS to also be significantly linked to perceptions of career
development at work. In other words, ensuring a satisfying experience of PA in firms
can have a positive effect on career development perceptions on the part of
employees. Furthermore, the study showed that career development is strongly
related to creative behavior at work. Finally, hypothesis 4 was supported; career
development mediates the relationship between PAS and creative behavior. “

15. Ducharme, Exploring the Links between

Performance Appraisals and Pay Satisfaction
“This paper examines employee pay satisfaction under four conditions:
1. when performance appraisals are linked to performance pay outcomes,
2. when performance appraisals are not linked to performance pay outcomes,
3. when no performance appraisals are in place but performance pay is used, and
4. when no performance appraisals are in place and performance pay is not used.

The data for this study were drawn from the 2002 Workplace and Employee Survey,
which is a comprehensive database of more than 24,000 employees and more than
6,000 Canadian workplaces from all sectors, designed to explore issues relating to
employers and their employees. Several statistical tests were conducted on the data,
including assessments of mean differences of the pay satisfaction variable across
the four groups. The results of the current study emphasize not only the vital
importance of a formal performance appraisal system but also the importance of
ensuring a visible link between performance appraisal and performance pay.

Methodology

Workplaces were randomly chosen to participate in WES from a population of all

workplaces operating in Canadian provinces with paid employees, with the exception
of government services and religious organizations. The response rate for the
employee portion of the survey was 83%. From this survey, we focused on several
variables related to performance appraisal(PA), pay and pay satisfaction.
Participants were asked to indicate if their current position was evaluated
by performance appraisal and, if so, whether the results affect their level of pay
and/or benefits. Participants who indicated that they were not formally evaluated
through performance appraisal also indicated whether performance pay of any kind
was a part of their earnings. All participants were also asked to rate their level
of satisfaction with their pay on a scale of 1 (very satisfied) to 4 (very dissatisfied}.
For the variables of interest, 15,647 employees responded and were included in our
analyses.

Findings

Several statistical tests were conducted on the data, including assessments of mean
differences of the pay satisfaction variable across the four groups. In summary, we
found that Group PA-Linked (those individuals who
received performance appraisals that were linked to pay) demonstrated significantly
higher pay satisfaction (M = 1.98, SD = .66) than all the other groups (p = .05).
Group PA-Not Linked (individuals who received performance appraisals that were
not linked to their pay) demonstrated significantly higher pay satisfaction (M = 2.06,
SD = .71) than Group No PA-PP (individuals who did not
receive performance appraisals but did receive performance pay; M = 2.11, SD =
.69, p = .05) and Group No PA-No PP (those who did not
receive performance appraisals or performance pay; M = 2.11, SD = .71, p = .05).
There were no significant differences between the two groups that did not
receive performance appraisals, whether they received performance pay or not.
Employees who received performance feedback and were compensated accordingly
enjoyed higher pay satisfaction than any other group of employees. It is interesting to
note that individuals who received performance feedback through appraisals, even
though these appraisals were not linked to pay, also demonstrated fairly high
pay satisfaction-significantly higher than individuals who did not receive performance
appraisals. In fact, individuals who received performance feedback not linked to pay
demonstrated higher pay satisfaction than individuals who did not
receive performance appraisals but did receive performance pay.

Implications for Management

This study suggests that individuals who receive performance appraisals are more
satisfied with their pay than individuals who do not. In addition, our findings suggest
that achieving instrumentality, or line of sight, could be as simple as establishing
a performance appraisal mechanism within the organization, regardless of whether
that performance appraisal is explicitly tied to performance pay. It is possible that the
act of carrying out a performance appraisal is sufficient to impart a perception of
fairness or of equity, such that pay satisfaction is positively affected. An interesting
implication of these results is that the compensation process may be more important
to employees than the compensation itself. “

16. Christine Clancy Fay, Social Context of the

Performance Appraisal Process: Exploring
Individual, Organizational, Job, and Social
Effects on Employee Reactions to Performance
Appraisal.
“This study explores the relative contributions of individual attributes, organizational
and job characteristics, and the social context of the organization in explaining
variation in employee reactions to performance appraisal. The performance
appraisal process has become a powerful institution within the employment
relationship, having significant impact upon employees. To fill this social context gap
in the literature on performance appraisal in the absence of employees’ cognitions
and behaviors regarding the process, this study explores satisfaction with the
process expressed by those whose employment fate is determined by it. The effects
of race and gender on satisfaction with performance appraisal are examined to
determine whether there are significant differences among employees. This study
goes further than previous appraisal work by considering the process within the
social context of the workplace with its coalitions, politics and relationships.

Methodology

The data collection occurred in two different stages. Initially, researcher interviewed
Human Resource Managers and/or Executive Directors of the four participating
nonprofit organizations: YMCA of Greater Springfield, Worcester YMCA, Spar and
Spindle Girl Scout Council of Eastern Massachusetts and Montachusett Girl Scout
Council of Central Massachusetts. Another major data source is a 70-item
questionnaire entitled “Work Climate Survey.” The instrument captures employees’
attitudes and opinions about the performance appraisal process in their specific
workplace, but it does not solicit any personal information about individual
evaluations, such as ratings or feedback. In addition to evaluating the appraisal
process, employees are asked questions about the organization, current jobs, job
satisfaction, and relations with other workers.

Methods of Analysis

In the early exploratory phase of my research, researcher utilized descriptive

statistics, and zero order correlations to get a sense of strong positive and negative
relationships, organizational differences, and possible non-linear relationships. At
this time, data confirmed that there were no significant differences among the four
organizations in their definitions of social context or in their levels of satisfaction with
performance appraisal.

Implications

This study has refined the definition of social context through newly created factors
to better describe the construct. Further, it has shown that social context can operate
dissimilarly at two separate levels in the organization, and is interpreted differently by
different organizational groups. Social context can be represented as
multidimensional, with each dimension existing on a continuum with a considerable
range between the two poles. These dimensions are vulnerable to change, given a
shift in any of the individual, job-related, or attitudinal variables. With boundaries
assigned to social context, it is possible to observe its impact in an interactive
multivariate environment, where it can have very direct impact on employment
outcomes or an indirect influence on employment through other variables. Social
context can offset the effects of an unsatisfactory job. If an employee is not content
in the current position, a perceived low control and high team organizational climate
can compensate for the negative job attitude. “

17. Mingqiong Zhang, High-Performance Work

Systems, Corporate Social Performance and
Employee Outcomes: Exploring the Missing
Links
“High-performance work systems (HPWS)-performance research has dominated
innovative human resource management studies for two decades. This paper seeks
to investigate these missing links in literature using data collected from a sample of
700 employees in China. The findings demonstrate that HPWS is positively related
to HPWS satisfaction and employees’ perceptions of CSP.

Theoretical Thinking and Hypothesis Development

Hypothesis 1 HPWS adoption will lead to high employees’ HPWS satisfaction.

Hypothesis 2 The relationship between HPWS adoption and employees’ affective
commitment will be partially mediated by employees’ satisfaction with the perceived
HPWS.
Hypothesis 3 The relationship between HPWS adoption and employees’
organizational citizenship behaviour will be partially mediated by employees’
satisfaction with the perceived HPWS.
Hypothesis 4 HPWS are positively associated with good corporate social
performance.
Hypothesis 5 A firm’s good social performance is positively associated with its
employees’ HPWS satisfaction.
Hypothesis 6 A firm’s good social performance is positively associated with its
employees’ affective commitment.
Hypothesis 7 A firm’s good social performance is positively associated with its
employees’ organizational citizenship behaviour.
Hypothesis 8 Employees’ affective commitment is positively associated with their
organizational citizenship behaviour.

Method

Data were collected from companies in Jiangsu, Guizhou and Guangxi provinces of
China, where local governments voluntarily distributed our questionnaires to firms
that were considered to be local good employers. The provinces were selected
based on the criterion of accessibility. Firms were selected based on the criteria of
both the good employer and sample variation in categories such as ownership and
firm size. All variables were measured with multi-item scales using a five-point Likert-
type scale as a response format (e.g. 1 = ‘strongly disagree’ and 5 = ‘strongly
agree’). Cronbach’s alpha for the final composite variables used in this study were all
over 0.8, indicating that the measures were reliable.

Results

The results of the CFA indicated that our hypothesized five factor measurement
model showed acceptable fit with the data, All the regression weights were
significant (p\.001), indicating the posited relationships among indicators and
constructs and thus the convergent validity, supporting the distinctiveness of the
constructs in our study (Hair et al. 1992). The findings revealed that HPWS led to
high HPWS satisfaction, supporting the unitarist perspective that HPWS elicit
positive employee attitudes towards high commitment HRM practices. HPWS was
also found to lead to a high level of employee perception of social performance,
lending support to the view that good management is a driver of corporate social
responsibility (Rothenberg and Hull 2008). Corporate social performance was shown
to have a positive influence on employee satisfaction with HRM practices,
organizational affective commitment and discretionary behaviours. This supports the
belief that good corporate social performance leads to positive employee work
attitudes and behaviours (Peterson 2004). The findings also provide support for the
stakeholder perspective, not just the shareholder perspective, on firm performance. “

18. Cristiana Parisi, The impact of

organisational alignment on the effectiveness of
firms’ sustainability strategic performance
measurement systems: an empirical analysis
“The present paper distinguishes between the structural and social dimensions of
alignment. The structural dimension focuses on aligning strategies, structures, and
planning systems. The social dimension of alignment refers to the fit between actors’
understanding and commitment to the organisation’s mission, objectives, and plans.
Investigating social alignment entails examining actors’ values, communication with
each other, and, ultimately, their shared understanding of the domain. Based on
survey responses from 405 European middle managers responsible for
implementing sustainability, this study suggests that whereas top management
commitment and structural alignment appear to positively impact the effectiveness
of sustainability SPMS and, ultimately, the firms’ social and environmental
performance, nothing can be said regarding the effects of social alignment. The
results from the analysis induce a reflection on whether the social alignment of
middle management regarding sustainability has a relevant impact on the
companies’ social and environmental performance. In line with Pedersen and
Neergaard (2009), the current paper characterises alignment on two dimensions that
describe the degree of fit of the strategies, structures, and planning systems: the so-
called ‘structural’ alignment and the understanding and commitment of the
organisation’s actors to the objectives, plans, and mission of the organisation, or the
‘social’ alignment. Therefore, the first hypothesis can be formulated as follows:
Hypothesis 1 Top management commitment to sustainability positively impacts both
structural and social alignment.

Hypothesis 2 Top management commitment to sustainability positively impacts

the effectiveness of sustainability SPMS within organisations.

Hypothesis 3 Structural and social alignment positively impact the effectiveness

of sustainability SPMS within organisations.

Hypothesis 4 The implementation of sustainability SPMS is positively related to

firms’ social and environmental performance.

Methodology

The current paper’s empirics are based on a web-based questionnaire survey

emailed to middle managers of 405 large European companies,1 with a response
rate of 29.6 %. Given the lack of a universally accepted definition of a sustainable
firm (Gray 2002) the present paper adopts the inclusion in one of the recognised
sustainability indexes: the Dow Jones sustainability index (DJSJ), STOXX, and the
Ethibel Sustainability Index (ESI)

Results

The findings of the analysis indicate the need to reconsider assumptions about the
importance of alignment and accurate perceptions among middle managers as a
precondition of organisational effectiveness. The majority of the literature assumes
the importance of aligning organisational structure and the consequent need for
accurate perceptions in order to manage them. Companies perform at a high level
even when middle managers are unaware of sustainability guidelines and internal
documents that top management has adopted, although they do not feel fully
involved in defining and implementing sustainability strategies. The companies under
analysis hold a relevant position among European companies. Therefore, if the top
management of those companies had been aware that misalignment and perceptual
errors were a source of ineffectiveness, they would have devoted resources to
eliminate these issues. Interestingly, none of the companies under analysis devotes
significant resources to correcting these errors. At a general level, perfect alignment
of managerial perceptions is probably unreachable, and several variables likely play
a role in aligning managers’ perceptions (Kathuria et al. 2007). Furthermore,
managerial commitment and knowledge of sustainability may have their origins in
personality characteristics, as managers perceive companies’ strategies as
individuals, but make decisions as executives. It can, therefore, be assumed that
middle managers can act effectively in most situations without having accurate
perceptions. They need to be aware of the company’s general long-term goals, but
the results of their decisions have prompt feedback; therefore, their misperceptions
cause only small errors. “
 19. Nadeem Iqbal, Impact of performance
appraisal on employee’s performance involving
the Moderating Role of Motivation

“This paper focuses on to find out the impact of performance appraisal on

employee’s performance and also analyses that motivation affects the relationship of
performance appraisal and employee’s performance. Two hypotheses are analyzed
by using sampling techniques; we were select 150 numbers of employees as sample
by using simple random sampling among the banks of Dera Ghazi Khan.Primary
data were collect through standard questionnaire. For analyzing data, we applied
correlation coefficient through IBM SPSS and Amos Software. Results presented
there is positive relationship between performance appraisal and employee’s
performance. Motivation as a moderator positively affected the relationship between
performance appraisal and employee’s performance.

Hypothesis Framing

Hypotheses1: There is the significant relationship exist between performance

appraisal and employees performance.

Hypotheses2: Motivation positively affects the relationship of performance appraisal

and employees performance. In this paper descriptive research design was applied.

Sampling design

For selecting the above mention population simple random sampling techniques
were used which provides every item of population same and known chances of
being nominated. For collecting data 150 respondents were nominated representing
the population. Simple random sampling technique is inexpensive and cheaper way
of analyzing in limited time duration.

Findings

The main objective of this research his to find the relationship among Performance
appraisal, employee’s performance and giving attention to the motivation role as a
mediator. The result of the study shows that there is significant relation between
Performance appraisal and employee’s performance. And motivation influences and
makes strong the relation of Performance appraisal and employee’s performance. By
seeing these results we have analyzed both hypotheses. The obtained results
show that there is significant relationship exist between Performance appraisal and
employee’s performance and motivation makes strong and clarified the relation
between performance appraisal and employee performance. If PA system is
successfully used in the banks of Dera Ghazi Khan, the employees would be able to
know how well they are performing and what is expected to them in future in terms of
their work performance and effort.
Conclusion

The basic purpose of an appraisal system should be to improve the employee

performance that will leads towards the organization success. The system must be
deeply observed the people and recognize that employees are the most important
resource. The system should first of all contribute to motivate all of the employees.
This ideology will require a continuous effort in, coaching, counseling and just, flat
communications between the employees and supervisors. The findings of this study
conducted from the 150 employees of banking sector in Dera Ghazi Khan seem to
suggest that banks interested in improving their performance through the
performance appraisal systems. Banks should seek to enhance the employee’s
motivation so that they become satisfied toward the appraisal system. Unskilled
appraisers that have lack of communication skills and therefore are not able to
accomplish an effective performance and lead to negative attitude toward the
appraisal system. “

20. Na Mao, High-performance work systems

and influence processes on employees’
attitudes
“The purpose of this paper is to explore the relationship between employee
perspectives of high-performance work systems and employee outcomes, i.e. job
satisfaction and affective commitment, and to propose ways of increasing the
positive effects of high-performance work systems on firm performance.

Design/methodology/approach

The data were collected from 370 employees in the Chinese manufacturing industry
during 2010. The Analysis of Moment Structures (AMOS) method was used to test
each of the eight hypotheses deriving from the conceptual framework.

Findings

The paper finds that: employee perspectives of high-performance work systems

have a positive effect on both job satisfaction and affective commitment; and breadth
of behavioural script and level of autonomy mediate the relationship between
employee perspectives of high-performance work systems and their attitudes
towards that organisation (job satisfaction and affective commitment); however, skill
variety did not mediate the relationship between employee perspectives of high-
performance work systems and employees’ attitudes in the data set used.

Hypothesis Formulation

H1a. Employee perspectives of high-performance work systems are positively

related to employees’ job satisfaction.
H1b. Employee perspectives of high-performance work systems are positively
related to employees’ affective commitment.

Methods

To test the relationship in the hypotheses, firms were included in sample if they had
more than a 100 employees. To reduce single-rater biases produced by different
sectors, we selected the manufacturing industry as previous research did because
the relationship between staffing practices and performance was higher in labour
intensive service industries than in capital-intensive industries (Datta et al., 2005).
In all, 370 responses of the five establishments were submitted, for an overall
response rate of 37 per cent. The subjects were predominantly male (60 per cent),
with an average age of 31.11 years (SD¼6.280). The average job tenure was 3.93
years (SD¼1.672), and 61 per cent (SD¼0.551) of the subjects had a bachelor’s
degree or above. The association between employee perspectives of high-
performance work practices and their attitudes to work. Although a high level of skill
variety should theoretically or intuitively have a positive effect on employees’
attitudes (Appelbaum et al., 2000), our data set indicates that this variable has little
effect.
There are two possible explanations for this unexpected result: first, the effect
of skill variety on the dependent variable may be non-linear; that is, positive within
the acceptable range of the limited learning ability of each employee and negative
when employees are over-trained. Second, the relationship between skill variety
and employees’ attitudes may be influenced by other moderating variables, such as
employees’ needs and intelligence levels, due to the limitations of our data set, these
propositions could not be tested.

Conclusions

The conclusions of this study indicate that managers should take steps to gain a
broader and deeper understanding of employee perspectives of organisational
policies, investment and motivation. In practice, managers could improve employees’
attitudes( job satisfaction and affective commitment) by establishing and propagating
easily intelligible high-performance work systems. In addition, to limit the possibility
of misunderstanding, meetings, trainings and special communications on the subject
of high-performance work systems should take place regularly to keep employees
updated and gather feedback from them. The findings of this study also indicate
some strategies to improve employees’ attitudes. That is, managers should consider
the indirect effect of employees’ perceived high-performance work systems on
employees’ attitudes via behavioural scripts and level of autonomy. When
employees’ job satisfaction and affective commitment are low, there are more likely
to be problems with the organisation’s incentive mechanisms than with its provision
of training policies. Cultivating positive habits among employees, or offering them
more freedom to explore and develop their talents, are helpful means of work
systems improving their attitudes, which in turn improves their behavioural outcomes
and performance. “