International Journal of Management, Innovations & Entrepreneurial Research

Vol 2, No 1, February 2016, pg 13-23

ISSN: 2395-7662, doi: 10.18510/ijmier.2016.212
PERFORMANCE APPRAISAL SYSTEM IN MAJAN ELECTRICITY
COMPANY (SOHAR, OMAN) AND ITS IMPACT ON EMPLOYEES’
MOTIVATION
Maryam Al Fazari
SCADA Software Engineer, Majan Electricity Company, Sohar, Oman
Email: alghandora-460@hotmail.com
Dr. M. Firdouse Rahman Khan
Faculty, Sohar University, Oman
Email: firdouse4u@yahoo.co.uk
Abstract
Purpose
The objective of the study is to investigate whether the performance appraisal system used is in Majan Electricity
Company, (Oman), measures the employees’ performance accurately and to ensure motivation and satisfaction of its
employees.
Design/methodology/approach
The study was conducted with 106 employees from all the departments of the main office of the company located at
Sohar, who were selected on stratified random sampling basis and were contacted through a well-defined
questionnaire.
Findings
The study reveals that even if there is a problem with the accuracy of performance appraisal system in measuring the
performance accurately, or due to rater error in the evaluation process, the employees’ performance appraisal is not
affected by them and has got positive impact on employees’ motivation and satisfaction.
Practical Implications
The study demonstrates that there is a strong association between the (i) performance appraisal system and (ii)
motivation of the employees and the employees’ satisfaction. It is also found that there is no relationship between
performance appraisal system, rater errors, and the accuracy of performance appraisal system.
Social Implications
Performance appraisal system is dependent on motivation of the employees and employees’ satisfaction. So, there
exists necessity for the company to pay attention towards motivating the employees through concentrating on
increasing the satisfaction of the employees.
Originality/value
No study have examined the impact of performance appraisal system of the Majan Electricity Company in Sohar
ever before considering employee’s motivation and the welfare of the employees in one hand and the management
on the other, and it is first hand study of its kind.
Research limitations/Implications
The study was restricted to the main office of the company located at Sohar, Oman. The study could be extended to
know the insight of the personnel involved in the entire Majan Electricity Company, Oman.
Key words: Performance Appraisal System (PAS), Motivation of the employees, Employees’ Satisfaction, Rater
errors in Performance appraisal system, Accuracy of performance appraisal system.
INTRODUCTION
Majan Electricity Company started its own business as a private company owned by government in May 2005 in
three rejoins: North Batina, Buraimi, and Dhahira. Being one of the leading companies in the sultanate, Majan
Electricity Company has adopted a number of quality assurance strategies throughout its internal operations. The
company has utilized a performance appraisal system which is a combination of technical and behavioral measures
that are directly linked with the key performance indicator of the company itself to reach the highest level of quality

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Vol 2, No 1, February 2016, pg 13-23
ISSN: 2395-7662, doi: 10.18510/ijmier.2016.212
and productivity through its employees. The prevailing performance appraisal system aims at monitoring, recording,
and measuring the variable aspects of the employee’s work flow in the company. This appraisal system is essential
for both the company and the employees as it is assessing the company’s performance through its employees’
performance. The company aims to sustain the employee’s performance throughout their work by providing the
employees with a positive environment that motivates them in order to perform well. Employees viewed
performance appraisal as discriminatory, punitive and judgmental processes, where cronyism and biased
considerations dominated objectivity (Horsoo, 2010). Employees do perform better if they know that their actions
are monitored and their performance is evaluated, so they are receiving recognition based on their efforts and they
are also willing to accept the negative feedback rather than not receiving feedback at all. So, the output of the
appraisal system is used to determine the abilities of each employee to detect the deficiencies in their work if any, in
order to provide them guidance in improving their performances and at the same time, it is also used to reward the
employees based on their performances. However, any evaluation system may encounter problems with its accuracy
in measuring. These problems may rise from rater side during appraisal process or from system’s criteria or by both.
The problem with performance appraisal system is that sometimes it poses some sort of pressure on the employees,
as they are asked to finish a number of duties within a limited time. Mostly, the employees stay at work for extra
hours to complete the assigned tasks to achieve the required Key Performance Indicators (KPI). Therefore, the
system should perform as a motivational tool that would allow the employee to enhance company’s performance
under the appropriate encouragement from the managers or supervisors and not to be discouraging one by
challenges and difficulties that being out of employee abilities. Sometimes, employee also feels that performance
appraisal system is not matching with their nature of work, especially those who are working in shift duties / call
centers. In fact, there should be no discrimination of any kind, in assigning the tasks to the employees. This research
investigates into the advantages and disadvantages associated with the performance appraisal system and measure
their relation with employees’ motivation and employees’ satisfaction in Majan Electricity Company-Sohar.
REVIEW OF LITERATURE
Performance appraisal system is considered as a way to evaluate employees’ performance and this evaluation is to
judge their performance (Scott, 2009). Fletcher (2001) defines performance appraisal more broadly as ‘activities
through which organizations seek to assess employees and develop their competence, enhance performance and
distribute rewards’. A study by Ojokuku (2013) found that the performance appraisal is forming a key of human
resource activity designed to deliver reward for performance and hence it is a vital instrument for enhancing
employee motivation and performance, if properly used. The strategy of performance appraisal can vary from
company to company and it depends on the individual organization’s context (Armstrong and Baron, 2004).
Organizations should know how to use performance appraisal as a tool to provide both the employee and
organization with the information needed to make decisions related to each area in the performance management
framework (Williams, 2001). For example, discussing the objectives that an employee has to meet in the following
year provides the basis for discussing what training and development needs the employee might require (Katavich,
2013). Performance appraisal is also defined as a process of assessing individual employee’s performance and how
it can be improved to contribute overall organizational performance (Grubb, 2007). Employees are more likely to be
receptive and supportive of a given performance appraisal program if they perceive the process as a useful source of
feedback which helps to improve their performance (Mullins, 2007). Ali et.al (2012) found that the effective and
suitable evaluation process in the organization should provide necessary feedback to the employees and should
motivate them. Boswell and Boudreau (2000) identified two uses of performance appraisals as evaluative and
developmental purposes. Evaluative appraisal is used for individual evaluation to deliver promotion, pay rise,
relocation, and employee termination whereas developmental appraisal is done for developing goals. Performance
appraisal helps a manager to ‘evaluate past and improve future performance’ (Taylor, 2008). Cook and Crossman
(2004) highlighted that the fundamental objective of performance appraisal policy is to facilitate management in
carrying out administrative decisions relating to promotions, dismissals, layoffs and pay increases. According to the
study of Akinbowale et.al (2013) the findings revealed that the employee participation in the performance appraisal
policy was high and this led to employee performance and perception of the process and outcome as being fair. A
systematic practice of giving feedback to employees will have a great impact on the intrinsic motivation of
employees (Wang and Guthrie, 2004). Ojokuku (2013) found that the feedback from this process allows an
employee to know how well they have performed in comparison with the set standard of the organization. However,
Nurse (2005) found that negative feedback from performance appraisal policy not only fails to motivate the typical
employee, but can also cause employees to perform worse. Managers must recognize that an employee’s
development is a continuous cycle of setting performance goals, assessing performance as to the accomplishment of

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ISSN: 2395-7662, doi: 10.18510/ijmier.2016.212
the goals and then setting new higher goals (Nurse, 2005). Boswell and Benson (2000) contend that the human
nature is in constant need of recognition and when they are recognized, either positively or negatively; it spurs them
to do more. Jose (2011) found that if the performance appraisal is designed according to the employee’s job
description then it will be easier for the employee to know what duties and responsibilities he has and what is
expected from him/her. Cole (2002) enumerated that some factors such as employees’ knowledge, skills, and nature
of task, technology in use, management style and organizational climate, as being important determinants of
employee performance. Jabeen (2011) confirmed that in the organization, each employee should get enough
information about the work to be performed. The target is to be attained has been set by the organization, where they
pass enough information to their employees about the work. Werner et al (2012) also noted that performance
management practices address issues of employee motivation thereby ensuring that their capabilities are fully
utilized. Colquitt (2001) argued that employees who perceived fairness in organization exposed higher level of
organizational commitment, productivity and demonstrate lower level of work withdrawals. Mensah and Seidu
(2012) found that the biggest complaint from managers is that they are not given sufficient guidelines to assess
people; and the biggest complaint from employees is that the process is not equitable and fair. Raters must be fully
knowledgeable of the performance appraisal system and the organization should provide rater training for managers
(Roch and O’Sullivan, 2003). Raters consider behavior of the ratees and their reputations when drawing attributional
inferences and deciding on appropriate rewards (Johnson et al., 2002). In general, both raters and ratees respond
more favorably to fair performance appraisal systems (Brown and Benson, 2003). However, many factors, including
organizational leadership and culture, impact the attitude of most employees towards performance appraisal,
regardless of their educational or professional standing (Gurbuz and Dikmenli, 2007). Armstrong (2012) defines
motivation as the force that energizes, directs, and sustains behavior. Robbins and Judge (2000), offered a specific
work-related definition of motivation as the willingness to exert high levels of effort towards organizational goals,
conditioned by the effort and ability to satisfy some individual need. Werner et al (2012) underscored this by
asserting that the most capable employees in an organization will not perform well unless they are motivated.
Akuoko (2012) demonstrated that the performance appraisal system can be an effective tool in employee motivation
if both the process and outcome are fair. Motivation and performance will improve if people have challenging but
agreed goals and receive feedback (Armstrong, 2004). Jackson and Schuler (2006) argue that effective performance
measurement and feedback enhances employee motivation and productivity, facilitates strategic planning and
change, and ensures legal compliance and fair treatment. Job satisfaction defined by many researchers is related to
the employees overall performance and the interest of employees on the job (Green, 2004; Harter et al, 2002). A
Study conducted by Karimi et.al (2011) confirmed that the performance appraisal system in practice is fair enough
to keep all the employees satisfied and the results reveal that there is a positive and significant relationship between
employee performance appraisal system and their satisfaction. Employees are likely to feel more satisfied with their
performance appraisal results if they have the opportunity to talk freely and discuss their performance (Akinbowale,
et.al 2013). According to Ali and Ahmad (2004) performance appraisal affects both job satisfaction and motivation
of workers.
RESEARCH METHODOLOGY
The research was conducted on primary data collection from the employees on first hand basis through a well-
defined questionnaire, on stratified random sampling basis from 106 employees of Planning and Asset management
Department, Customer Services Department, Human Resource and Administration Department, Projects Department
and Maintenance, Operation and Distribution Department of the main office of the company located at Sohar
excluding the managerial cadre.
ANALYSIS AND FINDINGS
Table No. 1 Demographic information about the respondents
Characteristics Frequency Percentage
Gender Male 85 80.2
Female 21 19.8
Age From 20-30 years 50 47.2
From 30-40 years 49 46.2
From 40-50 years 5 4.7
Above 50 years 2 1.9
Marital Status Married 89 84

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Vol 2, No 1, February 2016, pg 13-23
ISSN: 2395-7662, doi: 10.18510/ijmier.2016.212
Single 17 16
Resident of North Batina 88 83
South Batina 3 2.8
Sharqiya 1 0.9
Dakhilya 1 0.9
Buraimi 2 1.9
Dhahira 9 8.5 %
Muscat 2 1.9 %
Qualification Higher School 6 5.7
Diploma 31 29.2
Higher Diploma 7 6.6
Degree 57 53.8
Master 5 4.7
Nature of work Shift duty 19 17.9
Normal working hours 87 82.1
Division / Dept. Planning and asset 41 38.7
Customer affairs 15 14.2
Human Resource and Administration 13 12.3
Projects 9 8.5
Information Technology 6 5.7
Distribution, Operation & Maintenance 18 17
Finance 3 2.8
Health Safety Security Environment 1 0.9
Source: Questionnaire
Table No. 2 Motivation of employees
K-S Chi- p
# Statements SD D A SA SA
Value square Value
31 34 27
Performance Appraisal System 8 6
1 29.2 32.1 25.5 1.864
(PAS) motivates me 7.5 % 5.7 %
% % %
I am receiving a valuable 8 35 33 27 3
2 2.108
feedback from my rater 7.5% 33% 31.1% 25.5% 2.8%
18 40 29 15 4
3 I received financial rewards 2.365
17% 37.7% 27.4% 14.2% 3.8%
I receive recognition and 12 41 29 17 7
4 2.417
appreciation 11.3% 38.7% 27.4% 16% 6.6%
Existing PAS helped me in 11 19 32 32 12 64.189 .000
5 1.913
building career advances 10.4% 17.9% 30.25 30.2% 11.3%
doing PAS forms a way to reach 12 36 38 15 5
6 2.048
achievements 11.3% 34% 35.8% 14.2% 4.7%
5 27 21 43 10
7 I feel that PAS is time wasting. 4.7% 25.5% 19.8% 40.6% 9.4% 2.642

I am not interested with my PAS 3 25 34 36 8

8 2.147
current tasks 2.8% 23.6% 32.1% 34% 7.5%
My tasks are not encouraging to 5 29 23 42 7
9 2.572
take a responsibility 4.7% 27.4% 21.7% 39.6% 6.6%

Null Hypothesis: There is no relationship between the statements related to the motivation of employees and the
answers/choices of the respondents. It is evident from the table above that p value is less than 0.05 for all statements

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Vol 2, No 1, February 2016, pg 13-23
ISSN: 2395-7662, doi: 10.18510/ijmier.2016.212
in this group at the level of 5% of significance, i.e. null hypothesis is proved wrong. Therefore, there is a significant
relationship between these statements and the answers of the respondents. Further, it could be seen from the values
obtained from Kolmogorov-Smirnov test that “I feel that PAS is time wasting” ranked first among the all factors
followed by the factors “My tasks are not encouraging to take a responsibility” and “I receive recognition and
appreciation”.
Table No.4 Accuracy of performance appraisal system
K-S Chi- p
# Statements SD D A SA SA
Value square Value
My performance is evaluated 6 25 33 35 7
1 2.084
accurately 5.7% 23.6% 31.3% 33% 6.6%
I have the opportunity to discuss 16 56 21 11 2
2 3.210
the tasks 15.1% 52.8% 19.8% 10.4% 1.9%
I have the opportunity to discuss 16 60 19 7 4
3 15.1% 56.6% 17.9% 6.6% 3.8% 3.423
about my rating
Existing tasks of PAS considers 10 49 23 19 5
4 2.909
nature of working 9.4% 46.2% 21.7% 17.9% 4.7%
38.868 .010
Existing tasks of PAS is matching 11 42 30 16 7
5 2.452
with my skills 10.4% 39.6% 28.3% 15.1% 6.6%
Existing PAS is matching with 7 39 42 13 5
6 2.190
my job description 6.6% 36.8% 39.6% 12.3% 4.7%
Existing PAS is matching with 7 45 30 19 5
7 6.6% 42.5% 28.3% 17.9% 4.7% 2.630
my job qualification
There is no standard policy for 24 41 17 22 2
8 2.633
PAS in the company 22.6% 38.7% 16% 20.8% 1.9%

Null Hypothesis: There is no relationship between the statements related to the accuracy of performance appraisal
system and the answers/choices of the respondents. It is evident from the table above that p value is less than 0.05
for all statements in this group at the level of 5% of significance, i.e. null hypothesis is proved wrong. Therefore,
there is a significant relationship between these statements and the answers of the respondents. Further, it could be
seen from the values obtained from Kolmogorov-Smirnov test that “I have the opportunity to discuss about my
rating” ranked first among the all factors followed by the factors “I have the opportunity to discuss the tasks” and
“Existing tasks of PAS considers nature of working”.
Table No. 5 Rater errors
K-S Chi- p
# Statements SD D A SA SA
Value square Value
Our raters are trained well to rate 10 48 29 13 6
1 the employees 9.4% 45.3% 27.4% 12.3% 5.7% 2.766

I feel that there is a rater bias 17 37 28 22 2

2 exists in the evaluation 2.239
16% 34.9% 26.4% 20.8% 1.9%
42.258 .000
some of the employees are 21 27 32 21 5
3 evaluated emotionally 1.748
19.8% 25.5% 30.2% 19.8% 4.7%
I have been evaluated strictly 15 29 24 32 6
4 2.003
14.2% 27.4% 22.6% 30.2% 5.7%

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ISSN: 2395-7662, doi: 10.18510/ijmier.2016.212
Raters gave the employees almost 18 41 32 15 0
5 the same grade 2.349
17% 38.7% 30.2% 14.2% 0%
raters are giving grades lower 17 36 31 19 3
6 than what deserved 2.142
16% 34% 29.2% 17.9% 2.8%
raters are favoring selected 18 41 30 16 1
7 employees 2.385
17% 38.7% 28.3% 15.1% 0.9%
Halo effect is one of the rating 16 41 34 12 3
8 error 15.1% 38.7% 32.1% 11.3% 2.8% 2.330
Rater errors are affecting the 16 60 17 12 1
9 accuracy of PAS 3.439
15.1% 56.6% 16% 11.3% 0.9%

Null Hypothesis: There is no relationship between the statements related to rater error and the answers/choices of the
respondents. It is evident from the table above that p value is less than 0.05 for all statements in this group at the
level of 5% of significance, i.e. null hypothesis is proved wrong. Therefore, there is a significant relationship
between these statements and the answers of the respondents. Further, it could be seen from the values obtained
from Kolmogorov-Smirnov test that “Rater errors are affecting the accuracy of PAS” ranked first among the all
factors followed by the factors “Raters are favoring selected employees” and “Raters gave the employees almost the
same grade”.
Table No. 6 Satisfaction of employees
K-S Chi- p
# Statements SD D A SA SA
Value square Value
I am not satisfied with my 10 16 24 43 13
1 pervious PAS I underwent 4.9% 15.1% 22.6% 40.6% 12.3% 2.598

I have been rewarded fairly 10 36 33 21 6

2 through PAS 4.9% 34% 31.1% 19.8% 5.7% 2.119

There is no discrimination in 13 47 27 15 4
3 PAS regarding gender 12.3% 44.3% 25.5% 14.2% 3.8% 2.740

There is no discrimination in 16 49 30 8 3
4 2.750 69.132 .000
PAS regarding the age 15.1% 46.2% 28.3% 7.5% 2.8%
Expectations of employees affect 31 46 26 2 1
5 their satisfaction 29.2% 43.4% 24.5% 1.9% 0.9% 2.423

Receiving training is a result of 18 42 18 16 12

6 performance appraisal 17% 39.6% 17% 15.1% 11.3% 2.697

Satisfaction about PAS is 40 46 12 6 2

7 affecting the motivation 37.7% 43.4% 11.3% 5.7% 1.9% 2.794

Null Hypothesis: There is no relationship between the statements related to the satisfaction of employees and the
answers/choices of the respondents. It is evident from the table above that p value is less than 0.05 for all statements
in this group at the level of 5% of significance i.e. null hypothesis is proved wrong . Therefore, there is a significant
relationship between these statements and the answers of the respondents. Further, it could be seen from the values
obtained from Kolmogorov-Smirnov test that “Satisfaction about PAS is affecting the motivation” ranked first
among the all factors followed by the factors “There is no discrimination in PAS regarding the age” and “There is no
discrimination in PAS regarding gender”.

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ISSN: 2395-7662, doi: 10.18510/ijmier.2016.212
Table No. 7 Performance appraisal system

K-S Chi-
# Statements SD D A SA SA p
Value square
value
I have been informed about
17 45 11 24 9
1 the PAS 2.943
16% 42.5% 10.4% 22.6% 8.5%
I agree with the importance 28 58 14 5 1
2 of PAS in my company 26.4% 54.7% 13.2% 4.7% 0.9% 3.158

Tools provided are

27 47 19 11 2
3 determining employees’ 2.813
25.5% 44.3% 17.9% 10.4% 1.9%
tasks
Performance appraisal helps 19 50 23 9 5
4 in building relationship 2.928
17.9% 47.2% 21.7% 8.5% 4.7%
I am getting enough 11 38 20 23 14 82.208 0.000
5 information about my tasks 10.4% 35.8% 18.9% 21.7% 13.2% 2.397

There should be a proper 44 54 8 0 0

6 recording schedule for PAS 41.5% 50.9% 7.5% 0% 0% 3.031

The possible appraisal 42 52 12 0 0

7 problems should be known 39.6% 49.1% 11.3% 0% 0% 2.781

Each employee must be 53 46 7 0 0

8 given a feedback 3.298
50% 43.4% 6.6% 0% 0%
I have the right to reject my 53 40 10 3 0
9 appraisal grade 50% 37.7% 9.4% 2.8% 0% 3.103

There is no relationship between the statements related to the performance appraisal system and the answers/choices
of the respondents. It is evident from the table above that p value is less than 0.05 for all statements in this group at
the level of 5% of significance, i.e. null hypothesis is proved wrong. Therefore, there is a significant relationship
between these statements and the answers of the respondents. Further, it could be seen from the values obtained
from Kolmogorov-Smirnov test that “Each employee must be given a feedback” ranked first among the all factors
followed by the factors “I agree with the importance of PAS in my company” and “I have the right to reject my
appraisal grade”.
REGRESSION ANALYSIS
The regression analysis shows that p-value of accuracy of performance appraisal system is 0.702 which is more than
.05 and p value for rater error is .603 which is also more than .05. So, after removing these variables-the accuracy of
the system and the rater error, the regression analysis is carried out again to find out the regression fit.

Model Variables entered Variables Method

removed
1 Satisfaction of employees, Motivation (A) . enter

(A) All requested variables entered

(B) Dependent variable: PAS

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Model Summary
Model R R square Adjusted R Square Std. Error of the
Estimate

1 0.504 (A) 0.254 0.239 3.539

(A) Predicators: (constant), Satisfaction of employees, Motivation

ANOVA
Model Sum of Squares df Mean F Sig.
Square
Regression 438.850 2 219.425 17.522 .000
Residual 1289.877 103 12.523
Total 1728.726 105

(A) Predicators (constant), satisfaction of employees, Motivation

(B) Dependent Variables: PAS

Coefficients
Model Unstandardized Coefficients Unstandardized t Sig.
Coefficients

B Std. Error Beta

(constant) 5.219 2.366 2.206 .030
Motivation .259 .077 .292 3.376 .001
Satisfaction of .333 .079 .364 4.214 .000
employees

(A) Dependent variable: PAS

The obtained linear regression is a follows:
PAS = 5.219 + 0.259 M + 0.333 S,
where M = Motivation and S = Satisfaction of employees. It can be seen from table above that the performance
appraisal system dependent on motivation of the employees and employees’ satisfaction, where both motivation and
employees’ satisfaction has an impact on performance appraisal system. It is also found that there is no relationship
between performance appraisal system, rater errors, and the accuracy of performance appraisal system.
RESULTS AND CONCLUSION
“Rater errors are affecting the accuracy of performance appraisal system” was ranked first among the all factors
followed by the factors “I have the opportunity to discuss about my rating with the rater” and “Each employee must
be given a feedback regarding their performance”. Only 37% of the respondents are motivated by performance
appraisal system. The rest were distributed between neutral and demotivated with almost equal percentages. This
indicates that whether they are not confident to answer clearly or they do not know the exact effect of PAS on their
motivation. It has been found that the percentage of the respondents who received valuable feedback is 40.5%
compared to 28.3% who do not receive. It has been found that 55% of the respondents reported received of
financial rewards. It has been found that half of the respondents received recognition and appreciation for their hard
work through PAS. One third of the respondents showed neutral feeling toward performance appraisal system as a
way to reach valuable achievements for them as well as the company. This may be due to the lack of information

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received regarding the importance of PAS used in the company. Most of the respondents disagree that PAS is time
wasting. 46 % of the respondents reported that their current tasks to be reviewed under PAS are encouraging them
to take a responsibility in work forms. At the same time 40 % of the respondents reported that their performance is
not evaluated accurately by the existing PAS and 68 % reported that the PAS is with rater error. Most of the
respondents (71.7 %) reported that they had the opportunity to discuss their rating with their rater regarding PAS. It
is surprising to see that the majority of the respondents (61.3%) reported that there is no standard policy for PAS in
the company, as each department has its own way of assessment.
55% of the respondents reported that their raters are trained well whereas 51 % reported that there is a rater bias
exists in the evaluation process of the company. 45% report that the employees are evaluated emotionally whereas
42% reported that they have been evaluated strictly. It has been found that the majority of the respondents (56%)
believe that raters gave the employees almost the same grade to avoid hurting their feelings. It has been found that
half of the respondents stated that some raters are giving grades that are lower than what the employee deserves.
Majority of the respondents (56%) feel that some raters are favoring selected employees and giving them grades that
are higher than their performance, compared to 16% who don’t feel the same. 54 % of the respondents who believe
that halo effect is considered as one of the rating error that rater may fall on it. Majority of the respondents (72 %)
confirm that rater errors are affecting the accuracy of performance appraisal system.
53 % the respondents reported that they are satisfied with their pervious PAS they underwent whereas only 39%
reported that they have been rewarded fairly for their hard work. It is good to see that the respondents felt that there
is no gender discrimination and age discrimination prevails in the company towards the evaluation process of PAS.
57 % reported that receiving training is a result of performance appraisal. Majority of the respondents 81.1%
confirm that employees’ satisfaction on PAS affects their motivation. Majority of the respondents (58.5%) reported
that they have been informed of the performance appraisal when they joined the company and almost 81.1% believe
in the importance of PAS in the company. Further, 70% of the respondents find that the technology used and tools
provided by the company are important factors in determining employees’ tasks to be reviewed under PAS. Also,
65% of the respondents confirm that the performance appraisal helps in building a good relationship with my
manager as well as other employees in the company. Total respondents that got enough information about the tasks
to be reviewed under PAS, are 46.2% compared to about 35% who didn’t get enough information. A record high
percentage of the respondents (92.4%) confirmed that there should be a proper recording schedule for employees’
performance appraisal during the year. Majority of the respondents (89%) told that the possible appraisal problems
should be knowledgeable and should be understood. 93.4% of the respondents confirmed that each employee in the
company must be given a feedback regarding his performance appraisal result.
88% of the respondents reported that each employee in the company has the right to reject his appraisal grade and
request for a review through the committee.
The study revealed that even if there is a problem with the accuracy of performance appraisal system in measuring
the performance accurately, or rater errors in the evaluation process, the employees’ performance appraisal will not
affect them. It has also been found that there is an impact for performance appraisal system on employees’
motivation and satisfaction.

SUGGESTIONS
Employees’ good performance is a major necessity for a company. If performance is not measured and monitored by
evaluation, then the required output through performance will not be achieved. Thus the performance appraisal has
to be conducted. Even performance appraisal may be stressful for rater and ratee, but it is critical for developing
employees. It can also be used as a tool to adjudge the performance in order to identify a suitable reward –an
increase in pay, a bonus or a promotion. Variety of effective tools and techniques has been identified towards
employees’ performance evaluations. However, it is necessary to modify them as needed to match the prospects
over time. As there is a strong association between the (i) performance appraisal system and (ii) motivation of the
employees and the employees’ satisfaction and Performance appraisal system is dependent on motivation of the
employees and employees’ satisfaction, there exists necessity for every company to pay attention towards
motivating the employees through concentrating on increasing the satisfaction of the employees.

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