The Impacts of Performance

Appraisal on Employees’ Job

Satisfaction and Organizational
Commitment

Group 5
LORD’S STAR
GROUP MEMBERS

PAWAN THAPA
AAYUSH BHATTA
JEEVAN REGMI
SALONI GURUNG
MUKESH PHUYAL
SEJAL BHATTARAI
 INTRODUCTION
• An indispensable aspect of an organization (Rasch,
2004).
• HRM is responsible for the training and development
of employees to boost their productivity, efficiency
and satisfaction.
• HRM practitioners, via the use of performance
appraisals, evaluate their employees’ performance.
• Desirable performance of the employees depends
upon the positive and negative job attitudes.
• Many organizations are investing huge sums of
money in rewards and recognition programs.

• Enables employees to build their own developmental

goals which eventually culminate into an employee’s
personal growth.
 PROBLEM OF THE STATEMENT
• Researchers also cite loopholes in the appraisal
system and also warn of the dangers it poses to
management and their subordinates.

• The Halo effect

 OBJECTIVES
• To find out how performance appraisals benefits an
organization in achieving its goals.

• The relationship between performance appraisals

and employees’ commitment to an organization

• Investigated the effects that performance appraisals

have on employees’ job satisfaction.
 RESEARCH QUESTIONS
1. What is the relationship between employees, job
satisfaction and performance appraisal?
2. What is the degree of impact of performance
appraisal on employees’ job satisfaction?
3. What is the relationship between performance
appraisal and employees’ organizational
commitment?
4. What is the degree of impact of performance
appraisal on employees’ organizational
commitment?
Literature review

-AAYUSH BHATTA
 Performance Appraisal and Its Purpose

• “Formal process of employee monitoring through

evaluation of performance”
• Reasons to undertake Performance Appraisal
• Performance reviews
• Reward review
• Potential review
 Challenges and Criticisms of Performance
Appraisal
• Identifying proper evaluation criteria

• Lack of competency in evaluators

• Resistance by employees
Performance apprisial approach
• Behavior based approach

• Using a checklist defining specific criteria and

targets
• Reduces biasness in evaluation
• Psychological appraisals approach
• Helps employees to make a team player as it
evaluates Psychological traits.
 Job Satisfaction
• How employee feel for his job?
• Pleasurable emotional state in work
environment.
• Job dissatisfaction
• indicator of job performance
• Job satisfaction in relation to complexity of job
 Organizational commitment
• Devotion of employee toward organization
• Three pillars of organizational commitment
• Employees willingness to put effort in organizational goals
• Employee being a permanent or long lasting player in
organization
• Employee perception about core values of company
• Hr practices in relation to organizational commitment
• Psychological attachment of employee
• Feeling of employee towards organizational mission
and goal
Theoretical Background
-Jeevan Regmi
 Theoretical Background
• 1. Equity Theory:

• relational satisfaction in terms of perceptions

• of fair or unfair distributions of resources
• within interpersonal relationships
 1. Equity Theory
• borders on the issue of motivation to
maintain a healthy relationship with
his coworkers and his organization

decreases his
contributions
decreases his
contributions

increases his
increases his
contributions
contributions
 1. Equity Theory:
The researcher, thus, by juxtaposing the factors from reviewed
literature deduced hypotheses 1, 2, 3 and 4.

• H1: Fairness in
the appraisal
system.

is positively
related to the H2: Linking
H4: Feedback
after appraisals job performance
appraisal
satisfaction of with promotion
employees.

H3: Clarity of
roles
 2. Expectation theory:
• preferred rewards an employee expects to get if he undertakes
or performs particular actions.

• The likelihood that a particular action will bring about preferred reward is
at the heart of expectancy theory
 2. Expectation theory:
Hypotheses 5, 6, 7 and 8 were developed from the expectation
theory:

•
H5: Salaries
being linked
to
performance
appraisal

H8: is positively H6:

Involvement
of employees
related to Identification
of training
in formulating employees’ needs by
appraisal tools commitment. appraisals

H7: Clarity of
the purpose
of appraisal
Methodology and Findings
- Saloni Gurung
 Research Method
Quantitative method:
• Refers to counting and measuring of variables.
• More objective.
• Focuses on the collection and analysis of statistics.

Qualitative method:
• Refers to meanings, concepts, characteristics and
descriptions of variables.
• More subject to interviews and relies less on numbers.
• Focuses on interpreting non numerical data.
 Data Collection
• Collected using questionnaires (administered to 200
employees).

• Included 5 financial institutions - Best point savings

and loans, Beige capital microfinance, Global access
savings and loans, Cottage microfinance and Dalex
finance- in Ghana.
The questionnaire consisted of two sections.
Section A Section B

Part I Part II

• Designed to • Collected data • Connecting

collect by connecting employees’
demographical employees’ job commitment
information satisfaction with with employees
about the performance understanding
respondents. appraisal factors of the purpose
such as fairness of appraisal,
of the appraisal employee
system, clarity involvement in
of roles etc. the formulation
of the appraisal
tools etc.
 Findings
• H1: Fairness in the appraisal system is positively related to the
job satisfaction of employees.

• H2: Linking performance appraisal with promotion is

positively related to the job satisfaction of employees.

• H3: Clarity of roles is positively related to the job satisfaction

of employees.
•
• H4: Feedback after appraisals is positively related to the job
satisfaction of employees.
• H5: Salaries being linked to performance appraisal is
positively related to employees’ commitment.

• H6: Identification of training needs by appraisals is

positively related to employees’ commitment.

• H7: Clarity of the purpose of appraisal is positively

related to employees’ commitment.

• H8: Involvement of employees in formulating appraisal

tools is positively related to employees’ commitment.
Discussion and Implication
- Mukesh Phuyal
• Research clearly shows that performance
appraisal positively affects employees.

• Not just increases job satisfaction.

• Performance appraisal should be fair

• Least effort should be invested in clarifying

roles.
• Employee’s commitment can be earned through
various ways:

1. Identification of training needs

2. Involvement of employees in formulation of

appraisal tools

3. Clarity of performance appraisal purpose

4. Rewards in terms of salary

CONCLUSION
-SEJAL BHATTARAI
• The purpose of the study was to investigate
the impacts of performance appraisal on the
job satisfaction and commitment.
• Done to measure the employees satisfaction
at job and organizational commitment.
• The study recommended that after appraisals,
employees who are identified to be in need of
training should be accordingly provided with
training.
• The study recommends that employers
adhere to the reward systems which are linked
with performance levels .

• The study also recommends that after

appraisals, employees who are identified to be
in need of training should be accordingly
provided with training.
GAP AND LIMITATION
 GAP

• The case only showed the relationship between the

job appraisal which causes more organizational
commitment and job satisfaction but not in other
factors which can hinder the organizational

commitment and job satisfaction of employees.

 LIMITATIONS

• The research was led on organizations that

give out specific jobs to their employees but
not other.
• This is less effective way of conducting
research.
• Other such job appraisals were not
considered.
 THANK YOU!
ANY QUESTIONS?