Impact of Performance Appraisal on Employee Motivation in the Sector of Health Services

Chapter 1

Introduction

“Assessment” is the process of evaluating the work of the staff member in a given period vis-a-vis responsibilities assigned, providing timely feedback for the same with a view to performance improvement/ development, and providing him/her an opportunity to state his/ her views for the same.

Motivation is a factor that applies a driving force on our actions and work. According to Baron (1983, p. 123), motivation is an accumulation of different processes which influence and direct our behavior to achieve some specific goal. It is such a dynamic in today’s environment that explicitly creates and encompasses a positive impact on job. Within an organization, the best performance is feasible with most committed employees that can only be achieved through employee motivation.

The main objective of this paper is to develop a model which explains the two biases in appraisal ratings, and at the same time explains how its impact on employees future performances with regard to motivation. Although this paper might be does not address the problem of the design of an optimal reward scheme, it does illustrate that a better understanding in the performance appraisal process is likely to contribute to a better understanding of the working of incentive schemes through performance appraisal for employee motivation.

PROBLEM STATEMENT

Appraisal system plays an integral role in the employer’s performance management process as it translates employer’s strategic goals into an individual employee’s goals. Assessment system is aimed at helping in identifying staff capabilities and aptitudes that match the expectations of their jobs in terms of job knowledge, skills and attitudes, thus enhancing motivation, morale and job satisfaction.

HYPOTHESIS TESTING

H0: Performance appraisal and employee motivation are correlated with eachother. 

H1: Performance appraisal and employee motivation are not correlated with eachother.

   

Chapter 2 – Literature Review

Performance Appraisal & Employee Motivation and Loyalty

In the growing age of business and markets, human resource is the big asset of the organization; if the organization is not keeping well with its labour work force then it might get into trouble. Employees are the key features of the growth of the organization. In order to have efficiency, employee should be motivated and satisfied with their job and have devotion with the organization. HR professionals are the one who can make it possible to motivate the employees with the assessment systems by giving them fair appraisals as per their performance. There is a strong relationship between appraisal and motivation, job satisfaction and devotion. Keeping aside the main objectives of performance appraisal, it can be use as a mechanism to create a completion between employees to get the job done with all the linked targets and benchmarks (Robert, 1984).

If the performance appraisal has some shortcoming in it and is actually creating some discrepancy in the process, then it will affect the motivational level of the employees and ultimately it will affect their efforts and the risk taking ideas for the betterment of the organization. Also they will lose interest in the affairs of the organization (Robert & Kim, 2007). Plus this de-motivation leads the employees to the lack of loyalty and they will look other options of good job and hikes in the rewards (bonnie, 2002).

Accurate performance appraisal is always preferable but if there is any inaccuracy then employees always prefers to have accurate performance appraisal with no hikes in rewards but not an inaccurate system that never encourages or recognizes their efforts. The assessment process should be fair because those employees who desires to receive exact performance appraisal over the period of time and also have all the rewards associated with that appraisal is the most motivated employee among all and similarly he or she tends to be more satisfied with his or her job and more loyal to the organization.

  

Intrinsic motivation

If we consider performing of an activity by others as a simple definition of management (Blanchard, 1372; 11), we will accept that such performing of activity by others has a very close relationship with their motivation. While it seems what causes individuals' activity is a motivation that has been aroused from their need, so motivation is called individual's driving motor. We can consider motivation in individuals as a mood that attracts them to perform a special behavior and action (Golshan, 1372; 22). Intrinsic motivation is the motivation for performing of an activity for the individual himself. Because of the experience of feeling of satisfaction and pleasure in performing of that activity (Deci et al, 1989; Arlene, 1997) motivation is used for a collection of changing relations, whether independent or dependent, that making clear direction, extent and durability of behavior ( Compel, 1976). In a enthusiasm towards performing of activities that are necessary for attaining of aims of the intended system.

MANAGERIAL PERSPECTIVE

If we look at the performance appraisal process from the eyes of the management, they have a much positive approach and views about it as compared to that of the employees. Some of the benefits of the performance appraisal process according to the article which appeared in the May-June 1997 issue of Corporate University Review, the viewpoint of senior executives, performance appraisal systems are generally regarded as a necessary part of the organization’s management system. This condition seems to exist because of the widely accepted, generally unquestioned benefits of performance appraisal systems. If asked, atypical executive might indicate the following benefits:

• The system provides an opportunity for performance related discussions that include the following aims: setting work objectives for the employee, aligning individual and organizational goals, identifying training anddevelopment needs, and discussing career progression opportunities.

• Perhaps the most significant benefit of appraisal is that, in the rush and bustle of daily working life, it offers a rare chance for a supervisor andsubordinate to have "time out" for a one-on-one discussion of important work issues that might not otherwise be addressed.

• Appraisal offers a valuable opportunity to focus on work activities and goals, to identify and correct existing problems, and to encourage better future performance. Thus the performance of the whole organization is enhanced.

• Performance appraisal can have a profound effect on levels of employee motivation and satisfaction - for better as well as for worse.

• Performance appraisal offers an excellent opportunity - perhaps the best that will ever occur - for a supervisor and subordinate to recognize and agree upon individual training and development needs.

     

Factors affecting Employees’ Motivation

No one works for free, nor should they. Employees want to earn reasonable salary and payment, and employees desire their workers to feel that is what they are getting (Houran. J). Money is the fundamental inducement, no other incentive or motivational technique comes even close to it with respect to its influential value (Sara et al, 2004). It has the supremacy to magnetize, maintain and motivate individuals towards higher performance. Frederick Taylor and his scientific management associate described money as the most fundamental factor in motivating the industrial workers to attain greater productivity (Adeyinka et al, 2007). Research has suggested that reward now cause satisfaction of the employee which directly influences performance of the employee (Kalimullah et al, 2010). Rewards are management tools that hopefully contribute to firm’s effectiveness by influencing individual or group behavior. All businesses use pay, promotion, bonuses or other types of rewards to motivate and encourage high level performances of employees (Reena et al, 2009). One way managers can instigate motivation is to give appropriate information on the sentences of their actions on others (Adeyinka et al, 2007).

Chapter 3 – Research Methodology

  

In order to study the effect of performance appraisal process on the intrinsic motivation, a questionnaire designed and distributed among 100 employees of various Department in Health Sector and will use Statistical tools and testing to get better results.

Participants

Participants will be individuals age 18-50 located in Karachi.

  

Study Design

The PA occurred naturally in this organization. All employees were given a formal PA by their immediate supervisor once a year on the anniversary of their hire date. A graphic rating scale format was used for the written appraisal. During the PA, employees were provided past performance feedback, information on future areas for improvement, training needs assessment, and any merit increase. In effect, the PAs were intended by the organization to be both developmental and evaluative.

Although actual merit increases were not available for this research, pay and other rewards (for example, promotions) were tied to performance ratings. Therefore, investigating the role of performance ratings should provide an indication as to whether the relationship between perceived evaluative PA use and attitudinal reactions depends on the outcome of the appraisal.

Measures

Questionnaire will be used for measures to collect the data. A Likert scale (1 _ strongly disagree, 5 _ strongly agree) will be used for survey items on PA use and employee attitudes.

Conclusions

In many organizations, annual performance appraisals form the basis for the rewards employees get. In this paper, we have investigated how a manager’s performance appraisal aspects an employee’s future performance. A key feature of our model is that both the manager and the employee have a perception of the employees past performance.

References

Lynne Miller Francoa,*, Sara Bennettb, Ruth Kanferc (2002) Health sector reform and public sector health worker motivation: a conceptual framework

Quratul-Ain Manzoor Impact of Employees Motivation on Organizational Effectiveness

Shaemi Barzoki Ali, Abzari Mahdi, Javani Malihe (2012)

 The Effect of Employees’ Performance Appraisal Procedure on their Intrinsic Motivation

Bård Kuvaas a (2006) Performance appraisal satisfaction and employee

outcomes: mediating and moderating roles of work

motivation

(Meysam, 2012)  Stated in his research of “ The Effect Of Performance Appraisal Satisfaction On Employees Outputs Implying On The Moderating Role Of Motivation In Workplace” that the performance effect on turnover, absenteeism, production rate, work sample, tracking performance. So it can reduce turnover & absenteeism.

Research Journal of Finance and Accounting, ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online), Vol 2, No 3, 2011 ‘The Effect of Performance Appraisal Systems on Employees in Kenya Tea Development Agency: A Survey of Selected Tea Factories in Meru County-Kenya

Wendy R. Boswell, John W. Boudreau, Employee Satisfaction with Performance Appraisals and Appraisers: The Role of Perceived Appraisal Use

Jurjen J.A. Kamphorst, Otto H. Swank, The Role of Performance Appraisals in Motivating employees