Role of Performance Appraisal System and Its Impact on Employees Motivation

  • Pooja Dangol Kathmandu University (NP)
Keywords: performance appraisal, motivation, performance, employee development

Viewed = 111 time(s)


The general objective of the study is to determine the role of performance appraisal and its impact on employee. The study is guided by the following specific objectives: to establish the extent to which performance appraisal process affects employee motivation, to determine the extent to which appraisers affect staff motivation and to determine the challenges in appraising employee performance. The study adopted descriptive research design. The population of interest consists of 120 employees of Service Industry in Nepal. Data is collected using structured questionnaires and additional qualitative data is collected using the reference from the questionnaire and the objectives of the study. The data is analysed using statistical tools such as frequency distribution, percentages and Pearson correlations. Data is presented using tables and charts. The research findings suggest that regular assessment of performance leads to employee motivation. Performance appraisal rating can be considered as a technique that has a positive effect on work performance and employee motivation. Employees may be motivated if the appraisal process is based on accurate and current job descriptions. On the challenges of performance appraisal on employee motivation established that some managers tend to be liberal or strict in their rating of staff which may affect the employees’ motivation. The manager’s ability to address the skills gaps can have a significant impact on the employee’s motivation. Regular ratings may affect the performance and motivation of the employees. Fair assessment of the employee’s performance may enhance their motivation.


Anderson, N. R., & West, M. A. (1998). Measuring Climate for Work Group Innovation: Development and Validation of the Team. Journal of Organizational Behaviour, 235-258.
Caruth, L., & Humphreys, H. (2008). Performance appraisal: essential characteristics for strategic control. Measuring business excellence, 24-32.
Chan, Y., & Lynn, B. (1991). Performance Evaluation and the Analytic Hierarchy Process. Journal of Management Articles, 57-58.
Dash, H., Drabman, R., Spitalnik, R., & Spitalnik, K. (2008). Sociometric and disruptive behavior as a function of four types of token reinforcement systems. Journal of Applied Behaviour Analysis, 93-191.
Denby, S. (2010). The importance of training needs analysis. Industrial and commercial training, 147- 150.
Francis, X., & Brian, H. (20014). Factors that Bias Employee Performance Appraisals. Work Study, 10-13. Guest, D. E. (1999). Human Resource Management: The Workers Verdict. Human Resource Management
Holzer, N. (2007). The participation-performance controversy reconsidered: Subordinate competence as a mitigating factor. Group and Organization Studies, 411-423.
Islam, R., & Rasad, S. (2006). Employee Performance Evaluation by the AHP. Asia Pacific Management Review, 163-176.
Jayawarna, D., Wilson, A., & McPherson, A. (2007). Training commitment and performance in manufacturing SMEs. Journal of Small Business and Enterprise Development 14, 321-338.
Jones, H., & Wright, B. (2007). Perceived organizational support. Journal of Applied Psychology, 500-507.
Kumbhar, V. (2011). Customer's satisfaction in ATM service: An empirical evidence from public and private banks in India. Management Research & Practices, 24-35.
Lowe, R., & Vodanovich, S. (2005). A field study of distributive and procedural justice as predictors of satisfaction and organizational commitment. Journal of business and psychology, 99-114.
MacNeil, C. M. (2004). Exploring the supervisor role as a facilitator of knowledge sharing in teams.
Journal of European Industrial Training.
Mamoria, C. (2005). Personnel Management. New Delhi, India: Himalaya Publishing House.
Nancarrow, S. A., Booth, A., Ariss, S., Smith, T., Enderby, P., & Roots, A. (2013). Ten principles of good interdisciplinary team work. Human Resources for Health, 11-19.
Newman, A., Thanacoody, R., & Hui, W. (2012). The Impact of Employee Perceptions of Training on Organisational Commitment and Turnover Intentions: A Study of Multinationals in the Chinese Service Sector. A Thesis Submitted to Nottingham University Business School. Ningbo, China.
Ngo, H., Turban, D., Lau, C., & Lui, S. (2005). field study of distributive and procedural justice as predictors of satisfaction and organizational commitment. Journal of business and psychology, 99-114.
Ohabunwa, S. (2009, May 19). Nigeria Business Environment in the New Millennium. A paper presented for HRDB UNILAG on Renovating our corporate management practices for the New Millemium.
Otley, D. (1999). Performance Management: A Framework for Management Control System Research.
Porter, H. (2008). The measurement of organizational commitment. Journal of Vocational Behaviour, 224–247.
Qureshi, M., Ramay, I., & Zubair, M. (2007). Impact of Human Resource Management (HRM) Practices on Employees Performance. Islamabad: Muhammad Ali Jinnah University.
Rue, L., & Byars, L. (2005). Management: Skills and Application. Irwin McGraw- Hill 2000.
Scarnati, J. T. (2001). On becoming a team player. Team Performance Management: An International Journal, 7(1/2), 5-10.
Scott, M., Clotheir, B., & Spriegel, H. (2007). Personnel Management: Principles, practices and point of View. Management of Personnel Journal, 78.
Selvarajan, T., & Cloninger, A. (2011). Can Performance Appraisals motivate employees to improve performance- A Mexican Study. The International Journal of Human Resource Management, 1- 22.
Shaw, K., & Ichniowski, C. (2009). The Effect of Human Resource Management Systems on Economic Performance: An International Comparison of US and Japanese Plants. Management Science, 704-721.
Shaw, J., Delery, J., Jenkins, G., & Gupta, N. (2008). An organization-level analysis of voluntary and involuntary turnover. Academy of Management Journal, 511–525.
Skarlicki, D., & Folger, R. (2007). Retaliation in the Workplace: The Roles of Distributive, Procedural and Interactional Justice. Journal of Applied Psychology, 434-444.
Teseema, H., & Soeters, J. (2006). Affective commitment to the organization: The contribution of perceived organizational support. Journal of Applied Psychology, 825–836.
Tzafir, S. (2005). The relationship between trust, HRM practices and firm performance. International Journal of Human Resource Management, 16-22.
Ubeda, L., & Almada, C. (2007). Staff development and performance appraisal in a Brazilian research centre. European Journal of Innovation Management, 109-125.
Vasset, F., Marnburg, E., & Furunes, T. (2011). The effects of performance appraisal in the Norwegian municipal health services: a case study. Human Resources for Health.
How to Cite
Dangol, P. (2021). Role of Performance Appraisal System and Its Impact on Employees Motivation. Quantitative Economics and Management Studies, 2(1), 13-26.