IMPACT OF PERFORMANCE APPRAISAL ON EMPLOYEE SATISFACTION -A STUDY

International Journal of Research in Management & Social Science Volume 6, Issue 1 (II): January - March, 2018 ISSN 2322 - 0899 IMPACT OF PERFORMANCE APPRAISAL ON EMPLOYEE SATISFACTION –A STUDY Dr. Ch. Seetha Ram1 and G. Devi Manikeswari2 Assistant Professor1 and Research Scholar2, GITAM University, Visakhapatnam ABSTRACT There has been a general consensus in the belief that PAs lead to positive implications of organizations. Furthermore, PAs can benefit an organization’s effectiveness. One way is PAs can often lead to giving individual workers feedback about their job performance. In this dynamic and ever exponentially changing global market, nothing can be measured with accuracy because business world made market attributes volatile. In the complex business world, human beings are the most valuable assets. Human resources attitude is also volatile as subjected to many experiences and situations. In such scenario, one needs to measure how Human Resources perform for the purpose of reward, assessment and knowledge. The tools & techniques innovated for measuring human productivity and performance with respect to the required capability, intellect and experience is under an umbrella named Performance Appraisal System. No single Performance Appraisal system can assure the reliability of its results. PAS can only be performed as impartial as possible by choosing the best fit method out of trending ones. Performance appraisal process is a continuous process to monitor the actual performance of the employee i,e the work done by the employees throughout the year. In this stage careful selection of the appropriate techniques of measurement such as personal observation, statistical reports, and written reports for measuring the performance is needed. This paper attempts to explain PAS followed in HSL. Keywords: Performance Appraisal System, Orientation, Accomplishment, Potential INTRODUCTION A performance appraisal (PA), also referred to as a performance review, performance evaluation, (career) development discussion, or employee appraisal is a method by which the job performance of an employee is documented and evaluated. Performance appraisals are a part of career development and consist of regular reviews of employee performance within organizations. A performance appraisal is a systematic and periodic process that assesses an individual employee’s job performance and productivity in relation to certain preestablished criteria and organizational objectives. Other aspects of individual employees are considered as well, such as organizational citizenship behavior, accomplishments, potential for future improvement, strengths and weaknesses, etc. Performance management systems are employed “to manage and align" all of an organization's resources in order to achieve highest possible performance. “How performance is managed in an organization determines to a large extent the success or failure of the organization. Therefore, improving PA for everyone should be among the highest priorities of contemporary organizations". Some applications of PA are compensation, performance improvement, promotions, termination, test validation, and more. While there are many potential benefits of PA, there are also some potential drawbacks. For example, PA can help Facilitate management-employee communication; however, PA may result in legal issues if not executed appropriately, as many employees tend to be unsatisfied with the PA process. PAs created in and determined as useful in the United States are not necessarily able to be transferable cross-culturally. There are a number of potential benefits of organizational performance management conducting formal performance appraisals Systems (PAS). There has been a general consensus in the belief that PAs lead to positive implications of organizations. Furthermore, PAs can benefit an organization’s effectiveness. One way is PAs can often lead to giving individual workers feedback about their job performance. From this may spawn several potential benefits such as the individual workers becoming more productive. OBJECTIVES OF THE STUDY 1. To examine and existing methods of performance appraisal in India 2. To study the impact of performance appraisal on employee satisfaction in HSL 3. To analyze the perceptions of respondents regarding impact of performance appraisal on employee satisfaction in HSL METHODOLOGY OF THE STUDY The topic of the research is straight forwardly related to the employees of Hindustan Shipyard Limited, Visakhapatnam. It is necessary that they should be made aware of using performance appraisal in an organization. In this research study, the data was collected from the 350 respondents HSL Visakhapatnam through questionnaire. 58 International Journal of Research in Management & Social Science Volume 6, Issue 1 (II): January - March, 2018 ISSN 2322 - 0899 DATA ANALYSIS Figure -1: The performance review system at HSL Interpretation: Many employees are just satisfied with the performance review systems at HSL. Studies have shown that appraiser bias is often a problem in government and public sector organizations. From the above table we can infer that the responses about the performance review system are above the satisfactory level and 5% of them have responded that they are not satisfied. Figure -2: Role of PAS for achievement of objectives Interpretation: Performance management at HSL aims at building a high performance culture for both the individuals and the teams so that they jointly take the responsibility of improving the business processes on a continuous basis and at the same time raise the competence bar by upgrading their own skills within a leadership framework. By interpreting the above data we can surely say that the majority of the respondents are above satisfactory level about the role of Performance appraisal system for achievement of objectives and negligible percentage of respondents are not satisfied. Figure -3: The accomplishment of goals through performance appraisal system Interpretation: According to 10% of respondents at HSL performance appraisal system lacks in clarity, openness and fairness. So accomplishment of goal through performance evaluation would be complex process. From the above table we can infer that the respondents regarding the accomplishment of goals through performance appraisal system at HSL is above the satisfaction level i.e. 50%, but 10% are below satisfaction level. 59 International Journal of Research in Management & Social Science Volume 6, Issue 1 (II): January - March, 2018 ISSN 2322 - 0899 Figure -4: The Management involves in PAS Interpretation: Managers involved in the performance appraisal system assume responsibility for all the evaluation steps like orientation, training and development, feedback and annual appraisal. The above table depicts respondents view point to the extent of management involvement in performance appraisal system at HSL. 45% of them expressed that they are good, 50% are satisfied and 5% are not satisfied. Figure -5: The interpersonal skills enhancement took place through PA Interpretation: One of the most important and basic skills that every employee should have is interpersonal skill. Employees at HSL have the ability to get on well with people around and work cooperatively to get the job done. From the above table we can surely say that the majority of the respondents agreed that the improvement level of the employee interpersonal skills are 63%, 25% are satisfied. Figure -6: The level of employee satisfaction with the existing PAS Interpretation: Performance appraisal is a yearly rite of passage in organizations. At HSL poor communication during formal feedback session and poor informal feedback are the reasons for employee dissatisfaction with the existing performance appraisal system. From the above table depicts respondents view point to the employee satisfaction survey with the existing performance appraisal system is 35% good, 40% are above satisfaction lever but 20% are below satisfaction level. Figure -7: The PAS helps the employee to get an opportunity to increase competencies 60 International Journal of Research in Management & Social Science Volume 6, Issue 1 (II): January - March, 2018 ISSN 2322 - 0899 Interpretation: At HSL, annual reviews are conducted instead of ongoing reviews.10% of respondent says performance appraisal system does not help the employee to get an opportunity to acquire competencies. In my point of view manager conducting an annual review can fail to address problematic issues that occurred 10 months prior to the review, which doesn’t help employee understand how to improve his performance in those areas. From the above analysis the 60% of performance appraisal system helps to some extent to employee to increase his/her acquired competencies. Figure -8: The method being used for assessing employee through PAS Interpretation: By analyzing the information given above, we can say that 40% of respondents agreed that the method used in HSL for assessing the employee is good and 7% are below the satisfaction level. Figure -9: The impact of ‘BOSSISM’ in enhancing the employee morale Interpretation: When the boss and employee have different perceptions of the employee’s responsibilities, performance review can end in frustrations for both sides. Boss has to ask himself three questions to enhance the employee morale: What would help this employee excel in the job? What can I do to encourage progress? What will the employee need to grow and improve? From the above table we can surely say that the respondents agreed that the impact of BOSSISM in enhancing employee morale is 50% are above satisfaction level, but 15% are below satisfaction level. Figure -10: The influence of PAS being followed as regards reducing the grievance Interpretation: 10% of the respondents says that performance appraisal have no impact on reducing the grievance, as some employees may be favored unduly over others by exhibiting negative biases. From the above table depicted respondents view point to the reduction of employee grievance is 38% good, 40% are above satisfaction level. 61 International Journal of Research in Management & Social Science Volume 6, Issue 1 (II): January - March, 2018 ISSN 2322 - 0899 Figure -11: The role (transparency) of appraiser officer in assessing the employee Interpretation: The role of reporting officer is to adjudge the performance of employees every year in the areas of their work, conduct, character and capabilities.From the above table we can surely say that majority of respondents agreed that reporting officer have a role in assessing employee i.e. 50% good, 25% are excellent and 20% are above satisfaction level. Figure -12: Open communication between appraise and appraiser Interpretation: If employees enter into the performance appraisal process willing to defend their own positions in factual and fair way, and to work with managers, the process can become more pleasant. If not it can become a war. In general employees are not satisfied with open communication due to their defensive nature. From the above tabulation we can say that 50% of them are satisfied and 13 of them are not satisfied with the open communication between appraise and appraiser. Figure -13: The appraisal program being conducted by controlling officer for PA Interpretation: A new performance culture is being created with greater emphasis on the importance of the motivation, development and optimal utilization of human resources, towards the achievement of a client focused and results oriented public service. Dissatisfaction might be caused if the process is poorly structured. At HSL top performers see no differentiation in performance ratings, opportunities and compensation from under performers. By analyzing the information given above 40% of respondents agreed that the appraisal program conducted by controlling officer is good, 35% are above satisfaction level and 15% are not satisfied. 62 International Journal of Research in Management & Social Science Volume 6, Issue 1 (II): January - March, 2018 ISSN 2322 - 0899 Figure -14: The periodic reviews conducted through PAS helps in evaluating performance Interpretation: The primary purpose of the performance evaluation is to provide an opportunity for open communication about performance expectation and feedback .But at HSL due to defensive nature of employees 15% of respondents say that performance appraisal does not help in evaluating employee performance. Where as 85% of respondents agreed that the reviews conducted helps in evaluating employee performance. Figure -15: The impact of PAS in helping for career & succession planning Interpretation: By using a performance appraisal system organizations can put their employees on the track to increased productivity and keep them there, with increased visibility of company goals. From the above table we can infer that 40% of respondents agreed that the appraisal system helps the employee for his/her career planning & succession planning. Figure -16: Is employee recognition based on a fair & encouraging PAS Interpretation: Employee recognition based on fair performance appraisal system can provide benefits like engagement, manage culture, manage talent, reduce turnover. At HSL 15% of the employees are not satisfied with employee recognition based on performance appraisal system appraiser bias is often a problem in government and public sector organizations. From the above table we can infer that the respondents regarding employee recognition is based on a fair & encouraging performance appraisal system at HSL are mostly satisfied. Figure -17: Planning for future performance, development & clarification of expectations 63 International Journal of Research in Management & Social Science Volume 6, Issue 1 (II): January - March, 2018 ISSN 2322 - 0899 Interpretation: Performance appraisal deals with setting standards and measuring the achieved performance standards. It deals with future performance, development and clarification of expectations towards employee.From the above table we can infer that the respondents regarding planning for future performance, development & clarification of expectation is above the satisfaction level. Figure -18: 360 degree feedback to implement for performance appraisal Interpretation: 80% of the respondents agreed that 360 degree appraisal method is the most comprehensive appraisal where the feedback about the employee performance comes from all sources that come in contact with the employee on his/her job. 20% said no because frank and honest opinion may not be received, this is a criticism of 360 degree appraisal method. Figure -19: Frequently the employees are being appraised through training Interpretation: By analyzing the above given information the majority of respondents agreed that the employee are annually being appraised through training. Figure -20: Factors effecting employee performance assessment in appraisal system Interpretation: From the above analysis majority of respondents agreed that all the above factors affect the employee performance assessment in appraisal system. Figure -21: The PAS helps in bridging the gap between the actual & desired performance 64 International Journal of Research in Management & Social Science Volume 6, Issue 1 (II): January - March, 2018 ISSN 2322 - 0899 Interpretation: The main objective of performance appraisal is to review the performance of the employees over a given period of time and to judge the gap between the actual and the desired performance. Majority of the employees responded that performance appraisal at HSL helps in judging the gap between the actual & desired performance of employee.48% of respondents are satisfied with performance appraisal system. Figure -22: The overall PAS Interpretation: Performance appraisal system focuses on job performance, career development, organizational citizenship behavior, accomplishments, potential for future improvement, strengths and weaknesses, etc. Majority of the employees responded that the overall performance appraisal system at HSL is above satisfaction level. FINDINGS Most of respondents strongly agreed that they are aware of the existing performance appraisal. 60% of the respondents strongly agreed that they are satisfied with the current appraisal system. 40% of the respondents agreed that they are not satisfied with the current appraisal system. Most of respondents strongly agreed that performance appraisal is conducted in an organization to judge the gap between the actual and the desired performance. Some of respondents agreed that performance appraisal is conducted in an organization does not judge the gap between the actual and the desired performance. Few respondents agreed that they have no idea about it. Maximum of respondents strongly agreed that performance appraisal helps to strengthen the relationship and communication between superior – subordinates and management – employees.. 100% of respondents strongly agreed performance appraisal provides clarity of the expectations and responsibilities of the functions to be performed by the employees. 100% of respondents strongly agreed that they are rewarded for good performance. Most of respondents strongly agreed that performance appraisal system existing in the organization is achieving its objectives. Few of respondents agreed that performance appraisal system existing in the organization is not achieving its objectives. Most of respondents strongly agreed that performance appraisal rated by their superior is reflecting their actual performance. Maximum of respondents strongly agreed that their superior is transparent while appraising their performance. Most of respondents strongly agreed that performance appraisal system effect a change in your work style, change in your job enrichment, job enlargement. 80% of respondents strongly agreed that as a part of 360 degree appraisal approach self, peer, superior appraisals should not be implemented together for performance appraisal. 20% of respondents agreed that as a part of 360 degreed appraisal approach self, peer, superior appraisal should be implemented together for performance appraisal. SUGGESTIONS HSL is one of the heavy engineering industries that consist of 3250 employees on permanent rolls and about 3000 employees on daily basis through contractors with 14 registered trade unions.co-ordinal industrial relations between the trade unions could ultimately result in achieving the demands of employees via an organization goal. 65 International Journal of Research in Management & Social Science Volume 6, Issue 1 (II): January - March, 2018 ISSN 2322 - 0899 There is no “Self appraisal” system in HSL. Employees must be given an opportunity to appraise themselves which result in pro-active behavior, better communication and maintenance of good relations. A good numbers of respondents are interested in implementation of 360 degree appraisal method. Hence it is suggested that the 360 degree appraisal method may be implemented in place of existing system. The intention of introduction of performance appraisal is to provide encouragement to the employees. The concept of job rotation, job enrichment, job enlargement are to be implemented basing on performance appraisal system. The rating of a job holder after going through training session should strictly be based on performance of the employee on job. Performance related rewards could serve as the motivating factor promoting productivity oriented approach. CONCLUSION As for my observations in the organization and interaction with various working employee and the management personnel, I submit hereunder my conclusion: Employee performance appraisal should be followed in HSL as it was prevailing earlier i.e. systematic assessment of how well the employee is performing their jobs in relation to established standards and the communication of that assessment to employee. In HSL, performance appraisal tend to take place on an ongoing base within the organization as superiors evaluate their subordinates work and as subordinates appraise each other and their supervisors on a daily basis. 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