Effectiveness of Performance Appraisal System and its Effect on Employee Motivation

Employee performance has traditionally been accorded prime focus by human resource managers. As a result, a number of performance appraisal techniques have over time been devised to help establish employee’s performance. In the contemporary times, the use of performance appraisals has been extended beyond rating of the employee’s performance to aspects such as motivation. Accordingly, this study sought to investigate effectiveness of performance appraisal systems and its effect on employee motivation. The study’s main objectives pertained to establishing the moderating role of performance appraisal as a motivation tool as well as potential challenges.The study findings show the presence of significant positive outcomes when the organisation uses performance appraisal as a motivation tool. Further, the study finds that the use of more than one appraisal techniques helps yield greater satisfaction and consequently higher motivational levels. The specific aspects of performance appraisal systems (PAS) that help improve motivation include the linking of performance to rewards; using the PAS to help set objectives and benchmarks; as well as the use of PA to help identify employee’s strength and weaknesses.