EMPLOYEE PERCEPTION ASPECTS ON PERFORMANCE APPRAISAL PROCESS

INTRODUCTION

Employees play a key role in implementation of organizational strategies. It is through people that goals are set and objectives are realized. The performance of an organization is thus dependent upon the sum total of performance of its members. The success of an organization will therefore depend on its ability to measure accurately the performance of its members and use it objectively to optimize them as a vital resource (Biswajeet 2009). In the present highly competitive environment, organizations have to ensure peak performance of their employees continuously in order to compete and survive at the market place effectively (Prasad 2005). Performance of an individual can be defined as the record of outcomes produced as specified job functions or activities during a specified time period (Bernardin 2007). The term performance refers to a set of outcomes produced during a certain period of employees’ job time and does not refer to the traits, personal characteristics, or competencies of the performer.

Employees do not learn unless they are given feedback on the results of their actions. For corrective actions to take place feedback must be provided regularly and it should register both successes and failures (Biswajeet 2009). Appraisal is the evaluation of worth, quality or merit, so performance appraisal of employees means the evaluation of their performance during a certain period of time. In the organizational context, performance appraisal is a systematic evaluation of personnel by supervisors or others familiar with their performance (L.M. Prasad, 2005). Performance appraisal is also described as merit rating in which an individual is rated better or worse in comparison to others. This is one of the oldest and most universal practices of management (Tripathi 2005). This is a process which reveals that how well employees perform their jobs when the performance is compared with the predetermined set of standards (L Mathis & John H. Jackson). Merit rating is used basically for promotion of employees. However, performance appraisal is a more comprehensive term for such activities, because its use extends beyond ascertaining eligibility for promotion. Such activities may be training and development, salary increase, transfer, discharge, etc. besides promotion (Prasad, 2005).

Performance appraisal can be traced back to the early 20th century to Taylor's pioneering Time and Motion studies which led to most of modern human resources management practices. As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War - not more than 60 years ago. Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things historical, it might well lay claim to being the world's second oldest profession. There is, says Dulewicz (1989), "... a basic human tendency to make judgments about those one is working with, as well as about oneself." Appraisal, it seems, is both inevitable and universal. In the absence of a carefully structured system of appraisal, people will tend to judge the work performance of others, including subordinates, naturally, informally and arbitrarily.

Performance appraisal systems began as simple methods of income justification. That is, appraisal was used to decide whether or not the salary or wage of an individual employee was justified. The process was firmly linked to material outcomes. If an employee's performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order. Little consideration, if any, was given to the developmental possibilities of appraisal. If was felt that a cut in pay, or a rise, should provide the only required impetus for an employee to either improve or continue to perform well. Sometimes this basic system succeeded in getting the results that were intended; but more often than not, it failed. For example, early motivational researchers were aware that different people with roughly equal work abilities could be paid the same amount of money and yet have quite different levels of motivation and performance. These observations were confirmed in empirical studies. Pay rates were important, yes; but they were not the only elements that had an impact on employee performance. It was found that other issues, such as morale and self-esteem, could also have a major influence. As a result, the traditional emphasis on reward outcomes was progressively rejected. In the 1950s in the United States, the potential usefulness of appraisal as tool for motivation and development was gradually recognized. The general model of performance appraisal, as it is known today, began from that time.

On the other hand, perception can be defined as the way in which something is regarded, understood, or interpreted. Perceptions vary from person to person. (Your Dictionary, 2017). Different people perceive different things about the same situation. But more than that, we assign different meanings to what we perceive. And the meanings might change for a certain person. One might change one's perspective or simply make things mean something else.

In today’s competitive world, it is understood that organizations can only compete by their rivals through innovations. The human resource system can become more effective by having a valid accurate appraisal systems used for rating performance. However, despite the attention and resources paid to the practice, it continues to generate extreme dissatisfaction among employees and employers and is often viewed as unfair, political and inaccurate. Many researchers postulate that it is a problematic measure. According to Landy and Farr (1983), performance appraisal is a type of a psychological measure which requires human judgments and raters which usually have no objective way to asses’ true performance. It is often not empirical. The human inclination to judge can create serious motivational, ethical and legal problems in the workplace. Without a structured appraisal system, there is little chance of ensuring that the judgments made will be lawful, fair, defensible and accurate.

Globalization has become the mainstream for many industries and with it comes the difficulties associated with social, political, environmental and cultural consequences. Worldwide, a range of published works on multinational corporations and performance appraisals have been done with an aim of determining human resource challenges associated with globalization as well as the types of performance appraisals and elements for improvement of appraisal systems. According to Steven H. Appelbaum (2011), there is still limited literature dealing with distant employee performance appraisal in global organizations. The study suggested for further empirical research on best practices of performance appraisal for distant employees in global organizations.

According to Lienert (2003), there are many challenges which hinder the delivery of public service reforms in Africa. Among these key challenges is performance appraisal systems, employee attitude, psychometric rater accuracy and monitoring. Other factors include those relating to human resources like manpower deficiencies and lack of psychological dispositions and shortage of financial and material resources necessary for effective delivery of services. The problems of accountability as well as ethical issues also continue to affect effective delivery of public service.

In an effort to mitigate some of the challenges associated with performance appraisal, the Government of Kenya (GOK) has in the past launched several reform programs to improve service delivery. Some of these reform efforts include the Civil Service Reform Program (CSRP) (GOK, 1993) whose aim was to enhance public service efficiency and productivity. The program was designed to contain costs, improve performance in the public sector, and consolidate and sustain the gains made by reform initiatives (Opiyo, 2006).

The other reform initiatives included the implementation of Results

Based Management that was guided by Economic Recovery Strategy for Wealth and Employment creation (GOK, 2003) whose strategies included developing benchmarks and evaluating the performance of public institutions. In order to enhance the performance of public officers, the government introduced a program where rewards and sanctions were to be

Used to encourage provision of quality services in the public sector. The Performance Appraisal System (PAS) was introduced by the GOK to refocus the mind of the public from a culture of inward looking to a culture of businesslike environment, focused on the customer and results in addition to improving service delivery (Obong'o, 2009). According to the new PAS, the evaluation of staff performance is supposed to run concurrently with the duration of ministerial performance contracts and the Government Financial year.

Statement of the Problem

In spite of the large body of published work on the subject of performance appraisal, there are still gaps in empirical investigations of workers perception of performance evaluation. (Asamu F. 2013). Performance appraisal is the most critical human resource practice and an indispensable part of every organization, however the practice continues to generate dissatisfaction among employees and is often viewed as unfair and ineffective hence no study is found that compares public and private organization on fairness perception of performance appraisal system. (Shrivastra and Purang, 2011)

According to Church, A. H. (1985), employers put in a lot of resources in performance appraisal but still fail to understand why employees do not respond to the whole process as expected. Conducting performance appraisal is often a frustrating HR task. Lawler, (2015) found that pay discussions need to take place after and separately from performance appraisal feedback and discussions about training and development. He noted that performance appraisal systems neither motivate employees nor effectively guide their performance. Instead, they create conflict between supervisors and subordinates and lead to dysfunctional behavior. In practice, the result of performance appraisal usually corresponds to the justification of the employees’ compensation plan rather than improvement training for the year that follows. But what if compensation cannot be justified fairly by the performance appraisal? Gabris and Ihrke (2001) suggest that the lack of fairness in performance appraisal may actually impede the effectiveness of HR practices. It is therefore an important task for the arena of research to reveal the effects of perceived fairness of performance appraisal on employees’ behavior.

Despite a large body of published work on performance appraisal, there are still gaps in empirical investigations of employees’ perception of performance evaluation. From published literature, it is evident that there is inability of organizations to install an effective performance appraisal strategy which hinders most organizations from achieving competitive advantage (Church, A. H.2015). Currently, most employers use a lot of resources in carrying out performance appraisal with an aim of making decisions on promotions, identifying training needs and above all, motivating employees. Despite this, they still do not understand employees’ perceptions with regard to this process and its objectives. Statistics show that an estimated 40% of workers never receive performance evaluations, and for the 60% of the workers who do, most are poorly done. In spite of the attention and resources paid to performance appraisal, it continues to generate extreme dissatisfaction among both employees and employers. Accurate and adequate feedback about performance through appraisal reviews has been regarded as critical to an employee’s ability and motivation to perform effectively in an organization (Church, A. H.2015).

In the short run, if employees perceive performance appraisal process as unfair and inaccurate, employees are likely to develop negative attitude and behavior towards their supervisors. This would compromise creativity, innovation, the spirit of team work and would result in result in low outputs and quality of work. It also causes psychological distress among employees which has a myriad of negative effects.

In the long run, organization is likely to incur unnecessary costs in carrying out performance appraisal without achieving its core objectives. Since employees are dissatisfied with the job, the organization is likely to experience a high employee turnover rate which would in turn lead to a negative image of the organization and increased recruitment and training costs for new employees. The organization’s image would also be negatively affected as it would lose on the ‘employer brand’. This would mean a negative image of the organization being portrayed in the global labor market and would discourage potential partners and expatriates from working with the organization.

Objectives of the study

General Objective

The general objective of this study is to investigate the effects of employee perception of performance appraisal on the work outcomes in one of the hospitals in Uasin Gishu County.

Specific Objectives

Based on the general objective of the study, the specific objectives are:

To examine the effects of unfair appraisal on performance appraisal process.

To examine the effects of inaccurate appraisal on performance appraisal process.

To analyze the effects of subjective appraisal on performance appraisal process.

LITERATURE REVIEW

INTRODUCTION

Organizations are run and steered by people. It is through people that goals are set and objectives realized. The performance of an organization is thus dependent upon the sum total of the performance of the employee. The success of an organization therefore depends on its ability to measure accurately performance of employees and use it objectively to optimize them as a vital resource (Biswajeet, 2009). He believed that for corrective actions to take place feedback must be provided regularly and it should register both success and failures. Performance appraisal is evaluating employees on how well they do their work (Dessler, 2000). According to Muo (2007) performance appraisal involves a systematic, organized and formalized process of evaluating individual employees job related strengths and weaknesses with an aim of providing feedback on which performance improvement can be achieved. As noted by Armstrong (2006): it is sometimes assumed that performance appraisal is the same thing as performance management but there are significant differences. He defined it as the formal assessment and rating of individuals by their managers at, usually annual review meeting. In contrast, performance management is a continuous and much wider more comprehensive and more natural process of management that clarifies the mutual expectations, emphasizes the support role of mangers that are expected to act as coaches rather than judges, and focuses on the future.

Justification of Performance appraisal

Gibson et al (2007) justified that performance appraisal forms the foundation for any human resource functions, effectively setting the standards to drive recruiting efforts and it is customary to use this criteria in hiring, promoting, evaluating and equitably compensating employees and forming the basis for employee training programs.

Cardy and Leonard (2011) also supported the same ideology. They brought out the fact that performance appraisal is critical for individual and organizational effectiveness and that without assessment and feedback we have no basis for focusing our efforts to improve.

Empirical Literature

Perceived fairness if performance appraisal.

According to Selvarajan & Peggy (2011), in a research titled ‘Can Performance Appraisal Motivate Employees to Improve Performance’, they established that there is a relationship between appraisal and perceived fairness. The findings showed that multisource appraisals were perceived as having more distributive fairness than single-source appraisal.

Sharon N. and Mark H. (2008), in a case study of Saint Lucian identified essential factors that influence employee fairness perception of performance appraisal. They identified distribution justice, which refers to the perceived fairness of the actual rating, procedural justice, which refers to the perceived fairness of the procedure used to determine the appraisal rating, and interaction justice which refers to the perceived fairness of the rater’s interpersonal treatment of the ratee during the appraisal. The results showed that distributive procedural and interactional justice factors influence employees’ perception of fairness of the appraisal. The employees also identified some additional justice factors that were yet to be formally recognized in the justice literature: distributive, that is, consistency in reward distribution and procedural fairness.

Shang-Pao Yeh (2013) researched on ‘The effects of fairness perception of performance appraisal on psychological contract and organizational citizenship behavior (OCB)’ the study aimed at testing the relationships among performance appraisal fairness, psychological contract, and organizational citizenship behaviors. He found out that the higher the performance assessment fairness the higher psychological contract and OCBs. Significant and positive relationships were found between psychological contract and OCB; psychological contract moderates the relationships between performance assessment fairness and OCB.

Debbie P. (2014) carried out a research on the relationships between performance measures and employee outcomes. They found out that behavioral outcomes are indifferent regardless of the nature and type of performance measures used. However, the relationships between performance measures and behavioral outcomes are indirect through procedural fairness and trust in supervisor. James N. MacGregor (2014)acknowledged the importance of performance appraisal fairness in high-performing organizations but one of the major challenges faced human resource management was establishing both an effective and a fair performance appraisal system; yet little was known about the key organizational and psychological factors that affect employees’ perception of performance appraisal fairness, especially in public organizations. In regards to employees’ perception of performance appraisal fairness, most studies have focused on the structural factors rather than the cognitive or psychological perspectives. Particularly, one of the key overlooked factors driving employees’ perceived fairness of performance appraisal is psychological contract fulfillment, which describes the expectations between an employee and the employer and what each gives and expects in return from the other. This study examined whether psychological contract fulfillments were associated with employees’ perceived fairness of performance appraisals. The study found out that psychological contract fulfillments had a positive impact on employees’ perceived fairness of performance appraisals.

Perceived accuracy of performance appraisal.

In their study “Employee Fairness Perceptions of Performance Appraisal”, Sharon & Harcourt (2008), found out that employees’ distributive justice perceptions of their appraisal are molded by the extent to which the appraisal rating accurately reflects the employees actual performance, lack of feedback produces strong negative perception of appraisal fairness. They recommended that organizational policy requires supervisors to establish performance standards for each employee at the start of the appraisal period. They also recommended for further studies on additional factors that may mediate or moderate the relationship between performance appraisal satisfaction and employee outcomes, another area of study should investigate actual perceived work environment characteristics moderate the relationship between performance appraisal variables and work performance

A research by Chin-Ju Tsai & Wen-Lai Wang (2013) on ‘Exploring the factors associated with employees perceived appraisal accuracy: a study of Chinese state owned enterprises’ found that there is a positive relation between perceived distributed justice and employee perceived appraisal accuracy. Distributive justice has been seen to be crucial to the effectiveness of a PA system procedural justice which has shown five relationships with employee perceived appraisal accuracy. Also purpose of PA was found to be positively associated with employee perceived appraisal accuracy. They recommended that in both the organizational and the appraisal system employees views need to be given more attention as they are main source of competitive advantage. Employees perceived appraisal accuracy can impact on their behavior that the factors affecting employee perception are understood and that measures to increase their positive viewpoints are taken. Further research should extend the study to the private sector to determine whether the findings reported are generalizable but given that continuous institutional reforms are taking place in SOEs and that employees are under the influence of the same national culture one might gain some similar findings from privately owned firms. Also future research to use random sampling to prevent the potential occurrence of sample selection bias.

Miller (2002), in a study entitled ‘Examining contrast effects in performance Appraisal using appropriate contracts and assessing accuracy’ found that ratings of target performances were significantly higher than ratings of anchor performances and those ratings in all of the experimental conditions. He noted that experts may give higher ratings than non-experts and recommended further research to look at other anchor and target performance combinations.

According to Jacobs (1980), the perception of fairness in performance appraisals (PA) is one of the most important factors and considered a criterion when reviewing PA effectiveness In this particular study, numerous variables were examined in three main categories: interpersonal, procedural, and outcome fairness. Keeping in mind that although those were three distinct categories, they were all inter-related. The results were slightly contradictory to what was expected yet they were good results. The interpersonal variable, manager effectiveness, along with the outcome variables, fair pay and rewards, and an employee’s last year’s performance rating are the strongest predictors of the perception of fairness. However, there was not a significant finding in age discrimination.

According to Fanrang Meng &Jiannan Wu (2012) procedural fairness plays more important role to motivate the public service employees in the merit pay implementation than the distributive fairness. The emphasis of procedural fairness may reflect the respect and dignity of the individual, which therefore promote teachers’ acceptance of leadership management styles and further stimulate greater job engagement among employees.

Perceived subjectivity of performance appraisal.

A study done by Park (2013) entitled ‘Service motivation task and non-task behavior: A performance Appraisal experiment with Korean MPA and MBA students’ showed that the rater had a significant direct effort on performance appraisal. The study recommended that rater was directly related to performance ratings. This research had important practical implications particularly to managers of public organization on any organizations. Beyond this general leniency however raters seemed to have a slightly stronger moderating impact on performance appraisal and therefore future research should be done on the moderating factors.

Marcel V.R & Frank H.M. (2012) conducted an explorative study to investigate the effect of subjectivity in performance evaluation practices on managerial motivation in public sector organizations. They found out that increased subjectivity can enhance motivation if supervisors are able to provide better informational feedback. However, subjectivity is likely to reduce motivation if it reduces perceived mission clarity or negatively affects relations between supervisors and subordinates. .They also found out that subjectivity in performance evaluation practices reduces perceived mission clarity, which in turn decreases motivation and that subjectivity negatively affects subordinate managers’ trust in their supervisor, which also reduces motivation. Their results indicated that the negative effects of subjectivity in performance evaluation practices outweigh its potential positive consequences, suggesting that New Public Management's focus on more objective performance measures can indeed be beneficial. In addition, we find that the effects of subjectivity are moderated by organizational characteristics.

Francis B. & Peter A., (2012) in their research entitled “Employees’ Perception of Performance Appraisal System” brought out the fact that performance appraisals are essential for effective evaluation and management of staff. Their study focused on employees’ perceptions of performance appraisal biases or errors, and examined the implications for developing and implementing an effective appraisal system. The study also sought to identify pragmatic ways to ameliorate any appraisal biases that may be present in the institution’s appraisal system. . The results of the study indicated that employees of the institution perceive that the performance appraisal system of the institution is affected by subjectivity, and is influenced by some major errors. The findings had serious managerial implications for training, motivation and provision of resources for effective performance appraisal.

Low K. &Muhamed A., (.2012) carried out a research to understand the Concept of Subjectivity leading to Employees’ Perception of Fairness in the appraisal process. They intended to trace the relationship between subjectivity and fairness and concluded that subjectivity tends to be a major unfair element causing the unfairness in the performance appraisal. They echoed that fair performance appraisal is essential to ensure that no victim will be harmed or purposely be harmed. However, subjectivity is unavoidable in performance appraisal and the perceptions of injustice will still exist, since those who do not get what they want will consider it to be unfair and vice-versa. Therefore, it still revolves around human cognitions, which is a subjective phenomenon.

Folger, Konovsky, & Cropanzano, (1992) argued that to ensure that a fair environment exists, raters must be prepared to lay the foundation of fairness as the paramount consideration in every decision and action to be taken in connection with the implementation of performance appraisal. Raters should act as a truth seeker and bearer of each evaluation conducted by using a valid and trusted measurement

LaFave, (2008) defined subjectivity as subjective judgments and claims which are assumed to be heavily influenced by private "mental" stuff or personal considerations such as perception, beliefs, affection, and experience. He added that subjectivity in performance appraisal refers to the systematic directional biases in what people regard as just and unjust depending on the commitments to certain groups and their norms and values.

McEvoy (1990) discovered that the performance appraisal is a serious problem public sector. The conduct of fair and objective performance appraisal in public sector organizations is still at an unsatisfactory level, although some researchers and practitioners have committed an amount of time and resources to it. From time to time, various methods had been introduced and changes had been made in implementing a more ideal performance appraisal, but the element of subjectivity is unable to be completely excluded from the process. (Dreher & Dougherty, 2001) built on his findings and came up with a conclusion that raters' subjective judgments are imperfect and this weakness is behind the controversy in performance appraisal. In other words, raters' errors are errors in judgment that occur in a systematic manner when raters observe and evaluate their ratees' performance. The characteristics of subjective judgment are heavily influenced by fairness upon their performance appraisal result.

In public sector organizations, fairness is about the rules and social norms controlling how outcomes should be distributed, the procedures used for making such distribution decisions, how employees are treated interpersonally, and how management communicating the procedural explanations for why something occurred. For this reason, raters are expected to make a fair, objective and defensible judgment to cope with the demand of the ratees. These kinds of judgments are always subjective independent of whether they are arrived at either by cognitive reasoning or intuition and feeling (Mikula, 2005).

Ratees' perception of fairness in performance appraisal Ratees' perception of fairness is based on intangible factors such as beliefs, values, guiding principles, motivations, and psychologies Agno, (2011). Hence, the perception of fairness in performance appraisal is subjective, and it varies between ratees. Performance appraisal, raters evaluate their ratees to determine their strengths and weaknesses, to compare their performance with the performance standard set by the organization performance appraisal whether it is accurate, consistent, and rational.

In conducting fair performance appraisal, appraisers need to develop an open and transparent environment and need to put forward the value of fairness to the utmost position in giving rating to their appraisees. Even though appraisers are unable to fulfill every single expectation, they must align themselves with the value of fairness, which minimizes the aspect of disappointments and conflicts.

The judgments made by raters are often influenced by their own cognitions such as category structures, beliefs, interpersonal affect and attribution that will be used as a yardstick in comparing the effectiveness of individual and groups of ratees over others. The informal appraisal is not a well-structured system of appraisal and raters may be greatly influenced by their discretion when judging the work performance of their ratees.

Any personnel decision or judgment that may affect the status of ratees regarding their retention, termination, promotion, demotion and training requirements can be done by comparing them either with the behavior of others or with the organizational standard.

The characteristics of subjective judgment are heavily influenced by fairness upon their performance appraisal result.

Further studies can be done on additional factors that may mediate or moderate the relationship between performance appraisal satisfaction and employee outcomes, another area of study should investigate actual perceived work environment characteristics moderate the relationship between performance appraisal variables and work performance.

However, unfortunately, developing and employing an effective performance appraisal system is a pragmatic task for both the managers as well as the employees because of the mental, motivational and behavioral aspects that influence the system (Horsoo, 2010).

THEORIES RELATED TO THE STUDY.

The commonly used theories that act as the base for performance appraisal system are equity and expectancy theories (Kellough and Nigro, 2002; Perry, 2003; Risher, 2002; Vroom, 1964 cited in Akuoko, 2012) and path- goal theory (Armstrong, 2006 cited in Akuoko, 2012).

The equity theory,

This theory was developed by John Stacey Adams in the year (1963). Equity theory proposes that individuals who perceive themselves as either under rewarded or over rewarded will experience distress, and that this distress leads to efforts to restore equity. This paper describes a new construct, equity sensitivity, and proposes that reactions to equity/inequity are a function of an individual's preferences for different outcome/input ratios. It also proposes that satisfaction is based on a person's perception of fairness. Applying this theory when conducting a company's performance appraisals involves balancing the assessment of an employee's contribution to his job with the compensation and other rewards associated with his success. In general, highly-paid and rewarded employees tend to be the most motivated to continue performing well on the job. This theory describes the relationship between the perception of fairness and worker motivation. Equity theory is based on developing a suitable approach towards supervision of the employees (Adams, 1965 cited in Akuoko, 2012).

Equity theory assumes that there are objective and impartial behaviors in all the employees and that they feel motivated when they learn that they are considered equally and justly for rewards and recognitions and compensations along with unbiased and transparent performance assessment. Just the opposite happens when employees are treated biasely. It also assumes that an employee's perception of the fairness of his work's input and outcome influences his motivation. Effective performance management systems enable a small-business manager to clarify job responsibilities and expectations, develop an employee's capabilities, and align an employee's behavior to the company's strategic goals and values.

Criticism has been directed towards both the assumptions and practical application of equity theory. Scholars have questioned the simplicity of the model, arguing that a number of demographic and psychological variables affect people's perceptions of fairness and interactions with others. Furthermore, much of the research supporting the basic propositions of equity theory has been conducted in laboratory settings, and thus has questionable applicability to real-world situations (Huseman, Hatfield & Miles, 1987). Critics have also argued that people might perceive equity/inequity not only in terms of the specific inputs and outcomes of a relationship, but also in terms of the overarching system that determines those inputs and outputs. Thus, in a business setting, one might feel that his or her compensation is equitable to other employees', but one might view the entire compensation system as unfair (Carrell and Dittrich, 1978).

This theory is relevant to this study since employees typically feel satisfied with the outcome of their efforts, including their pay, when the compensation matches what they feel they have put into the job. If employees perceive that others get more for doing less, they typically become less motivated to work hard. Managers create a productive work environment by communicating job requirements clearly and establishing fair and consistent performance objectives for all employees.

Goal- setting theory

Goal setting theory was proposed by Edwin Locke in the year 1968. This theory proposes that the individual goals established by an employee play an important role in motivating him for superior performance. The theory proposes that human beings are more motivated to act when there is a reward at the end of the performance of a task or behavior. This theory assumes that if goals are not achieved, employees either improve their performance or modify the goals and make them more realistic. In case the performance improves, it will result in achievement of the performance management system aims (Salaman. 2005).

Existing criticisms of goal setting theory is that when two separate goals are set at the same time, exerting too much focus on one may make it difficult to achieve the other (Latham, 2004). For example, if someone sets quantity and quality goals simultaneously; trying too hard for quantity may cause quality to be neglected (Latham, 2004). However, this can be fixed by prioritizing separate goals or finding a balance between goals directly dealing with each other. It is more important to have well thought out goals than to have too many and not be able to follow through on any one goal (Gergen & Vanourek, 2009).Another limitation deals with goals and risks. During a computer game study, Knight, Durham, and Locke (2001) found that participants who were given difficult performance goals increased risk strategies to improve performance. Additionally, a limitation that can occur is commonly referred to as tunnel vision. This is when employees focus so intently on their goals that they will ignore other aspects of their job. When attention is focused too narrowly on a goal, intentional bias can occur. In the study, subjects were asked to measure the number of passes in a basketball game. Concentrating too much on a specific task or goal can cause you to miss a major aspect of your environment (Simons & Chabris, 1999). If people are always having goals set for them it is difficult for them to motivate themselves. Improper management techniques, or the presence of inequity in the workplace (e.g., underpayment), can subvert the effectiveness of the goal setting theory. Goal Setting Theory also does not account for actions motivated by the subconscious; as the goal-setting theory focuses on cognition with no regard to the subconscious. On occasion, an individual can do something without being aware of what is motivating them. More tangible and challenging goals would be much more difficult to pursue subconsciously, largely due to the amount of planning and forethought required to accomplish them. But subtler and more general goals could potentially be striven for and achieved subconsciously. Finally, goal-setting theory focuses on how goals are related to job performance, but does not take into account the "why" now how this is related to increased job performance. This lack of defined translation between goals and job performance calls for future research.

The Goal Setting theory is relevant to this study because employees keep following their goals. Goal setting help in motivation and enhancing performance mostly, when goals are challenging but accepted by employees and feedback is communicated (Akuoko, 2012).

Performance Management Theory

This theory was proposed by Ankita Agarwal and Project Guru in 2011.

It proposes that Performance management is a concept in the field of human resource management which involves continuous identification, measurement and development of the performance of individuals and aligning performance with the strategic goals of the organization. This concept was also supported by Aguinis, (2009).

Performance management theory assumes that there is no single universally accepted model of performance management. Various experts have explained the concept in their own ways. Mabey (1999) has prescribed the model of performance management system in the form of ‘performance management cycle’. This cycle has 5 elements which suggest how performance management system should be implemented in an organization.

The element of performance management system cycle includes:

Setting of objectives.

Measuring the performance.

Feedback of performance results.

Reward system based on performance outcomes

And amendments to objectives and activities (Mabey et al, 1999).

Criticism of the theory arises, in part, because three different modes of theorizing have been employed with different strategic positions and how these practices relate to firm performance approach that is emerging in the organization theory and strategic management literatures.

Performance management theory is relevant to this study since it involves a continuous process of identifying, measuring and developing the performance of individuals and aligning performance with the strategic goals of the organization” (Aguinis, 2009). It therefore tries it link employees’ performance to the organizations ability to attain its goals.

Expectancy theory

This theory was proposed by Victor Vroom in 1964. Vroom’s expectancy theory proposes that employees are motivated to deliver better when they have the confidence that their good performance shall be rewarded in form of bonus, salary hike or promotion which is competent of fulfilling personal objectives. People typically value fair treatment. Successful entrepreneurs recognize this and structure their small-business workplace to reward people according to their contributions. They also recognized that people have needs. Other theories help explain how to understand these needs, for example, psychologist Abraham Maslow’s need-hierarchy theory, developed in the 1940s, states five levels of personal needs: physiological, safety, belonging, esteem and self-actualization.

The expectancy theory is based on the hypothesis that individuals adjust their behavior in the organization on the basis of anticipated satisfaction of valued goals set by them. The individuals modify their behavior in such a way which is most likely to lead them to attain these goals.

Critics of the expectancy model were Graen (1969) Lawler (1971), Lawler and Porter (1967), and Porter and Lawler (1968). Their criticisms of the theory were based upon the expectancy model being too simplistic in nature; these critics started making adjustments to Vroom’s model. Edward Lawler claims that the simplicity of expectancy theory is deceptive because it assumes that if an employer makes a reward, such as a financial bonus or promotion, enticing enough, employees will increase their productivity to obtain the reward. However, this only works if the employees believe the reward is beneficial to their immediate needs. Lawler’s new proposal for expectancy theory is not against Vroom’s theory. Lawler argues that since there have been a variety of developments of expectancy theory since its creation in 1964; the expectancy model needs to be updated. Lawler’s new model is based on four claims. First, whenever there are a number of outcomes, individuals will usually have a preference among those outcomes. Two, there is a belief on the part of that individual that their action(s) will achieve the outcome they desire. Three, any desired outcome was generated by the individual’s behavior. Finally, the actions generated by the individual were generated by the preferred outcome and expectation of the individual. Instead of just looking at expectancy and instrumentality, W.F. Maloney and J.M. McFillen found that expectancy theory could explain the motivation of those individuals who were employed by the construction industry. For instance, they used worker expectancy and worker instrumentality. Worker expectancy is when supervisors create an equal match between the worker and their job. Worker instrumentality is when an employee knows that any increase in their performance leads to achieving their goal.

This theory is relevant since it underlies the concept of performance management as it is believed that performance is influenced by the expectations concerning future events (Salaman, 2005). Behaviorist B. F. Skinner also worked in the 1960s to understand how reinforcement works. He concluded that negative reinforcement leads to negative outcomes. Effective small-business managers can apply these observations to managing performance by motivating their employees through positive reinforcement and appraising them fairly on at least an annual basis.

SUMMARY:

Equity theory developed by John Stacey Adams in the year clearly brings out the fact that satisfaction is based on a person's perception of fairness. Applying this theory when conducting a company's performance appraisals involves balancing the assessment of an employee's contribution to his job with the compensation and other rewards associated with his success. This clearly shows its consistency with the relationship between Performance appraisal and perceived fairness. Employees feel motivated when they learn that they are considered equally and justly for rewards and recognitions and compensations along with unbiased and transparent performance assessment. However, Adams (1965) proposed in the equity theory that conditions of unfairness will create tension within a person, which he or she will attempt to resolve.

There is no single universally accepted model of performance management. This is an inconsistency of the performance management theory. Various experts have explained the concept in their own ways. This backs up one of the findings which states that performance appraisal still revolves around human cognitions, which is a subjective phenomenon.

Expectancy theory underlies the concept of performance management as it is believed that performance is influenced by the expectations concerning future events. Expectancy theory implies that employees are motivated to deliver better when they have the confidence that their good performance shall be rewarded in form of bonus, salary hike or promotion which is competent of fulfilling personal objectives. People typically value fair treatment. Inconsistency noted on expectancy theory is its simplicity and deceptive nature since it assumes that if an employer makes a reward, such as a financial bonus or promotion, enticing enough, employees will increase their productivity to obtain the reward. However, this only works if the employees believe the reward is beneficial to their immediate needs.

Among the most consistent findings in goal-setting research is the relationship between goal attainment and performance satisfaction. Locke and Latham (1990) Brett and VandeWalle (1999) found that goal orientation does not have a direct relationship with performance. Rather it is mediated by the type of goal a person selects. Consistent with Dweck’s theory, those with a learning goal orientation self-set a challenging or a learning goal, and those with a performance goal orientation self-set an easy goal—one they perceived as readily attainable. Consistent with the earlier discussion of strong versus weak situations, assigning a specific high goal masks or mitigates the effect of goal orientation on behavior. On a task that was complex in that it required the acquisition of knowledge in order to master it, people with a learning goal orientation performed better than those with a performance goal orientation only in a “weak” situation, that is, in the experimental condition where people were instructed to do their best. But those who were assigned a specific, high-learning goal performed than those with a goal to do your best on the task, regardless of their goal orientation (Seijts et al., 2004). In short, goal-setting as a state (when goals are assigned) appears to trump goal orientation as a trait on complex tasks.

CONCLUSION:

Perceptions of performance appraisal subjectivity are likely to have a negative influence on the entire appraisal process thus the organization may not achieve its overall objective of carrying out the appraisal. Subjectivity is likely to reduce motivation if it reduces perceived mission clarity or negatively affects relations between supervisors and subordinates. Employees of an organization perceive that the performance appraisal system of the institution is affected by subjectivity, and is influenced by some major errors, which have serious managerial implications for training, motivation and provision of resources for effective performance appraisal.

The characteristics of subjective judgment are heavily influenced by fairness upon their performance appraisal result. Employees are likely to perceive the appraisal process as fair if they feel it is just, non-discriminatory and objective in its approach which would mean success on the overall appraisal process.

When the appraisal process is perceived to be inaccurate by the appraised, they are likely to develop a negative attitude towards the entire process and may not embrace feedback from the appraisers. Employees perceived appraisal accuracy can impact on their behavior positively or negatively therefore the management should strive to ensure that the appraisal process is performed with due diligence and complies with all the preset standards of operations.

Further research should extend the study to the private sector to determine whether the findings reported are generalizable but given that continuous institutional reforms are taking place, all employees are under the influence of the same national culture one might gain some similar findings from privately owned firms. Also future research should use random sampling to prevent the potential occurrence of sample selection bias.

However, subjectivity is unavoidable in performance appraisal and the perceptions of injustice will still exist, since those who do not get what they want will consider it to be unfair and vice-versa. Therefore, it still revolves around human cognitions, which is a subjective phenomenon. Performance appraisal is an essential tool for organizational development and that performance appraisal serves as a tool for employees’ performance.

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