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Abstract: The aim of the study is to assess the perception of performance appraisal practice of ANRS office of the auditor general and its effect on employees’ work outcomes, in the form of work performance, affective commitment and turn over intention as well. To undertake these general objective six specific objectives with their underling hypothesis were designed and assessed by quantitative& qualitative research design. To set background information on the proposed hypothesis the theoretical, conceptual and empirical related literatures were reviewed and most of the literatures finding implies that perception of employees on performance appraisal system had a significant influence on their work out comes.
In conducting this study, the required data is obtained through structured questionnaires and interview. The structured questionnaire was adopted from four prior related studies. To check the reliability and validity of the adopted instruments the Cranach’s coefficient alpha test and the construct and content validity test was carried out. To determine the sample from the total population of 202 employees, first, the target population was stratified in to seven stratums (based on business processes) and then to select respondents from each stratum simple random sampling technique was applied; having this, the researcher uses formula based-sample size determination. Basically, a total of 134 questionnaires were distributed to the sampled employee, among these 119 were returned, of which, 9 responses are uncompleted. Thus, 110 returned questionnaires (i.e. representing 82% of response rate) are analyzed using statistical package for social science (SPSS version 16). In the analysis descriptive statistics, correlation analysis and simple regression analysis was performed.
The descriptive finding of the study shows that in ANRS office of auditor general employees had low level of perception towards the existing performance appraisal practice. Employees of ANRS offices of the auditor general have high level of work performance, low level of affective organizational commitment and moderate level of turn over intention.
INTRODUCTION
1.1. Back ground of the study
In this world of competition as organizations effort to remain competitive and sustainable, human resource (HR) professionals and strategic planners should collaborate strongly in designing strategies, which are more productive and useful. Based on many researches1, the most winning organizations in the 21st century will be those to focus on integrated HR processes and systems. So the role of human resource becomes more and more vital which includes personnel related areas such as job design resource planning, performance appraisal system, recruitment, selection, compensations and employee relations.Among these functions, one of the most critical ones that bring global success is performance appraisal.
An organization implements the performance appraisal system to allocate rewards for the employee, provide development advice as well as to obtain their perspectives, and justice perception about their jobs, department, managers, and organization. Prior studies reveal that employee perception of fairness of performance appraisal is a significant factor in employee acceptance and satisfaction of performance appraisal. A good perception will create a positive working environment in the organization, while a negative perception will affect the company performance. These perceptions depend on the manager or supervisor’s actions and behaviors toward the employee. If performance appraisals are perceived as unfair, therefore, the benefits can diminish rather than enhance employee’s positive attitudes and performance.
Specifically, the perceptions of procedural unfairness can adversely affect employee’s organizational commitment, job satisfaction, trust in management, performance as well as their work related stress, organization citizenship behavior, theft, and inclination to litigate against their employer. During the last ten years, the number of studies which examined the effect of performance appraisal system on employee had increased7. In another study by Brown 2010, revealed that there was a direct relationship between performance appraisal satisfaction and employee outcomes, which is mostly job satisfaction among employees8.
Moreover, a number of studies have provided support for the argument that performance appraisal has remained a problem which is vague and perhaps unsolvable in human resource management9. Besides the study conducted by Poon (2004), very little is known about the relationship between performance appraisal quality and employee out comes, especially in identifying the effect of performance appraisal quality towards the job satisfaction. However, in developing countries the research in this field is very limited. In our country, Ethiopia, even though there are few studies conducted on Awash International Bank (AIB) and private colleges, which deals about performance evaluation and satisfaction of employees, there is no empirical study conducted on public organizations about employees’ perception of PA and their expected outcomes supported by formal and published research.
This study is conducted with the aim to explore the relationship that exists between employee’s perception of PA and their work outcomes, in the form of work performance affective commitment and turnover intention, which is specifically conducted to address the problems faced by working individuals in Amhara National Regional State office of the auditor general(ANRS OAG) because one of the factors that affect employees’ work outcomes is their perception towards the performance appraisal practice of the organization. Therefore, ANRS office of the auditor general can realize the current state of the employee outcomes and create strategies to improve work performance and affective organizational commitment, thus reducing employees’ turnover.
In conducting this study, the required data is obtained through structured questionnaires and interview. The structured questionnaire was adopted from four prior related studies. To check the reliability and validity of the adopted instruments the Cranach’s coefficient alpha test and the construct and content validity test was carried out. To determine the sample from the total population of 202 employees, first, the target population was stratified in to seven stratums (based on business processes) and then to select respondents from each stratum simple random sampling technique was applied; having this, the researcher uses formula based-sample size determination. Basically, a total of 134 questionnaires were distributed to the sampled employee, among these 119 were returned, of which, 9 responses are uncompleted. Thus, 110 returned questionnaires (i.e. representing 82% of response rate) are analyzed using statistical package for social science (SPSS version 16). In the analysis descriptive statistics, correlation analysis and simple regression analysis was performed.
The descriptive finding of the study shows that in ANRS office of auditor general employees had low level of perception towards the existing performance appraisal practice. Employees of ANRS offices of the auditor general have high level of work performance, low level of affective organizational commitment and moderate level of turn over intention.
INTRODUCTION
1.1. Back ground of the study
In this world of competition as organizations effort to remain competitive and sustainable, human resource (HR) professionals and strategic planners should collaborate strongly in designing strategies, which are more productive and useful. Based on many researches1, the most winning organizations in the 21st century will be those to focus on integrated HR processes and systems. So the role of human resource becomes more and more vital which includes personnel related areas such as job design resource planning, performance appraisal system, recruitment, selection, compensations and employee relations.Among these functions, one of the most critical ones that bring global success is performance appraisal.
An organization implements the performance appraisal system to allocate rewards for the employee, provide development advice as well as to obtain their perspectives, and justice perception about their jobs, department, managers, and organization. Prior studies reveal that employee perception of fairness of performance appraisal is a significant factor in employee acceptance and satisfaction of performance appraisal. A good perception will create a positive working environment in the organization, while a negative perception will affect the company performance. These perceptions depend on the manager or supervisor’s actions and behaviors toward the employee. If performance appraisals are perceived as unfair, therefore, the benefits can diminish rather than enhance employee’s positive attitudes and performance.
Specifically, the perceptions of procedural unfairness can adversely affect employee’s organizational commitment, job satisfaction, trust in management, performance as well as their work related stress, organization citizenship behavior, theft, and inclination to litigate against their employer. During the last ten years, the number of studies which examined the effect of performance appraisal system on employee had increased7. In another study by Brown 2010, revealed that there was a direct relationship between performance appraisal satisfaction and employee outcomes, which is mostly job satisfaction among employees8.
Moreover, a number of studies have provided support for the argument that performance appraisal has remained a problem which is vague and perhaps unsolvable in human resource management9. Besides the study conducted by Poon (2004), very little is known about the relationship between performance appraisal quality and employee out comes, especially in identifying the effect of performance appraisal quality towards the job satisfaction. However, in developing countries the research in this field is very limited. In our country, Ethiopia, even though there are few studies conducted on Awash International Bank (AIB) and private colleges, which deals about performance evaluation and satisfaction of employees, there is no empirical study conducted on public organizations about employees’ perception of PA and their expected outcomes supported by formal and published research.
This study is conducted with the aim to explore the relationship that exists between employee’s perception of PA and their work outcomes, in the form of work performance affective commitment and turnover intention, which is specifically conducted to address the problems faced by working individuals in Amhara National Regional State office of the auditor general(ANRS OAG) because one of the factors that affect employees’ work outcomes is their perception towards the performance appraisal practice of the organization. Therefore, ANRS office of the auditor general can realize the current state of the employee outcomes and create strategies to improve work performance and affective organizational commitment, thus reducing employees’ turnover.
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