EFFECTS OF PERFORMANCE APPRAISAL SYSTEM ON EMPLOYEE MOTIVATION: THE CASE OF DASHEN BANK S.C.

Abstract

The purpose of this study was to examine Effects of Performance Appraisal System on Employee Motivation in Dashen Bank S.C. The study used quantitative research approach with Explanatory and Descriptive research design methods to objectively answer the proposed research questions.162 sample size were selected using stratified random sampling techniques by classifying homogeneous employees from different braches position as strata. Structured questionnaires consisted of 26 statements with five point Likert scale were used to collect the data. Statistical Package for Social Science (SPSS) 25 software was used to analyzing the questionnaires. Descriptive statistics was also used to measure the central tendency through use of mean scores, percentage and presented in tables and graphs. Correlation analysis was used to establish the relationship between the study variables. The study revealed that there is statistically significant positive relationship between the Performance Appraisal parameters and employees’ motivation. The result of multiple regressions analysis revealed that 91.1% of the variation of employees’ motivation can be predicted by the independent variables i.e. performance standard, Communication, Measurement of performance, Compare performance against actual standard, providing feedback and Corrective measures are significantly affects employees’ motivation at 95% confidence level. Performance standard and Communications specifically exhibit the strongest correlations, suggesting their substantial impact on motivation. The reliability test conducted to check the dependability and consistency of the instrument showed, a Cronbach Alpha of 0.950 which is most relevant for the study. All the hypothesis of the study showed that the six independent variables have statistically moderate significant relationship with employee motivation based on their corresponding Pearson correlation and Beta Coefficient with sig.00 (2-tailed) and P-value(<0.05). Finally, the finding of the study showed that performance standard, Communication, Measurement of performance, Compare performance against actual standard, providing feedback and Corrective measures are significant drivers of employee motivation and the study recommended that the bank should compare the employee performance with the stated standards