UNIVERSITY OF ALGARVE IMPACT OF PERFORMANCE APPRAISAL ON EMPLOYEES ...

209 Pages·2015·4.32 MB·English

UNIVERSITY OF ALGARVE

IMPACT OF PERFORMANCE APPRAISAL ON EMPLOYEES’
MOTIVATION

Artsem Lashchonau

Dissertation
Master integrated in Human Resources Management

Research paper elaborated under the guidelines of:
PhD Professor Ileana Androniu Pardal Monteiro

2015
UNIVERSITY OF ALGARVE

IMPACT OF PERFORMANCE APPRAISAL ON EMPLOYEES’
MOTIVATION

Artsem Lashchonau

Dissertation
Master integrated in Human Resources Management

Research paper elaborated under the guidelines of:
PhD Professor Ileana Androniu Pardal Monteiro

2015
IMPACT OF PERFORMANCE APPRAISAL ON EMPLOYEES’
MOTIVATION

DECLARATION OF AUTHORSHIP WORK

I hereby declare that the dissertation submitted for Master Degree in Human Resources
Management at the University of Algarve is my own original work and has not been
submitted or published to any other institution of higher education establishment. I
further declare that all authors and sources are properly cited and indicated in the text by
means of a comprehensive list of references.

Signature____________________

© Copyright: Artsem Lashchonau
“A Universidade do Algarve tem o direito, perpétuo e sem limites geográficos, de
arquivar e publicitar este trabalho através de exemplares impressos reproduzidos em
papel ou de forma digital, ou por qualquer outro meio conhecido ou que venha a ser
inventado, de o divulgar através de repositórios científicos e de admitir a sua cópia e
distribuição com objetivos educacionais ou de investigação, não comerciais, desde que
seja dado crédito ao autor e editor.”
i
Acknowledgment and Dedication
I wish to thank, first and foremost, my supervisor, Professor Ileana Androniu
Pardal Monteiro for her constant guidance, generous help, and support during the course
of the dissertation research and the writing of the thesis.
Throughout my life one person has always been there during those difficult and
trying times. I would like to dedicate this master thesis and everything I do to my mother
Galina Laschenova.
“…it’s not just learning that’s important. It’s
learning what to do with what you learn and
learning why you learn things that matters.”
Norton Juster
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Abstract
This research is conducted to find out the causes of employees’ motivation in the
performance appraisal context. We hypothesized that higher level of perception towards
the established constituent elements of performance appraisal (perceived accuracy,
appraisal satisfaction, procedural, interactional, and distributive fairness) would lead to
higher level of employees’ motivation. We further examined if the presence of
interrelations in between the established elements of performance appraisal would
eventually indirectly affect employees’ motivation. The data was sourced with the aid of
an on-line questionnaire, while, for analyzing, we applied IBM SPSS 21.0 and AMOS
22.0 software. Results show that appraisal satisfaction and procedural fairness are
significantly positively related (directly and indirectly) to employees’ motivation, while
perceived accuracy impacts employees’ motivation just indirectly (through appraisal
satisfaction, procedural and interactional fairness). Interactional fairness has significant
direct negative impact on employees’ motivation and significant indirect positive impact
mediated by appraisal satisfaction. Finally, distributive fairness is negatively related to
employees’ motivation both directly and indirectly.
Keywords: employee motivation; performance appraisal; perceived accuracy; appraisal
satisfaction; perceived appraisal fairness.
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Resumo
Esta pesquisa tem como objetivo compreender as causas da motivação dos trabalhadores
no processo de avaliação de desempenho. Colocou-se a hipótese de que uma maior
perceção dos elementos constitutivos da avaliação de desempenho (exatidão percebida,
satisfação com a avaliação, justiça processual, interacional, e distributiva) levaria a um
maior nível de motivação dos empregados. Examinou-se a presença de inter-relações
entre os elementos estabelecidos da avaliação de desempenho procurando saber se esta
afetaria indiretamente a motivação dos funcionários. Os dados recolhidos por
questionário on-line, foram analisados recorrendo aos programas IBM SPSS 21.0 e
AMOS 22.0. Os resultados mostram que a satisfação com a avaliação e a equidade
processual estão significativamente positivamente relacionados (direta e indiretamente)
com a motivação dos colaboradores; a exatidão percebida está apenas indiretamente
relacionada com a motivação (através da satisfação com a avaliação, a equidade
processual e interacional); a justiça interpessoal tem um impacto negativo direto
significativo na motivação dos trabalhadores e um impacto positivo indireto mediado
pela satisfação com a avaliação. Finalmente, a justiça distributiva está negativamente,
direta e indiretamente relacionada com a motivação dos colaboradores.
Palavras-chave: motivação; avaliação de desempenho; exatidão percebida; satisfação
com a avaliação; justiça percebida.
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Table of Contents
List of Figures .................................................................................................................. viii
List of Tables ..................................................................................................................... ix
List of Appendices .............................................................................................................. x
List of Abbreviations ........................................................................................................ xii
Introduction ......................................................................................................................... 1
General Introduction ....................................................................................................... 1
Statement of the Problem ................................................................................................ 2
Purpose and Objectives of the Study............................................................................... 3
Significance of the Study ................................................................................................ 4
Definition of Key Terms ................................................................................................. 6
Structure of the Thesis..................................................................................................... 7
I. Literature Review ............................................................................................................ 8
1.1 Motivation Definition ................................................................................................ 8
1.2 Theories of Motivation .............................................................................................. 9
1.2.1 Content theories of motivation. ........................................................................ 10
1.2.1.1 Maslow’s hierarchy of needs theory. ......................................................... 10
1.2.1.2 Alderfer’s ERG theory. .............................................................................. 11
1.2.1.3 Herzberg’s dual-factor theory. ................................................................... 12
1.2.1.4 McCelland’s acquired needs theory. .......................................................... 13
1.2.2 Intrinsic and extrinsic motivation. .................................................................... 15
1.2.2.1 Intrinsic motivation and Cognitive Evaluation Theory. ............................ 15
1.2.2.2 Extrinsic motivation and Organismic Integration Theory. ........................ 16
1.2.3 Process theories. ............................................................................................... 18
1.2.3.1 Equity theory. ............................................................................................. 19
1.2.3.2 Expectancy theory. ..................................................................................... 22
1.2.3.3 Reinforcement theory................................................................................. 25
1.2.3.4 Goal-setting theory..................................................................................... 29
1.3 Considerations of Motivation Theories Implementation ........................................ 31
1.4 Performance Appraisal Defined .............................................................................. 33
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1.5 Historical Development of Performance Appraisal ................................................ 35
1.6 Performance Appraisal Purpose .............................................................................. 36
1.7 Performance Appraisal Process ............................................................................... 37
1.8 Performance Appraisal Methods ............................................................................. 39
1.8.1 Traditional methods. ......................................................................................... 40
1.8.2 Modern methods. .............................................................................................. 43
1.9 Performance Appraisal Criticism ............................................................................ 46
1.10 Performance Appraisal and Motivation ................................................................ 48
1.10.1 Perceived fairness. .......................................................................................... 52
1.10.2 Perceived accuracy. ........................................................................................ 54
1.10.3 Appraisal satisfaction. .................................................................................... 55
1.11 Summary ............................................................................................................... 57
II. Methodology ................................................................................................................ 60
2.1 Participants .............................................................................................................. 60
2.2. Materials ................................................................................................................. 63
2.2.1 Instrument. ........................................................................................................ 65
2.2.1.1 Work extrinsic and intrinsic motivation scale. .......................................... 65
2.2.1.2 Perceived fairness scale. ............................................................................ 66
2.2.1.3 Satisfaction with performance appraisal scale. .......................................... 68
2.2.1.4 Perceived accuracy scale. ........................................................................... 68
2.3 Design and Procedure.............................................................................................. 69
2.3.1 Research method and design appropriateness. ................................................. 72
2.3.2 Measurement of variables. ................................................................................ 74
2.4 Summary ................................................................................................................. 76
III. Results ......................................................................................................................... 78
3.1 Descriptive Statistics ............................................................................................... 78
3.2 Factor Analysis ........................................................................................................ 80
3.2.1 Confirmatory factor analysis. ........................................................................... 80
3.2.1.1 Model fit..................................................................................................... 81
3.2.1.2 Modification indices. ................................................................................. 84
3.2.1.3 Standardized residual covariances. ............................................................ 85
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3.2.1.4 Validity and reliability. .............................................................................. 86
3.2.1.5 Measurement model invariance. ................................................................ 89
3.2.1.6 Common method bias. ............................................................................... 90
3.2.1.7 Composites imputation. ............................................................................. 91
3.2.2 Exploratory factor analysis. .............................................................................. 91
3.2.2.1 Data appropriateness. ................................................................................. 91
3.2.2.2 Factor structure. ......................................................................................... 92
3.2.2.3 Face validity. .............................................................................................. 94
3.2.2.4 Convergent validity. ................................................................................... 95
3.2.2.5 Discriminant validity. ................................................................................ 95
3.2.2.6 Communalities. .......................................................................................... 96
3.2.2.7 Reliability. .................................................................................................. 96
3.3 Assumptions ............................................................................................................ 97
3.4 Correlation Analysis .............................................................................................. 101
3.5 Path Analysis ......................................................................................................... 104
3.5.1 Mediation. ....................................................................................................... 108
3.6 Summary ............................................................................................................... 112
IV. Discussion ................................................................................................................. 115
4.1 Discussion of the Results ...................................................................................... 116
4.2. Limitations and Recommendations for Future Research ..................................... 131
4.3 Implications for Research and Practice ................................................................. 134
4.4 Conclusion ............................................................................................................. 136
References ....................................................................................................................... 139
Appendix ......................................................................................................................... 154

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List of Figures
Figure 1.1. Maslow’s hierarchy of needs. ........................................................................ 11
Figure 1.2. Integrative Motivation Model: basis. ............................................................. 15
Figure 1.3. Organismic Integration Theory. .................................................................... 17
Figure 1.4. Intrinsic and extrinsic rewards in Integrative Motivation Model .................. 18
Figure 1.5. Equity theory equation. .................................................................................. 19
Figure 1.6. Intermediary position of equity theory. ......................................................... 20
Figure 1.7. Equity theory in Integrative Motivation Model. ............................................ 22
Figure 1.8. Motivational multiplier effect of the elements of Vroom’s theory. .............. 23
Figure 1.9. Vroom’s expectancy theory implication. ....................................................... 24
Figure 1.10. Expectancy theory in Integrative Motivation Model ................................... 25
Figure 1.11. Extrinsic rewards allocated to employees. .................................................. 26
Figure 1.12. Schedules of positive reinforcement............................................................ 27
Figure 1.13. Reinforcement theory in Integrative Motivation Model.............................. 29
Figure 1.14. Goal-setting theory in Integrative Motivation Model (completed model). . 31
Figure 1.15. Classification of performance appraisal methods. ....................................... 40
Figure 1.16. Main motivational factors of Integrative Motivation Model. ...................... 49
Figure 1.17. Theoretical model of performance appraisal impact on employees’
motivation. ........................................................................................................................ 52
Figure 3.1. Scree plot for eigenvalues. ............................................................................. 93
Figure 3.2. Path model of the impact of performance appraisal on employees’
motivation. ...................................................................................................................... 105
Figure 3.3. Revised path model of the impact of performance appraisal on employees’
motivation with standardized estimates. ......................................................................... 111
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