Effect of Performance Appraisal on Employee Motivation: the Case of the National Housing Corporation

Abstract

Performance appraisal is a significant component of human resource management and very vital part that influences efficiency and effectiveness of both employee and the organization. Hence the necessity for organizations to continually measure and evaluate employee performance through PA. The general objective of this research was to examine the effects of PA on employee motivation at the NHC. The study was guided by the following specific objectives: to determine the extent to which employees at NHC perceive the PA system as fair; to establish whether the employees at NHC receive clear feedback on PA; to determine how feedback obtained from PA process is used to motivate employees; and to establish how the management can improve the appraisal process to motivate employees. Stratified random sampling was used to select a sample of 50 respondents from a target population of 221 employees. The analysis was done using Statistical Package for Social Sciences (SPSS). It was established that PA process is essential for employee motivation at NHC. Employees of NHC perceived PA as a process that was conducted fairly and in turn enhanced motivation. Performance feedback received by the employees of NHC significantly motivates employees and consequently boosted overall productivity of the organization. The study also established that the use of PA results was not sufficiently used and the organization needed to employ more strategies of maximizing the use of results from the PA. Finally, the study established that the PA would be more effective if conducted on a regular basis.