Effect of performance appraisal on employee job satisfaction in Kenya revenue authority

Abstract

Effective performance system can lead an organization to take strides towards success but an ineffective performance appraisal system can seal the fate of the organization by creating chaos and confusion from the top management to bottom in the organization. Organizations have continued with the performance appraisal system without establishing whether it has an effect on the employee job satisfaction. The Kenya Revenue Authority conducts performance appraisal for its employees using the objective approach, which focuses on individual goals and objectives but does not assess the skills and abilities required of the employee to perform their duties. However, this is not an appropriate use of performance appraisal system, because the main outcome of this system is the determination of the appropriateness of the pay increase. The objective of this study was to establish the effect of performance appraisal system on employee job satisfaction at the Kenya Revenue Authority. The research was conducted in the form of a case study which sought to find the effect of performance appraisal on employee job satisfaction in Kenya Revenue Authority. The study focused on KRA staff based in Nairobi. Both primary and secondary data was used. The data was collected from one hundred and twenty two employees who were selected through stratified sampling approach. The data was analyzed using both descriptive and inferential specifically the mean score, standard deviation, Pearson correlation, and chi square tests were used. The findings were presented using charts and tables. The findings of the study show that performance appraisal helps KRA and individual employees meet set targets, however there is a lack of job satisfaction. The staff are not satisfied because the management does not use the performance appraisal to determine salary increments, rewards/penalties, promotions, fringe benefits, training needs and career growth opportunities. In conclusion the findings have indicated a positive and significant relationship between performance appraisals and job satisfaction.