A Project Report

Submitted for the partial fulfillment of the requirement of the

Advance Diploma in Business Management Programme.

Impact of Employee Perception on

Implementation of Performance Appraisal System

Student Name : D.D.D. Dissanayake

Registration No : ADBM-SUN-163P-011

Programme : Advanced Diploma in Business Management

(Part Time)

NATIONAL INSTITUTE OF BUSINESS MANAGEMENT

Colombo - Sri Lanka

1
Table of Contents
Chapter 1: Introduction ........................................................................................................... 4
1.1 Introduction to the organization ............................................................................... 4
1.1.1 History ................................................................................................................ 4
1.1.2 Media Factory (Pvt) Ltd ...................................................................................... 4
1.1.3 Business Specializations ..................................................................................... 5
1.1.4 Competitors ....................................................................................................... 5
1.1.5 Existing PA System ............................................................................................. 6
1.2 Introduction to the project ........................................................................................ 6
1.3 Research Problem ...................................................................................................... 8
1.4 Research Objectives ................................................................................................... 9
1.5 Significance of the Study .......................................................................................... 10
1.6 Scope of the Project ................................................................................................. 11
1.7 Methodology............................................................................................................ 11
1.8 Limitation ................................................................................................................. 12
1.9 Chapter Framework ................................................................................................. 13
Chapter 2: Theoretical Background ....................................................................................... 14
2.1 Introduction ............................................................................................................. 14
2.2 Performance Appraisal ............................................................................................ 14
2.3 The Performance Appraisal Process ........................................................................ 15
2.4 Establish Performance Standards: ........................................................................... 16
2.5 The common methods of performance appraisal today ......................................... 20
2.6 Benefits of Performance Appraisal .......................................................................... 21
Chapter 3: Data Analysis and Interpretation ......................................................................... 23
3.1 Data Analysis ............................................................................................................ 23
3.1.1 Age ................................................................................................................... 23
3.1.2 Gender ............................................................................................................. 23
3.1.3 Designation ...................................................................................................... 24
3.1.4 No of years in the company ............................................................................. 24
3.1.5 Department ...................................................................................................... 24
3.1.6 Have you ever been monitored by PA system previously? ............................. 25
3.1.7 Performance appraisal system provides essential feedback to employees
about their performance ................................................................................................. 25
3.1.8 Performance appraisal system is important for Media Factory ...................... 26

2
 3.1.9 Performance appraisal system provides essential feedback to employees
about their performance. ................................................................................................ 26
3.1.10 Performance appraisal system should be use to reward employees .............. 27
3.1.11 Existing PA system is the best solution for evaluate employee performance . 27
3.1.12 I receive specific and accurate feedback from my manager on my past
performance .................................................................................................................... 28
3.1.13 I feel more motivated after performance appraisal ........................................ 28
3.1.14 Performance Review improves job performance ............................................ 29
3.1.15 Performance appraisal makes me better understand what I should be doing29
3.1.16 I clearly understand the purpose of performance appraisal. .......................... 30
3.1.17 Employees (other than managerial or HR practitioners) must be involved
when designing the performance appraisal policy. ......................................................... 30
3.1.18 Performance appraisals are fairly and honestly done in this organization ..... 31
3.1.19 The current employee performance evaluation should be revised to meet the
needs of Media Factory ................................................................................................... 31
3.1.20 Promotion / Bonus / rewards should be purely based on Performance
Appraisal 32
3.2 Interpretation .......................................................................................................... 32
Chapter 4: Discussion............................................................................................................. 33
4.1 Research ................................................................................................................... 35
Chapter 5: Recommendation & Conclusion .......................................................................... 36
5.1 Recommendation..................................................................................................... 36
5.2 Conclusion ................................................................................................................ 38

List of Tables & Figures

Table 1 - Revenue Vs Expenditure ............................................................................................ 8

Figure 1- Revenue Vs Expenditure Graph ................................................................................. 9

3
 Chapter 1: Introduction

1.1 Introduction to the organization

Media Factory group of companies is one of the largest full-fledged advertising agency

in Sri Lanka. They offer the intelligence to find or create valuable audiences, the power

to engage them most effectively and efficiently, and the ability to create desired

marketing outcomes for its clients.

1.1.1 History

Decade ago, as a small-scale advertising agency, Media Factory starts its journey by

two creative individuals. In the beginning, it all started in a small room with two

computers in Sellamuttu Avenue, Colombo. From then, they “unbundled” the media

component from the advertising process in an extraordinary way, determined to succeed

against all odds, with the use of specialized skills, Media factory gets the best media

deals to make every cent of the its client’s budget work for them (Daily Mirror, 2015).

1.1.2 Media Factory (Pvt) Ltd

Now, Media Factory (Pvt) Ltd. is one of the premier media advertising agency in Sri

Lanka, located in Kyncey Road, Colombo 7, with over 100+ employees. Media Factory

specialized in media consultancy, media Planning, creative designing, advertising, PR

& BTL solutions and becomes the ultimate game changer in Sri Lankan advertising

industry.

Media Factory caters to corporate & multinational clients in five separate business units

under one large umbrella. Media Factory Pvt. Ltd., Madison Media Sri Lanka, Magenta

Pvt. Ltd, Mandarin BTL & Momentus Pvt. Ltd are the five branches of Media factory

group of companies.

4
1.1.3 Business Specializations

Media Consultancy: Advice clients regarding media strategies and planning budget

to maximus their marketing objectives.

Media Planning: Sourcing and selecting optimal media platforms for a client's brand or

product to use or to determine the best combination of media to achieve the marketing

campaign objectives.

BTL solutions: Below-the-line advertising service provides strategies in which a

product is promoted in mediums other than radio, television, billboards, print and film.

Types of below-the-line advertising commonly include direct mail campaigns, trade

shows and catalogs, targeted search engine marketing etc. This advertising type tends

to be less expensive and more focused.

1.1.4 Competitors

Media factory compete with local and global top-rated companies in adverting industry

such as;

 GroupM World wide

 Phoenix

 Triad

 Ogilvy Media

5
1.1.5 Existing PA System

According to the analysis conduct by the HR Department, its noticed that current PA

system does not accurate to get expected results due to below findings;

 Lack of clarity

 Appraisal errors

 Sampling error

 Primary and regency errors

Main reason for the above is existing PA System is not specifically made for Media

Factory and its applies general organizational PA evaluation. Media Factory is an

advertising agency and company has its own organizational coulter such a s flexible

working hours, work from home policies etc. So, there is a need of proper customized

PA system that suits for Media Factory.

1.2 Introduction to the project

Every business or organization has its own business goals. To achieve them, they needs

to sell products or services to the market to keep afloat and beat the competition. As an

any other business organization, an advertising agency is a business entity, and must

aspire to maximize profits as it awaits new business. In an industry, such as adverting,

increasing sales and achieving businesses goal is depends on how satisfied is the

customer on their service.

Customer satisfaction will mainly base on productivity of their service and

professionalism that reflected how its employees, from the lowest to the top

management handles clients and the overall job. Also, it will be a crucial for the

6
agency’s continuity which may suffer in the event customers give negative assessments

of its work to other potential clients.

Employee performance plays an integral role in achieving business goals while

customer satisfaction and employee performance goes hand in hand. When the

employees provide excellent professional service, company will satisfy its clients

expectations and reputation is almost on employees' performance.

Therefore, imperative to monitor the performance of people at the work place to ensure

achievement of organizational goals and Performance appraisals become essential tool

for the effective management and evaluation of staff in any organization. Performance

Appraisal systems are implemented in most of the successful large-scale organizations

to develop individuals, improve organizational performance, and feed outcomes into

business planning.

Recently Media Factory (Pvt) Ltd financial reports shows company internal expenses

are increasing while revenue decreases compared to previous years and after statistical

analysis reveals that this is due to low performance of employees. As a solution

management decide to implement Performance Appraisal System to the company.

In general Advertising industry has flexible working environment where monitoring

performance of employee can be difficult task as well as wrong PA system can give

negative effect to the employees. The purpose of this research is identifying how

Performance Appraisal System will impact on employees from the perception of

employees’ point of view.

7
1.3 Research Problem

According to Media Factory annual financial report company revenue was decreased

while other expenses increased compared to last three years. In more insight, statistical

analysis, it reveals that this a impact of low employee performance as mentioned below;

 Not completing the day to day jobs on time.

 Some employees / departments habitually work late hours & this increase

overtime pays, Electricity bills, Transport and food expense.

 Late attendance when the work long hours’ previous day

 Poor client servicing

Below chart shows revenues vs cost statistics of two Media planning departments/Units

in Media Factory (Pvt)Ltd.

Table 1 - Revenue Vs Expenditure

Primus Primus Praxis Praxis

Period Depart.Revenue Depart.Expenses Depart.Revenue Depart.Expenses
(In Mill.) (In Mill.) (In Mill.) (In Mill.)
Year 2014 135 14 120 27
Year 2015 150 16 137 38
Year 2016 130 15 100 40

8
Figure 1- Revenue Vs Expenditure Graph

According to literature reviews and researches, to overcome the above problem and

increase employee performance the best solution is to implement performance appraisal

system (PA) to the organization. Performance appraisal help to measure and enhance

employee work performance while achieving numerous benefits. Also, research

findings indicate that in some situations performance appraisal system can give

negative effects on employees while influencing the overall job dissatisfaction of

employees and decrease the expected work outcomes as well.

1.4 Research Objectives

The purpose of this research is to identify how performance appraisals systems will

impact on employees who are involved the appraisal and whether the performance

appraisal gives either a positive or negative effect on the employees and the

organization. The overall aim of this study is to look at the performance appraisal

9
system from employees’ point of view and to understand whether if they believe it is

an effective tool.

I. To examine why an appraisal system is important.

II. To find the expectation of Management and Employee.

III. Does Performance Appraisal motivate employee to work efficiently and

improve performance?

1.5 Significance of the Study

This study will be beneficial to Media factory (Pvt) Ltd and other organizations in the

advertising industry to identify how will performance appraisal system will effect on

their employees and its business objectives. Also, this research would contribute to

knowledge and literature focused on how performance appraisal can be more effective,

which would enable management to understand and develop broader human resource

management process. Some of the key beneficiaries and benefits of performance

appraisal system are listed below;

 Beneficiaries

 Company/ Organization - Improve organizational performance,

employee retention and loyalty, improve productivity and cost advantages.

 HR Department - Performance appraisal system is develop

& implement by human resources department. Human resources will

receive regular feedback and evaluate results to build a better organization

culture and drive towards its goals.

10
  Management/Managers - Saves time, reduces conflicts, increase

efficiency/ performance, better understanding of subordinate’s capabilities

and weaknesses.

 Employees - Motivation

Improve communication

Rewards, promotions, bonus etc.

Understand responsibilities and personal

weaknesses

1.6 Scope of the Project

The research is conducted at Media Factory (Pvt) Ltd. considering its revenue, client

satisfaction, employee performance and other expenses. This study highlighted on

employees’ perception of existing performance appraisal methods.

1.7 Methodology

The methodology of the study contains the research design, population of the study,

sampling procedures and data collection and analysis procedures. Data for the study

comprises two main sources – primary and secondary data sources. The primary data

was obtained from Media Factory (Pvt) Ltd.

11
Target population : 100 employees

Sample size : 30 employees

Primary Data : The questionnaire is the main source of collecting data

Secondary Data : Secondary data was collected from available literature

on relevant study, internet, and from the organization financial reports.

1.8 Limitation

 This research study and its findings are limited to related industry and Media

Factory (Pvt) Ltd.

 This research finding may not applicable for unrelated organizations other than

advertising & Media due to industrial culture, flexible working hours and other

related factors.

 There may be a possibility that some of the competitive organizations data may

not available due to confidentiality.

12
1.9 Chapter Framework

 Chapter 1: Introduction

This chapter describe the organization and the objective of this research

 Chapter 2: Theoretical Background

This Contains theoretical and empirical finding of previous studies related to

the topic are reviewed.

 Chapter 3: Data Analysis and interpretation

Includes the research design & Methodology, Source of data, sampling design,

method of data analysis tools employed are included under this section.

 Chapter 4: Discussion

Data analysis and discussion of research findings

 Chapter 5: Recommendations and Conclusion

Summary, conclusion & recommendation

13
 Chapter 2: Theoretical Background

2.1 Introduction

This chapter is focused on investigating the research area of the project & how the

performance appraisal originated, its evolution over time and where it is today as a

human resource management tool. Also discuss the functionality and elements of

successful performance appraisal systems and how it will be help to enhance

performance of organization workflow.

2.2 Performance Appraisal

Performance appraisal (PA) is a formal method of review and evaluation of individual

employee or team task performance and performance appraisal is an important

component in performance management.

The precise origin of performance appraisals is not known but according to reports, as

many other management tools, performance appraisals was firstly implemented for

military. The US army adopted the practice during the First World War, and gradually

the practice spread to industrial organizations (Aalto University, 2014).

Performance appraisals in industry begun in the beginning of industrial era by

measuring organizational efficiency. In 1911 Frederick Winslow Taylor called as the

“father of Scientific Management: published a book named The Principles of Scientific

Management that expose Taylor's view of principles of scientific management

(Management Study HQ, 2016). His method consist of 4 principles as follows:

14
 Replace working by "rule of thumb," or simple habit and common sense, and instead use
the scientific method to study work and determine the most efficient way to perform
specific tasks.

Rather than simply assign workers to just any job, match workers to their jobs based on
capability and motivation, and train them to work at maximum efficiency.

Monitor worker performance, and provide instructions and supervision to ensure that
they're using the most efficient ways of working.

Allocate the work between managers and workers so that the managers spend their time
planning and training, allowing the workers to perform their tasks efficiently.

(Taylor, 1911)

In the book “Handbook of Research on Human Factors in Contemporary Workforce

Development” ‘performance appraisal is an opportunity for individual employees and

those concerned with their performance, typically line managers, to engage in a

dialogue about their performance and development, as well as the support required from

the manager’ (Christiansen & Chandan, 2017).

2.3 The Performance Appraisal Process

There are several steps should be followed to perform performance appraisal. One of

the standard appraisal processes is shown below:

15
  Establish Performance Standards

Process starts with by determine & evaluating the expected outputs, skills of the

employee by analysis and job descriptions (Khanka, 2007).

 Communicate Performance Expectations to Employees

After performance standards are established, it is important to discus and communicate

with employees about the benefits of performance appraisal and what is expected of

them. If required, the standards may be modified or revised depending on the feedback

obtained from the employees (Khanka, 2007).

16
  Measure Actual Performance:

In this step appraisal process initiate by measuring actual performance by information

available from various sources such as personal observation, statistical reports, oral

reports, and written reports (Khanka, 2007) .

 Compare actual performance with standards

Actual performance is compared with the predetermined standards and discussion of

the appraisal with the concerned employees.

 Discuss the appraisal with the employee

The fifth step in the appraisal process is to communi-cate to and discuss with the

employees the results of the appraisal. This is, in fact, one of the most challenging

tasks the manager’s face to present an accurate appraisal to the employees and then

make them accept the appraisal in a constructive manner.

A discussion on appraisal enables employees to know their strengths and weaknesses.

This has, in turn, impact on their future performance. Yes, the impact may be positive

or negative depending upon how the appraisal is presented and discussed with the

employees.

 Initiate corrective action:

The final step in the appraisal process is the initiation of corrective action when it is

necessary. The areas needing improvement are identified and then, the measures to

correct or improve the performance are identified and initiated.

17
2.4 Performance appraisal methods

There are numerus methods used to measure the quantity and quality of performance

appraisals. Each method will be used depending on the needs of the organization

(Maharjan, 2016), among which some popular ones are described below.

 Essay method

 Comparative evaluation

 Rating

 Forced distribution method

 Forced choice method

 Graphic rating scale method

 Field review method

 Checklist

 Confidential report

 Critical incident method

 Management by objectives (MBO)

 Behaviorally anchored rating scales (BARS)

 Cost accounting method

 360-degree appraisal

2.5 Current trends in Performance Appraisal

In recent years many big organizations change their traditional performance appraisals

systems and restructured with new management processes. In 2016, since the data based

evaluation method had proven ineffective General Electric and Adobe, started to focus

on company goals rather than traditional employee metrics ( BetterWorks, 2017).

18
Many organizations have already realized yearly assessments are an inefficient way of

measuring employees. Annual reviews mean an employee has about one hour of

discussion to see how they’re doing in last 365 days.

According to Fortune magazine, women in the tech sector receive an overwhelming

amount of critical feedback compared to their male counterparts during performance

reviews. In fact, only 13 percent of women surveyed had a review free of criticisms

compared to 58 percent of men. Due to that companies revised performance appraisal

methods inconsistencies and focus on providing fair, unbiased comments when

evaluating employee performance ( BetterWorks, 2017).

Organizations are adopting software tools to help ensure that employees receive

ongoing performance feedback. such tools enable employees to receive and request

feedback in real-time, send automated email reminders to ensure employees and their

managers check-in with each other regularly, provide online agendas for effective one-

to-one conversations and give HR and senior management visibility of whether regular

performance discussions are taking place (Hearn , 2016).

Performance management has been criticized in the past for creating a tick box

mentality for managers who have reams of performance appraisal paperwork to get

through. Performance management software is being implemented by many companies

to make managing goals and tracking progress easier for managers and employees

(Hearn, 2016).

19
2.6 The common methods of performance appraisal today

90-degree Appraisal:

The employee evaluates himself and shows his strengths and achievements or his boss

evaluates him. (Self or Boss)

180-degree Appraisal:

The employee and the boss evaluate his performance on monthly basis. (Self and Boss)

270 Appraisal:

The method where in the employee is evaluated by 3 persons, himself, boss and co-

workers.

360 Appraisal:

Also known as ‘multi-rater’ feedback, where feedback about employee’s performance

comes from a Supervisor/superior, co-worker, client/customer, subordinates and the

self-assessment of the employee himself.

720 Appraisal:

As the name itself suggests, in this method, the 360-appraisal method is practiced twice.

First the 360-degree appraisal is done, where the performance of the employee is

analyzed and having a good feedback mechanism, the boss sits down with the employee

again a second time and gives him feedback and tips on achieving the set targets.

20
2.7 Benefits of Performance Appraisal

First and the most significant benefit of the appraisal system for the manager or the

head of department is that it provides a document of employee performance over a

specific period of time. Every employee’s performance influences the performance of

all the team or even firm (especially if it is small). A drop in the ocean, you say? If you

use the performance appraisal system correctly and smart, the results won’t leave you

indifferent.

It clarifies the employee’s role in the team/company. Some workers like to know where

they stand regarding their job performance and like to see what exactly they do, what

they need to do, and what else (useful) they can do for the company.

Self-development. Now this is the most important benefit for the employee.

Performance appraisal allows you to provide positive feedback as well as identifying

areas for improvement. Employee can discuss and even create a developmental

(training) plan with the manager so he can improve his skills.

It motivates employees if supported by a good merit increase and compensation system.

Self-development is good – but you need motivation to start working on yourself.

It provides a structured process for an employee to clarify expectations and discuss

different issues with their manager.

21
It lets both manager and employee set up long- and short-term goals. When you see

how well you are performing now, it is easier to predict what opportunities you will

have in future and identify goals depending on the obtained information.

The statistics can be used to monitor the success of the organization’s recruitment and

induction practices.

Performance appraisal system also helps the management in deciding about the

promotions, transfers and rewards of the employee.

It is easy to identify the under-performers and eliminate them.

Both manager and employee can review the changes in the performance in process of

time.

22
 Chapter 3: Data Analysis and Interpretation

3.1 Data Analysis

Research data was collected from questioner with 20 questions and based on answers data
analysis for question is listed below

3.1.1 Age

Age Category No of Respondents %

20 - 29 11 37%
30 - 39 10 33%
40 - 49 6 20%
50 - 59 3 10%
Total 30 100%

3.1.2 Gender

Gender No of Respondents %
Male 15 50%
Female 15 50%
Total 30 100%

23
3.1.3 Designation

Designation No of Respondents %
Manager 8 27%
Executive 20 67%
Trainee 1 3%
Intern 1 3%
Total 30 100%

3.1.4 No of years in the company

Years in service No of Respondents %

Year 0 - 1 3 10%
Year 1 - 5 12 40%
Year 5 - 10 13 43%
Year 10 + 2 7%
Total 30 100%

3.1.5 Department

Department No of Respondents %
HR 3 10%
Finance 9 30%
Client Servicing 5 17%
Creative 2 7%
Media Planning 8 27%
IT or Other 3 10%
Total 30 100%

24
3.1.6 Have you ever been monitored by PA system previously?

3.1.7 Performance appraisal system provides essential feedback to employees

about their performance

25
3.1.8 Performance appraisal system is important for Media Factory

3.1.9 Performance appraisal system provides essential feedback to employees

about their performance.

26
3.1.10 Performance appraisal system should be used to reward employees

3.1.11 Existing performance appraisal system is the best solution for evaluate

employee performance?

27
3.1.12 I receive specific and accurate feedback from my manager on my past

performance

3.1.13 I feel more motivated after performance appraisal

28
3.1.14 Performance Review improves job performance

3.1.15 Performance appraisal makes me better understand what I should be

doing

29
3.1.16 I clearly understand the purpose of performance appraisal.

3.1.17 Employees (other than managerial or HR practitioners) must be involved

when designing the performance appraisal policy.

30
3.1.18 Performance appraisals are fairly and honestly done in this organization

3.1.19 The current employee performance evaluation should be revised to meet

the needs of Media Factory

31
3.1.20 Promotion / Bonus / rewards should be purely based on Performance

Appraisal

3.2 Interpretation

Out of 30 employee’s majority of employees are in the 20 to 29 age group & 50 to 59

age group has only 5 employees.

Majority of employees are in the executive category. Among them most believe

performance appraisal is required for performance evaluation but not happy with the

existing performance appraisal system.

Majority of employees agree that there should be a new performance appraisal system

to media factory.

32
 Chapter 4: Discussion

This chapter presents the summary of findings on employee perception of the

effectiveness of performance appraisal system at the Media Factory.

According to Media Factory previous annual financial report company revenue was

decreased while other expenses increased compared to last three years. In more insight,

statistical analysis exposes that this is an impact of low employee performance as

briefly mentioned below;

 Not completing the day to day jobs on time.

 Some employees / departments habitually work late hours & this increase

overtime pays, electricity bills, transport and food expense.

 Late attendance when the work long hours previous day.

 Poor client servicing.

It reveals that already there is a performance appraisal system exists in the organization

but it’s not reflect expected output to address above issues. After careful analysis of

existing performance appraisal system and its results, several reasons identified why

existing performance appraisal system fails;

I. Didn’t assess actual performance —Assessment mainly focuses on the

individual’s characterizations of their personal traits such as knowledge (i.e.

technical knowledge of the subject), behaviors (i.e. attendance &

Punctuality) etc. According to Dr. John Sullivan article published in Talent

Management & HR, he mentioned “These factors may contribute to

performance, but they are not measures of actual output. If you want to

33
 assess the person, call it “person appraisal.” Performance is about output

quality, volume, dollar value, and responsiveness” (Dr. John, 2011).

II. Infrequent feedback - If the primary goal of the process is to identify and

resolve performance issues, annual performance appraisal feedback did not

reflect real time data. Formal feedback needs to be given monthly or

quarterly.

III. Lack of effectiveness metrics - Goals of the PA is to identify results,

provide feedback to reduce weaknesses, determine training needs, and to

identify poor performers. Unfortunately, the most common measure relating

to performance appraisal is the percentage completed. Jeff Haden notes in

an article for Inc, traditional metrics such as productivity can present a

moving target and can often be misleading. “Measuring is important, but

measuring what you need to measure and measuring it the right way is

critical” (Haden , 2016).

IV. The process does not flex with the business & corporate culture - Media

Factory (Pvt) Ltd. Is an advertising agency, therefore there are slight

deference’s when compared to other tradition business organization work

environment such as flexible working hours, work from home methods,

team works etc.

V. Managers are not trained - Managers are not trained on how to assess and

give honest feedback. And most managers don’t not know how to enhance

the career path of their employees.

34
4.1 Research

The aim of the study was to establish the employee perception on the effectiveness of

performance appraisal system at the Media Factory (pvt) Ltd. 75% of employees

contribute their feedback through research questioner.

Overall analysis confirmed that most of the employees at Media Factory (pvt) Ltd. feels

existing PA system does not contribute anything to their career growth. Also, the

perception of most of the employees is that the system is not based on realistic standards

and it may not be beneficial to their career growth objectives.

This research also identified that the existing performance appraisal system at the

Media Factory (pvt) needs to restructure and this study revealed the reasons, as to why

a new performance appraisal system is important.

Further revealed, although the existing performance appraisal system is not accurate

and effective, same performance appraisal been applied consistently over time.

According to the findings of Kelley & Michela (1980) “in order for the individuals to

make accurate and confident attributions, distinctiveness of the event, which facilitates

its perceived importance, should be complemented by the consistency of its effects over

time and modalities. Applying this logic to the performance appraisal system context,

it can be inferred that for the employees to make sense of the expected behaviors and

attitudes, the outcomes of such behaviors should be consistent across the time,

practices, and employees”.

Another finding confirmed that the employees are not involved in the development of

the existing performance appraisal system. Kelley and Michela (1980) who confirm

that “individuals are more likely to make accurate attributions when the perceptions of

35
the stimuli-effect relationship are shared. They further suggest that shared perceptions

are necessary for the emergence of organizational climate”.

Chapter 5: Recommendation & Conclusion

This chapter presents the summary of the study, the conclusion and the

recommendations comprehensively.

5.1 Recommendation

The primary objective of this study was to assess the influence of perception of existing

performance appraisal at Media Factory (Pvt) Ltd. and to find its weaknesses and

recommend new performance appraisal system that can achieve expected outcomes.

Major concern for this research was its notice that there were drastically low

performance issue in employees and high expenditure in financial reports. The study

has been successful in accomplishing its 3 research objectives and it makes

contributions to the literature. Thus, based on the finding of the study the following

solution are drawn.

Solution

In accordance with the results obtained within the findings gathered from the study,

below solutions are recommended.

36
To increase performance and satisfaction of employees implementing proper

performance appraisal system is required.

Existing performances system does not reflect expected output. therefore, corrective

measure should take to restructure the performance appraisal system.

It was revealed from the study that performance appraisal records are extremely useful

to analyze the performance of the employees. Therefore, its recommend using

performance appraisal data to identifying employee strengths and weaknesses, then

prescribe appropriate training to employees as a means of developing their full

potentials for organizational benefits.

When developing the new performance appraisal system, its recommend getting

employee feedback on its measuring metrics. This will help to reduce negative effect

towards performance appraisal system from the employee perception.

New performance appraisal system should unique to business & corporate culture.

360 Appraisal, also known as ‘multi-rater’ feedback method is recommended, where

feedback about employee’s performance comes from a supervisor/superior, co-worker,

client/customer, subordinates and the self-assessment of the employee himself.

37
5.2 Conclusion

The researchers’ main objective for carryout this study was to evaluate the existing

performance appraisal system and its effect on employee performance at the Media

Factory (Pvt) Ltd. Again, the study analyzes deep into the reasons for poor performance

of existing performance appraisal, the difficulties associated with conducting

performance appraisal and the various factors that can be employed to improve the

performance appraisal system. Finally its revealed the reasons for fail existing system

and also identified how to overcome weaknesses and develop new performance

appraisal system that compile with organizational business goals.

38
List of References
BetterWorks, 2017. Performance Management Trends for 2016. [Online]
Available at: https://www.betterworks.com/articles/performance-management-trends-for-
2016/
[Accessed 22 9 2017].

Aalto University, 2014. History of performance appraisal. [Online]

Available at:
https://wiki.aalto.fi/display/appraisals/History+of+performance+appraisal+interview?sortBy
=name&sortOrder=descending
[Accessed 10 8 2017].

Christiansen, B. & Chandan, H. C., 2017. Handbook of Research on Human Factors in

Contemporary Workforce Development. s.l.:IGI Global.

Daily Mirror, 2015. Daily Mirror. [Online]

Available at: http://www.dailymirror.lk/77561/media-factory-group-completes-10-years-in-
advertising
[Accessed 15 6 2017].

Dr. John, S., 2011. Talent Management and HR. [Online]

Available at: https://www.tlnt.com/the-top-50-problems-with-performance-appraisals/
[Accessed 27 9 2017].

Haden , J., 2016. Performance Metrics: Numbers Can Lie. [Online]

Available at: https://www.inc.com/jeff-haden/best-way-to-measure-performance.html
[Accessed 27 09 2017].

Hearn , S., 2016. Performance Management Trends for 2017. [Online]

Available at: https://clearreview.com/latest-performance-management-trends-2017/
[Accessed 25 09 2017].

Hearn, S., 2016. How New Performance Management Trends will Make a Big Impact.
[Online]
Available at: http://engageforsuccess.org/how-new-performance-management-trends-will-
make-a-big-impact
[Accessed 27 9 2017].

Khanka, S. S., 2007. Human Resource Management. New Delhi: S. Chand Publishing.

Maharjan, P., 2016. Performance Appraisal Methods. [Online]

Available at: https://www.businesstopia.net/human-resource/performance-appraisal-
methods
[Accessed 12 09 2017].

Management Study HQ, 2016. Contribution by F.W. Taylor – Scientific Management. [Online]
Available at: http://www.managementstudyhq.com/taylor-principles-of-scientific-

39
management.html
[Accessed 20 8 2017].

Taylor, F. W., 1911. The Principles of Scientific Management. New York: W. W. Norton &
Company, Inc..

40