Effect of Performance Appraisal System on Employee Motivation

Abstract

Performance appraisal system (PAS) is one of the major factors that can influence both intrinsic and extrinsic motivation of employees in an organization. This study aims to determine the relationship between performance appraisal system and motivation and investigates the extent to which performance appraisal practice impacts employees' motivation. Data was collected through self administered questionnaire distributed to a sample of 200 employees of Moha Soft Drinks Industry S.C., Ethiopia. Stratified simple random sampling technique has been employed to select the respondents. Statistical analysis such as descriptive, Pearson product moment correlation coefficient and simple regression analysis were employed to analyze the data. The findings indicate that there is positive and significant relationship between PAS and employee motivation. On the basis of the findings, appropriate recommendations along with implications for further research have been forwarded.