Employee satisfaction with the performance appraisal system in Sainsbury’s, UK

Abstract

This paper is based on an empirical study of the performance appraisal system of one of the UK’s top retail super market, Sainsbury. The data will be collected from the employees of Sainsbury’s using quantitative methods. Survey questionnaire research strategy will be implemented in order to collect the primary data from employees. Regression analysis will be performed in order to test the significance of variables to measure the satisfaction of employees with various factors of performance appraisal. The paper aims to seek the employee’s perceptions and satisfaction levels towards their performance appraisal systems.

Introduction

In today’s highly competitive corporate world, performance plays a key role and companies need high quality performance. It has been widely accepted that organisations that use performance management systems are better performed organisations (Bowen and Lawyer, 1992; Bulger, 1995). This is the main reason that performance appraisal has become one of the most widely researched areas (Fletcher, 2002). Performance appraisal has been generally defined as a process identifying, observing, measuring, recording and developing job relevant skills of employees (Swanepoel et al, 2000). Also Coens and Jenkins (2000) add that performance appraisal is a process in which all individual workers behaviours and work attitudes are observed for a specific period of time. Performance appraisals are very important in an organisation to set performance goals, standards, administer rewards, disciplinary actions and other issues (Holbrook, 2002). Fletcher (2001) argues that performance appraisal should be viewed as a process or mechanism to motivate and reward the employees. Since the performance appraisal is directly related to employee it is very important to understand the perceptions of employees towards their performance appraisal system (Kinlaw, 1988). The satisfaction and positive perception towards performance appraisal is very important in order to get job satisfaction for employees (Ellickson, 2002; Judge et al, 2001). There has been an extant literature and extensive research has been done on the area of employee reactions and perceptions towards appraisal system. (Levy and Williams, 2004). However, there is lack of knowledge about the factors affecting the satisfaction of supermarket employees towards their performance appraisal system. Hence this research attempts to analyse and evaluate the perceptions and factors affecting employees’ satisfaction towards performance appraisal in a supermarket. Sainsbury’s supermarket has been selected for the purpose of this research as this is one of the UK’s top retail supermarkets. By attempting to understand the perceptions and satisfaction levels of employees of a top retail supermarket, the author makes an effort to gain an insight in their HR practices.

Problem Statement

It has been widely accepted that performance appraisal is one of the most important aspects of human resource practices of any organisation (Boswell and Boudreau, 2002). Also, performance appraisal plays a vital role for both employees and organisations. Moreover, performance appraisal helps employees to gain an insight in to their strengths and weaknesses and improve their skills in order to work efficiently. Although there is an increasing importance to performance appraisal, there has been very limited research in the retail industry. It is very interesting and useful to study the current performance appraisal systems of Sainsbury by identifying the employees’ perceptions.

Aim of the research

Objectives of Research

This research aims at achieving the following objectives:

• To measure the extent to which the employees of Sainsbury’s supermarket are satisfied with their current appraisal system
• To identify if the current appraisal system motivates employees and increases their productivity
• To identify the errors committed by appraisers in making appraisals from the view point of employees
• To determine the fairness of the performance appraisal system currently used as perceived by the employees

Research Questions

• To what extent are the employees of Sainsbury satisfied with their current appraisal system?
• Does the current appraisal system of Sainsbury motivate its employees and influence their productivity?

Literature Review

This section provides a critical analysis and evaluation of previous researches made in the area of performance management and performance appraisals. Moreover, this section also reviews various approaches and problems in appraisal systems and employee perceptions towards their performance appraisal systems.

Performance Management

Performance management has been widely accepted as one of the most important practices of human resource management (Judge and Ferris, 1993). Usually performance management consists of all organisational activities that define how well employees are performing in their job thereby being productive for the organisation (Mondy and Noe, 2005). Moreover, Sims (2002) adds that performance management is a continuous process of management which clarifies the mutual expectations of employee and organization. Also he adds that performance management focus on the concept of managerial support to employees for their development and career growth. On the other hand, Varma et al (2008) suggests that performance management is a system through which organizations assign and evaluate work, provide constructive feedbacks, identify training and development needs to tis employees. Furthermore, Robert (2004) supports that clarifies how the employee and manager will work together to improve the employee’s performance thereby improving the organizational performance. Hence, it is widely accepted fact that conducting performance measurement regularly is highly beneficial for organizations in order to manage and expect high quality work from the employees (Shreshta, 2006).

Performance Appraisal

Williams (1998) suggests that there exists three different approaches to performance management, a system for managing organisational performance, system for managing employee performance and a system for integrating employee and organisational performance. The system for managing employee performance is usually called performance appraisal which reviews an employee’s performance of assigned duties and responsibilities. Organisations across the world use various assessment systems to evaluate and measure employee performance (Carroll and Schneier, 1982). Karol (1996) suggests that performance appraisal is a formal communication event between an employee and immediate line manager to analyse and evaluate the employee’s work performance and discuss the future career aspects. Armstrong (2006) agrees to this notion and adds that it is a formal assessment and rating of individual employees by their managers, usually at the end of the year. On the other hand, Grote (2002) argues that performance appraisal is a process in which the manager fills out an assessment form and evaluates individual performance on various aspects. Furthermore, Herwig (2003) adds that performance appraisal is used to assess whether the employee is being paid fairly and if he/she is eligible for an increment and remuneration bonus. Moreover, Grote (2002) says that performance appraisal can help managers to identify and motivate people to achieve their target goals more efficiently. Also, he adds that appraisal systems integrate the values, mission and vision of an organisation with the employee performance. Regardless of the definitions, it can be said that performance appraisal is an on-going process in an organisation to evaluate employee performance based on various parameters.

Methods of Performance Appraisal

There are various methods of conducting employee performance appraisals, however not all methods are suitable for every organisation. An effective performance appraisal system should be fair and open, should clearly identify the strengths and weaknesses and also highlight the productivity of employees (Winston and Creamer, 1997).

360 degree feedback appraisal method is one of the most popular approaches to performance appraisal. This method involves evaluation input from various levels of the organisation for an employee. Mondy and Noe (2005) suggest that most common appraisal errors can be minimised or eliminated by allowing more than one person to evaluate the performance of an employee. Yukl and Lepsinger (1995) also argued that this is an approach which relies on feedback from an employee’s superiors, subordinates, colleagues and sometimes customers. Jones and Bearley (1996) also added that gathering feedback from multiple sources can avoid various discrepancies involved in performance appraisal systems. On the other hand Shreshta (2007) argued that the 360 degree feedback approach allows the organisation to get an insight of an employee from various perspectives and from various sources. Although it has been considered a very useful approach it has been criticised that this approach allows many people to view the performance document of the appraisal, which is considered to be a confidential information (Mathis,. 2007).

The essay approach is a simple evaluating method in which the assessor writes a brief essay about the employee which includes his work specific behaviours, strengths and weaknesses (Mondy, 2008). This approach mainly depends on the evaluator’s writing ability which showcases the employee’s performance.

A checklist appraisal method contains a checklist with series of questions related to employee work behaviour to which the evaluator should answer and the HR department assess and gives a rating based on the score (Mathis, 2007). The evaluator will be given a list of situations and statements which needs to applied to the employee while providing the answers (Decenzo, 2002).

The most commonly used performance appraisal method is the graphic rating scale which lists some characteristics and employees are given a rank basing on their performance levels (jafari et al, 2009). This approach lists all employees from highest to lowest in their performance levels (Mathis, 2007).

The behavioural observation scale approach is method in which the mangers observe and make a record of some critical incidents and consider the frequency to which these behaviours are exhibited by the employees before giving them a rank (Sims, 2007).

From the above discussion, it is quite evident that there exists several methods of performance appraisal and each has its advantages and disadvantages. In order to select a particular approach to performance appraisal, managers should first consider the vision, mission and objectives of the organisation. Further, they need to compare the employee’s performance against the organisation’s objectives.

Employee perceptions towards performance appraisal

There has been a significant amount of research conducted in the area of employee perceptions and satisfaction of the appraisal systems being used by their organisations. Most of the researchers focused their study on evaluation of the performance appraisal systems and the perceptions of employees about their efficiency and fairness levels.

The most important objective of organisations in conducting performance appraisals should be to improve the quality of work and provide maximum employee satisfaction (Keeping and Levy, 2000). However, if the employees perceive the appraisal to be unfair, it may lead to reduced employee satisfaction (Shreshta, 2006). On the other hand, Mikovich and Read (1992) suggest that most of the employees perceive their appraisal system to be very unfair and biased. Shivani (2006) also adds that often a performance appraisal is a hurried session without proper interaction with the managers. On the other hand, Sreedhara (2010) argued that performance awards are only given to employees for temporary satisfaction will not reflect in their annual appraisal ratings. Moreover, Lathel and Wexley (1981) argued that this kind of perception by the employees towards their appraisal system is a major problem for organisational leaders. Pettijohn et al, (2001a) suggest that employee commitment can be achieved by the use of proper criteria for evaluation and openness to discussing the appraisal. Furthermore, Poon (2004) adds that dissatisfaction with the performance appraisal influence encourages employees to quit the job thereby increasing the attrition rate of the organisation. Roberts and Reed (1996) already suggested that increasing the participation, constructive feedback and goal setting will positively influence the employee’s satisfaction towards performance appraisal. This will in turn increase the productivity of employees. Moreover Ryan and Deci (2000) add that employee motivation can be improved with the proper communication of organisational goals and with proper mapping of the job expectations. Finally, Bhaduri (2008) suggests that in order to manage the attrition rates, organisations should start assessing their performance management systems and do necessary modifications.

In this context, this research attempts to study the perceptions of employees of Sainsbury, one the leading super marketing chains in UK. By studying the perceptions of employees of Sainsbury, this research aims to gain an insight in to their performance appraisal system. Moreover, the study aims to understand to what extent employees are satisfied with their present systems. Furthermore, the research aims to gain insight in to factors that affecting the satisfaction of employees regarding their appraisal system.

Methodology

Study methods and data collection

Quantitative approach is one which employs strategies such as experiments and surveys and collects data which should be analysed and interpreted in understandable format (Creswell, 2003). Qualitative approach is the one in which the author tries to get the responses to open ended questions ranging from online questionnaires to in-depth interviews. Although the qualitative approach provides more detail and a real basis of analysis, this method can be expensive and time consuming (Collis and Hussey, 2003).

From the above discussion, it can be evaluated that quantitative study methods are applicable for this research. Since the aim is to obtain the responses from employees and evaluate how much they are satisfied with the appraisal system, quantitative research methods are more relevant.

Data Collection

There are two main approaches to data collection i.e. primary and secondary data collection methods. Primary data is the data collected directly from the source through observations, interviews and questionnaires (Collis and Hussey, 2003). On the other hand, secondary data is collected from other sources such as journal articles, text books, scholarly research papers (Bryman and bell, 2003).

For the purpose of this research, both primary and secondary data collection methods will be used by the author in order to collect the data. Primary data will be directly collected from employees of Sainsbury and secondary data will be collected from the websites and journal articles.

Research strategy

Survey questionnaire based research strategy will be used for this study in order to get the responses from the employees of Sainsbury. Using surveys, data can be collected in an economical way from selected population. The questionnaire consists of questions related to demographic data, position and range of salary in the organisation. Also the next part consists of questions about how long they have been with the company. The other questions will be asked in order to record the opinion of employees on how well the managers provide information about their career objectives. Moreover, questions will be asked on how often the employees receive feedback about their performance. The other questions include how well do the employees understand their performance management system and to what extent they are satisfied with their present system. The sample would be any employees working for Sainsbury supermarket who had at least one performance appraisal.

Data Analysis

The survey questionnaire will be sent via email and also be given to the employees by hand to get their responses. Once all the questionnaires are received, the statistical data analysis software SPSS will be used in order to analyse the data effectively. Also a hypothesis will be developed to check if employee satisfaction with the appraisal system has any relation to the way in which the managers conduct and accomplish various aspects related to performance appraisal. Through the data analysis, these hypotheses will be tested to see if all the goals are achieved according to the hypothesis. Correlations analysis and chi-square testing will be performed to observe if there is any difference between various factors.

Gantt chart

This section provides a brief description of the project schedule. This research utilises all the available resources in order to successfully accomplish the research aims and objectives.

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