Contribution of Performance Appraisal to

Employee performance: a case of Marks & Spencer and

House of Fraser, UK

01/18/2013
 ACKNOWLEDGEMENT

I feel immense gratitude to acknowledge the assistance and support of all the people who

directed me in various stages of this research. Without the supervision and support of my mentor

this research would not have concluded successfully. He provided me with timely and valuable

insights which clarified the entire process of research preparation. At the same time I feel

indebted to mention the help extended by the participants of primary research. In absence of their

relevant opinions and viewpoints the objectives of the study could not have been achieved.

Finally, I would like to thank my family and friends who gave me moral support all through this

research.
 ABSTRACT

Performance appraisal is regarded as a very important aspect of human resource

management. It is capable of making or breaking the backbone of a company i.e. its employees.

Therefore, the role played by performance appraisal in improving the performance levels of

employees is very important to be recognized. The importance of performance evaluation is even

more in retail sector as the products are homogeneous and a company can differentiate on the

basis of its customer service. Therefore, the current report examines the role played by

performance appraisal in improving the performance of employees. Two main retail

organizations of UK i.e. Marks & Spencer and House of Fraser are studied in this context.

The report starts with an introduction into the background of the study and the rationale

for conducting this research. A major step towards achieving synergy in everything and gaining

high employee commitment is to provide the staff members with correct information and hence

establishing an integrated performance management mechanism. Performance appraisal system

thus becomes a very important aspect to be researched and thereby gauge its effect on employee

productivity.

The literature review section of the report presents detailed account of what performance

appraisal is and how it affects the work related attitudes, behaviors, performances and turnover

intentions of the employees. The performance appraisal system of the two companies is also

provided in this section. Marks & Spencer adopts 360° system while House of Fraser adopts

Management by Objective. However, employees of both the companies are not entirely satisfied

with their performance appraisal. This leads us to the recommendation part of the report which

suggests reasonable steps that can be taken by the companies to improve the effectiveness of

their systems and thereby improve employee performance.

TABLE OF CONTENT

CHAPTER 1: INTRODUCTION.............................................................................................................1
1.0 Introduction............................................................................................................................1
1.1 Background of the Study...................................................................................................2
1.2 Research Background.......................................................................................................3
1.3 Organization Background......................................................................................................4
1.3.1 Overview of Marks & Spencer........................................................................................4
1.3.2 Overview of House of Fraser..........................................................................................5
1.4 Rationale for the chosen topic................................................................................................6
1.5 Purpose of Undertaking the Research....................................................................................7
1.6 Statement of the problem.......................................................................................................7
1.7 Research Question..................................................................................................................9
1.8 Research Objectives...............................................................................................................9
CHAPTER 2: LITERATURE REVIEW.................................................................................................11
2.0 Introduction..........................................................................................................................11
2.1 Justification of Literature Review........................................................................................11
2.2 Various definitions of Performance Appraisal.....................................................................11
2.3 Purpose of Performance Appraisal......................................................................................14
2.4 Theoretical Framework........................................................................................................16
2.4.1 Performance appraisal and work performance............................................................17
2.4.2 Performance Appraisal and Employee commitment towards organization..................18
2.4.3 Performance Appraisal and Turnover Intentions of employees....................................20
2.5 Perception of Performance Appraisal in organizations........................................................20
2.6 Performance Appraisal in Retail Industry............................................................................22
2.6.1 Performance Appraisal of Office Staff..........................................................................23
2.6.2 Performance Appraisal of Store Staff...........................................................................23
2.6.3 Employee Benefits.........................................................................................................23
2.6.4 Promoting Employees....................................................................................................24
2.6.5 Importance of Performance Appraisal in Retail Industry.............................................24
 2.7 Performance Appraisal procedures at Marks & Spencer.....................................................25
2.7.1 Effect of Performance appraisal of Marks & Spencer on Employee Performance......27
2.8 Performance Appraisal system in House of Fraser..............................................................28
2.8.1 Effect of Performance appraisal of House of Fraser on Employee Performance........30
2.9 Conclusion...........................................................................................................................31
CHAPTER 3: RESEARCH METHODOLOGY.......................................................................................32
3.1 Introduction..........................................................................................................................32
3.2 Research Philosophy............................................................................................................33
3.3 Research Aims and objectives.............................................................................................34
3.4 Research Approach..............................................................................................................34
3.5 Quantitative Approach.........................................................................................................35
3.6 Selected Design....................................................................................................................35
3.7 Sample Selection..................................................................................................................36
3.8 Data Collection Method.......................................................................................................36
3.9 Data Analysis.......................................................................................................................37
3.10 Validity and Reliability......................................................................................................38
3.11 Ethical considerations........................................................................................................38
3.12 Limitations of the study.....................................................................................................39
CHAPTER 4: DATA ANALYSIS & FINDINGS....................................................................................41
4.1 Introduction..........................................................................................................................41
4.2 Analysis................................................................................................................................41
CHAPTER 5: CONCLUSION AND RECOMMENDATION......................................................................56
Conclusion.................................................................................................................................56
Recommendations......................................................................................................................58
CHAPTER 6: REFLECTIVE STATEMENT...........................................................................................60
REFERENCES...................................................................................................................................62
APPENDIX 1....................................................................................................................................67
TABLE OF FIGURES

Figure 1 Performance Appraisal of Office staff at House of Fraser..............................................30

 CHAPTER 1: INTRODUCTION
1.0 Introduction

All the business enterprises in today’s globalized and competitive era are attempting

towards creating a rich performance culture which is implemented at both corporate and business

strategic level in order to increase employee contribution to organizational success. In such a

work culture, employees play the key role and this entire process is known as performance

management. Armstrong stated that workforce performance management is the mechanism of

developing the employees with commitment and competence, working towards the

accomplishment of mutual objectives (Aguinis, 2009).

In past some years, companies have become quite concerned about the performance

management of their employees. Organizations are now adopting new and modernized methods

of working in order to accomplish their missions and visions. In order to be in tune with the new

concepts of rapid technological revolution, companies have started acknowledging the

significance of novel techniques of performance management (Cardy and Leonard, 2011).

Performance appraisal system is one of the key pillars of the performance management

process which is closely associated with organizational performance. Performance appraisal has

a direct and far reaching impact on organizational performance as performance of employees

ultimately affects overall performance of the organization. Companies have realized the value of

performance appraisal and all the multinational corporations have executed this system to

increase the productivity of their employees (Smither and London, 2009).

However, performance appraisal acts as a double edged sword in companies. Though it

has direct link to employee motivation and satisfaction and other benefits as well, studies have

revealed that this process has an equal likelihood of inflicting a bad influence on both

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organizational and workforce performance (Relationship between Performance Appraisal and

Organizational Performance, 2012).

The purpose of the following study is to investigate the contribution made by

performance appraisal to employee performance in the retail sector of UK, particularly in Marks

& Spencer and House of Fraser.

1.1 Background of the Study

Performance appraisal is one of the most complex and intricate components of

performance management and human resource management on the whole. Appraisal comprises

of the cause and effect relationship based on which labor as well as employment policies are

schemed. It is a methodical and organized evaluation of employees’ performance at regular

intervals. Though this process involves lot of interaction and documentation and is a very formal

process in itself, yet in yesteryears only an informal approach was followed which included very

less record keeping. However, off late many firms have began to adopt a more formalized

appraisal process (Arthur, 2006).

Presently, a lot of companies are planning to execute or are executing many

recognition/reward programs, assuming that such schemes will facilitate the much wanted

cultural change. Many firms even spend huge sums in such activities and managers are even

asked to set aside a portion from their overall budget for this intention. All this is done on the

belief that such incentives and rewards will motivate the employees to perform better (DelPo,

2007).

However, performance appraisal can be both beneficial as well as bad for the company.

While this process is aimed at improving employee satisfaction and work related behavior, it can

also act as a de-motivating factor and leaves a bad imprint on the minds of efficient employees.

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Performance appraisal instead of creating a good performance culture might develop anxiety in

the environment and may act as a hindrance in enabling the needed changes in the performance

as well as attitudes of employees (Arthur, 2006).

The Retail sector of UK is very dynamic in nature. It offers the maximum amount of

employment opportunities. The retail industry is committed towards hiring and maintaining a

socially plus culturally diverse workforce. When there is such a wide and diverse workforce, it

becomes imperative to have effective performance management systems in place. The retail

companies are continuously attempting to restructure their management culture in order to enable

efficacy at all levels in the organization. Performance appraisal serves a number of purposes in

the retail sector (Mullie and Hill, 2004).

1.2 Research Background

Review of appraisal system is ongoing as this process has enhanced in scope and use

across different industries and businesses. The major critique relates to the management using

performance appraisal system as an orthodox practice of rectifying as well as developing

performance (Ubeda and Santos, 2007).

Many people think that performance appraisal techniques are nothing but just wastage of

time and money as it is used for only appraising performance of an individual. But it is not so,

performance appraisal methods not only analyze the performance of an individual but if applied

properly by the management can help in motivating staff members as these methods clarify the

goals and objectives of the organization (Waldman and et.al., 2011). But this is in contrast to

older approaches of performance measurement. Many scholars feel that most of the employees

do not want to reveal their actual performance and thus it hampers in their growth trajectory.    

3
 Moreover, many managers does not provide proper feedback to the employees and feel

that any negative feedback from their side can further deteriorate the performance level of an

individual instead of improvement as they can get de-motivated from negative comments. Thus,

it is contradictory to the statement, that performance appraisal can act as development process

(Latham and Wexley, 2006).

The primary purpose of performance appraisal related to giving information to the

employees regarding their work and the type of behavior which is expected from them at the

workplace. According to Heyel, “Performance appraisal is the method of assessing the

qualifications as well as performance of a staff member in respect of his work and post for which

he has been employed, for intention relating to administration such as giving monetary rewards,

selecting for promotions, placements and other such actions that need a differential treatment

among group members as differentiated from actions affecting all the members similarly

(Fletcher, 2010). Appraisals are important to comprehend the relative merits, competencies and

worth of employees to their organization. It scores the workers on basis of their performance.

1.3 Organization Background

1.3.1 Overview of Marks & Spencer

Marks & Spencer is a well known British retailer which has its headquarters in London.

The company was founded in the year 1884 by Michael Marks and Thomas Spencer. It has

round about 703 outlets in UK and around 361 outlets in more than 40 nations. The major

specialties of the retail giant are luxury food items and clothing. The company recorded revenue

of £9.9 billion in the year 2012 and an operating income of £810.0 million (Marks & Spencer,

Company Overview, 2013).

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 There are around 78,000 employees in the stores of Marks & Spencer all across the

world. In the year 2004, Marks & Spencer was on the threshold of being acquired by Arcadia

Group and BHS boss. However, M&S announced a recovery plan in that year, which involved

purchasing the control of Per Una range, selling off the financial services business to HSBC

Bank, stopping the expansion of Simply Food line and shutting down the Gateshead Lifestore

(Marks & Spencer, Company Overview, 2013).

Delivering impeccable customer service is the central component of Marks & Spencer

brand and hence obtaining timely and effective support from its staff is crucial for this. All the

stored of M&S are similar plus the store managers follow a central direction. The main

competitors of the retailer are Sainsbury, Asda, Tesco, Next and John Lewis (HRM in Marks &

Spencer, 2009).

1.3.2 Overview of House of Fraser

House of Fraser is also a British upscale retail store founded in the year 1849 in Glasgow.

It is currently headquartered in London. The group has around 60 outlets in and around UK as

well as Ireland. The specialties of the store are cosmetics, clothing and houseware. The

department store group was earlier known as Fraser & Sons. The group progresses tremendously

in the initial years of 20th century, however, subsequent to the Second World War; plenty of

acquisitions transformed the company into a national chain. Over all these years, the department

group has acquired many famous stores like Kendals, Howells, Jenners, Dickins & Jones,

Beatties and Army & Navy (House of Fraser since 1849, 2011).

House of Fraser is the 3rd biggest traditional departmental store group in UK. It currently

employs 4951 people in its stores. The group made revenue of £681 million and an operating

profit of £56.8 million in the year 2011. The group was subjected to a number of attempted

5
acquisitions by other firms; however, it was the takeover by Baugur in the year 2006 which

brought into public attention its actual ownership (House of Fraser since 1849, 2011).

1.4 Rationale for the chosen topic

Performance appraisal process emphasizes on group as well as individual performance

over a particular time period and reviews the promotional prospects plus increase in monetary

benefits. Performance appraisal is the most crucial aspect of performance management as it

outlines a formal and structural system which assists a manager to interact with his subordinate

and assess his performance thereby (Levy and Williams, 2004). Performance appraisal not only

facilitates communication and interaction but it is also an important means of gauging employee

performance. Formulating the procedures and policies related to employee performance, which

are suitable for organizational needs can be very challenging (Schwartz, 2001).

While on one hand performance appraisal is touted to be a great contributor to the

increase in employee productivity, at the other extreme it is also regarded to have a bad impact

on employees and the work environment. Hence, determining the actual contribution of

performance appraisal to employee performance and productivity is very important. Only an

effective performance appraisal system which is appreciated by both the managers and

supervisors can be helpful in increasing staff performance. Otherwise, the performance appraisal

system can create an environment of insecurity as well as anxiety among the employees (Wicks,

n.d).

The retail managers face numerous high impact decisions on a daily basis that need to be

taken as quickly as plausible responding to varied problems. At the same time declining margins

establish the need to reallocate or reduce labor. It is not plausible for retail managers to respond

to every problem and hence, priorities are required to be made (Mohr, n.d). A major step towards

6
achieving synergy in everything and gaining high employee commitment is to provide the staff

members with correct information and hence establishing an integrated performance

management mechanism. Performance appraisal system thus becomes a very important aspect to

be researched and thereby gauge its effect on employee productivity (Mullie and Hill, 2004).

1.5 Purpose of Undertaking the Research

Numerous researches have been conducted on performance appraisal, its different

methods and its relative significance in organizations. However, as far as the contribution of

performance appraisal to employee productivity and performance is concerned, there are very

limited studies on the effect of performance appraisal on workforce outcomes such as work

related behavior and performance, commitment towards the organization and contribution to

attainment of objectives. This restricts the complete understanding of performance appraisal and

its different aspects. The findings and results of this research will thus produce new conclusions

and develop new insights which will enrich the present literature on this topic.

Moreover, this research will augment the level of understanding pertaining to

effectiveness of performance appraisal system in the retail industry. The intention of this

research is to understand how the top retail groups such as Marks & Spencer and House of Fraser

manage their performance appraisal system in addition to their effectiveness in increasing the

work performance as well as productivity of their employees. By identifying the satisfaction

level of employees of these two retail houses with the performance appraisal system, insights can

be gained into what makes an effective PA system which enhances employee performance.

1.6 Statement of the problem

In the 21st century, the entire business environment is progressively becoming dynamic

and uncertain. There is a rise in this trend due to forces like changes in market conditions,

7
technological advancements and innovation and globalization. For the purpose of being able to

endure and sustain in such an aggressive environment, both small and big companies are

adopting competence centric management as an approach to management of their human

resources. The dynamism of the business environment requires companies to pay greater

attention towards the development of employee competence. This plays a significant part in

attaining success as well as gaining an edge over rival firms.

The critical role played by performance appraisal in firms has been acknowledged since

very long. It serves numerous purposes like extending the foundation for taking selection

decisions, deciding on pay increments in addition to acting as a medium for interaction between

employees and their supervisors. However, majority of the researches in this area have been

rather limited.

At the level of an organization, the performance appraisal system affects and influences

other functions of the Human Resource mechanism plus the overall organizational strategy. The

effectiveness of the performance appraisal system of an organization is a precondition for

ascertaining the success of recruitment, training plus workforce motivational activities. At a

more strategic level, the requirement for swift as well as effectual organizational change in

present day’s dynamic political, economic and social environment mandates that the entire

workforce regularly realign their performance with the developing objectives and goals of their

company. The requirement to continuously realign the performance typifies many departments of

the firm which struggle with getting their employees to clinch the practices as well as

philosophies which are directed towards bringing about improvement in performance. However,

performance appraisal system may or may not contribute to improvement in employee

performance. Hence, an effective performance appraisal system ought to be regarded as a key

8
organizational change effort that should be followed for the purpose of enhancing the

effectiveness of an organization.

Therefore, this research aims at fulfilling the gap in knowledge regarding the contribution

of PA system to employee productivity by studying the impact of performance appraisal systems

on the productivity and work performance of employees in Marks & Spencer and House of

Fraser, UK.

1.7 Research Question

For the purpose of developing a comprehensive research and resolve the major problem

related to contribution of performance appraisal towards the performance of employees in the

two retail houses, below mentioned research questions have been formed:

a) What is performance appraisal?

b) What is performance appraisal supposed to achieve?

c) Is there a downside to performance appraisal?

d) Is there a significant relationship between performance appraisal and employee work

performance?

e) Does performance appraisal results in improvement in employee motivation, turnover

intentions and organizational commitment?

1.8 Research Objectives

The main aim of the research is to identify the contribution made by performance

appraisal system towards improvement in employee performance in Marks & Spencer and House

of Fraser. To fulfill this aim following research objectives have been set:

a) To understand performance appraisal and different methods of performance appraisal.

b) To identify the connection between PA and motivation of employees in retail sector.

9
c) To determine the various problems with performance appraisal mechanism.

d) To identify how performance appraisal augments employee performance.

e) To determine the satisfaction level of employees with the methods of performance

appraisal.

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 CHAPTER 2: LITERATURE REVIEW

2.0 Introduction

The data gathered from secondary sources forms part of the literature review which

emphasizes on obtaining the overall ideology of the researcher behind the study. This type of

data is in practicality the information based on general concepts on an existing piece of work.

There is much more to literature review than just illustrating the insights provided by different

authors. The main intention of this chapter is to re-assess the existing and accessible literary

sources relevant with the subject matter of study so that a firm research background is

established and any gaps in the literature can be identified. Previous researches and studies on

performance appraisal, its different methods, its importance particularly in retail sector, problems

encountered and the various drawbacks etc. are presented in the following paragraphs.

2.1 Justification of Literature Review

The justification for conducting this literature review is that it will help in identifying the

effect of performance appraisal on employee performance in two big retail companies of UK.

Although, a number of research works are present which demonstrate how performance appraisal

is related to performance of employees but no research work provides an in-depth review of the

different impacts of performance appraisal. This piece of work identifies the impact of appraisal

on the turnover intentions of employees and how it can help in increasing or decreasing

employee commitment towards organizations. These aspects are not widely covered in already

established works and hence bears a new look.

2.2 Various definitions of Performance Appraisal

A performance appraisal is also known by a different terminology such as performance

review and employee appraisal. This is a process by which the work related performance of a

11
staff member is gauged in respect of quantity, quality, behavior and cost. This is conducted by

seniors, colleagues, juniors and self. However, in a formalized manner, it is facilitated by the

immediate supervisor or manager of an employee to whom he is reporting directly (Bose, 2004).

Performance appraisal is a process of evaluating, determining, comparing, identifying, directing,

rectifying and managing the career development process of employees. It is the method of

collecting, recording and critically appraising the contribution of an employee to the attainment

of organizational objectives. It is the review of personal strengths and weaknesses, current

accomplishments and failures in addition to employees’ suitability for recognition, rewards,

promotion, incentives, salary hike or more training (Geet and et.al., 2009). Ultimately it indicates

the appropriateness of an employee in his present job for the company. An appraisal is the

assessment of the merit, quality or worth of an employee. It must evaluate performance in

achieving the plans and goals plus the performance of an employee as a manager. Different noted

personalities and authors have defined this process as follows:

a) According to Flippo, “Performance appraisal is the periodic, methodological and

unbiased rating of a staff member’s prudence and excellence in relation to matters

relating to his current employment and to his potentialities for a better career.” (Geet and

et.al., 2009)

b) As per Alford and Betty, “It is the assessment of the relative worth of an employee’s

services on his post to the organization.”

c) In the words of Douglass, “Performance appraisal is the process of obtaining and

processing the information required for improving the accomplishments and performance

of an individual employee”. (DelPo, 2007)

12
 d) According to Heyel, “Performance appraisal is the method of assessing the qualifications

as well as performance of a staff member in respect of his work and post for which he has

been employed, for intention relating to administration such as giving monetary rewards,

selecting for promotions, placements and other such actions that need a differential

treatment among group members as differentiated from actions affecting all the members

similarly (Aguinis, 2009).

e) As stated by Newstrom, “It is the method of assessing employee performance, sharing

that information with them and finding out ways to enhance performance.

Hence, from the above definitions given by experts, the meaning of performance

appraisal can be summarized as – The process wherein the performance of an individual is rated,

scored and a feedback is provided to him. Performance appraisal system is employed in

organizations to keep a track on progress made by each employee in terms of his work and

communicating the same to respective employees (Smither and London, 2009). Bonuses,

promotions, training needs, incentives and etc. are frequently based on the details given by a

performance appraisal.

As per Heyel, many people confuse merit rating with performance appraisal. However,

the two techniques are fundamentally different. In the process of merit rating, the internal

qualities as well as merits of an employee are analyzed such as his mental and physical merits,

nature and so on (Neely and et.al., 2001). On the other hand in performance appraisal,

assessment of the quantitative factors is done on the basis of quantum of production, quantum of

accepted as well as rejected jobs and etc. Therefore, under merit rating, emphasis is laid on what

an employee actually is from inside, while under performance appraisal the focus lies on what

does an employee do and what potentialities are possessed by him (Wicks, 2012).

13
2.3 Purpose of Performance Appraisal

In the words of Alford and Betty, every individual has different aptitudes, attitudes and

abilities. Differences will always creep in when two or more people are working on the same job

in terms of quantity and quality of output. Hence, this makes it very hard to decide who is more

suitable for a job. When people are hired for a job in an organization, company expects them to

work at their maximum potential. However, this is not the case with all the employees and

therefore, the management tries to find out the weak link which deters complete attainment of

objectives (Parmaks, 2009). The need for assessing the contribution made by every individual in

the company arises. This is what performance appraisal actually is. Appraisals are important to

comprehend the relative merits, competencies and worth of employees to their organization. It

scores the workers on basis of their performance. All the strengths, deficiencies and weaknesses

in employee performance are critically examined so that his future performance can be

improved. The most well known purpose of performance appraisal is the improvement of

individual performance. From an organizational point of view there are two main purposes of

this system: a) Maintaining the organizational control and b) Measuring the efficacy with which

the human resources of a company are being utilized (Mullie and Hill, 2004).

Nonetheless, in addition to this, there are many other desired benefits and declared

intentions of performance appraisal. These include motivating and improving the morale of

employees, making the expectations from employees clear and thereby mitigating the ambiguity

relating to their performance, deciding on rewards and incentives, determining the training and

development needs, choosing people for promotion, counseling, management of career

development and planning the corrective measures (Falcone and Sachs, 2007). In short all these

intentions are directed towards enhancing the productivity and performance of both the

14
employees and the organization. However, as per Armstrong and Baron, there is an increase in

more judgmental and harder forms of performance appraisal rather than developmental and

softer approaches. As a result of this, there has been a shift in this system and it is now being

used for enhancing present performance instead of career planning and discovering future

potentiality (Bohlander and Snell, 2007).

Performance appraisal is normally employed as an effectual tool for improving the work

performance of employees by highlighting their strengths and weaknesses and showing them

how their performance can be augmented by best utilizing their strengths. There are still

apprehensions regarding which party benefits the most from performance appraisal, organization

or employees (Jeffrey and Bartholomev, 2001). The objectives of performance appraisal can be

summarized in the below mentioned points:

a) To assess the employee performance and identify the affect of action plans on the

performance of employee over a particular time period (Miah and Hossan, 2012).

b) To determine the strengths, deficiencies and weaknesses encountered while working and

success or failure in achieving the performance standards.

c) To collate, record, gauge and evaluate the information pertaining to the employee

performance in the respective year.

d) To facilitate management in exercising control in the organization (Geet and et.al., 2009).

e) To identify the missing link between the real and projected performance standards,

competencies and behavior.

f) To find out the areas in which further improvement by way of training and development

is required (Blau, 2005).

15
 g) To enable improvement in communication process and relations between people of all

levels (Aguinis, 2009).

h) To provide employees fair and unbiased feedback regarding their performance of the

year.

i) To inform the employees about the expectations that the organizations keeps with them.

j) To provide assistance in determining the transfer and promotion policies.

k) To render the compensation schemes more rational and scientific (Arthur, 2006).

l) To evaluate the efficacy of other human resource functions like recruitment, selection and

training.

m) To facilitate the efficient utilization of human resources to satiate the desired goals and

objectives and gain an edge over the competitors.

n) Lastly, to assist management in formulating effective rewards, recognition and incentive

plans to bring about improvement (DelPo, 2007).

2.4 Theoretical Framework

Dependent Variable

Employee
Independent Variable Mediating Variable Outcomes
o Work
Performance Intrinsic
Performance
Appraisal Motivation
o Organizational
commitment
o Turnover

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2.4.1 Performance appraisal and work performance

Studies by Anderson (2005) propose that human resource practices influence the

outcomes of an organization by shaping and directing employee attitudes and behaviors. More

particularly such practices augment the effectiveness of employees by generating conditions

wherein workers become all the more engaged in the company and strive hard to attain the goals

(Anderson, 2005). These HR practices are likely to impact both employee and organizational

performance by making use of selective hiring, motivation and giving opportunity to make

contribution. Moreover, Korsgaard, Klein and Robertson proposed that performance appraisal

provides numerous benefits which include enhanced work related performance. Furthermore, this

process appears to be a crucial element of the broader set of HR practices (John, n.d). It is

basically a system to evaluate the degree up to which the day to day performance of each

employee is related to the objectives set by the firm. There are numerous studies which reveal

that performance appraisal does influence employee’s satisfaction level with his job which in

turn has the ability to lead to elevated performance levels. Smither and London (2009) suggested

that one of the major factors which attributes to an effectual performance appraisal system

involves ascertaining that the entire process concentrates on performance. Hence, an association

between performance and performance appraisal is clearly evident (Smither and London, 2009).

One of the key steps in developing an effectual PA mechanism is determination of

organizational objectives. These objectives are then converted into divisional and subsequently

into individual goals. This enables the worker to straightaway know the standards and

benchmarks against which his/her performance will be assessed. (Bose, 2004) This process

comprises of making clear the job role, roles and responsibilities and job description. Clarifying

how the individual responsibilities add to the broader goals and why both team and individual

17
performance is critical reduces ambiguity in performance. Objectives formulated in this manner

must mirror the organizational objectives and give a linkage between organizational and

employee performance (Lisa and Paul, 2000).

Cardy and Leonard (2011) noted that one more major objective of performance appraisal

is to give feedback in order to strengthen employee development and growth. As per the

literature, the intention of feedback and goal setting in the PA procedure is to elevate individual

employee performance (Cardy and Leonard, 2011). Hence, it can be said that a positive relation

exists between performance appraisal system and job performance. Yet another important

function of this mechanism consists of equipping the employees with updated skills and

knowledge. It was noted by Jabeen (2011) that the perception of employees regarding investment

made by company in their development will result in employees feeling obliged to pay back the

organization by way of improved work performance (Jabeen, 2011).

2.4.2 Performance Appraisal and Employee commitment towards organization

Performance appraisal helps in clarifying the expectations kept by an organization

relating to the actions, activities and outcomes of its employees. If a worker is not aware of what

he is responsible for, what authority he has, what his organization expects from him and on what

parameters will he be evaluated, he will be reluctant to take decisions and will have to depend

upon a trial and error method in satiating the expectations of his seniors. This link between

performance appraisal and organizational commitment is advocated by Ubeda and Santos (2007)

who suggest that managerial feedback keeps the employees informed of the results and

performances expected of them. Such clarity gives a boost to focusing attention which in turn

augments performance and satisfaction. Hence, in its explicatory role, performance evaluation

18
process is time and again credited with mitigating role uncertainty which results in elevated job

performance, satisfaction and effective organizational commitment (Jack, 1997).

DelPo (2007) noted that performance evaluation activities could be utilized by companies

to communicate organization’s vision, goals and strategies to their employees. In addition to this,

the emotional as well as affective facets of super-ordinate objectives might seize the hearts of

employees and provide them with a reason to rally around. Hence, it is plausible that employees

might experience advanced commitment levels as they have a clear idea of the organizational

vision and goals (DelPo, 2007). Therefore, the staff members might become highly committed to

their companies. It is very important to not only consider employee’s qualifications required for

the job post but also their skills, experience and knowledge for future innovations. Such

competencies and abilities which are discovered by performance evaluation at all levels of the

hierarchical system are significant aspects for success of the competitive strategy of the firm. It

was noted by Levy and Williams (2004) that activities related to performance evaluation have

the potential of enriching the perceptions of employees of being valued by their company. This

perception is crucial for affective commitment and hence sound work performance (Geet and

et.al., 2009).

Apart from this, Bohlander and Snell (2007) identified that there is likelihood for

employees to display elevated affective organizational dedication if they feel that the activities

related to performance evaluation support employee development. Falcone and Sachs (2007)

found out that performance appraisal system might have positive links with loyalty towards

organization as a result of enhanced participation of employees. It is proposed that this in turn

enhances productivity of employees (Falcone and Sachs, 2007).

19
2.4.3 Performance Appraisal and Turnover Intentions of employees

According to Armstrong (2005), senior-subordinate interaction is a theory of interaction

in leadership which concentrates on the relation between a senior and his each of his

subordinates. This association is perceived as dyadic or in simple terms as happening between

the senior manager and each of his subordinate individually. The performance evaluation

process to some degree is employed to foster this relation between the seniors and their

subordinates (Armstrong, 2005). This process enables a room for improvement in the interaction

taking place between the superior manager and his team members by using feedback system.

This feedback system involves, informs and inspires employees plus creates strong superior-

subordinate relationships. In experiential studies, this type of exchange between a leader and his

team member was construed negatively as turnover intention (Kunreuther, 2012).

Hence, there is a possibility that there might be a negative relation between performance

evaluation and turnover intentions of employees.

2.5 Perception of Performance Appraisal in organizations

Though the above discussion shows that performance appraisal has positive impact on the

employee performance, motivation and organizational commitment, yet the actual impact of this

system differs from organization to organization. Performance appraisal can have both positive

as well as negative impact on the employees. It is determined by the fact that whether the

workers got motivated to improve their performance on receiving constructive feedback or they

got demotivated and lost interest in their jobs (Lawler, 2012). So far, the purpose, objectives and

use of performance appraisal in companies has been come across, however, its actual perception

and understanding is not taken into account in majority of the cases which is a very important

aspect for both employees and organizations. If the employee fails to recognize the relevance of

20
this system then this creates an environment of insecurity (Performance Management and

Appraisal, n.d). Just like organizations expect a lot from their employees, the employees too have

certain amount of expectations from their company in terms of growth and appreciation.

Nonetheless, a negative feedback on performance can highly disrupt a worker on a mental level

and he might lose interest in his work. Significant changes in his attitude and work related

behavior will be witnessed which will be a cause of concern and problem for both him and the

company. He will find no motivation in achieving organizational objectives (Relationship

between Performance Appraisal and Organizational Performance, 2012).

Many employees are of the impression that their pay scale increases and promotion are

mainly dependent on their performances. Hence, they are in a predicament and take this situation

as survival of the fittest. As a matter of fact they know that at the end of the day it is only their

performance which will be taken into consideration and hence, to develop their career they need

to be pro-active towards their work (Roger and James, 1999). Thus, it becomes essential for

managers to carry out the appraisal process very carefully. Employees can understand criticism

only till the extent it is relevant and useful for them. If the information relating to any

improvement in performance is presented in a non-constructive manner then this might not go

down well with some employees (Neely and et.al., 2001).

Managers most often feel that when the time comes to provide a negative feedback then

the employees are most likely to get demotivated and dejected. According to a study carried out

in the General Electric Company, many points regarding performance feedback were

highlighted. Under this study, employees were appraised by the superiors over two weeks on two

occasions (Brown and et.al., 2010). There were two rounds of interviews in which the first one

was about salary and performance while the second one was regarding performance and

21
improvement. The main observation was that there was too much criticism done by the managers

which resulted in an over defensive behavior of employees (Caruth and Humphreys, 2008). The

main learnings from that study were that unnecessary and too much criticism creates a

pessimistic and unenthusiastic impact on performance and motivation levels of employees.

Interviews that are aimed at improving performance must not take up promotion and salary

issues simultaneously (Parmaks, 2009). There are many other studies which show performance

issues of employees as a result of negative feedback.

2.6 Performance Appraisal in Retail Industry

Plush store windows and attractive promotional drives make career in retail sector appear

to be very simple and glamorous: store, smile and sell. However, underneath this layer lies a

mesh of factors which impacts retailing and render correct employee performance evaluation a

challenging task (Mullie and Hill, 2004). When the economy is in the phase of a crisis,

customers cling tighter to their pockets. There are various other environmental factors which

influence the retail sector and sideline the performance improvement related processes.

An effective performance appraisal system therefore is the need of the hour for retail

companies. However, development of an all encompassing performance appraisal as well as

compensation policies can impose different challenges in retail firms (Performance Management:

A Retail Perspective, 2010). Retail organizations hire at least two essentially distinct types of

staff members: store staff and office staff. Many big retail firms also have staff in warehousing

and distribution department. For office personnel, the starting salaries are based on an

employee’s job title, education and experience. On the other hand, for employees working in the

stores, firms usually employ front line workers at minimal or slightly higher wages. The front

22
line managers are employed at a higher package than the store workers but still are less paid as

compared to office staff (Davis, 2012).

2.6.1 Performance Appraisal of Office Staff

The back office staff of retail companies has a relatively different work experience as

compared to their counterparts. This necessitates an entirely diverse approach to their

performance evaluation. Evaluation of office employees mainly focuses on factors such as

contribution made to team efforts, individual performance and productivity, taking new roles and

responsibilities in the firm and providing additional inputs for organization’s success (Marketos

and Yannis, 2008).

2.6.2 Performance Appraisal of Store Staff

The very first performance evaluation of a newly joined store staff member will most

likely concentrate on his degree of struggle or success in learning the different aspects of his job

such as stocking shelves, maintaining the cash register and services to customers. The ensuing

performance evaluations then concentrate on the goals set for an individual staff member by him

and his supervisor mutually. These reviews might stress on cultivating customer service

skillfulness and etc. Both store and office staff performance evaluation generally rest on

developmental goals of employees (Performance Management: A Retail Perspective, 2010).

2.6.3 Employee Benefits

These are the benefits are a type of additional compensation apart from hourly wages and

basic salaries. Permanent office personnel are usually given wide ranging benefits apart from

their salaries. However, the benefits that accrue to the store staff are very less as compared to

that of the office staff (Marketos and Yannis, 2008). In many cases where part time employees

23
are employed usually no benefit is given and many full time employees are also not given

incentives in big retail companies. Nonetheless, there are many employee centric retail groups

which respect and truly value their store staff and extend the same benefits to them as office

personnel. They also offer the part time employees partial benefit options (Mohr, n.d).

2.6.4 Promoting Employees

Promotion of deserving employees to higher posts must always be an essential

component of performance appraisal method. Retail companies encounter a distinct and huge

decision in this sphere due to the workplace dichotomy (Performance Management: A Retail

Perspective, 2010). These organizations might decide on promoting the exceptional front line

workers time and again or they might decide on filling the initial official positions with external

applicants. The main challenge encountered in promoting workers from within the store into the

official workplace is to identify the front line staff member whose educational qualifications and

accomplishment are apt for the profile of entry level office worker. This promotion decision is

solely based on performance appraisal of employees (Lewis, 2008).

2.6.5 Importance of Performance Appraisal in Retail Industry

Following are the benefits of performance appraisal in retail sector:

 Fair employee comparison – A performance evaluation mechanism used likewise for all

staff members provides management a fair and ideal way of making comparisons among

employees. Without such an objective means to evaluate the employee performance, it

can be tough to gauge who is working above or at the expectations of the company and

who is turning out to be an unnecessary cost for the company (Farfan, 2007).

 Improves Customer Service – Staff members in retail industry can pose both indirect as

well as direct influence on revenue and sales. Sales are indirectly influenced by the

24
 communication between employees and customers. Consumer loyalty is to a certain

extent based on the type of service received by them. If objective consumer centric goals

such as amount of constructive feedback certificates and etc. are included in employee’s

job description as well performance evaluation then employees can be motivated to

produce higher consumer service levels (Wicks, 2012). In absence of timely performance

evaluation system, most of the workers will lack an inner drive to perform better.

 Augments Upselling – The direct influence that employees of a retail company have on

the sales figure is related to their direct selling competency. The Salesforce commands a

significant influence on what the customers buy and in how much quantity. A worker

who is paid only on an hourly basis is generally not interested in doing upselling.

Evaluating the contribution of each employee to the sales and revenue figure in the

performance appraisal system assists management in ensuring best performance level of

each employee (Armstrong, 2005).

 Enhancing the reputation of company – Employees in retail sector prefer being employed

with a company which has regular performance reviews and clear objectives. They are

very clear of the level of performance that is expected from them. This makes a retail

group alluring for potential applicants, providing the company with a broader talent pool

(Farfan, 2007).

2.7 Performance Appraisal procedures at Marks & Spencer

Performance appraisal methods practiced by Marks and Spencer are modernized and thus

help company to better evaluate its employees. The most basic method of performance appraisal

adopted by the management of Marks and Spencer is conducting regular interview with its

employees (Marks & Spencer, Company Overview, 2013). Through the interview management

25
of Marks and Spencer judge and evaluate the performance of individual candidate and then

decide what kind of training and development & promotion skills must be imparted to the

employees so as to enhance their skills and productivity. Further, Marks and Spencer’s

performance appraisal methods are so designed that it helps management of Marks and Spencer

to analyze the area in which the employees need to be motivated (Marks and Spencer, 2012).

Most of the company do performance appraisals once or twice in a year, but Marks and Spencer,

on the other hand, practices these activities in every quarter, that is in every three months Marks

and Spencer do performance appraisal of its employees. And scholars feel it is better to practice

performance appraisals very frequently, as the company will able to make correct decision timely

and further, employees will also be able to keep an eye on their performance and if needed, can

adopt certain measures to improve their skills. Thus, through performance appraisal Marks and

Spencer ensures that their staffs is properly trained, as it is well known properly trained staff will

perform his work more confidently and will be motivated in a better way which will enhance his

efficiency and skills (Woehr and Huffcutt, 2011).

As stated earlier, Marks and Spencer practice performance appraisal very frequently. At

the end of every three months or six months performance review or performance appraisal is

conducted. Under this, individual worker of Marks and Spencer discuss his progress with his or

her manager (Marks and Spencer, n.d). Then, on the basis of their performance they have shown

over the last year, manager rates all the employees for their skills and competencies. Present

performance of the employees is than compared with that of expected performance level and

then according the feedback is provided to each employees. These feedbacks help employees to

analyze them their performance as against the expected performance level and thus help

employees to find out the areas in which they are lacking (HRM in Marks & Spencer, 2009).

26
 Once the feedback is provided to all the employees, the manager then meets all the

employees individually and discusses the plans for the future improvement for the coming year.

As each individual is provided with his or her feedback, according to the feedback develops an

improvement plan and according set the objective for the coming year (Performance Appraisal

Methods, n.d). Thus, feedback by the manager helps the workers to focus more on their career

path. Further, company also arranges training and development sessions for its employees so as

to enhance their managerial skills, so that they can develop managers for futures who can

effectively undertake particular management role. Thus, the above mention performance cycle

enables Marks and Spencer to motivate its employees and further, to maintain an effective and

efficient manpower (Marks and Spencer, n.d).

2.7.1 Effect of Performance appraisal of Marks & Spencer on Employee Performance

Marks and Spencer generally follow interview technique for conducting performance

appraisal of its employees. Moreover, they do this very frequently, that is in every three months

or six months. This enables them taker necessary actions well in time so that they can improve

the performance of its employees. Marks and Spencer follows fair policy in providing feedback

to its employees. For example, if an employee is doing extremely well, the manager will provide

a positive feedback to the individual (Wicks, 2012). On the other hand, if the employee is not

able to perform well, or is not able to maintain the desired standards of performance, manager

provides negative feedback to such employee. Sometimes, this negative feedback de-motivates

the employee and he or she feels dissatisfied. To over from this problem, Marks and Spencer

conducts some training and development & promotion session so that they can impart necessary

skills in their employees so that he or she gets motivated. Thus, this helps the management of

Marks and Spencer to improve the performance of its employees and on the other hand

27
employees with enhanced skills and productivity feels motivated (Parmaks, 2009). And as a

result, in their net appraisal review they get positive comments from there manager.

2.8 Performance Appraisal system in House of Fraser

Initially there were many challenges faced by the management of House of Fraser in

relation to its performance appraisal system. However, with time and experience, the retail group

has developed a distinctive appraisal procedure which mirrors its history, corporate goals,

workforce population and marketplace. Performance appraisal is conducted on a half yearly basis

at House of Fraser (House of Fraser since 1849, 2011). The company follows a different

appraisal system for its office staff and the front line staff. For the office employees,

Management by Objective appraisal method is used. Under this method, the first stage involves

defining organizational objectives by the top management of the retail company. These

objectives relate to the value system, history and vision of House of Fraser. These goals are then

communicated to the entire staff both office and stores. From this point onwards, the difference

initiates between the performance reviewing processes of the two categories of employees. For

the official workforce, firstly goals are set jointly by the superior and the subordinates (Farfan,

2007). This process facilitates the involvement of all the members of organization.

Subsequent to this, the managers provide their respective individual employees with

required resources and tools to accomplish their goals. This allotment of resources is also done

only after consulting with subordinates. The expected standards of performance are also set

jointly and actions for executing performance are chosen. Once the goals are set, resources are

distributed and course of action is decided, the subordinates execute their performance. In case

any clarification or guidance is needed, then the superiors extend their support (Performance

Appraisal Methods, n.d).

28
 The final step includes periodically reviewing the performance and progress made by the

employee. This evaluation finds out the adequacy level of employee’s progress and identifies the

problems faced if any. The performance is discussed with the employee in form of constructive

feedbacks and the entire MBO cycle is reviewed (House of Fraser since 1849, 2011).

While this is the performance appraisal system of the office staff, the performance of the

front line employees is evaluated by using 360 degree performance appraisal system. The

performance of the Salesforce is reviewed on the basis of feedback provided by an employee’s

superior, peers, juniors and customers. It also involves a discussion with employee on his

perspective of his own performance. Depending upon the corresponding feedbacks, the

performance of an individual employee is rated and his promotion or training needs are hence

identified (Performance Appraisal Methods, n.d). This type of performance appraisal system is

used by the company as it provides a very effective means of reviewing the performance of line

staff on a 360 degree basis. Only getting the viewpoints of a subordinate’s senior is not enough

in sales job. The work related behavior, attitude towards peers and juniors and the level of

service quality extended towards the customers are very important to be gauged in order to get an

objective view. However, this feedback is not solely tied to promotions and merits. The feedback

is properly framed by the management and this feedback is supported by customized coaching

plus other back up services (House of Fraser since 1849, 2011).

29
 Supervisor

Figure 1 Performance Appraisal of Office staff at House of Fraser

2.8.1 Effect of Performance appraisal of House of Fraser on Employee Performance

The performance appraisal system used by House of Fraser has had a positive

influence on the performance and productivity of its employees. The office employees are very

much aware about organizational and their individual goals and know the expectations their

company keeps from them. Though performance appraisal is not directly linked with rewards

and merits, however, it forms a strong basis for promotions. Employees themselves feel

responsible to perform better. Hence, their performance receives a positive boost. The feedback

may sometimes be negative, yet it is given in a constructive manner. This does not lower

employee morale (Wicks, 2012).

For the store staff also this system is not directly linked with pay. For them this can

act as a demotivating factor as the staff is not self motivated and they expect rewards or

promotions for their service. In addition to this, the superiors can at times be quite harsh while

giving feedback. This creates an environment of negativity. Hence, it can be said that the

performance appraisal system of House of Fraser has both negative and positive effect on

employees of the retail company (House of Fraser since 1849, 2011).

30
2.9 Conclusion

Thus, from the above literature review it can be concluded that performance appraisal is

of significant importance for every organization. It contributes essentially to increasing employee

performance and productivity by way of positive feedbacks and motivation in form of rewards,

promotion and etc. However, at the same time, it can also result in decreasing the productivity

and morale of employees if not given in a constructive manner (Miah and Hossan, 2012).

Performance appraisal has the capability of instilling an environment of fear and those

employees who are performing well might become anxious. The importance of performance

appraisal in retail industry is also very evident. As almost all the retail houses sell homogenous

products, it becomes important on emphasize on customer service and increase the sales figures

(Cardy and Leonard, 2011). The store staff is in direct contact with the customers and their

performance can have a direct impact on customer satisfaction. The performance appraisal

system of both Marks & Spencer and House of Fraser is distinct. Both the approaches have both

positive and negative impact on employee performance. Therefore, it can be said that

performance appraisal makes mixed contributions to employee productivity and performance

(Aguinis, 2009).

31
 CHAPTER 3: RESEARCH METHODOLOGY

3.1 Introduction

In research methodology part, report presents a speculative statement, which forms a

basis for the project survey. A brief introduction with respect to several strategies and

methodologies adopted while research process is being given through this chapter. It normally

reveals the practical framework plus varied methods put up in report conducted. For effectively

attaining the objectives as well as outcomes of numerous issues, many philosophies and

instruments of research was also created (Babbie, 2010).

Research is a planned and sequential evaluation of the topic under purview. It also gives

illustration about the approaches of research used in study. The description regarding data

collection method, analysis of collected data and various research methods applied in the

research are provided in the body of research methodology (Ethridge, 2004). Through

completely defining the limitations plus probabilities of study, the methodology part places the

research in between current and traditional research in information system. The particular section

of dissertation places focus on accumulation as well as compilation of data for a specific

purpose. Accordingly, this chapter confines the hidden facts or figures, which have not been

marked out till the date. Moreover, it also identifies problems solutions with the help of

systematic practices and function (Gibaldi, 2010).

As we can see that in humans, backbone gives a proper support to whole body, similarly

is the case with research study and research methodology. The section facilitates several

outcomes and provides adequate support in considering the data in relation to particular trend of

market (Gill and Johnson, 2002). Here, in this research report, an importance of performance

appraisal in the improvement of employee’s performance and productivity is evaluated.

32
Furthermore, it is analyzed that in retail sector what is the connection between performance

appraisal and workforce motivation. The research is completed by analyzing results of

questionnaire survey on Marks & Spencer and House of Fraser, in relation to significance of

performance appraisal in these companies plus its impact on employees. These are UK based

multinational companies with big giants in retail sector. Various research approaches is also

being rationalized and explained by the investigator, for the reason to review the results of study.

3.2 Research Philosophy

Philosophy provides an idea and outline of information plus methods in relation of

specific topic or event. Such data required to be collected, observed and scrutinized. In many of

the projects, the original theoretical assumptions turn up from the interpretive observations. For

the reason to keep adequate functioning as well as processing, a very crucial role is played by

research philosophies. It gives effective support in maintaining appropriate delineate of research

(Kumar, 2010). The philosophy of research is being categorized into two fractions, such as

positivism and Interpretivism. The research methods give assistance in selecting an adequate

approach for the survey. For example, in surveys where large sample is targeted for collecting

information, in such case positivism philosophy is most appropriate one. This method puts

prominence on facts, creates a hypothesis and finally makes their analysis. On the other side,

Interpretivism philosophy investigates small sample size for a specific duration. Building ideas

through information induction is the focus for this method (Merriam, 2009). In the current report

positivism philosophy is employed as data will be collected through questionnaire survey.

33
3.3 Research Aims and objectives

The main aim of the research is to identify the contribution made by performance

appraisal system towards improvement in employee performance in Marks & Spencer and House

of Fraser. To fulfill this aim following research objectives have been set:

f) To understand performance appraisal and different methods of performance appraisal.

g) To identify the connection between PA and motivation of employees in retail sector.

h) To determine the various problems with performance appraisal mechanism.

i) To identify how performance appraisal augments employee performance.

j) To determine the satisfaction level of employees with the methods of performance

appraisal.

3.4 Research Approach

Research approach supports in enhancing the report effectiveness. There are two kinds of

approaches in almost all research projects, i.e. quantitative and qualitative. In this dissertation,

researcher will be utilizing the Interpretivism philosophy, for having complete understanding

plus information of incidents taking place in the process of survey. A profound insight of every

part of the project is also viewed with the help of this approach. Moreover, in order to analyze

the survey results, qualitative method would be incorporated by the researcher. A supportive

hand will be given by the qualitative approach for collecting, evaluating together with extracting

hidden facts and significance of performance appraisal in Marks & Spencer and House of Fraser

(Miles and Huberman, 1994). The approach will provide assistance by allowing the researcher to

have a clear understanding of several factors, which affects both individuals and organizational

performances. Keeping employee’s motivation at workplaces is very critical task for the

management of firms. Since, both companies are huge international giants, so it is essential for

34
them to maintain the performance of workforce, for increasing productivity of business, by

providing strong motivation. The researcher is evaluating methods of appraisal used by two

companies along with issues associated for carrying out this process at workplaces. The data’s in

relation to this matter is compiled by use of secondary data collection methods. In this regards,

several articles, academic journals and scholars’ books are searched by the investigator in the

section of literature review that helps in undertaking qualitative research study (Orb, Eisenhauer

and Wynaden, 2001).

3.5 Quantitative Approach

Quantitative approach is also known as deductive approach. This approach comprises of

collecting data and interpreting the outcomes of the analysis. There is a lot more to the

quantitative approach as it employs hypothesis testing and concepts that make up for the themes.

This type of research includes use of numerical values and numbers which create a link between

the participants and variables. One of the major characteristics of this type of research is that data

collection method differs from the analysis. The current report uses an inductive approach

(Roberts, 2010).

3.6 Selected Design

Research Design can be described as a theoretical set that provides immense help in a

research study. It basically emphasizes on moving back to the research questions and paying

detailed attention to the collected data so that the questions can be dealt with in better manner.

Research design is of four types case studies, longitudinal, cross-sectional and experimental. As

per the nature and aims of the research, primary as well as secondary data have been gathered.

Secondary data has been collected from journals, internet, books and magazines. The secondary

data does not completely provide answers to the research question but aids the primary research.

35
3.7 Sample Selection

The process of sampling is practical in nature that saves the valuable time of investigator,

for the reason to conduct the research in simple manner. It is one of the significant determinants

in any of the research project plus brings various tactics that lessens the required quantity of data

to be collected through focusing on data from sub-group, rather than all essential aspects. While

collecting data, concentration should be given that the sample is sufficient enough to facilitate

valid or suitable information. The approach of sampling is normally used, in order to gather an

appropriate sample for the compilation of primary data as well as several polices are also

accessible in this respect that mainly divide it into two parts, such as probabilistic and non-

probabilistic sampling (Panneerselvam, 2004).

In the present report, the researcher will make use of random sampling method, for the

reason to collect the respondent’s feedbacks. This sampling method is regarded as one of the

optimum forms of sampling and helps in the sample selection in a rational manner. The

particular method has been chosen, as in this there is an equivalent chance of population

selection in the sample (Perry, 1998). It also gives guarantees about the assessment is being

undertaken in an ethical manner without violating values and interest of any participants. In this

research, the survey size of sample would be 50 participants that will include employees of

Marks & Spencer and House of Fraser (Roberts, 2010).

3.8 Data Collection Method

There are mainly two methods of accumulating data i.e. primary and secondary. Primary

data gathered for the study belongs to the actual location of event. The data accumulated

particularly for this research study is classified as primary data. The primary data on

performance appraisal of Marks & Spencer and House of Fraser was collected through

36
questionnaire of the employees which contained both open ended and close ended questions.

Secondary data was also collected for the research. It was collected with help of books, journals,

articles and internet sources (Driscoll and Brizee, 2012).

3.9 Data Analysis

In order to have considerate information plus knowledge in respect of acquired data, set

of methods are made into use, which is called “Data Analysis”. It gives support in modifying the

collected information into required data as well as aids in assessing the results of study. Results

derivative from several sources are accumulate by data analysis that leads in presentation of clear

image of composed data. Various things form an important part at the time of data analysis and

the most vital among them is the quality of information (Driscoll and Brizee, 2012). The data

should be of supreme quality as well as it must be free from biasness of human beings. This

section of the study provides conclusion to the investigation and the relevant statistical statement

creates its basis. Significant decision is undertaken by paying attention on this part of the study,

thus it is an indispensable section. Through assisting in accomplishment of survey, this technique

has achieved importance both for the research and the investigator (Hewlett-Packard, 2012).

For examining the collected information, both qualitative and quantitative techniques are

being utilized in this study. In order to gather data regarding appraisal methods used by both

companies as well as its impact on the performance of staff members, secondary data collection

sources are being utilized by the researcher. Moreover, qualitative research will aid the

researcher in identifying various problems that affects the practices of effective performance

appraisal (Miller, n.d). Themes will be prepared for the responses so that detailed insights can be

obtained and the responses will also be represented graphically.

37
3.10 Validity and Reliability

With the help of validity, the obtained outcomes accuracy could be assessed. For the

reason to evaluate the result of investigation, it often concentrates on valid data collection. It

offers a series of evidence and facts for conducted research. Validity also gives supportive hand

for creating an estimation of accuracy plus genuineness of the investigation. The main intention

of the research is being reproduced by its concision section. The aim of reliability is keeping

standardization and consistency of survey results. Certainty plus accuracy of findings is also a

great reliability concern. If the investigator conducts any study then there may be few complex

conditions that depreciate the quality of research; this part eliminates occurrence of such kinds of

situations or events (Remenyi, 2010).

Less knowledge of the researcher about the topic or subject of study could have impact

on the consequences of investigation. Due to this concern, several sources are being utilized, in

order to validate the data that are collected for attaining the results. Motivation should be given

to all employees that are engaged in different departments of a company, for increasing their

interest to attain best productivity for business. Moreover, performance appraisal should also be

planned in a manner that could enhance the act of each staff member at workplace. For

completing study on this topic as well as to ensure better authenticity of data, scholarly journals

and articles of different authors is reviewed. Numerous books were searched to have a

comprehensive understanding of research topic. Reliability together with validity makes the

study more genuine and useful (Research methods: Data analysis, n.d).

3.11 Ethical considerations

In order to undertake any investigation, participation of humans and several other

subjects are being included. Moreover, composite issues such as social, legal, ethical and

38
political factors are raised too. Ethics is considered as a process that defined what is correct and

what is wrong with respect of group, society and the individuals (Remenyi, 2010). In research

ethics, there are basically three kinds of objectives is being comprised. One is concentrates on

the human being protection, who are taking participation in investigation or study. The another

intend of research ethics is to make sure to all the stakeholders, such as government, society,

individuals and groups that the particular study is being conducted in their interest. Last but not

the least, the intention of ethical research is in regards of issues like, confidentiality, plans of the

research, ethical soundness of the activities, risk management and the process of intriguing

sanction of all the relevant sources from where the data is being taken (Walton, n.d).

For enhancing the authenticity and reliability of investigation, it is obligatory to follow

ethical consideration. In this report, all the data’s as well as information from secondary

resources are gathered from the reliable scholar’s journals, books and articles. In addition to this,

every author whose research work in relation to topic of investigation given in the literature

review part are also reliable plus valid (Remenyi, 2010).

3.12 Limitations of the study

In the path of undertaking investigation, some of the constraints are faced by the

investigator that is explained in following bullets;

 Thoughts and views of several scholars and authors comprised in the section of literature

review, can be contradict sometimes.

 The findings of investigation was not generalized as it is undertaken in a confined area

plus related to a particular subject matter.

39
 As in this study the secondary method of data collection is being utilized for data

gathering and thus, information could be irrelevant plus the author’s views might be

completely biased (Strohmenger, 2011).

40
 CHAPTER 4: DATA ANALYSIS & FINDINGS
4.1 Introduction

This chapter of the research report analyzes the data collected by primary or secondary

means during the research along with a discussion of the various research outcomes and findings.

The findings pertain to the research questions which have steered the entire research. Data

analysis is basically a process for the transformation, remodeling and revision of information in

order to arrive at a conclusion for a particular problem or situation. Data analysis is chiefly

performed by two main methods i.e. quantitative and qualitative. Under quantitative analysis

information acquired from the respondents is expressed in numeric terms. On the other hand,

under quantitative analysis emphasis is placed upon the experiences stated by the participants

and on the hidden meanings attached with those experiences.

The current report employs both quantitative and qualitative methods of data analysis for

examining the accumulated data. The reason behind using both these methods is that the

representation of data in term of percentages will provide accuracy to the research while the

elucidation of data in form themes will provide illuminating insights into the research topic

which cannot be presented through graphs. The use of both methods of analysis is considered to

be the best combination for presenting the research outcomes.

4.2 Analysis

The primary data gathered by means of questionnaire survey of the employees of Marks

& Spencer and House of Fraser UK, has been analyzed in both graphical terms and theoretical

form. As the employee base of the two companies is quite huge hence random sampling

technique has been employed which would represent the entire population. 50 respondents in

total i.e. 25 from each company have been selected. The employees from different departments

41
of the companies were selected. Thematic analysis of the responses obtained from the

participants along with graphical representation of data in percentage form has been used.

Thematic analysis is the process of analyzing the data by forming several themes. Normally,

thematic evaluation is used in synergy with analytical process i.e. the quantitative pattern.

Theme 1: Evaluation of performance and motivation describe performance appraisal best.

When the employees of the two companies were asked that what according to them

performance appraisal is, majority of the employees from both Marks & Spencer and HOF said

that evaluation of employees’ performance characterized the term best as it is primarily a tool to

evaluate the performances of employees which if implemented effectively can provide both

motivation and job satisfaction. On the other hand many of the employees from the two

companies also said that they considered it to be a motivational tool. They felt that on receiving

positive feedback about their performances they felt motivated to work. . If the process is not

fairly executed then it can also result in grave dissatisfaction among employees and affect their

performances. Some other participants also said that they believed performance appraisal as a

means of promoting employees while some said that it was a way to increase job satisfaction.

70

60

50

40
M&S
30 HOF

20

10

0
Promotion Performance Motivation Job Satisfaction
Evaluation

42
Findings: On analyzing the responses of the employees of the two companies it was identified

that 65% employees of Marks & Spencer considered performance appraisal to be a performance

evaluation technique, while 25% regarded it as a motivational tool and 5% each considered it as

a means of promoting them and enabling job satisfaction. 60% of the employees of House and

Fraser considered performance appraisal to be a performance evaluation technique, 30%

regarded it as motivational tool, 10% thought of it as a means of promoting them. The above

responses bring to light one thing that employees have different perceptions when it comes to

performance appraisal.

Theme 2: 360° appraisal system and management by objective are the two methods

adopted by the companies.

On asking the employees about the performance appraisal system followed in their

companies, the employees of Marks & Spencer said that their company was using 360° appraisal

system. The employees of House of Fraser responded by saying that their company used MBO

technique.

100
90
80
70
60
50 M&S
HOF
40
30
20
10
0
360° MBO Grading Merit

Findings: On evaluating the responses of the research participants 100% employees of M&S said

their company is using 360° appraisal system and 100% employees of HOF said that their

43
company is employing MBO. These responses clearly indicate one thing that all the employees

have a precise idea of the performance evaluation system followed in their companies.

Theme 3: The satisfaction level among the employees regarding their performance

appraisal system is high.

When the respondents were questioned on their satisfaction level regarding the

performance appraisal method being followed in their organizations, majority of the employees

of Marks & Spencer answered in the affirmative. They said that the 360° performance appraisal

system followed in their company is good as it involves the feedback from their colleagues who

possess actual insights and information relating to their performances. In addition to this, they

feel that assessing their self performances enhances their awareness regarding the flaws and

strengths. However, some employees feel that their colleagues and juniors may sometimes be

biased and might not rate their performances fairly. The employees of House of Fraser also

showed mixed reactions. Some of them said that they were satisfied with management by

objective approach to performance appraisal as it helped them understand their goals and the

level of performance expected from them. This made it convenient for them to enhance their

performance. They were aware of the expectations of the organization from them. They also feel

that with help of MBO, proper lines of authority are established and ineffective communication

and delegation are done away with. The element of objectivity is introduced in activities.

However some felt that this system is too complicated and sometimes their supervisors take

undue advantage of this by simply assigning and not negotiating objectives. Apart from this they

feel that it is not an equitable means of evaluating performance as the goals of all the individuals

are different in terms of complexity and intellectual requirement. They said that the company

44
follows the same approach for all levels of employees whereas this method is less suitable for

assembly line workers as for them traditional appraisal systems are more applicable.

80
70
60
50
M&S
40
HOF
30
20
10
0
Yes No

Findings: From the analysis of responses of employees to this question it was identified that 80%

employees of Marks & Spencer are satisfied with the appraisal method used in their organization

whereas 20% are not very satisfied. The case is a bit different in House of Fraser where 50%

employees are satisfied and 50% are dissatisfied.

Theme 4: The performance evaluation methods are adequately evaluating the performance

of employees.

The employees were asked to rate how effectively their respective performance appraisal

methods were evaluating the performances on a scale. Majority of the employees of Marks &

Spencer said that the appraisal method adopted by their organization was quite good in

evaluating their performances. Some employees rated it as just slightly good. On the other hand

the some employees of House of Fraser found the methods to be quite good while the majority

found the system to be just slightly good.

45
 80
70
60
50
40
30 M&S
20 HOF
10
0
d d d er ba
d
ba
d
ba
d
g oo g oo g oo th
y e y ei tl y t e
el
y
el ui
t
ht
l N h ui
em ig ig Q em
r Q
Sl Sl t r
Ex
t Ex

Findings: On the evaluation of the responses given by the employees regarding the effectiveness

of the appraisal method in assessing the performance, 75% employees of M&S said the method

was quite good in discharging its purpose, 15% said that it was just slightly good, 5% regarded it

as extremely good and 5% said it was neither good nor bad. At the same time, 65% employees of

HOF found the system to be slightly good, 25% regarded it as quite good, 5% were indifferent

regarding the method while 5% rated it as slightly bad. This clearly shows one thing that the

system followed by the two companies is not free from errors and some improvements are

required to make it error proof.

Theme 5: Evaluation of performance improves both motivation and job satisfaction to

some extent.

The employees of both the firms were asked to rate whether performance evaluation

resulted in improved motivation and job satisfaction or not on a five point scale. Majority of the

employees from M&S responded by saying that they agreed to this aspect. As many employees

perceived performance appraisal as a means to augment motivation and improve job satisfaction,

they felt that evaluating their performances does increase their encouragement. However, there

46
were some employees of the company who felt that assessment of performance does not have

anything to do with motivation and work related satisfaction. Maximum employees of HOF said

that this system improved their motivation and job related satisfaction to only some extent while

there were some employees who said strongly agreed with the point saying that there

motivational level and satisfaction improved manifolds.

70

60

50

40
M&S
30 HOF
20

10

0
Stongly Agree Neither Disagree Strongly
Agree Disagree

Findings: The examination of responses of employees of Marks & Spencer revealed that 60% of

the employees were agreeing to the point that assessment of performances resulted in increased

job satisfaction and motivation, 10% strongly agreed to it, while 15% neither agreed nor

disagreed and 15% employees disagreed. 70% employees off House of Fraser responded in

agreement of the point, 25% were in strong agreement while 5% were neither in agreement nor

in disagreement.

47
Theme 6: Performance appraisal assists to a great extent in setting and achieving

meaningful goals and objectives.

The staff members of both the corporations were asked to rate the effectiveness of their

respective performance appraisal method in helping them set and attain meaningful goals.

Maximum employees of Marks & Spencer said that 360° appraisal system of theirs helped them

extremely to identify their personal and professional goals and strive towards fulfilling them.

Some staff members said that the method was only quite helpful. Majority employees of House

of Fraser said that the performance appraisal system adequately assisted them in forming their

goals and attaining them. As MBO by its name suggests following goals for achieving success

the employees believe that they have been assisted in following a clear path directed by their

clearly defined goals. However, not all employees were of this viewpoint and said that the

method only slightly helped them in setting and accomplishing their objectives.

80
70
60
50
40 M&S
HOF
30
20
10
0
Extremely Quite Slightly Neither

Findings: The analysis displayed that, 75% employees of Marks & Spencer believed that their

performance appraisal system was very helpful in assisting them in setting and attaining their

goals. However, 15% said that the method was quite helpful while 5% said that it was just

slightly helpful. 60% employees of House of Fraser responded by saying that the evaluation

48
method was quite helpful in setting and accomplishing meaningful goals, 35% said that it was

slightly helpful and 5% said that it was extremely helpful.

Theme 7: Timely feedback is provided to employees.

When the participants were asked that did they receive timely feedback through their

performance appraisal method, majority of the staff members of M&S replied in the affirmative.

Though there were some employees maybe from different department who said that the feedback

was not always timely. Some respondents from HOF said that they received regular and timely

feedback. While some said that the feedback was not timely. This can be attributed to the

difference in nature and complexity of work.

80
70
60
50
M&S
40 HOF
30
20
10
0
Yes No

Findings: The evaluation indicates that 75% employees of M&S responded by saying that they

received timely feedback while 25% said they didn’t. 65% employees of HOF said that they got

feedback in a timely manner while 35% said they didn’t.

Theme 8: The feedback related to performance is helpful in improving work related

performance.

When the respondents were asked about the role feedback played in improving their on

the job performance, maximum employees of Marks & Spencer said that the timely feedback

49
provided to them by their seniors helped them a lot in improving their work performance. They

said that as they knew the main aim of performance evaluation is to assess the performance and

identify the shortcomings as well as strengths, feedback was taken constructively. In addition to

this, feedback on performance provided by their peers, juniors and seniors were very helpful in

knowing the exact areas where improvements were required. Some employees said that they

didn’t find significant improvement in their performance as they found the feedback to be biased.

Majority respondents of HOF said that considerable improvements are facilitated by the

feedback on their performance, while certain employees had a conflicting view.

Findings: Performance appraisal plays an instrumental role in improving the work performance

of employees.

Theme 9: Rewards or performance based pay are desired by most employees.

When the respondents were asked that do they think their performance appraisal should

be linked with pay, majority respondents from M&S were in favor of barring just a few

employees. The staff members of HOF were also in favor of performance based pay.

100
90
80
70
60
M&S
50 HOF
40
30
20
10
0
Yes No

Findings: 95% employees of Marks & Spencer wanted rewards to pay to be linked with

performance evaluation while there were 5% people who were fine if there was no linkage

50
between rewards and appraisal. 98% employees of House of Fraser were in favor of this linkage

except 2% who were not very interested in rewards. Hence, one thing is clear from this that

linking pay or rewards with appraisal can motivate employees to perform better.

Theme 10: Active involvement of employees will increase the effectiveness of performance

appraisal instruments.

In response to the question demanding suggestions from employees to improve the

effectiveness of performance appraisal instruments, majority of the employees from both the

companies said that active involvement of employees in developing performance standards will

result in a better appraisal instrument.

Findings: Employees prefer to be assessed by instruments designed and developed taking help of

staff members. When performance standards will be developed by employees themselves then

their performance is likely to increase.

Theme 11: The management is not much biased during the appraisal process.

When the respondents were asked to rate the fairness of their senior management during

the appraisal process majority employees from M&S said that the management was not much

biased, while some said that it was neutral. However, there were some employees who found the

management to be somewhat biased. Similar responses were obtained from the employees of

HOF.

70
60
50
40
30
20 M&S
10 HOF
0
h t l h ll
uc ha ra uc
m w eu
t
m ata
e
ry m N ot ot
Ve So N N

51
Findings: 65% employees of M&S was of the view that the senior management was not much

biased during appraisal, 20% say it is somewhat biased while 15% perceive it to be neutral. 60%

employees of HOF find the management to be not much biased, 25% say it is neutral while 15%

say it is somewhat biased. This indicates that somewhere the top management is biased and this

can affect employee performance.

Theme 12: The performance appraisal has resulted in mitigation of turnover intentions of

employees.

When the employees were asked whether their turnover intentions post performance

appraisal have reduced, maximum employees of M&S replied in affirmative while some said that

the appraisal didn’t have much effect on these intentions. On the other hand, majority of the

people in HOF said that the system didn’t affect their intentions of leaving job while there were

only some who said that their intentions changed.

70
60
50
40 M&S
30 HOF
20
10
0
Yes No

Findings: 70% employees of M&S reported change in their turnover intentions while 30%

reported the opposite. 40% staff members reported a change while 60% said it did not affect their

intentions.

Theme 13: The improvement in performance was rated as above average.

52
 When the employees were asked to rate improvement in their performances post

appraisal maximum of the employees of M&S said that the improvement was above average

while some said it was average. Likewise, majority employees of HOF said that the improvement

was average rated.

70

60

50

40
M&S
30 HOF

20

10

0
Below Average Average Above Average Exceptional

Findings: 65% employees of M&S rated their improvement as above average while 35% rated it

as average. 55% employees of HOF rated their performance as average, 35% as above average

while there were 10% who considered the improvement as exceptional.

Theme 14: There are changes in work related attitude and behavior.

Majority employees of M&S say that they witnessed positive changes in their work

related behavior and attitude. While there were some who said there were not many changes in

their attitudes. Maximum staff members of HOF said that they experienced only somewhat

changes in their behavior while some were neutral.

53
 60
50
40
30 M&S
HOF
20
10
0
Very much somewhat Neutral Not much Not at all

Findings: 55% respondents from M&S said that they witnessed very much change in their

attitude and behavior, 25% said reported only somewhat change, 15% said not much change was

seen and 5% didn’t see any change at all. 60% employees of HOF reported only somewhat

change, 20% were neutral, 5% saw very much change while 5% experienced not much change.

Theme 15: The sales figures have witnessed an upward trend post performance evaluation.

The sales figures of both the stores have witnessed an upsurge subsequent to the appraisal

of their employee performance. Majority respondents from both the companies confirm this

thing.

90
80
70
60
50 M&S
40 HOF
30
20
10
0
Yes No

54
Findings: 90% employees feel the upsurge in sales figures is due to evaluation of their

performances and its after effects, while 10% do not attribute it to performance appraisal. 85%

employees in HOF attribute it to performance appraisal while the rest 15% do not.

Theme 16: Training needs was adequately identified during appraisal.

Majority of the respondents from both the companies said that the after conducting

performance appraisal training needs were adequately identified.

80
70
60
50
40 M&S
HOF
30
20
10
0
Extremely Quite Slightly Neither

Findings: 70% employees of M&S felt that training needs were adequately identified, 20% said

that they were slightly identified, 5% felt it was extremely successful while 5% said that it was

unsuccessful. 75% employees of HOF felt that training needs were sufficiently identified, 15%

regard it as slight, 5% each for both extreme cases.

55
 CHAPTER 5: CONCLUSION AND RECOMMENDATION

Conclusion

The above chapters provide a comprehensive overview of performance appraisal and the

role played by it in augmenting or decreasing the performance of employees. The Literature

Review section of the report provides a detailed account of purpose of performance appraisal,

performance appraisal and work performance, performance evaluation and employee

commitment towards organization, turnover intentions of employees, perception of this system in

organizations, importance of performance appraisal in retail industry and the after effects of this

system in Marks & Spencer and House of Fraser, UK (Cardy and Leonard, 2011).

The literature review has been immensely helpful in furnishing great insights into an

array of topics. It has been learnt that appraisals are very important to make out the comparative

worth, competencies and merits of employees in an enterprise. It helps in critically reviewing the

strengths, weaknesses and deficiencies in the performances so that the future performance of

employees can be improved. According to the literature review the most evident purpose of

carrying out performance evaluation is to bring about improvement in individual performance

which will in turn enhance organizational performance (Jabeen, 2011). The studies conducted by

many authors revealed that there is often a proportional relationship between performance

appraisal and the job satisfaction level of employees which consequently results in high levels of

performance. The studies by some eminent researchers state that appraisal methods help in

clarifying the expectations of companies from their employees. This transparency augments

focused attention which increases employee performance and satisfaction. With increased

satisfaction the organizational commitment of employees also increases (Bohlander and Snell,

2007). Some research works also suggest that the interaction taking place between a superior and

56
his subordinate during appraisal time can either shape or break employees’ morale. The studies

revealed that there is a negative relation between appraisal and turnover intentions of employees.

Practicality says that performance appraisal can have both positive as well as negative

impact on the performance of employees. This largely depends upon how employees perceive

this system. If the relevance of performance appraisal system is not understood by them then it

might create an environment of insecurity (Woehr and Huffcutt, 2011). This system holds

significant importance in retail industry as people desiring to work in retail industry prefer

working with a firm which has clear benchmarks and fair performance reviews. As almost all the

retail houses sell homogenous products, it becomes important on emphasize on customer service

and increase the sales figures (Cardy and Leonard, 2011). The store staff is in direct contact with

the customers and their performance can have a direct impact on customer satisfaction

From the data analysis conducted of the primary data it has been found out that the

performance appraisal method followed in Marks & Spencer and House of Fraser are different

from each other. Though both the companies use modern methods of appraisal i.e. 360° and

MBO yet they are not free from errors and hence do not satisfy all the employees (Prowse and

Prowse, 2009). From the above findings it can be concluded that the employees of both the

companies have different perceptions regarding the actual purpose of performance appraisal. The

satisfaction level of employees regarding the system adopted in their respective organizations is

varying. Employees prefer a system accompanied with rewards and having their active

involvement (Korsgaard and Roberson, 1995). Nonetheless, the performance of employees on

the whole has increased due to performance appraisal and the rising sales figures are a slight

evidence for it.

57
Recommendations

However, there are some recommendations for the companies which can improve the

effectiveness of their performance appraisal systems. Firstly, it is very important to ensure that

both the managers as well as the employees must comprehend the appraisal system. The senior

management of the two companies must explicitly describe the specific purpose of performance

evaluation. This reduces the ambiguity and confusion of the process. The main aim behind this is

that everyone in the organization must be clear about the purpose of conducting appraisal.

Secondly, as found out in the data analysis that the employees were not completely pleased with

the appraisal method being followed in the firms, it is recommended that the companies assess

the efficacy of their existing systems. The needs of both the managers and the employees are

different. Hence, the firms must determine them and then draft a questionnaire to evaluate the

extent up to which the workforce perceives the system to be effectual.

It is also very critical for a manager to possess adequate skills to evaluate his/her

subordinate’s performance. Hence, the companies should concentrate on assisting managers

cultivate those appraisal skills and required confidence. Interaction between superiors and

subordinates is central to how employees take their feedback. Therefore, the seniors must be able

to provide constructive feedback. It is believed that ambiguous performance standards lead to

unsuccessful appraisals. For the evaluation to be accurate and meaningful, it is necessary to

establish precise goals in advance.

The management must schedule informal evaluations periodically on a routine basis.

Such type of small appraisals promotes open communication, provides the seniors with an

opportunity to monitor the progress of their subordinates, give constant feedbacks and cater to

small problems so that they do not culminate into major ones. It has been found through data

58
analysis that linking rewards with performance evaluation is desired by almost all employees.

Therefore, the management must provide essential resources for linking pay with performance.

The employees must be encouraged to speak up with his senior if he finds any area of

incongruity. It is very necessary to make the employee comfortable so that he is not afraid of the

repercussions for asking for clarification. His strong areas and places where improvement is

required must be effectually discussed. No employee is perfect and this should be understood by

managers. Before out-rightly criticizing, the manager must understand the reasons behind bad

performance and then correctly counsel the employee instead of inconsiderate backlash. Majority

of the employees said that they would appreciate their active involvement in developing

performance standards. Thus, the management must include employees in setting the standards

so that employees will also have a clear cut idea of the expectations their company keeps of

them. The organizations must also think about involving the employees in the preparation of

performance appraisal instruments. This would facilitate development of a more effective

performance appraisal system.

One thing that must be kept in mind by the senior level officers is that they should always

remind the employees that their performance review does not get automatically linked with

compensation revision. Employees may get dejected by certain outcomes of his evaluation. This

disappointment must not be deepened by not attending to the issue of compensation if it was

presumed to be so by him. Hence, it can be said that by following the above mentioned

recommendations and by giving appropriate priority and planning the efficiency of the

performance appraisal systems can be improved.

59
 CHAPTER 6: REFLECTIVE STATEMENT

This study has been a very illuminating journey for me. As part of my academic career,

this research work has improved my learning to a great extent. The present report has added

immensely to my knowledge on the retail sector as well as a very important aspect of human

resource management – performance appraisal. It was very delightful to go through different

literary sources related to this study. Variations in perspectives of different researchers kept my

interest alive in the research as I was able to find gaps in their studies.

My knowledge regarding conducting a sequential and proper research also improved

significantly. In depth knowledge has been gained about the system of performance appraisal

along with its effects on the performance level of employees. Learning about the importance of

performance appraisal in retail industry, I understood the latent challenges faced by companies in

appraising their employees.

The study was carried out in two main stores of UK, i.e. Marks & Spencer and House of

Fraser. Valuable information regarding the performance appraisal method used by these two

companies and their potential shortcomings plus strengths was obtained. At the time of surveying

employees, reluctance was experienced on their part. To overcome such barriers though was

challenging but proved to be quite enlightening.

All through this dissertation I learnt that human resources is a very complex domain and

includes various intricacies which require detailed understanding. Performance appraisal even

though sounds very simple but has lot many dimensions attached to it. Comprehensive learning

of this discipline was acquired by me that will also help me in my future agendas.

After reading so many articles and journals I was able to recommend decent ways of

improving the effectiveness of performance appraisal systems of the two companies. Hence, I

60
can say that this research has greatly enhanced my knowledge and personality and taught me the

importance of planning and time management.

61
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 APPENDIX 1

Questionnaire for employees

Name: __________________________

Age: ____________________________

Department: ______________________

Tenure with the company: ___________

Q1. Performance appraisal in your opinion is?

o Promotion of employees

o Evaluation of employees

o Motivational technique

o Job satisfaction

Q2. Which performance appraisal method is used by your organization?

o 360 Degree

o Management by Objective

o Grading

o Merit

o Other _______________________

Q3. Are you satisfied with the method being implemented by your organization?

o Yes, why? ___________________________________________

o No, why? ____________________________________________

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Q4. Is the appraisal method evaluating your performance effectively?

Good Bad

Extremely Quite Slightly Neither Slightly Quite

Extremely

Q5. Do you think that performance evaluation improves job satisfaction and motivation?

Strongly agree Agree Neither Disagree Strongly Disagree

Q6. Do you think that performance appraisal assists you in setting and achieving meaningful

goals?

Extremely Quite Slightly Neither

Q7. Is the present appraisal method providing timely feedback to you?

o Yes

o No

Q8. The performance feedback received by you is helpful in improving your work related

performance?

Q9. Do you think some rewards or pay should be linked to the appraisal method?

o Yes

o No

Q10. If yes, what kind of rewards can motivate you?

Q11. Are negative feedbacks de-motivating you?

Strongly agree Agree Neither Disagree Strongly Disagree

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Q12. What according to you will increase the effectiveness of performance appraisal instrument?

Q13. Is the management biased while conducting performance appraisal?

Very much Somewhat Neutral Not much Not at all

Q14. In your opinion does performance appraisal provide constructive criticism in a positive

way?

Strongly agree Agree Neither Disagree Strongly Disagree

Q15. Has the performance appraisal method resulted in mitigation of turnover intentions?

Very much Somewhat Neutral Not much Not at all

Q16. Has the work related behaviour and attitude of workforce changed accordingly?

Very much Somewhat Neutral Not much Not at all

Q17. Rate the improvement in your performance after the performance appraisal

o Below average

o Average

o Above average

o Exceptional

Q18. Has sales figure seen an upward trend subsequent to the evaluation of employees’

performance?

o Yes

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 o No

Q19. What were the changes observed after implementing the appraisal method?

Q20. Were training needs effectively identified after conducting performance appraisal?

Extremely Quite Slightly Neither

Q21. Is the performance appraisal system helpful in reducing grievance of employees?

Not at all Somewhat Moderately Extremely

Q22. What are the benefits of performance appraisal according to you?

Q23. Is the performance appraisal method helpful in identifying your actual potential?

Not at all Somewhat Moderately Extremely

Q24. Does performance appraisal system help in clarifying your job responsibilities?

o Yes

o No

Q25. Is the management devoting adequate resource for this system?

o Yes

o No

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