FINAL YEAR PROJECT

THE IMPACT OF PERFORMANCE APPRAISAL SATISFACTION

ON MANAGERIAL EMPLOYEES WORK PERFORMANCE,
ORGANIZATIONAL COMMITMENT AND TURNOVER
INTENTION

Submitted by:
Syed Uzair Haider
(07-0076)
Supervised by:
Ms Saira Ibrahim

Submitted on:
April 14, 2011

Program:
BACHELORS OF BUSINESS ADMINISTRATION PROGRAM
Spring 2011

National University of Computer & Emerging Science

Management Science Department,
Karachi, Campus

FAST SCHOOL OF BUSINESS, KARACHI

Recommendation for External Examination

This final year project, hereto attached, titled, The Impact of Performance Appraisal
Satisfaction

on

Managerial

Employees

Work

Performance,

Organizational

Commitment and Turnover Intentions, prepared and submitted by Syed Uzair

Haider, in partial fulfillment of the requirements for the degree of Bachelors of
Business Administration (BBA), is hereby forwarded for appropriate action.

Ms. Saira Ibrahim

Advisor

FAST SCHOOL OF BUSINESS, KARACHI

Certificate of Completion
The final year project titled The Impact of Performance Appraisal Satisfaction on
Managerial Employees Work Performance, Organizational Commitment and
Turnover Intentions, prepared and submitted by Syed Uzair Haider, in partial
fulfillment of the requirements for the degree of Bachelors of Business
Administration (BBA) has been accepted and approved.

Ms. Saira Ibrahim

Advisor

Dr. Nadeem A. Syed

Head of Management Science Department

ACKNOWLEDGMENT
All praises and thanks are for Almighty Allah Who is the source of all knowledge and
wisdom endowed to mankind and to the humanity as a whole. I would particularly like
to thank my project advisor Ms. Saira Ibrahim for many insights she provided
throughout this report. Her guidance and support proved to be a useful tool in making
the repot a quality one. I would also like to thank several anonymous reviewers whose
suggestions always incorporated.
I am thankful to my parents and my friends who encouraged and helped me during the
hard times of this project. Last but not the least, all the participants who participated
and filled the questionnaire.
I hope that this work of mine will benefit the students that will be part of FAST-NU in
future, once again my sincere thanks to all the people involved in my research study
directly or indirectly.

Table of Contents
LIST OF TABLES..........................................................................................................1
LIST OF FIGURES........................................................................................................2
EXECUTIVE SUMMARY............................................................................................3
1. INTRODUCTION......................................................................................................4
1.1. Performance Appraisal Methods.........................................................................5
1.1.1. Management by Objectives (MBO)..............................................................5
1.1.2. Critical Incident Method...............................................................................5
1.1.3. Graphic Ratings Method...............................................................................6
1.1.4. Weighted Checklist Method..........................................................................6
1.1.5. Performance Ranking Method......................................................................6
1.1.6. 360 Degree Performance Appraisal..............................................................6
1.2. Performance Appraisal in Civil Aviation Authority............................................7
1.3. Issues related to the topic....................................................................................7
1.4. The Problem:.......................................................................................................8
1.5. Research Questions:............................................................................................8
1.6. Objectives of the study:.......................................................................................8
1.7. Justification:........................................................................................................9
1.7.1. Reason for study:..........................................................................................9
1.7.2. Stake holders:................................................................................................9
1.8. Limitation:.........................................................................................................10
1.9. Scope:................................................................................................................10
1.10. Definition of the key terms..............................................................................11
1.10.1 Performance Appraisal...............................................................................11
1.10.2. Work Performance....................................................................................11
1.10.3. Organizational Commitment.....................................................................11

1.10.4. Turnover Intention....................................................................................12

1.10.5. Intrinsic Motivation..................................................................................12
2. LITERATURE REVIEW.........................................................................................13
2.1. Definition of Performance Appraisal.................................................................13
2.2. Performance Appraisal Features........................................................................15
2.3. Purpose of Performance Appraisal....................................................................15
2.4. Dissatisfaction with Performance Appraisal.....................................................16
2.5. Research on Performance Appraisal Satisfaction and Employee OutcomesStudy Conducted in Norwegian Banks.....................................................................17
2.6. Research on Performance Appraisal Practices..................................................17
2.7. Study Comparing Employees Attitude towards Performance Appraisal..........18
2.8. Performance Appraisal Satisfaction and Work Performance.............................18
2.9. Performance Appraisal Satisfaction and Organizational Commitment.............19
2.10. Performance Appraisal Satisfaction and Employees Turnover Intention.......19
2.11. Performance Appraisal Satisfaction and Intrinsic Motivation.........................20
3. RESEARCH METHODOLOGY.............................................................................22
3.1. Research Design................................................................................................22
3.2. Procedure...........................................................................................................22
3.3. Population..........................................................................................................23
3.4. Sample and Sampling Method...........................................................................23
3.5. Measurement / Instrument Selection.................................................................24
3.6. Theoretical Framework......................................................................................24
3.7. Variables............................................................................................................24
3.8. Hypothesis.........................................................................................................25
3.9. Software Used...................................................................................................25
4. DATA ANALYSIS AND FINDINGS......................................................................26
4.1. Descriptive Analysis..........................................................................................26

4.1.1. Respondent Demographic Profile...............................................................26

4.2 Cross Tabulation.................................................................................................33
4.3. Central Tendencies............................................................................................41
4.4. Pearson Correlation Analysis............................................................................42
4.5. Regression Analysis...........................................................................................44
5. CONCLUSION AND RECOMMENDATION........................................................46
5.1. Conclusion.........................................................................................................46
5.2. Recommendation...............................................................................................47
5.3. Scope for Future Research.................................................................................48
REFERENCES.............................................................................................................49

LIST OF TABLES
Table 4.1.1: Demographic analysis-Gender Wise
Table 4.1.2: Demographic analysis-Age Wise
Table 4.1.3: Demographic analysis-Education Wise
Table 4.1.4: Demographic analysis-Marital Status Wise
Table 4.1.5: Demographic analysis-Job Position Wise
Table 4.1.6: Demographic analysis-Monthly Personal Income Wise
Table 4.1.5: Demographic analysis-Service Length Wise
Table 4.2.1: Cross tabulation analysis-Gender and age
Table 4.2.2: Cross tabulation analysis-Gender and Current Job Position
Table 4.2.3: Cross tabulation analysis-Length of Service and Current Job Position
Table 4.2.4: Cross tabulation analysis-Current Job Position and Performance
Appraisal Satisfaction
Table 4.2.5: Cross tabulation analysis-Current Job Position and Intrinsic Motivation
Table 4.2.6: Cross tabulation analysis-Current Job Position and Work Performance
Table 4.2.7: Cross tabulation analysis-Current Job Position and Organizational
Commitment
Table 4.2.8: Cross tabulation analysis-Current Job Position and Turnover Intention
Table 4.3.1: Central Tendencies Measurement for Performance Appraisal Satisfaction,
Intrinsic Motivation, Work Performance, Organizational Commitment and Turnover
Intention
Table 4.4.1: Pearson Correlation Analysis Matrix - Factors (Performance Appraisal
Satisfaction, Intrinsic Motivation, Work Performance, Organizational Commitment
and Turnover Intention)
Table 4.5.1: Regression Results Testing Direct and Mediation Models
Table 4.5.2: Regression Results Testing Performance Appraisal Satisfaction with
Intrinsic Motivation

LIST OF FIGURES
Figure 3.6.1: Theoretical framework of the study
Figure 4.1.2: Demographic analysis-Age Wise
Figure 4.1.3: Demographic analysis-Education Wise
Figure 4.1.4: Demographic analysis-Marital Status Wise
Figure 4.1.5: Demographic analysis-Job Position Wise
Figure 4.1.6: Demographic analysis-Monthly Personal Income Wise
Figure 4.1.5: Demographic analysis-Service Length Wise
Figure 4.2.1: Cross tabulation analysis-Gender and age
Figure 4.2.2: Cross tabulation analysis-Gender and Current Job Position
Figure 4.2.3: Cross tabulation analysis-Length of Service and Current Job Position
Figure 4.2.4: Cross tabulation analysis-Current Job Position and Performance
Appraisal Satisfaction
Figure 4.2.5: Cross tabulation analysis-Current Job Position and Intrinsic Motivation
Figure 4.2.6: Cross tabulation analysis-Current Job Position and Work Performance
Figure 4.2.7: Cross tabulation analysis-Current Job Position and Organizational
Commitment
Figure 4.2.8: Cross tabulation analysis-Current Job Position and Turnover Intention

EXECUTIVE SUMMARY
Performance Appraisal plays a very important role in measuring employees
performance and giving rewards, training and promotion on the basis of the result.
This study aims at studying impact of performance appraisal on managerial
employees work performance, organizational commitment and turnover intention.
The mediating variable intrinsic motivation effect is also explored on the dependent
and independent variable.
The data were collected from 242 managerial employees from 3 different branches of
Civil Aviation Authority, Karachi, Pakistan.
The research result showed, performance appraisal satisfaction has an impact on
managerial employees work performance, organization commitment and turnover
intention. In addition, the mediating variable intrinsic motivation has a slight effect on
the relation between performance appraisal satisfaction and work performance,
organizational commitment and turnover intention.
In short, the majority of managerial employees of Civil Aviation Authority were
satisfied with the current performance appraisal process. Managers should try to
create a friendly working environment and try to introduce new pay for performance
system so that intrinsic motivation of employees is enhanced and thus their work
performance and organizational commitment will also be increased.

1. INTRODUCTION
The major challenge faced by todays managers in different type of organization is
how to get the maximum amount of performance from their employees. Managerial
employees satisfaction and performance lead the department's performance and
satisfaction, if the manager is performing good than he/she would be concerned about
the employees under him and vice versa. Performance Appraisal is considered as one
of the most valuable tool for human resource. Performance appraisal generally
involve appraising employees performance based on the sentence and opinions of
subordinates, peers, colleagues, boss, other supervisors and even employees
themselves (Jackson & Schuler 2003). Performance appraisal effectiveness has been
studied in different context. But there is a need of exploring areas like performance
appraisal satisfaction and its effect in terms of employees

outcome. The main

purpose of this research is to investigate the relationship between performance

appraisal satisfaction and employee outcomes in the form of work performance,
effective organizational commitment and turnover in Civil Aviation Authority,
Karachi. The research will also scrutinize the hypothesis which asserts that intrinsic
work motivation will play as a moderating role between performance appraisal
satisfaction and employee outcomes.
Evaluating the employees performance is one of the most important parts of any
organization. Management needs a course of action process to observe employees
performance that can lead to improvement in efficiency and productivity of the
organization through performance appraisal. Hence, precise and sufficient feedback
about employees performance through performance appraisal analysis has also been
observed as critical to an employees aptitude and inspiration to perform efficiently
and effectively in an organization (Lee and Son 1998, p. 203).
Organization processes are getting difficult day by day due to increased globalization,
advancement in information technology and new innovation and changes in market
condition. The success depend on how you react to the changing trend and adopt new
techniques effectively and efficiently by utilizing the resources possess by an
organization. Performance management in wider perspective is a managerial process
that links company objectives performance standards and assessment, to which the
performance review or performance appraisal are frequently used (Pickett 2003).
4

1.1. Performance Appraisal Methods

To assess the performance of employees and their involvement towards attaining the
organizations goals, performance appraisal is considered as one of the most important
managerial tool. Different companies use different appraisal methods according to
their liking to assess their employees performance. Since performance cannot be
objectively measure 100%, hence there are advantages and disadvantages of every
method (Vikas Vij, 2010)

1.1.1. Management by Objectives (MBO)

The most common and modern day tool use for appraising employees used instead of
traditional performance appraisal system is MBO management by objectives method.
This is a further drawn in method that starts from setting of goals and stops with the
valuation of the actual results obtained and any deviation from desired once. It
engages regular meeting with employees intended to improve their performance
through continuous observation and correcting variations alongside. The stress here is
on not just evaluating the performance or input of the employee, in addition giving
regular and precise comment to the employee so that he obtains an opportunity to
increase his performance by dealing with the specific matters of worry. The number of
organizations implementing this method of performance appraisal is increasing
because of its more broad approach.

1.1.2. Critical Incident Method

Another type of performance appraisal method is critical incident method where the
boss or supervisor assesses employee performance lying on the base of certain
definite events or actions inside a specified period of time. The actions or events can
be positive or negative. The supervisor who asses the employee keeps a detail records
of such event occurrence throughout the assessment period and then makes a final
comment at the end.

1.1.3. Graphic Ratings Method

Graphic rating method is one of the common and traditional methods to evaluate an
employees performance. The supervisor or boss assigned certain ratings to
employees action and behavior according to specific criteria specified in the form.
The supervisor maintains a score form where the employees actions and behaviors
are rated on definite and specific structure outlined in the form. A final appraisal is
compiled by the supervisor base on earlier ratings.

1.1.4. Weighted Checklist Method

The supervisor who has expertise and experience in the related determines what job In
this case; the supervisor who is intimately familiar with the jobs under evaluation
prepares a broad checklist of factors that determines a productive or unproductive
behavior on the job. The factors included in checklist are assigned different weight
age depending on its importance and impact on the organizations overall goals. This
method help in achieving a more measurable and objective based appraisal for
employees performance.

1.1.5. Performance Ranking Method

This method is used to compare employees performance with other co-workers rather
than evaluating individual performance. From a group of employees performance is
ranked from best performer to the worst performer. In this way the best performer or
the best employee set benchmark which is compared to other employees and then they
are rank according to the closest performance level they have achieved.

1.1.6. 360 Degree Performance Appraisal

The 360 degree performance appraisal method is one of the most common and
practiced method of performance appraisal these days in most of the organizations. It
utilizes various techniques to assess employees performance.

The supervisor

conducts evaluation of an employee based on identified and specific parameters.

Comparison is also made between performances of different employees. Confidential
feedback from employees and supervisors is also included in this method. Afterward,
all the information gathered is compiled and analyzed to get a wide-ranging
performance evaluation of an employee.

1.2. Performance Appraisal in Civil Aviation Authority

Civil Aviation Authority, Pakistan is an autonomous body working under the
supervision of Federal Government of Pakistan through Ministry of Defence. On 7 th
6

December 1982 it was established as an autonomous body. Civil Aviation Authority is

managing all the air related activities like the authoritarian, air traffic services,
management of the airports, infrastructure and commercial enlargement at the
airports, etc. Civil Aviation Authority in 2005 went through restructuring process after
which the administration department was divided into two different departments
Human Resource and Career Development Department and Finance and Pension
Departments. Before the restructuring process Civil Aviation Authority administration
department used to take care of human resource department duties. Previously the
ACRs (Annual Confidential Report) was the method adopted by the Civil Aviation
Authority to evaluate their employees performance that was not as good as compared
to the current employee evaluation method of performance appraisal 360 feedback.

1.3. Issues related to the topic

Performance appraisals can serve as a motivational tool for employees who think that
their productivity is satisfactorily evaluated. On the other hand, those employees who
receive pessimistic response from their supervisor, they see performance appraisal as
a shallow tool used to refuse their rights and privileges. If performance appraisal
evaluations of employees are based on a supervisors individual judgment, then
preferential employees might be likely to be given better ratings than their peers
(Kinner 2006).
The performance appraisal outcomes of employees whether positive or negative not
only setup the basis for relationship between employee and his employer, but it can
also play an important role in determining whether an employee receives an equal
opportunity to grow or excel in an organization.
In addition, if personal conflicts exist among employers and employees, there is equal
likelihood that performance appraisal evaluations would not be just to individuals on
the receiving end. When supervisors use prejudice and stereotyped attitude to appraise
their subordinates, employees feel they have been wrongly evaluated or
misunderstood by their top executives Simmons (2003).

1.4. The Problem:

A number of researches had been conducted on the topic of performance appraisal
satisfaction and employee outcomes but their findings cannot be generalized to the
7

Pakistani perspective. Due to the lack of researches on performance appraisal

satisfaction in Pakistan scenario the research will help in identifying the employees
attitude towards performance appraisal and what are the potential barriers in way
towards its implementation.
To discover the relationship between performance appraisal satisfaction and
employee outcomes in the form of work performance, organizational commitment
and turnover intentions.
Whether intrinsic motivation will moderate the relationship between performance
appraisal satisfaction and employee outcomes in the form of work performance,
organizational commitment and turnover intentions.

1.5. Research Questions:

The research questions will try to find out whether the following relationships exist:

Is there a significant relationship between Performance Appraisal satisfaction

and employees work performance?

Is there a significant relationship between Performance Appraisal satisfaction

and employees organizational commitment?

Is there a significant relationship between Performance Appraisal satisfaction

and employees turnover intentions?

Does intrinsic motivation moderate the relationship between Performance
Appraisal satisfaction and employee outcomes in the form of work
performance, organization commitment and turnover intentions.

1.6. Objectives of the study:

The major objectives for this research:

To find out the relationship between performance appraisal satisfaction and

employee outcome in the form of work performance, organizational commitment
and turnover intentions for managerial employees of Civil Aviation Authority.

To find out whether intrinsic motivation moderates the relationship between

performance appraisal satisfaction and employee outcomes in the form of work
performance, organizational commitment and turnover intentions.

1.7. Justification:
1.7.1. Reason for study:
The reason why I have selected to study the relationship between performance
appraisal satisfaction and employee outcomes for managerial employees of Civil
Aviation Authority is to find out whether such a large government organization cares
for their employees and knows the important of performance appraisal in contributing
to overall efficiency and effectiveness of the organization. Whether there is a concept
of how to appraise their employee in the correct manner.
There are few researches conducted in Pakistan especially in government organization
on the topic of performance appraisal satisfaction and employee outcomes in the form
of work performance, organizational commitment and turnover intentions.
The research findings will definitely help Civil Aviation Authority human resource
department in better understanding their employees thinking regarding Performance
Appraisal system. The research will also help Civil Aviation Authority evaluate their
existing performance appraisal system so that the maximum amount of employee
satisfaction can be generated through a systematic and well defined process that will
lead to reduce in employee turnover, increase work performance and work
commitment.

1.7.2. Stake holders:

The different stakeholders who can benefit from this research are:

Civil Aviation Authority is the major stakeholder of this research as they can
improve their performance appraisal system by identifying the different key
factors identified in this research and how it has an effect on the employees
overall performance and motivation. By taking the findings of the research they
can efficiently and effectively make better decisions.

New researches specially people who are going to explore the area of performance
appraisal and employee satisfaction in government sector of Pakistan and also the
same applies for the research on private organizations.

Employees of the organization are also one of the most important stakeholders of
this research as they are the reason due to which organization succeed effectively
and efficiently in the long run. Hence, they should be aware of all the aspect that
affects the entire performance appraisal process in their organization.

1.8. Limitation:
Some of the limitations that I may face during this research:

Since the sample was derived from the population of managerial employees of
Civil Aviation Authority, Karachi. Hence it will not be applicable to entire Civil
Aviation Authority, Pakistan.

Since Civil Aviation Authority is a government based organization hence I may

face difficulty during my research in gathering the relevant information and data
from the respective department.

There is lack of previous researched done on performance appraisal and employee

outcomes in Pakistan and especially in Civil Aviation Authority.

The unavailability of respondent especially at the top managerial positions like

Directors and General Managers due to their busy schedules.

The answer from the respondents may not be precise or truthful thinking that the
data can be revealed to the top management or their supervisors.

Many of the employees can be influenced by their peers and colleagues in giving
answers to the different questions asked in questionnaire.

1.9. Scope:
This study will focus on:

The research will be conducted in the following offices of Civil Aviation

Authority, Karachi.

Jinnah International Airport, Karachi

Headquarter Civil Aviation Authority Terminal 1, Karachi
General Engineering Depot, Karachi
Headquarter Civil Aviation Authority Works Directorate Karsaz, Karachi

The research can also be applicable in different environment.

10

The sample size for this research will be relatively small since the research will
focus only on managerial employees in Civil Aviation Authority, Karachi.

1.10. Definition of the key terms

1.10.1 Performance Appraisal
Performance appraisal is a procedure inside the overall management process.
(Dowling et al., 1999), and is described as the overall work performance assessment
of an individual in order to land at objective personnel decisions (Robbins et al.,
2000).
Cascio (1998) defines performance appraisal as a method to advance employees
work performance by assisting them recognize and make use of their complete
potential in carrying out the organizations objectives and to provide valuable
information to employees and supervisors which will help them in making work
related decisions.

1.10.2. Work Performance

Work performance is defined as the efficiency and effectiveness required by an
individual to meet work goals and standards that are required to do a specific job
(Ivancevich & Matteson, 1996).

1.10.3. Organizational Commitment

It is defined as relating an employees loyalty towards his organization, readiness to put
in effort on behalf of the organization, level of aim and value harmonizing with the
organization, and desire to preserve association Bateman and Strasser (p.95).

There are number of factors that determine an employees commitment towards their
organization, including individual factors (e.g., age, tenure in the organization,
disposition, inside or outside control acknowledgment); organizational factors (job
design and the leadership style of one's supervisor); non-organizational factors
(availability of options). These are some factors that affect commitment (Nortcraft
and Neale, 1996).

11

1.10.4. Turnover Intention

Turnover intention is an employees personal likelihood that they are permanently
exiting the organization at some time in the coming future. (Vandenberg & Nelson,
1999, p.1315).

1.10.5. Intrinsic Motivation

Intrinsic motivation refers to motivation that arouses from within an individual rather
than from any external or outside benefits, such as money or grades.
The motivation comes from the happiness one gets from the job itself or from the
sense of satisfaction in completing or even working on a task (Ray Andrew, 2008)

12

2. LITERATURE REVIEW
The purpose of this literature review is to set up the foundation for this research
project. This constitutes an impressive list of textbooks, periodicals, business
publications and research projects. The literature review stage also includes gathering
key resources that were obtainable via the Internet.

2.1. Definition of Performance Appraisal

Denhardt (1991) describes performance appraisal as a precise assessment with respect
to an employees progress in carrying out specified tasks. Devries, Morrison,
Shullman and Gerlach (1981) explain performance appraisal as a method through
which organization determines and evaluates an employees performance and
accomplishments for a predetermined period. Edwards (2000) describes performance
appraisal as the formal, organized assessment of how good employees are performing
in their jobs in relative to recognized and established standards, including
communication of that assessment to the employee and the organization. Edwards
remarks that the objective of the performance appraisal method is to enhance the
quality of work and the individual employees involved in the work. Edwards goes on
to say that performance appraisal if completed correctly, can strengthen the
organization as it prepares and develops the personnel in that organization. Edwards
affirms, the overall total of the persons performance is the performance of the
organization.
Performance appraisals are esteemed for defining major expectations and determining
the degree to which expectations are met. Appraisals can make comprehensible to
workers that from where they have attain success and which part they need to improve
their performance. Moulder point out that appraisals are useful in setting our
organizational goals and in implementing improve communications between various
groups working in the organization and between employees and their boss Moulder
(2001).
Cascio (1998) describes performance appraisal as a method to advance employees
work performance by providing help in understanding and using their complete
potential in carrying out the organizations missions and to provide information to
13

employees and managers for use in making work related decisions. He goes onto
define EPAS as an exercise in observation and judgment, a feedback process and an
organizational intervention. Cascio also affirm it is an imprecise human process that is
used in a different way in more or less every organization in spite of same industry.
General to the majority of definitions of performance appraisal is the idea of
enhancing performance and developing people, even though its use in organizations
continues to be different. Some other definitions of PA are as stated below:
a) Performance Appraisal is defined as a tool to identify and monitor staffs
competences, as well as taking into account a companys core competence and
external demands (Ubeda & Santos, 2007, p.110).
b) Performance Appraisal is defined as a prearranged formal interaction involving a
subordinate and his/her superior. It usually embraces of a periodic interview, in which
the work performance of the subordinate is examined and discussed (Arbaiy &
Suradi, 2007, p.195).
c) Performance Appraisal is a "central administration method, which means that it
needs to be linked to such activities as business planning, clinical audit, etc"
(Edmonstone, 1996, p.12).
d) Performance Appraisal is defined "as a tool to achieve a variety of human resource
management objectives" (Kumar, 2005, p.1).
While a number of performance appraisal definitions are present, it directs to a much
related meaning. Performance appraisal according to this research can be defined as a
tool used to achieve subsequent aims and objectives within an organization.
a) To retain control over their employees (e.g. Mount, 1983; Vance et. al, 1992).
b) To involve the employee in setting goals for the organization (e.g. Vance et. al,
1992).
c) To evaluate the extent to which each employees day-to-day performance is linked
to the goals established by the organization (e.g. Coutts & Schneider, 2004;
Lowenberg & Conrad, 1998).
d) To reward employees, both intrinsically and extrinsically (e.g. Vance et. al,
1992).
e) To accomplish specific goals, such as self-enhancement or enhancing relationships
with supervisor/subordinates (e.g. Murphy & Cleveland, 1995).
14

f) To improve the employees performance by constant communication and feedback

among both the employee and the organization (e.g. Vance et. al, 1992).
g) To identify areas within an employee that requires training or development (e.g.
Boice & Kleiner, 1997).
h) To specify the behavior that employees must perform in accordance with the
organizational objectives (e.g. Vance et. al, 1992).
Performance appraisals can nurture unwholesome association between a supervisor
and his employee. Performance appraisal has been considered as one of the Seven
Deadly Diseases of Management by W. Edwards Deming (2000). According to
Deming (2000), the performance evaluation, nourishes short-term performance,
annihilates long-term planning, builds fear, demolishes teamwork, and nourishes
rivalry and politics. He recommends that performance appraisals make group harsh,
trampled, battered, hopeless, and feeling below substandard, and disheartened for
number of days after the receipt of performance appraisal ratings.

2.2. Performance Appraisal Features

The key features of performance appraisal according to McMaster (1994) and
Williams (2002) are
i. Recognition of strategic objectives
ii. Setting of departmental/team goals
iii. Activities identified/performance plan developed
iv. Outputs agreed
v. Monitor/review of performance through appraisal
vi. Determine development needs
vii. Allocate reward

2.3. Purpose of Performance Appraisal

The importance in determination of aims and objectives that can be achieved through
performance appraisal can be understood by reviewing the past literature. It can also
serve as a vital or beginning point for the study.
Boice and Kleiner (1997) propose that the main objective of performance appraisal is
to let an employee know how he is performing as what is expected of him by his
supervisor. But this can be seen as one side of the picture. Fletcher (2006) keeping a
15

more unbiased or impartial analysis suggested that for performance appraisal to be

effective there should be something for both the employee and his employer. The
main principal of performance appraisal it that it aims to measure only the
performance of an employee and this is not a widespread view and inadequate.
Successful and effective performance management is an important factor in achieving
companys goal, if seen from the organization viewpoint. It is stated above that the
assessment of performance is the central element of performance management, and
so must be of the Organization. Caruth and Humphreys (2008) supports this
perspective by signifying it is a company essential that the performance appraisal
structure contains characteristics to meet the organizational requirements and all of its
stakeholders including management and staff.

2.4. Dissatisfaction with Performance Appraisal

Even though with the excessive use of performance appraisal methods and its
apparent significance in the future there is substantial argument about its effectiveness
and usefulness. Different researches have been conducted over the years that have
identified the lack of satisfaction towards the effectiveness of performance appraisal
systems in different type of organizations. A study done by Bricker (1992) the survey
report results indicated that only 20 percent of American organizations were very
contented with their performance evaluation process. A 1990 Industry Week survey of
readers pointed out that merely 18 percent respondents said that there performance
appraisal evaluation was effective. While it was 20 percent in 1987. Thirty-one
percent of the respondents found performance appraisal evaluation not very effective
or a waste of time and resources (Verespej, 1990). Wyatt Company surveyed 900
companies and found out that just ten percent of companies indicated satisfaction with
their employee evaluation programs (Small Business Report, 1993). Thirty percent
were dissatisfied and 60 percent were not convinced one way or another. Society for
Human Resource Management in 1997 countrywide surveyed human resource experts
found that only five percent of the respondents were very satisfied with their
organizations performance evaluation system and that 42 percent were dissatisfied to
some extent (Barrier, 1998).

16

2.5. Research on Performance Appraisal Satisfaction and Employee

Outcomes- Study Conducted in Norwegian Banks
Kuvaas (2006) a research was carried out in Norwegian banks which examined 593
employees regarding their thinking and observations about performance appraisal
method. The research discovered the alternate relationships between performance
appraisal satisfaction and employee outcomes in the form of work performance,
organizational commitment and turnover intention. In addition, the research also
explored whether or not intrinsic work motivation will mediate and moderate the
relationship between performance appraisal satisfaction and employee outcomes. The
findings exposed that there was a direct relationship between performance appraisal
satisfaction and employee outcomes. The results also indicated that the relationship
between performance appraisal satisfaction and work performance was both mediated
and moderated by employees intrinsic work motivation.

2.6. Research on Performance Appraisal Practices

A research was conducted by Al Taamnah (1994) to study the perceptions of
Jordanian Civil Service workforce towards the performance appraisal method in
broad. The research results conclude low level of satisfaction between employees
towards
1) Main principle of performance appraisal evaluation.
2) Objectivity, fairness and justice.
3) Consideration paid to their objection on the content of annual performance
appraisal reports.
4) How well the performance appraisal evaluation results have been conveyed to
individuals.
Alpander (1980) conducted another research on the managerial role in the
performance appraisal interview by comparing change in attitudes towards 12
functions of supervisory job measured prior and after 200 supervisors were exposed to
a training program in appraisal interviews and found no major change in attitude with
respect to the 12 functions listed in the training program. Aplander (1980) with
respect to the perceived level of comfort or discomfort in communicating negative
17

performance evaluation results and handling discipline problems found significant

change and the mean rating for the 12 functions increased by 1.3 and 1.2 respectively
on a scale of 1 to 5.

2.7. Study Comparing Employees Attitude towards Performance

Appraisal
A researcher named Chow (1999) interviewed 164 Chinese from Hong Kong and the
Peoples Republic of China. The sample composed from a number of different
organizations and different industries and their positions ranged from director,
manager, professional, section head, and supervisor. Chow (1999) found no major
differences between the Chinese group and Hong Kong group in terms of internal
performance attributions, however, the two groups differ with regards to other aspects.
The Chinese sample favored a direction to performance appraisal, were more inclined
to nonperformance linked factors and a stronger preference for open, truthful, and
direct relations between supervisors and subordinates, while the Hong Kong sample
expressed an opposite orientation towards openness, truthfulness, and direct relations
between supervisors and subordinates.
A study in a Midwestern State University was conducted in U.S.A by Pooyan and
Eberhardt (1989). The study compared performance appraisal satisfaction among
supervisory and non-supervisory employees. The date gathered from the research
concluded that supervisors were significantly more content and pleased with
performance appraisals and explained their performance appraisals in more positive
terms compared to non supervisors.

2.8. Performance Appraisal Satisfaction and Work Performance

The overall management success depends on the type of performance appraisal
method adopted by them. This replicates how the overall organizational goals will be
met by different hierarchical levels present in the organization. An effective
performance appraisal system can increase the chance of success for an organization
by carefully assessing the performance of their employees and identifying the key
variables that may affect their performance in a positive manner. On the contrary an
ineffective performance appraisal system can seal the fortune of an organization by
creating disorder and uncertainty from the top to bottom organizational level. It can
result in slow growth or devastating results for the organization.
18

2.9.

Performance

Appraisal

Satisfaction

and

Organizational

Commitment
Employees should be given a number of opportunities throughout the organization so
that they feel committed to the organization. Meyer & Allen, (1997), through his
research concluded that those employees who have good relationship with their
supervisor show more commitment towards their organization. He also stated that if
employees feel attachment and commitment towards their colleagues or work group,
their overall organizational commitment will also be high. Lio (1995) explored
through his study that employees organizational commitment is drastically
interconnected to their perceived job security (p.241).
The level of commitment shown by employees towards their organization can be
influence by the management styles used in their organization. Koopman (1991)
researched how employees were impacted by the management styles and found those
employees who favored their management style also favored their organization.
Nierhoff et al (1990) explored that the overall management culture and style driven
by the top management actions are strongly related to the degree of employee
commitment (p. 344). These associations show the importance of having strong
managers in an organization.

2.10. Performance Appraisal Satisfaction and Employees Turnover

Intention
Performance appraisal also has a great impact on employees turnover intention that is
quitting the current job and searching for another job and actual turnover rate in the
organization (Brown 1996; Egan, Yang & Bartlett 2004). The most important
objective or task of performance appraisal is to positively influence future
performance (Cleveland, Murphy & Williams 1989; Huffman & Cain 2000; Swanson
& Holton 2001; Thomas & Bretz 1994). Latham, et al. (1993), says the main objective
of carrying out performance appraisal is to enhance the performance of the
organizational human resource. The performance appraisal objectives like conveying
of organizational and departmental goals, the ability of performance appraisal to boost
employees observation of being esteemed and being an important element of an
organizational team (Levy & Williams 2004) also effects turnover intention.
Performance appraisals are also an efficient tool for supervisors to increase this
19

organizational efficiency and effectiveness. In spite of this there are managers who are
hesitant in using performance appraisal. According to some studies (DeCarlo & Leigh
1996; Jaworksi & Kohli 1991), performance appraisal assists in enhancing
performance and increasing both organizational commitment and job satisfaction. It
also helps in lowering down the turnover level if use properly (Babin & Boles 1996;
Babakus, Cravens, Johnston & Moncrief 1996; Brown & Peterson 1994). Bard
Kuvaas (2006), observed positive results concerning turnover intention with
performance appraisal satisfaction, that those employees who are contented with how
their performance appraisal is conducted have low turnover intentions.
Poon (2004), studied conclude that dissatisfaction with performance appraisal
influence employees to quit through their current job. In a research conducted by
Clardy and Dobbins (1994), he explored that for performance appraisal to
optimistically influence employees attitude and future development employees have
to experience positive appraisal responses. In other case the performance appraisal
system will move towards failure.

2.11. Performance Appraisal Satisfaction and Intrinsic Motivation

In order to understand the relationship between performance appraisal and employees
outcomes and how intrinsic motivation moderates their relationship one should
understand what is intrinsic motivation and its components parts. Contrary to extrinsic
motivation which is based on rewards and punishments restricted by the organization
(e.g. expectancy theory (Vroom, 1964)), which states that intrinsic motivation is based
on positively valued knowledge and past experiences that a person gets
straightforwardly from their work tasks (Deci, 1975; Deci & Ryan, 1985). The
different positive experiences helps in getting an individual eager, drawn, energized
and committed to their work (Thomas & Tymon, 1997).
Performance appraisal actions such as involvement, recognition of goals and
objectives and feedback may affect satisfaction with performance appraisal that can
affect employee work performance and motivation (Roberts & Reed, 1996). An
optimistic connection between intrinsic motivation and organizational commitment
which suggest that few of the pros linked with challenging, interesting and innovating
jobs are credited to the organization (Ganesan and Weitz as cited by Kuvaas, 2006).
Richer, Blanchard and Vallerand (2002) stated that those employees who are doing
20

motivating, pleasurable and thrilling jobs have less desire in quitting their job. The
main reason behind this is due to the less likeliness to be fascinated by extrinsic
rewards presented by other organizations. To end with there are several studies that
have reported negative and important correlations between intrinsic motivation and
turnover intentions (e.g. Kuvaas, 2006; Richer et al., 2002).

3. RESEARCH METHODOLOGY
This study intends to examine the relation between performance appraisal satisfaction
and employee outcomes in the form of work performance, organizational commitment
and turnover intentions for managerial employees in Civil Aviation Authority. The
study will also investigate the hypothesis which assert that intrinsic work motivation
will moderate association between performance appraisal satisfaction and employee
outcomes in Civil Aviation Authority
21

3.1. Research Design

The research design will base on quantitative research. Quantitative research is used
to measure how many people feel, think or act in a particular way. These surveys tend
to include large samples through structured questionnaires that are usually used
incorporating mainly closed questions by the researcher.

3.2. Procedure
The research will be conducted by the following process:
Step 1: Secondary date will be gathered from internet, magazines, books, journals
regarding performance appraisal satisfaction on employee outcomes.
Step 2: Will prepare a plan of action for my research with the consultation of my
advisor.
Step 3: Questionnaire, surveys and interview will be conducted from managerial
employees in Civil Aviation Authority to gather primary data.
Step 4: All the related research data will be compiled and enter into SPSS software to
find out the respective trend.
Step 5: After using different statistical tools correlation and regression will interpret
the results.
Step 6: On the basis of results the hypothesis will be proved or rejected.
Step 7: Conclusion and recommendation will be provided with the possible scope for
future research.

3.3. Population
Civil Aviation Authority Pakistan is a very large semi government organization
operating in major parts of the country, some of them includes Karachi, Lahore,
Islamabad, Quetta and Multan. The total number of employees working in Civil
Aviation Authority Pakistan is nine thousand six hundred (9,600) and out of which
eleven hundred (1,100) are managerial employees. The total number of managerial
employees working in Karachi is six hundred and fifty (650) as told by the General
Manager Human Resource, Headquarter Civil Aviation Authority Terminal 1, Karachi.
The managerial employees are those who are working in group (PG 7-11). They
include
Directors (PG 11)
22

General Managers (PG 10)

Corporate Managers (PG 9)
Deputy Managers (PG 8)
Assistant Manager (PG 7)

Due to certain limitations the research will find out the relation between performance
appraisal and employee outcomes on managerial employees in different offices of
Civil Aviation Authority located in Karachi. There are four offices of Civil Aviation
Authority in Karachi that are:

Jinnah International Airport, Karachi

Headquarter Civil Aviation Authority Terminal 1, Karachi
General Engineering Depot, Karachi
Headquarter Civil Aviation Authority Works Directorate Karsaz, Karachi.

3.4. Sample and Sampling Method

The sample size of my research will consist of 242 managerial employees of Civil
Aviation Authority, Karachi. The questionnaire will be filled by those managerial
employees who had a prior experience or information regarding performance
appraisal and what is its overall impact on human resource of an organization.
The type of sampling method I will use for this research is stratified sampling.

3.5. Measurement / Instrument Selection

a) Primary
The primary research data will be collected through questionnaires and interviews
from the managerial employees in Civil Aviation Authority, Karachi.
b) Secondary
The secondary research data will be collected through internet, articles, magazines,
journals and books.

3.6. Theoretical Framework

The proposed theoretical framework for this study is as shown in Figure below.

23

3.7. Variables
According to the theoretical framework defined in literature review, following are the
variables that will be studied during the course of research:
Performance Appraisal Satisfaction (Independent Variable)
Intrinsic Motivation (Moderating Variable)
Employee Outcomes which include Work Performance,

Organization

Commitment and Turnover Intentions (Dependent Variable).

3.8. Hypothesis
H1: Performance appraisal satisfaction will positively influence work performance.
H2: Performance appraisal satisfaction will positively influence organizational
commitment.
H3: Performance appraisal satisfaction will negatively influence turnover intentions.
H4: Intrinsic motivation will moderate the relationship between performance
appraisal satisfaction and work performance, organizational commitment and turnover
intentions.

3.9. Software Used

The softwares that will be used during this research:

Microsoft Word
24

Microsoft Excel
SPSS

4. DATA ANALYSIS AND FINDINGS

4.1. Descriptive Analysis
4.1.1. Respondent Demographic Profile
Table 4.1.1: Gender of Respondents
Frequency

Percent

Male

232

95.9

Female

10

4.1

Total

242

100.0

25

Gender Frequency

4%
Male
Female

96%

Figure 4.1.1: Gender of Respondents

Interpretation:
Table 4.1.1. Shows the frequency and percentage of gender of 242 respondents. There
are 232(95.9%) of male and 10(4.1%) of female respondents. Since the research was
conducted in Civil Aviation Authority, Karachi, the majority of managerial
employees working there were male.

Table 4.1.2: The Age Group of Respondents

Frequency

Percent

20 29 years

27

11.2

30 39 years

76

31.4

40 49 years

79

32.6

50 and above

60

24.8

Total

242

100.0

26

Age

25%

11%

20 29 years
30 39 years
40 49 years
50 and above

31%
33%

Figure 4.1.2: The Age Group of Respondents

Interpretation:
Table 4.1.2 shows the frequency and percentage of age of respondents. 27 respondents
(11.2%) are 20-29 years old, 76 respondents (31.4%) are 30 to 39 year old, 79
respondents (32.6%) are 40 to 49 years old and 60 respondents (24.8%) are 50 years
old or greater.

Table 4.1.3: The Educational Level of Respondents

Frequency

Percent

Secondary

.4

Diploma

44

18.2

Degree

181

74.8

Post-graduate

16

6.6

Total

242

100.0

27

Educational Level

7% 0%

Secondary

18%

Diploma
Degree
Post-graduate

75%

Figure 4.1.3: The Educational Level of Respondents

Interpretation:
The table 4.1.5 shows the frequency and percentage of the education level of
respondents. From the information above, majority of 181 respondents hold a degree
qualification (74.8%). The second largest group consists of 44 respondents who hold a
diploma (18.2%). The third largest group consists of 16 respondents who hold a postgraduate degree (6.6%) and the smallest group consists of only 1 respondent which is
a secondary holder (0.4%).
Table 4.1.4: The Marital Status of Respondents
Frequency

Percent

Single

31

12.8

Married

211

87.2

Total

242

100.0

28

Marital Status

13%
Single
Married

87%

Figure 4.1.4: The Marital Status of Respondents

Interpretation:
The table 4.1.4 shows the frequency and percentage of marital status of respondents.
Out of 242 respondents, 31 respondents (12.8%) are single and the remaining 211
respondents (87.2%) are married.

Table 4.1.5: The Current Job Position of Respondents

29

Frequency

Percent

Director

1.2

General Manager

2.5

Corporate Manager

60

24.8

Deputy Manager

88

36.4

Assistant Manager

85

35.1

Total

242

100.0

Current Job Position

Director

1% 3%
25%

35%

General Manager
Corporate Manager
Deputy Manager
Assistant Manager

36%

Figure 4.1.5: The Current Job Position of Respondents

Interpretation:
The table 4.1.5 shows the frequency and percentage of the respondents position.
Deputy Manager is the largest group which consists of 88 respondents (36.4%), the
second largest group of Assistant Manager which consists of 85 respondents (35.1%),
the third largest group of Corporate Manager which consists of 60 respondents (24.8)
followed by General Manager with 3 respondents (2.5%) and Director is the smallest
group with 3 respondents (1.2%).
Table 4.1.6: The Monthly Personal Income of Respondents

30

Frequency

Percent

Less than Rs 50,000

70

28.9

Rs 51,000 Rs 100,000

102

42.1

Rs 101,000 Rs 150,000

61

25.2

Rs 151,000 and above

3.7

Total

242

100.0

Monthly Personal Income

4%

Less than Rs 50,000

29%

25%

Rs 51,000 Rs 100,000
Rs 101,000 Rs 150,000
Rs 151,000 and above

42%

Figure 4.1.6: The Monthly Personal Income of Respondents

Interpretation:
The table 4.1.6 shows the frequency and percentage of the monthly income of
respondents. 70 of the respondents fall in the income bracket of Rs 51000 Rs
100,000 with (42.1%). The second largest income bracket is less than Rs 50,000 with
70 respondents and (28.9%). The third largest income bracket is between Rs 101,000
Rs 150,000 with 61 respondents (25.2%). The income bracket of Rs 151,000 and
above is the least employees having 9 respondents (3.7%) because there are only few
respondents that are at top managerial level
Table 4.1.7: The Length of Service of Respondents

31

Frequency

Percent

Less than 1 year

12

5.0

1 5 year

49

20.2

6 15 year

73

30.2

15 year or above

108

44.6

Total

242

100.0

Length of Service

5%

Less than 1 year

20%

1 5 year
6 15 year

45%

15 year or above
30%

Figure 4.1.7: The Length of Service of Respondents

Interpretation:
The table 4.1.7 shows the frequency and percentage of the time length of respondents
that have been employed by the company. The respondents are divided into four
categories. 12 respondents worked in the organization for less than 1 year (5%), 49
respondents worked for 1 to 5 years (20.2%), 73 respondents worked for 6 to 15 years
(30.2%) and 108 respondents worked for the organization for 15 years or above
(44.6%).

4.2 Cross Tabulation

Table 4.2.1: Cross tabulation analysis-Gender and age
32

Age
20 29 years
Gender

Female
Male

Total

30 39 years

Total

40 49 years

50 and above

10

21

72

79

60

232

27

76

79

60

242

90
80
70
60
20 29 years

50

30 39 years

40

40 49 years

30

50 and above

20
10
0
Female

Male

Figure 4.2.1: Cross tabulation analysis-Gender and age

Interpretation:

Table 4.2.2: Cross tabulation analysis-Gender and Current Job Position

33

Current Job Position

Director
Gender Female
Male
Total

Total

General

Corporate

Deputy

Assistant

Manager

Manager

Manager

Manager

10

58

82

83

232

60

88

85

242

90
80
70
60

Director

50

General Manager

40

Corporate Manager

30

Assistant Manager

Deputy Manager

20
10
0
Female

Male

Figure 4.2.2: Cross tabulation analysis-Gender and Current Job Position

Interpretation:

Table 4.2.3: Cross tabulation analysis-Length of Service and Current Job

Position
34

Current Job Position

Director
Length of

Less than 1

Service

year

General

Corporate

Deputy

Assistant

Manager

Manager

Manager

Manager

Total

10

12

1 5 year

23

24

49

6 15 year

12

24

34

73

46

39

17

108

60

88

85

242

15 year or
above
Total

50
45
40
35
30
25

Director

20

General Manager

15

Corporate Manager

10

Deputy Manager

Assistant Manager

Figure 4.2.3: Cross tabulation analysis-Length of Service and Current Job

Position
Interpretation:
Table 4.2.4: Cross tabulation analysis-Current Job Position and Performance
Appraisal Satisfaction

35

Performance Appraisal Satisfaction

Strongly

Strongly

Disagree
Current Job
Position

Director
General
Manager
Corporate
Manager
Deputy Manager
Assistant
Manager

Total

Total

Disagree Neutral

Agree

Agree

42

60

15

51

15

88

71

85

21

21

173

25

242

80
70
60
50
40

Strongly Disagree

30

Disagree

20

Neutral

10

Agree
Strongly Agree

Figure 4.2.4: Cross tabulation analysis-Current Job Position and Performance

Appraisal Satisfaction
Interpretation:

Table 4.2.5: Cross tabulation analysis-Current Job Position and Intrinsic

Motivation

36

Intrinsic Motivation
Disagree
Current Job Position Director

Total

Neutral

Agree

Total
Strongly Agree

General Manager

Corporate Manager

22

29

60

Deputy Manager

13

33

40

88

Assistant Manager

12

27

45

85

32

84

120

242

50
45
40
35
30
25
20
15
10
5
0

Disagree
Neutral
Agree
Strongly Agree

Figure 4.2.5: Cross tabulation analysis-Current Job Position and Intrinsic

Motivation
Interpretation:

Table 4.2.6: Cross tabulation analysis-Current Job Position and Work

Performance
37

Work Performance
Disagree
Current Job Position Director

Total

Neutral

Agree

Total
Strongly Agree

General Manager

Corporate Manager

38

14

60

Deputy Manager

13

68

88

Assistant Manager

10

57

18

85

30

169

42

242

80
70
60
50
40
Disagree

30

Neutral

20

Agree

10

Strongly Agree

Figure 4.2.6: Cross tabulation analysis-Current Job Position and Work

Performance
Interpretation:

Table 4.2.7: Cross tabulation analysis-Current Job Position and Organizational

Commitment

38

Organizational Commitment
Disagree
Current Job Position Director

Total

Neutral

Agree

Total

Strongly Agree

General Manager

Corporate Manager

33

25

60

Deputy Manager

56

30

88

Assistant Manager

48

34

85

142

93

242

60
50
40
30
Disagree

20

Neutral
Agree

10

Strongly Agree

Figure 4.2.7: Cross tabulation analysis-Current Job Position and Organizational

Commitment
Interpretation:

Table 4.2.8: Cross tabulation analysis-Current Job Position and Turnover

Intention

39

Turnover Intention

Total

Strongly

Strongly

Disagree
Current Job
Position

Director
General
Manager
Corporate
Manager
Deputy Manager
Assistant
Manager

Total

Disagree Neutral

Agree

Agree

24

20

60

27

44

10

88

12

59

85

65

128

25

14

10

242

70
60
50
40
Strongly Disagree

30

Disagree

20

Neutral

10

Agree

Strongly Agree

Figure 4.2.8: Cross tabulation analysis-Current Job Position and Turnover

Intention
Interpretation:

40

4.3. Central Tendencies

Table 4.3.1: Central Tendencies Measurement for Performance Appraisal
Satisfaction, Intrinsic Motivation, Work Performance, Organizational
Commitment and Turnover Intention
N

Minimum Maximum

Mean

Std.
Deviation

Performance Appraisal
Satisfaction

242

3.82

.762

Intrinsic Motivation

242

3.41

.748

Work Performance

242

4.04

.560

Organizational
Commitment

242

3.38

.543

Turnover Intention

242

2.07

.987

Valid N (listwise)

242

Interpretation:
In the Table 4.3.1 the descriptive statistics of the variables are presented from 242
respondents. The dependent variables, work performance is perceived to be the
highest (M = 4.04, SD = 0.560). This was followed by turnover intention (M = 2.07,
SD = 0.987) and organizational commitment (M = 3.38, SD = 0.543). The Satisfaction
with the independent variable performance appraisal (M = 3.82, SD = 0.762) is on the
high side whereas, intrinsic motivation (M = 3.41, SD = 0.748) among the employees
in Civil Aviation Authority is moderate. All the independent, moderating and
dependent variable the standard deviation was less than one (1) which shows that data
are close or tightly correlated to the mean.

4.4. Pearson Correlation Analysis

Table 4.4.1: Pearson Correlation Analysis Matrix

41

Performanc
e Appraisal
Satisfaction
Performance

Pearson

Appraisal

Correlation

Satisfaction

Intrinsic
Motivation

Performanc
e

Organizationa

Turnover

l Commitment

Intention

.526

.397

.298

-.699

.000

.000

.000

.000

242

242

242

242

242

.526

.177

.163

-.402

.006

.011

.000

Sig. (2-tailed)
N

Work

Intrinsic Motivation Pearson

Correlation

Work Performance

Sig. (2-tailed)

.000

242

242

242

242

242

.397

.177

.207

-.253

Sig. (2-tailed)

.000

.006

.001

.000

242

242

242

242

242

.298

.163

.207

-.123

Sig. (2-tailed)

.000

.011

.001

242

242

242

242

242

-.699

-.402

-.253

-.123

Sig. (2-tailed)

.000

.000

.000

.057

242

242

242

242

Pearson
Correlation

Organizational

Pearson

Commitment

Correlation

Turnover Intention

Pearson
Correlation

.057

242

**. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed).

Interpretation:
The table 4.4.1 shows the correlation among the independent (performance appraisal
satisfaction), mediating (intrinsic motivation) and dependent variable (work
performance, organizational commitment and turnover intention). From the
42

correlation analysis matrix performance appraisal satisfaction has a positive but weak
correlation with work performance (r = 0.392, p < 0.01). Performance Appraisal
Satisfaction has also a positive but weak correlation with Organizational Commitment
(r = 0.298, p < 0.01). Whereas, Performance Appraisal Satisfaction has also a negative
correlation with Turnover Intentions (r = -0.699, p < 0.01).

4.5. Regression Analysis

Table 4.5.1: Regression Results Testing Direct and Mediation Models

43

Variable
s

PAS

Work Performance
Direct
Effect

Mediated

0.397

0.420

Effect

IM

0.177

0.159

0.157

0.159

Organizational
Commitment

Turnover Intention

Direct
Effect

Mediated
Effect

Direct
Effect

Mediated
Effect

0.298

0.293

-0.699

-0.674
-0.402

0.163
0.089
0.089

0.089

0.490
0.489

0.490

Notes
PAS = Performance Appraisal Satisfaction
IM = Intrinsic Motivation
Standardized regression coefficients are shown.
N = 242
Table 4.5.2: Regression Results Testing Performance Appraisal Satisfaction with
Intrinsic Motivation
Variable
PAS

Intrinsic Motivation
0.526

0.276

Standardized regression coefficients are shown.

Interpretation:
Results from the regression models are presented in Table 4.5.1 and Table 4.5.2. The
first step of the regression models in Table 4.7 is used to test the direct relationships.
These analyses show that performance appraisal satisfaction is positively influenced
44

by work performance ( = 0.397, p < .01) and organizational commitment ( = 0.298,

p < .001). On the other hand, turnover intention ( = -0.699, p < .001) was found to
negatively influence performance appraisal satisfaction. Thus, all three hypotheses
H1, H2 and H3 were accepted.
Whereas, the impact of performance appraisal on work performance, organizational
commitment and turnover intention is partially mediated by the mediating variable
that is Intrinsic Motivation.

45

5. CONCLUSION AND RECOMMENDATION

5.1. Conclusion
The main objective of this research was to find the impact of performance appraisal
satisfaction on managerial employees work performance, organizational commitment
and turnover intentions of Civil Aviation Authority, Karachi, Pakistan.
The majority of managerial employees working in Civil Aviation Authority, Karachi
is satisfied with the performance appraisal process adopted within their organization.
The above data and findings conclude that the impact of performance appraisal
satisfaction on managerial employees work performance and organizational
commitment is positive. On the other hand, the impact of performance appraisal
satisfaction on managerial employees turnover intention is negative. Moreover, the
impact of performance appraisal satisfaction on managerial employees work
performance, organizational commitment and turnover intention is partially mediated
by the intrinsic motivation.
The correlation analysis also supports the hypothesis. Performance appraisal
satisfaction and work performance are weakly
This correlation analysis revealed that minor weak relationship exists between
performance appraisal satisfaction and work performance ( = 0.397, p < 0.01). Also
relatively weak correlation exists between performance appraisal satisfaction and
organizational commitment ( = 0.298, p < 0.01). But the correlation between
performance appraisal satisfaction and turnover intention ( = -0.699, p < 0.01) is
highly negatively correlated affirming the hypothesis. But the mediating variable
intrinsic motivation has a very weak correlation with the dependent variables.
Furthermore, the regression results also proved that performance appraisal satisfaction
has an impact on managerial employees work performance, organization
commitment and turnover intention. In addition, the mediating variable intrinsic
motivation has a slight effect on the impact of performance appraisal on the three
dependent variables that are work performance, organizational commitment and
turnover intention.

46

5.2. Recommendation
The following steps may be used to increase the level of performance appraisal
satisfaction which will help in increasing the managerial employees work
performance, commitment to the organization and reduce turnover intention.
I. A series of meetings with top, middle and low level employees to discuss and
evaluate the current performance appraisal program including strengths and
weaknesses. In addition, meetings between union representatives and
management could be significant to the potential success of performance
appraisal satisfaction. Input from managers should identify present strengths,
hardships, weaknesses, and shortcomings in the present performance appraisal
process.
II. Adequate training should be imparted to the supervisors who are responsible
for initiating, measuring and effectively managing the performance appraisal
process.
III. The research concludes that intrinsic motivation also plays a part in work
performance, organizational commitment and reduces turnover intention. The
managers of Civil Aviation Authority should take measures to praise the
employees for job well done, set highest level of work standards, establish
trust in their employees, propose career progression, and also empowering
them in making decisions where required. This will increase the intrinsic
motivation of the employees which would boost their work performance,
IV.

organizational commitment and reduce the turnover intention.

An improved performance appraisal system incorporated with better HR practices
will improve performance appraisal satisfaction and also increase employee
performance, organizational commitment and reduce turnover intentions.

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5.3. Scope for Future Research

Further, this study is conducted on managerial employees of Civil Aviation Authority,
Karachi. This will provide the opportunity for other researchers to conduct this
research in other private and government organizations.
Future study can be conducted to examine the other variables like training and
rewards that can mediate the impact of performance appraisal satisfaction on
employees work performance, organizational commitment and turnover intention.
Future research can also be conducted examining both the affects of intrinsic and
extrinsic motivation on performance appraisal satisfaction

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