Satisfaction with performance appraisal system as a tool to enhance employee outcomes in banking sector organizations – evidence from Republic of Kosovo
Satisfaction with performance appraisal system as a tool to enhance employee outcomes in banking sector organizations – evidence from Republic of Kosovo

Summary/Abstract: Purpose – Considering that Performance appraisal is one of the most critical activities in the field of Human Resource Management, this research aims to understand the importance of building a performance appraisal system in the organization, in order to achieve the highest results by employees. Aims – Primary aim of this paper is to analyze in detail the performance appraisal system and employee satisfaction. Another aim is comparing if the inclusion of financial or non-financial factors in this system, causes more employee satisfaction; and to see if there is any significant correlation between employee satisfaction with the performance appraisal system and effects such as performance improvement, employee motivation and loyalty to the organization. Methodology – This paper contains an empirical research conducted with employees of two organizations in the banking sector and one hundred respondents. The research is addressed from the employee’s perspective on the performance appraisal system in their respective organizations, by using the questionnaire as an instrument. Findings – The results indicate a strong influence of financial factors on employee satisfaction with the performance appraisal system. As we analyze the effects, we notice a positive correlation between employee satisfaction with the appraisal system, and the improvement of actual performance. Analyzing correlation between motivation and loyalty, it is concluded that the correlation is strongest in the relation to loyalty. Limitations – A wider sample that includes other banking companies would make these results more reliable. Practical implications – These reported findings note that the employee satisfaction with performance appraisal system can be converted to short and long-term benefit for the organization. Ideas on how to achieve such satisfaction are also discussed. Originality – This paper is relevant for all companies, mostly banks, which want to build an effective PAS that is preferable from their employees, and it is more likely to create positive effects towards these employees.

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