Employee performance has traditionally been accorded prime focus by human resource managers. As a result, a number of performance appraisal techniques have over time been devised to help establish employee's performance. In the contemporary times, the use of performance appraisals has been extended beyond rating of the employee's performance to aspects such as motivation. Accordingly, this study sought to investigate effectiveness of performance appraisal systems and its effect on employee motivation. The study's main objectives pertained to establishing the moderating role of performance appraisal as a motivation tool as well as potential challenges.The study findings show the presence of significant positive outcomes when the organisation uses performance appraisal as a motivation tool. Further, the study finds that the use of more than one appraisal techniques helps yield greater satisfaction and consequently higher motivational levels. The specific aspects of performance appraisal systems (PAS) that help improve motivation include the linking of performance to rewards; using the PAS to help set objectives and benchmarks; as well as the use of PA to help identify employee's strength and weaknesses.Key words: Performance, Appraisal, Motivation, Employee
INTRODUCTIONPerformance appraisal is a widely discussed concept in the field of performance management. The importance accorded to performance appraisal systems in part arises from the nature of the current business environment, which is marked by the need to achieve organisational goals as well as remain relevant in intensely competitive markets through superior employee performance (Chen and Eldridge, 2012). Within this context, various studies suggest that organisations can hardly control the behaviour of their employees (Attorney, 2007). The organisations can however control how employees perform their jobs. In addition, performance management research shows that a significant number of employees tend to have the desire to perform their jobs well as part of their individual goals as well as a demonstration of loyalty towards the organisation (Wright & Cheung, 2007). Arguably, the key to ensuring that employees perform well lies in the ability to provide them with the right working environment. Such an environment generally includes fair treatment, Maley (2013) these are the very qualities that are created by an effective performance appraisal system. While focusing on performance appraisal as a motivational tool, studies in this field strongly suggest that performance appraisal systems can be used to enhance motivation (Chen & Eldridge, 2010;Appelbaum et al., 2011). However, the link between performance appraisal and employee motivation has often been studied in a traditional or general manner and hence the relationship tends to be blurred in nature. The traditional use of performance appraisal has for instance been criticised for the reward of -win-lose‖ results as opposed to -win-win‖ results in which the system promotes supportive and cooperative beh...