Impact of Fairness of Performance Appraisal on Motivation and Job Satisfaction in Banking Sector of Pakistan

Performance appraisal is a formal program in which employees are told the employer's expectations for their performance and rated on how well they have met those expectations. A fair appraisal system is essential in any organisation to retain valuable employees. It enables employees to understand their job responsibilities and shows them the path towards individual growth. This paper seeks to investigate the role played by fairness of performance appraisal in the process of motivating employees and increasing their satisfaction with job in banking sector of Pakistan. The study explored impact of fairness of performance appraisal on employee motivation and job satisfaction and endeavours to influence banking sector of Pakistan for a consideration of fair systematic and structured appraisal approaches to acknowledge employees' efforts which would in turn increase their motivation and satisfaction with job. A questionnaire was used as an instrument for data collection. A sample of 450 employees from 21 banks was selected out of which 439 responded. Dependent variables were motivation and job satisfaction and independent variable was fairness of performance appraisal. Regression and Correlation analysis were performed to test the relationships on the data using SPSS. In general the findings revealed that there is a statistical significant relationship between the variables and fairness of performance appraisal has a positive influence on employee motivation and job satisfaction. The results of the study and future implications are discussed along with suggestions.