EMPLOYEE PERFORMANCE APPRAISAL SATISFACTION

318 Pages·2014·4.65 MB·English

EMPLOYEE PERFORMANCE APPRAISAL SATISFACTION:
THE CASE EVIDENCE FROM BRUNEI’S CIVIL SERVICE

A thesis submitted to the University of Manchester
for the degree of Doctor of Philosophy
in the Faculty of Humanities

2014

NORFARIZAL OTHMAN

Institute for Development Policy and Management
School of Environment, Education and Development
TABLE OF CONTENTS

Table of Contents ……………………….……………………………………………………………………………. 2
List of Appendices …………………………………………………………………………………………………….. 7
List of Figures ………………………………………………………………………………………………………….. 8
List of Tables ……………………………………………………………………………………………………………. 9
Abstract ……………………………………………………………………………………………………………………. 11
Declaration ………………………………………………………………………………………………………………. 12
Copyright ………………………………………………………………………………………………………………….. 12
Acknowledgements ………………………………………………………………………………………………….. 13
Publications and Paper Presented …………………………………………………………………………… 14
List of Abbreviations ……………………………………………………………………………………………….. 15

CHAPTER ONE : INTRODUCTION ……………………………………………………... 17
1.1 Introduction …………………………………………………………………………………........ 17
1.2 Rationale of Study ……………………………………………………………………………….. 21
1.3 Background and Scope of Study ………………………………………………………….. 22
1.4 The Context of Study ……………………………………………………………………………. 25
1.5 Aims and Objectives of Study ………………………………………………………………. 26
1.6 Research Methods and Methodology ……………………………………………........ 27
1.7 Research Contributions and Significance of Study ……………………………….. 30
1.8 Structure of the Thesis ………………………………………………………………………….. 31

CHAPTER TWO : LITERATURE REVIEW ……………………………………………….. 34
2.1 Introduction …………………………………………………………………………................. 34
2.2 Individual Performance: An Overview …………………………………………………… 34
2.3 Theories of Performance Management ………………………………………………….. 35
2.3.1 Definition of Performance …………………………………………………………….......... 35
2.3.2 Underpinning theories of performance management ………………………….. 39
2.3.2.1 Equity theory …………………………………………………………………………………………. 40
2.3.2.2 Expectancy theory …..……………………………………………………………………………… 41
2.3.2.3 Procedural Justice theory …………………..………………………………………………….. 42
2.3.2.4 Goal-setting theory ………………………………………………………………………………… 42
2.3.3 Performance Appraisal Satisfaction ………………………………………………………. 45
2.4 Performance Measurement and Management Practices in the Public
Sector ……………………………………………………………………………………………………… 47
2.5 Performance Appraisal Process ……………………………………………………………… 51
2.5.1 Nature of Performance Appraisal …………………………………………………………… 51
2.5.2 Performance Evaluations Measures ………………………………………………………. 52
2
2.5.2.1 Objective and Subjective Measures ………………………………………………………. 53
2.5.2.2 Team-based measures …………………………………………………………………………… 54
2.5.3 Rewards and Pay-for-Performance ………………………………………………………… 56
2.5.4 Accuracy of Performance Ratings and the Relationship of Appraiser
and Appraisee ……………………………………………………………………………………….. 58
2.5.5 Rating Scale Format ………………………………………………………………………………. 59
2.6 Cultural Settings of Performance Management ……………………………………. 60
2.6.1 Performance Management in the Asian settings …………………………………… 61
2.6.1.1 Performance Management in India ……………………………………………………….. 62
2.6.1.2 Performance Management in China ………………………………………………………. 63
2.6.1.3 Performance Management in South Korea ……………………………………………. 65
2.6.1.4 Performance Management in Malaysia ………………………………………………….. 65
2.6.1.5 Performance Management in Singapore ……………………………………………….. 66
2.6.1.6 Performance Management in Vietnam …………………………………………………… 67
2.6.2 Reflections of the Performance Management Practices in the Asian
Settings …………………………………………………………………………………………………… 68
2.7 Chapter Summary ………………………………………………………………………………….. 69

CHAPTER THREE : SETTING AND CONTEXT OF THE STUDY……………………. 71
3.1 Introduction ……………………………………………………………………………………………. 71
3.2 Brunei Darussalam: General Background ……………………………………………… 71
3.2.1 Overview of Brunei Darussalam ……………………………………………………………. 71
3.2.2 National Philosophy ……………………………………………………………………………….. 74
3.3 Structure of the Government System ……………………………………………………. 75
3.3.1 Brunei’s National Vision …………………………………………………………………………. 78
3.4 Overview of Current Performance Appraisal System in the Public
Sector of Brunei …………………………………………………………………………………….. 80
3.4.1 Purposes of Performance Appraisal System …………………………………………. 81
3.4.2 Stages in an open staff appraisal …………………………………………………………. 81
3.4.3 Format of Appraisal Forms ……………………………………………………………………. 82
3.4.4 The use of Performance Appraisal Information ……………………………………. 84
3.5 Chapter Summary …………………………………………………………………………………. 84

CHAPTER FOUR: CONCEPTUAL FRAMEWORK ……………………………………….. 86
4.1 Introduction ……………………………………………………………………………………………. 86
4.2 Gap in Literatures …………………………………………………………………………....... 87
4.3 Adaptation of Conceptual Framework ………………………………….............. 90
4.4 Proposed Research Questions and Development of Hypotheses ………. 91
3
4.4.1 Goal setting and Purposes of Performance Appraisal …………………………. 92
4.4.2 Alignment of Personal Objectives with Organisational Goals …………….. 94
4.4.3 Fairness of Appraisal System ……………………………………………………….……… 95
4.4.4 Types of Performance Evaluation Measures ………………………………......... 96
4.4.4.1 Objective and Subjective Measures ………………………………………………………. 97
4.4.4.2 Team-based Measures …………………………………………………………………………… 99
4.4.5 Format of Rating Scales ………………………………………………………………………. 100
4.4.6 Appraiser-Appraisee Relationship and Credibility of Appraiser ……………. 101
4.4.7 Dimensions of Culture ……………………………………………………………………………. 102
4.4.7.1 In-Group Collectivism …………………………………………………………………………….. 104
4.4.7.2 Power Distance ………………………………………………………………………………………. 105
4.4.8 Pay-for-performance ……………………………………………………………………………… 107
4.4.9 Demographic variables …………………………………………………………………………… 109
4.5 Chapter Summary …………………………………………………………………………………… 110

CHAPTER FIVE : RESEARCH METHODOLOGY AND METHODS …………………… 111
5.1 Introduction ……………………………………………………………………………………………… 111
5.2 Research Philosophy and Foundations ……………………………………………………. 113
5.2.1 Research Paradigms ………………………………………………………………………………… 113
5.2.2 Mixed Methods and Triangulations ………………………………………………………….. 117
5.3 Research Design ………………………………………………………………………………………. 121
5.3.1 Planned Research Study Schedule ………………………………………………………….. 124
5.4 Qualitative Research ………………………………………………………………………………… 124
5.4.1 Reasons for Qualitative Research ……………………………………………………………. 124
5.4.2 Research Methods for Collection of Qualitative Data ………………………………. 125
5.5 Measurement Scales ………………………………………………………………………………… 126
5.5.1 Scale Development and Validation …………………………………………………………… 126
5.5.2 Specification of the Domain constructs ……………………………………………………. 126
5.5.3 Generation of Measurement Item ……………………………………………………………. 128
5.5.3.1 Independent Variable ……………………………………………………………………………….. 130
5.5.3.2 Dependent Variable …………………………………………………………………………………… 131
5.5.3.3 Moderating Variables ………………………………………………………………………………… 132
5.5.3.4 Control Variable ……………………………………………………………………………………….. 132
5.6 Development of Quantitative Measures ………………………………………………….. 132
5.6.1 Scale Construction …………………………………………………………………………………... 132
5.6.2 Pilot Study ………………………………………………………………………………………………… 136
5.6.3 Reliability and Validity ………………………………………………………………………………. 137
5.7 Main Data Collection ………………………………………………………………………………… 139
4
5.7.1 Target Population ……………………………………………………………………………………… 139
5.7.2 Sampling Procedures ………………………………………………………………………………… 139
5.7.3 Sample Size ………………………………………………………………………………………........ 141
5.7.4 Data Collection Procedures ………………………………………………………………………. 142
5.8 Data Analysis Techniques and Statistical Packages for Main Quantitative
Study ………………………………………………………………………………………………………… 143
5.9 Initial Data Examination and Data Screening for Main Quantitative
Study ………………………………………………………………………………………………………… 145
5.9.1 Missing Values and Treatment …………………………………………………………....... 146
5.9.2 Analysis of Outliers ………………………………………………………………………………….. 146
5.9.3 Test of Normality of Data Distribution ……………………………………………………… 149
5.9.4 Test of Homoscedasticity …………………………………………………………………………. 150
5.9.5 Test of Multicollinearity ……………………………………………………………………………. 151
5.10 Ethical Consideration ……………………………………………………………………………….. 153
5.11 Chapter Summary …………………………………………………………………………………….. 154

CHAPTER SIX: QUALITATIVE FINDINGS AND ANALYSIS ………………………… 156
6.1 Introduction ………………………………………………………………………….................. 156
6.2 Main Qualitative Findings ………………………………………………………………………… 156
6.2.1 Profile of Interviewees …………………………………………………………………………….. 157
6.2.2 Current Performance Appraisal System …………………………………………………… 157
6.2.3 Perceived Employee Performance ……………………………………………………………. 162
6.3 Key Summaries from Interviews ……………………………………………………………… 166

CHAPTER SEVEN: QUANTITATIVE FINDINGS AND ANALYSIS ………………….. 168
7.1 Introduction ………………………………………………………………………………………………. 168
7.2 Measurement Purification: Pilot Study ……………………………………………………. 168
7.2.1 Pilot Study Methodology and Demographics of Respondents …………………. 168
7.2.2 Descriptive Statistics for Pilot Study ………………………………………………………… 171
7.2.3 Reliability Test …………………………………………………………………………………………. 172
7.3 Main Study Findings …………………………………………………………………………………. 175
7.3.1 Sampling …………………………………………………………………………………………………… 175
7.3.2 Demographic details of respondents ………………………………………………………. 175
7.3.2.1 Background Information …………………………………………………………………………. 175
7.3.3 Summary of responses of Likert-item scale for the whole questionnaire
…………………………………………………………………………………............................. 178
7.3.4 Descriptive Statistics of Construct Items ………………………………………………… 179
5
7.3.4.1 Current Appraisal System ……………………………………………………………………….. 179
7.3.4.2 Perceived Employee Performance …………………………………………………………… 184
7.3.4.3 Mean Ranking Score of Variables …………………………………………………………….. 189
7.4 Factor Loadings and Data Analysis ………………………………………………………….. 190
7.4.1 Exploratory Factor Analysis ……………………………………………………………………... 190
7.4.2 Assessment of Construct Validity …………………………………………………………… 197
7.4.3 Structural Equation Modelling ………………………………………………………………… 199
7.4.4 Confirmatory Factor Analysis and Measurement Models ………………………… 201
7.4.5 Assessment of Model Fit for Confirmatory Factor Analysis …………………….. 207
7.5 Hypothesis Testing …………………………………………………………………………………… 212
7.6 Summary …………………………………………………………………………………………………. 215

CHAPTER EIGHT : DISCUSSIONS …………………………………………………………. 217
8.1 Introduction …………………………………………………………………………………………… 217
8.2 Overview of the Research Study and Summary of Main Findings ………. 217
8.3 Interpretations of Construct Items and Discussions of Hypotheses ……. 220
8.3.1 Perceptions of Current Appraisal System ……………………………………………… 220
8.3.2 Perceived Employee Performance …………………………………………………………. 222
8.3.2.1 Fairness of Appraisal System ……………………………………………………………….. 222
8.3.2.2 Goal Setting and Purposes of Performance Appraisal ………………………….. 224
8.3.2.3 Types of Performance Evaluation Measures …………………………………………. 225
8.3.2.4 Alignment of personal objectives with organisational goals …………………. 226
8.3.2.5 Format of rating scales ………………………………………………………………………….. 227
8.3.2.6 Appraiser-appraisee relationship and credibility of appraiser ………………. 228
8.3.2.7 Presence of pay-for-performance …………………………………………………………. 229
8.3.2.8 Cultural Variables ………………………………………………………………………………….. 230
8.4 Discussion of Factor Analysis and Model Fit …………………………………………. 233
8.5 Key Summaries and Synthesis of Discussions …………………………………….. 233
8.6 Chapter Summary ………………………………………………………………………………… 238

CHAPTER NINE : CONCLUSIONS AND RECOMMENDATIONS ………………….. 239
9.1 Introduction …………………………………………………………………………………………… 239
9.2 Research Contributions and Implications ……………………………………………… 242
9.2.1 Theoretical Contributions ………………………………………………………………………. 242
9.2.2 Managerial Implications ………………………………………………………………………… 245
9.3 Limitations of Study ……………………………………………………………………………… 250
9.4 Directions for Future Research …………………………………………………………….. 252

6
9.5 Summary ……………………………………………………………………………………………….. 254
9.6 Personal Reflections on this Research …………………………………………………… 254

References ……………………………………………………………………………………………………………… 257

[Total word count = 84,964]

LIST OF APPENDICES
Appendix 1 Summary of Key Terms used in this research ………………………… 288
Appendix 2 Budget allocations according to various ministries in Brunei…… 293
Appendix 3 Brunei’s strategy to achieve the National Vision 2035 …………… 294
Appendix 4 Interview Agenda ……………………………………………………………………… 295
Appendix 5 Survey Questionnaire (English version) …………………………………… 297
Appendix 6 Survey Questionnaire (Malay version) ……………………………………. 303
Appendix 7 Research Consent Form and Participant Information Sheet……. 310
Appendix 8 Descriptive statistics with results of skewness and kurtosis
analysis …………………………………………………………………………………….. 314
Appendix 9 Normality assessment using Kolmogorov-Smirnov and
Shapiro-Wilk tests ……………………………………………………………………. 315
Appendix 10 Initial component matrix for exploratory factor analysis ……….. 316
Appendix 11 Construct correlations (estimates) results for nomological
validity of model ………………………………………………………………………. 317

7
LIST OF FIGURES
Figure 2.1 Performance Relationship …………………………………………………………… 38
Figure 2.2 The Performance Management Cycle …………………………………………. 38
Figure 2.3 Questions Addressed by Four Theories of Research …………………. 44
Figure 3.1 Brunei Darussalam and neighbouring countries ………………………… 72
Figure 3.2 Distribution of Civil Servants in Brunei’s Civil Service ………………. 78
Figure 4.1 Hypothesized model of study …………………………………………………….. 93
Figure 5.1 Deductive and inductive reasoning in research ……………………….. 117
Figure 5.2 Mixed methods procedures ……………………………………………………….. 121
Figure 5.3 Research Design …………………………………………………………………………. 124
Figure 5.4 Procedure for developing measurement scales ………………………… 128
Figure 7.1 Catell’s scree plot ……………………………………………………………………….. 195
Figure 7.2 Path diagram showing initial hypothesized first-order
confirmatory factor analysis model …………………………………………… 207
Figure 7.3 Initial Structural Model ………………………………………………………………. 208
Figure 7.4 Final confirmatory factor analysis model (with standardised
coefficients) ………………………………………………………………………………… 211
Figure 7.5 Full structural model ………………………………………………………………….. 212
Figure 7.6 Best-fit model of study ………………………………………………………………. 216

8
LIST OF TABLES
Table 2.1 Various Definition of Performance as a Function of Different
Variables …………………………………………………………………………….......... 37
Table 2.2 Dynamics of Performance Theories ……………………………………………. 40
Table 2.3 Summarised Issues of Performance Appraisal System in the
selected Asia Pacific Region …………………………………………………………. 69
Table 3.1 Brunei Darussalam Key Indicators 2011 …………………………………….. 73
Table 3.2 Stages in an open appraisal system ……………………………………………. 82
Table 3.3 General criteria and trait measured in performance appraisal by
Grades ………………………………………………………………………………………….. 83
Table 3.4 Grade ratings and percentage equivalence in performance
ratings ………………………………………………………………………………………….. 84
Table 4.1 Some meta-analyses findings on rewards and performance …….. 109
Table 5.1 Summary of Relationship between Research Objectives,
Research Questions and related hypotheses ……………………………… 112
Table 5.2 Alternative terms for main research paradigms ………………………… 113
Table 5.3 Philosophical assumptions of positivism …………………………………….. 115
Table 5.4 Contrasting implications of positivism and social
constructionism…………………………………………………………………………….. 115
Table 5.5 Fundamental differences between quantitative and qualitative
research strategies ……………………………………………………………………… 117
Table 5.6 Time schedule for the research study ……………………………………….. 123
Table 5.7 Main variable/construct and their definition ………………………………. 129
Table 5.8 Constructs, scale item and item sources ……………………………………. 130
Table 5.9 Initial Survey Questionnaire items in relation to hypotheses and
constructs ……………………………………………………………………………………. 136
Table 5.10 Different types of validity …………………………………………………………… 138
Table 5.11 Descriptions of different types of probability-based sampling
techniques …………………………………………………………………………………… 141
Table 5.12 Distribution of population and sampling for main study …………… 142
Table 5.13 Data analysis techniques and purposes …………………………………….. 144
Table 5.14 Univariate and multivariate outlier detection results ………………… 148
Table 5.15 Test of Homogeneity of Variances …………………………………………….. 151
Table 5.16 Bivariate correlation ……………………………………………………………………. 152
Table 5.17 Correlation matrix with variance inflation factor (VIF) and
tolerance ……………………………………………………………………………………… 152
Table 6.1 Profiles of respondents for interviews ……………………………………….. 157
Table 7.1 Demographic characteristics of participants for pilot study……….. 170
Table 7.2 Correlation table for pilot study ………………………………………………….. 172
Table 7.3 Results of scale reliability analysis ……………………………………………… 173
Table 7.4 Revised Cronbach’s alpha values for pilot study ……………………….. 174
Table 7.5 Demographic details of respondents for main study …………………. 177
Table 7.6 Responses of Likert-item scale for the whole questionnaire for
main study …………………………………………………………………………………… 178
Table 7.7 Descriptive statistics and correlations of the single item scale for
Grade I and II ……………………………………………………………………………… 179
Table 7.8 Descriptive statistics and correlations of the single item scale for
Grade III and IV ………………………………………………………………………….. 180

9
Table 7.9 Descriptive statistics and correlations of the single item scale for
Grade V ………………………………………………………………………………………… 181
Table 7.10 Summary of responses of the importance of the general criteria
in the current appraisal form ……………………………………………………… 182
Table 7.11 Descriptive statistics and correlations of the perception of the
current appraisal system …………………………………………………………….. 183
Table 7.12 Summary of responses for the perception of the current
appraisal system ………………………………………………………………………….. 184
Table 7.13 Descriptive statistics and correlations of goal setting and
purposes of performance appraisal …………………………………………….. 184
Table 7.14 Descriptive statistics and correlations of the alignment of
personal objectives with organisational goals ……………………………. 185
Table 7.15 Descriptive statistics and correlations of the perceived fairness
of appraisal system …………………………………………………………………….. 185
Table 7.16 Descriptive statistics and correlations of the types of
performance evaluation measures ……………………………………………… 186
Table 7.17 Descriptive statistics and correlations of format of rating scales
………………………………………………………………………………………………………. 186
Table 7.18 Descriptive statistics and correlations of the appraiser-appraisee
relationship and credibility of appraiser …………………………………….. 187
Table 7.19 Descriptive statistics and correlations of in-group collectivism
constructs …………………………………………………………………………………….. 187
Table 7.20 Descriptive statistics and correlations of power-distance
constructs …………………………………………………………………………………….. 188
Table 7.21 Descriptive statistics and correlations for pay-for-performance
………………………………………………………………………………………………………. 188
Table 7.22 Summary of responses of the importance of the general aspects
in the future performance appraisal system ………………………………. 189
Table 7.23 Kaiser-Meyer-Olkin (KMO) and Bartlett’s Test of this
research……………………………………………………………………………………….. 192
Table 7.24 Initial Item Communalities ……………………………………………………...... 193
Table 7.25 Total Variance Explained …………………………………………………………….. 195
Table 7.26 Rotated Component Matrix …………………………………………………………. 196
Table 7.27 Inter-construct correlations ………………………………………………………… 198
Table 7.28 Average Variance Extracted (AVE) and Discriminant Validity……… 198
Table 7.29 Summarised table of final factor loadings with mean, standard
deviations and Cronbach’s alpha (after EFA) and average
variance extracted (AVE) ……………………………………………………………… 200
Table 7.30 Summarised results of the initial CFA …………………………………………. 203
Table 7.31 Squared multiple correlations………………………………………………………. 204
Table 7.32 Unstandardized and standardized coefficients with relevant β
and t-values …………………………………………………………………………………. 204
Table 7.33 Goodness-of-fit statistics for the initial CFA ……………………………….. 208
Table 7.34 How the final CFA model was achieved ………………………………………. 209
Table 7.35 Summary of Hypothesis Testing …………………………………………………. 214
Table 8.1 Summary of Main Findings with respect to relevant research
questions and related hypotheses ………………………………………………. 219
Table 9.1 Summary of main objectives mapped out the key findings of the
research ………………………………………………………………………………………. 241

10