THE EFFECTS OF PERFORMANCE APPRAISAL ON EMPLOYEE RETENTION: A COMPARISON OF FINNISH AND VIETNAMESE ENTERPRISES
DOI:
https://doi.org/10.37569/DalatUniversity.7.1.148(2017)Keywords:
Employee retention, Fairness issue, Goals setting, Performance appraisal, Relationship with supervisor, RewardsAbstract
This research aims to identify the features of a performance appraisal system and explore how each feature affects the employees’ loyalty. Furthermore, the study would like to discover if these effects are different in different cultures.The author applied qualitative method, and the data were collected through 15 semi-structured interviews (including 7 casesconducted in Finland and 8 cases interviewed in Vietnam). Participants chosen for the research were knowledgeable employees working in Vietnamese or Finnish original enterprises.Four features of a performance appraisal system, which are goal setting, supervisor - subordinate relationship, rewards linked with performance result and fairness issue are argued based on literature review. From empirical studies, a variety of findings is identified supporting and supplementing for existing theories. One of those is the emphasis of self-development based performance appraisal in Finland and the rewarding based one in Vietnam. The performance appraisal system has weak impact on Finnish employees’ loyalty; while it does influence Vietnamese individual intention to leave the job. The findings also illustrate that Finnish staff take clear goal setting and fairness as prerequisite features of a performance appraisal; Vietnamese employees, in contrast, view the relationship with supervisors and rewards received as more significant criteria.This study provides suggestions of retaining talents for managerial practices. Findings of the research could assist international managers to concentrate on features which strongly affect the employees’ satisfaction and loyalty when they design and implement performance appraisal system in different locations.
Metrics
References
Chiang, F. (2005). A critical examination of Hofstede’s thesis and its application to international reward management. The International Journal of Human Resource Management, 16(9), 1545-1563.
Chiang, F. F. T., & Birtch, T. A. (2010). Appraising performance across borders: An empirical examination of the purposes and practices of performance appraisal in a multi-country context. Journal of Management Studies, 47(7) 1-24.
Colquitt et al. (2001). Justice at the millennium: A meta-analytic review of 25 years of organizational justice research. Journal of Applied Psychology. 86(3), 425-445.
Deluga, R. J. (1998). Leader-member exchange quality and effectiveness ratings: The role of subordinate-supervisor conscientiousness similarity. Group & Organization Management, 23(2), 189-216.
Evans, P., Pucik, V., & Björkman, I. (2011). Global challenge: International human resource management (2nd ed.). New York, USA: McGraw-Hill.
Elicker, J. D. (2006). The role of leader-member exchange in the performance appraisal process. Journal of Management, 32(4), 531-551.
Erdogan, B. (2002). Antecedents and consequences of justice perceptions in performance appraisals. Human Resource Management Review, 12(4), 555-578.
Furnham, A. (2005). The psychology of behaviour at work: The individual in the organization (2nd ed.). New York, USA: Psychology Press.
Golden, T. D., & Veiga, J. F. (2008). The impact of superior-subordinate relationships on the commitment, job satisfaction, and performance of virtual workers. The Leadership Quarterly, 19, 77-88.
Gruman, J. A., & Saks, A. M. (2011). Performance management and employee engagement. Human Resource Management Review, 21(2), 123-136.
Hartmann, F., & Slapničar, S. (2012). The perceived fairness of performance evaluation: The role of uncertainty. Management Accounting Research, 23(1), 17-33.
Hofstede, G. (1980). Culture’s consequences: International differences in work-related values. California, USA: SAGE Publications.
Hofstede, G. (2001). Culture’s consequences: Comparing values, behaviors, institutions, and organizations across nations. California, USA: SAGE Publications.
Hofstede, G. (2005). Cultures and organizations: Software of the mind, intercultural cooperation and its importance for survival (2nd ed.). New York, USA: McGraw-Hill.
Hofstede, G., & Bond, M. H. (1988). The Confucius connection: From cultural roots to economic growth. Organizational Dynamics, 16, 5-21.
Hui, L., & Qin-xuan, G. (2009). Performance appraisal: What’s the matter with you? Procedia Earth and Planetary Science, 1(1), 1751-1756.
Jr, P. W. T., & McNall, L. (2010) Justice perceptions of performance appraisal practices. Journal of Managerial Psychology. 25(3), 201-228.
Kavanagh, P., & Brown, M. (2007). Understanding performance appraisal fairness. Asia Pacific Journal of Human Resources.45(2), 132-150.
Kuvaas, B. (2011). The interactive role of performance appraisal reactions and regular feedback. Journal of Managerial Psychology, 26(2), 123-137.
Latham, G. P., Almost, J., Mann, S., & Moore, C. (2005). New developments in performance management. Organizational Dynamics, 34(1), 77-87.
Lawler, E. E. (2003). Reward practices and performance management system effectiveness. Organizational Dynamics, 32(4), 396-404.
Mayer, R. C., & Davis, J. H. (1999). The effect of the performance appraisal system on trust for management: A field quasi-experiment. Journal of Applied Psychology, 84(1), 123-136.
Murphy, K. R., & Cleveland, J. N. (1995). Understanding performance appraisal: Social, organizational, and goal-based perspectives. California, USA: SAGE Publications.
Sholihin, M., & Pike, R. (2009). Fairness in performance evaluation and its behavioural consequences. Accounting and Business Research, 39(4), 397-413.
Saunders, M., Adrian, T., & Philip, L. (2009). Research methods for business students (5th ed.). New Jersey, USA: Prentice Hall.
Smith, H. P., & Brouwer, P. J. (1977). Performance appraisal and human development: a practical guide to effective managing. Massachusetts, USA: Addison-Wesley Longman.
The Hofstede Centre (2014a). National cultural dimensions. Retrieved from http://geert-hofstede.com/national-culture.html.
The Hofstede Centre (2014b). Dimensions. Retrieved from http://geert-hofstede.com/ dimensions.html.
The Hofstede Centre (2014c). Finland in comparison with Vietnam. Retrieved from http://geert-hofstede.com/dimensions.html.
Tziner, A., Joanis, C., & Murphy, K. R. (2000). A Comparison of three methods of performance appraisal with regard to goal properties, goal perception, and ratee satisfaction. Group & Organization Management, 25(2), 175-190.
Downloads
Published
Volume and Issues
Section
Copyright & License
Copyright (c) 2017 Nguyễn Hà Thu
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
How to Cite
