Convergence in Effective Performance Appraisal System Technique: Foster Employee Involvement and Organizational Commitment Evidence from Indian SMEs

The performance appraisal system is the way of finding, examining, and recording information about the employees‘ performance for the specific period in the organization. It is an investigation of an employee‘s current accomplishment and malfunction, individual strengths and weak point, and further fittings for promotion or guidance and training. Appraisal system is also the judgment about an employee‘s performance in a job, based on considerations other than productivity. The appraisal system has become mandatory in an organization to judge one‘s performance, since its absence would lead to certain ethical issues in the organization. Hence, this research was conducted with objective to investigate the effectiveness of performance appraisal system and its relationship with the employee motivation, involvement, and commitment in leading small-and medium-scale enterprises (SMEs). A conceptual framework model was developed for an effective performance appraisal system proved using SPSS 20.0, Smart PLS 3.0, Minitab 17.0, AMOS package and R statistics. Also, many relevant results were showing that the following subsequent components such as appraisal method, fairness outcome, fairness process, goal congruity, employee participation, performance feedback, performance-based pay, and performance appraisal feedback have a strong relationship with the effective performance appraisal process in SMEs. This research work is an effort to discover the impact of effective performance appraisal system on enhancing employees‘ performance and further increasing their motivation, commitment, and involvement in the leading small-and medium-scale enterprises (SMEs)