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Effects of Performance Feedback on Employee’s Performance

A Research Paper
Presented to the Faculty of the
Department of Accountancy and Business Management
College of Business Administration and Accountancy
Mindanao State University at Naawan
9023, Naawan, Misamis Oriental

In Partial Fulfilment of the


Requirement for the Degree of
Bachelor of Science in Business Administration
Major in Management

Mylene Angas
Honnyve Pamisa
Jerome Sabayanan

September 2018
CHAPTER 1

Problem and Its Scope

In today’s globalized society, organizations have to face high competition and


must react quickly to every changes constantly occurring in the market place. All
organizations strive for success and desire to get profits and a continuous progress.
However, many have to deal with employee retention issues i.e. organizations struggle
to retain their employees (Manzoor, 2012, Bhuvanaiah & Raya, 2015). According to
Sandhya and Kumar (2001), this employee retention challenge could be better
managed through motivating the employees by means of open communication and
rewards among other aspects. Moreover, even though motivation is really different from
one person to another, and performance is not only influenced by motivation; the
motivation to well execute a job represents one of the most important factors affecting
performance (Van Knippenberg, 2000). Therefore, learning how to motivate employees
will most likely help the manager to better manage his or her team and lead the
employees to achieve better performance. However, only a small number of
organizations recognize the employees as their main assets (Manzoor, 2012).
Furthermore, the authors believe that, although certain companies do recognize their
employees as the heart of their business, the do not always care or understand what
motivates them.

Most of the organizations invested on the employee, the capacity of the


employee to get things done properly with a good quality output. But most of the
companies or organization tends to forget the main assets of the organization which is
the employee (Manzoor, 2012).

Sustaining the organization’s existence by improving performance is one of the


goals of any organizations aside from surviving. In order to meet the needs of the highly
competitive markets, organizations must continually increase performance. By
evaluating the employees, managers should give the employee a performance
feedback that could increase employees’ performance as well as to improve themselves
personally that could give also interest for the organization.

Business leaders want employees to succeed. Employees are an integral


component of the overall business' success. Plus when employees succeed, they have
a more positive demeanor and everyone enjoys being at the office more when people
are happy. Performance feedback is critical to helping employees understand
expectations, make adjustments and get the coaching necessary to improve and
succeed. On the other side of the equation is feedback managers, may receive in the
process as well that helps them more effectively lead the organization.

According to Ashford & Cummings (1983), feedback represents resources that


inform individuals in the work environment about how well they have attained both their
own and the organization’s goals and targets. It also is a way to make individuals know
about the others’ (e.g. manager, colleagues) perception of their behaviour and
accomplishments.

For the last few years, a specific type of communication, the feedback; has
received great attention and interest from many researchers (e.g. London & Smither,
2002; Medvedeff et al., 2008). Prior studies as well as personal experiences have
proved the ability of feedback in allowing individuals to gain valuable knowledge about
their performance. Indeed, feedback ideally helps individuals to adopt a development-
oriented state of mind, leading them to learn about themselves, their behavior, and
ultimately enhance their performance (London & Smither, 2002). According to Saedon
et al., (2012) feedback could be defined as specific information concerning the
comparison between one’s observed performance and a standard. For these authors,
feedback aims at improving the observed individual’s performance, and can be either
outcome or process-oriented (Medvedeff et al., 2008). While outcome-oriented
feedback only gives information about general success or failure, process-oriented
feedback provides specific and detailed information about the strengths, weaknesses
and actual performance of the recipient and how he or she could improve it (Knesek,
2015; Medvedeff et al., 2008). In most cases, employees are more interested in process
feedback than in the outcome feedback since they seek information about how to
perform better.

Yet, some researchers argue that feedback has highly variable effects on
performance and could, instead of improving it, sometimes lead to debilitate employees’
performance (Kluger & DeNisi 1996). Indeed, employees may be afraid of receiving
feedback because these specific discussions have long focused solely on employees’
mistakes and not enough on their accomplishments (Knesek, 2015). Many employees
avoid feedback because being criticized is highly unpleasant. They fear these
performance discussions will lead to arguments and threats (Jackman & Strober, 2003).
Likewise, some managers are frightened to provide feedback since it could either hurt
employees’ feelings or lead to stonewalling (Jackman & Strober, 2003).

The goal of this study is to find out how important is the performance feedback in
the organization as well as to the employees, if there is a relatively significant effect on
this to the organization and employees
Theoretical Background

Performance feedback has an indirect effect on productivity via human resources


systems such as training, compensation, career planning and job design. On the other
hand, there are also direct personal effects of performance feedback to be considered.
Reducing the ambiguity of performance, developing manager-subordinate relationships,
facilitating the employee achieving goals, personal development and adaptation to
change are effects occurring in the personal dimension of performance feedback.

Reducing the Performance Ambiguity

When the level of perceived ambiguity related to performance increases, it can also be
said that in the employees’ minds there is also uncertainty as to whether or not the level
of performance desired by management is being demonstrated so there is an increase
in feedback oriented (Bennett at al, 1990: 343). Previous performance plays an
important role in this perceived uncertainty. For those who have previously shown a
high level of performance in the organisation, feedback information is thought to be
unnecessary in the belief that they are performing in the desired way. In contrast, those
whose performance was not of a satisfactory level in the previous period always need
performance feedback, even if it is negative, because of the performance uncertainty
(Audia and Locke, 2003: 633)

Development of Manager-Subordinate Relationships

Performance feedback interviews develop inter-personal social relations and increase


communication (Kaynak et al, 1998: 208). As performance feedback interviews carry
above all the aim of ‘sharing’, they create a positive or negative interaction between the
manager and subordinate or in more general terms, the evaluator and evaluatee
(Cacioppe and Albrecht, 2000: 400). Uyargil et al. (2008, p. 257) indicated that
developing work relations and improving communication from the aspect of both rater
and rate are the main success factors of performance feedback process.

A positive interaction established betwen a manager and subordinate in a performance


feedback interview directly affects the employee’s satisfaction. This is because in
establishing a two-way communication (Gravan et al, 1997: 140). between the manager
and employee, there is an opportunity for the employee to voice his expectations,
feelings, wishes or complaints. The freedom to express himself increases an
employee’s motivation and develops the relationship with the manager (Nathan et al,
1991: 354).

Facilitating the Achievement of Goals


To create goals to increase the level of performance two important preconditions are
necessary:

1. The employee must have a clear concept of what he must do to realise the stated
goals.

2. The goals must be accepted by the employee. When creating goals, the employee’s
views and suggestions must be taken into account. There is a risk that the employee
will not make sufficient effort to meet goals which have not been accepted.

Because of the two reasons given above, goal collaboration and consensus should be
created between employees and the organisation. Goal oriented feedback information
not K.Kaymaz Business and Economics Research Journal 2(4)2011 121

only states what is necessary to realise the goal, but also puts the employee into the
position of partnership regarding the goal (Schweiger and Sumners, 1994: 5).

Personal Development and Adaptation to Change

Many performance evaluation forms have a personal development area on the reverse
page and this is a most important section which directly affects the employee’s
performance. This section states what it is necessary for the employee to acquire in the
future for his benefit. The future planning in feedback interviews is so important in
determining of areas for development. Personal development plans provide the
acquisition of skills by encouraging training and the use of technical and behavioural
knowledge at work (Armstrong and Baron, 2007: 96-97)

The conceptual framework of the stated personal effects of performance feedback and
the edited theoretical model of work are shown in Figure 1.

Decreasing Performance Ambiguity

Development of Manager-
Subordinate Relationship
Performance
Facilitating the Achievement Of
Feedback MOTIVATION
Goals

Supporting Personal Development

Adaptation To Change
Independent Variables Dependent Variables

Decreasing Performance Ambiguity

Development of Manager-
Subordinate Relationship

Facilitating the Achievement Of


Performance Goals

Feedback
Supporting Personal Development

Adaptation To Change

Figure 1: The Conceptual Framework Of The Study

Figure 1 presents two variables entailed in the study. These two variables are
independent and dependent. Researchers gathered the data on independent variables.
This variable is the performance feedback. The result from independent variable would
yield into of Decreasing Performance Ambiguity, Development of Manager-Subordinate
Relationship, Facilitating the Achievement Of Goals, Supporting Personal Development,
and lastly Adaptation To Change.
INPUT RESEARCH OUTPUT

Performance Feedback
 Construct
Questionnaire
 Decreasing
Performance
Ambiguity  Conduct an
 Development of Interview
Manager-
Subordinate
Relationship
 Data Tabulation
 Facilitating the
Achievement Of
Goals
 Supporting  Analyze and
Personal Interpret Data
Development
 Adaptation To
Change

Figure 2. Flow of Research Process

Figure 2 presents the outline of the focused research process. The input is in two folds
which are the indendent and dependent variables.
Statement of the Problem

This study will determine the effects of performance feedback to the increase on
employees’ performance, in order for the organization to realize how important
performance feedback in the company as well as to the employee, it will help them to
grow personally, letting them know their capability as well as what to improve
themselves for the betterment of the organization. The study wants to answer the
following questions:

How important is the managers’ feedback to the employee?


What are the necessary actions to be done to help the employee in their performance?
Why is that, most of the companies tends to forget the most valuable asset in the
organization?

Significance of the Study

This study will determine the effect of performance feedback to the increase of
the employees’ performance. The aim of this study is to determine how performance
feedback reflects individual based implications and probable effects on motivation. To
show the importance of giving performance feedback to the employees that could help
them to grow personally as well as the organizations’ interests. In this study also wants
to know the importance of having a performance feedback towards employees.

Making good relationship towards employee that could leads to loyalty and
contentment or satisfaction on the job

Scope and Limitation of the Study


The scope of this study is to determine how significance performance feedback
to the increase on employees’ performance. This study will focus on the organization
having performance evaluation monthly such as Business Process Outsourcing (BPO)
companies from Iligan City to Cagayan De Oro City. The researcher will visit the said
industries to be able to get such information that will be needed in this study. In addition,
this study will only focus to the regular employees. Moreover, there will be an interview
to the manager how performance feedback given.

Definition of Terms

The following are the list of definition which will be used in this study:

Performance Feedback is ongoing process between employee and manager where


information is exchanged concerning the performance expected and the performance
exhibited.

Performance is defined by the potential to successfully implement actions that will


reach the organization’s objective and goals (Lebas, 1995). Therefore, employees’
performance refers to the extent to which the workers’ activities and missions have
been well executed. Their performance is to be reviewed by their manager e.g. line
manager or project manager.

Employee performance refers to the extent to which the worker’s activities and
missions have been well executed. Their performance is to be reviewed by their
manager e.g. line manager or project manager.

Performance management is a process that aims to increase the individuals’


performance, getting the best of each employee while also improving the organization’s
performance as a whole (Dransfield, 2000).
Feedback process in which the effect for output of an action is ‘returned’ (fed-back) to
modify the next action.

Motivation internal and external factors that stimulate desire and energy in people to
be continually interested and committed to a job, role or subject, or to make an effort to
attain goal.
CHAPTER II
Review of Related Literature