THE INFLUENCE OF PERFORMANCE MANAGEMENT PRACTICES ON

EMPLOYEES ENGAGEMENT

By

SUMERA

2015-KIU-0105

2015-2017

Department of Business Management

Karakoram International University Gilgit Baltistan

 THE INFLUENCE OF PERFORMANCE MANAGEMENT PRACTICES ON

EMPLOYEES ENGAGEMENT

BY

Sumera

2015-KIU-0105

MBA (Professional)

2015-2017

This thesis is submitted to the Department of Business Management Karakoram

International University in partial fulfillment of the requirement for the degree of

class MBA (HR) for the session 2015-2017.

June, 2016
 DECLARATION

I hereby declare that this submission is my own work and effort and that it has not been
submitted anywhere for award. Where other sources of information have been used, they
have been acknowledged

Signature _______________

Name: Sumera

Reg. No: 2010-KIU-0105

Date: ____________________
 THESIS COMPLETION CERTIFICATE

This is to certify that this research work entitled “The Influence of Performance
management practices on Employees engagement” by Sumera has been accepted in its
present form by the Department of Business Management KIU, Gilgit Baltistan as
satisfying the thesis requirements for the award of degree of MBA in Business
Management.

The following areas have been critically monitored:-

1. Conformance to APA Format.

2. Precision & Correctness of the language.

3. Literature Review is relevant and comprehensive.

4. Relevance of references with the text.

5. Methodology and Estimation techniques are appropriate.

Name & Signature: ----------------------

Designation: ------------------------------
 Department of Business Management

THESIS AND DEFENSE APPROVAL SHEET

The undersigned certify that they have read the following thesis, examined the defense
and are satisfied with the overall exam performance, and recommend the thesis to
Department of Business Management for acceptance.

Thesis Title: The Influence of Performance Management Practices on Employees

Engagement.

Submitted by: Sumera

Registration #: 2015-KIU-0105

Masters of Business Administration

Degree in Full

Name of Research Supervisor Signature of Research Supervisor

Name of External Examiner Signature of Examiner

___ __
 LIST OF TABLES

Table 4.1 Reliability Statistics…………………………………………………... 23

Table 4.2 Demographic Details of Respondents………………………………... 24

Table4.3 Correlation Coefficient………………………………………………… 25

Table 4.4 Model Summary……………………………………………………….. 26

Table 4.5 ANOVA……………………………………………………………….. 27

Table 4.6 Results of Regression Analysis………………………………………… 27

i
 LIST OF ABBRIVITION

AKCSP Aga Khan Cultural Service Pakistan

AKESP Aga Khan Education Service, Pakistan

AKHSP Aga Khan Health Service, Pakistan

AKRSP Aga Khan Rural Support Program

AKUPDCN Aga Khan University Professional Development Center North

ANOVA Analysis of variance

AR Assessing and rewarding

DP Developing and planning

MR Managing and reviewing

NGO Nongovernmental organization

PHD Doctor of philosophy

PM Performance management

SPSS Statistical package for social sciences

ii
 ACKNOWLEDGEMENT

All praises and thanks to Almighty Allah who has showered His blessings throughout my

life, given me strength, spirit and determination to complete this research work.

I gratefully acknowledge my thesis supervisor, Sir Mehtab Alam, for his continuous

guidance, encouragement and dynamic supervision. I am extremely grateful to him as

without his support and continual help, completion of this research work would have

been impossible.

I wish to express my deep felt gratitude towards my family members for their endless

support over the years. Their heartfelt prayers and appreciation has always been an asset

and a great source of inspiration to me; without their shadow of love, perhaps it would

have seemed difficult for me to achieve my goal.

Last but not the least; I am deeply grateful to all my friends who made it possible for me

to complete this project.

iii
 ABSTRACT

In this research, Performance Management practices such as developing and

planning, managing and reviewing and assessing and rewarding performance influence

on employees’ engagement were observed in nongovernmental organizations in Gilgit.

Based on a combination of literature review and questionnaire surveys, this research

explores that for any organization to achieving its vision extremely depend on employees

performance therefore satisfied , committed and loyal employees always work effectively

and efficiently. A questionnaire was adapted to collect the data and convenient sampling

technique was used for collecting data from respondents, and sample for the study was

comprised of one hundred employees working in nongovernmental organizations situated

in Gilgit. The data was analyzed by SPSS and found reliability, correlation coefficient,

regression analysis. The result indicates that there was significant and strong positive

correlation between variables. However on the basis of regression coefficient test PM

practices have positive influence on employees engagement.

Keywords: Performance management, developing and planning, managing and

reviewing, assessing and rewarding, employees’ engagement.

iv
 Contents

LIST OF TABLES ............................................................................................................................ i

LIST OF ABBRIVATION .............................................................................................................. ii
ACKNOWLEDGEMENT .............................................................................................................. iii
ABSTRACT.................................................................................................................................... iv
CHAPTER 1 .................................................................................................................................... 1
INTRODUCTION ........................................................................................................................... 1
1.1 Background of the study ...................................................................................................... 1
1.2 Significance of the study ....................................................................................................... 2
1.3 Broad and specific problem area.......................................................................................... 3
1.4 Research objectives .............................................................................................................. 4
1.5 Research questions ............................................................................................................... 4
1.6 Delimitations of the study ...................................................................................................... 4
CHAPTER 2 .................................................................................................................................... 5
LITERATURE ................................................................................................................................. 5
2.1 Concepts and Definitions ....................................................................................................... 5
2.1.1 Performance management ............................................................................................... 5
2.1.2 Performance management practices................................................................................ 5
2.1. 3 Developing and planning performance ........................................................................ 6
2.1.4 Managing and reviewing performance ........................................................................... 6
2.1.5 Assessing and rewarding performance ......................................................................... 8
2.1.6 Employee Engagement ................................................................................................. 8
2.2 Theoretical reflections ......................................................................................................... 11
2.2.1 Developing and planning performance impact on employee engagement ....................... 11
2.2.2 Managing and reviewing performance impact on employees engagement .................. 13
2.2.3 Assessing and rewarding impact on employee’s engagement ...................................... 14
2.4 Theoretical Framework ........................................................................................................ 18
2.5 Hypotheses ........................................................................................................................... 18
2.6 literatures Gap ...................................................................................................................... 19
CHAPTER 3 .................................................................................................................................. 20
RESEARCH METHODOLOGY................................................................................................... 20
3.1 Population frame .................................................................................................................. 20

v
 3.2 Sample selection .................................................................................................................. 20
3.3 Unit of analysis .................................................................................................................... 20
3.4 Type of study ....................................................................................................................... 20
3.5 Instrument development/selection ....................................................................................... 21
3.7 Data collection procedures ................................................................................................... 21
3.8 Data analysis techniques ...................................................................................................... 22
CHAPTER 4 .................................................................................. Error! Bookmark not defined.
RESULTS AND DISCUSSION .................................................... Error! Bookmark not defined.
4.1 Reliability test of the data ........................................................................................................ 23
4.3 Correlation results for dependent and independent variables .............................................. 25
4.7 Discussion ............................................................................................................................ 28
CHAPTER 5 .................................................................................................................................. 31
CONCLUSION, LIMITATION AND FUTURE RESEARCH DIRECTIONS ............................ 31
5.1 Conclusion ........................................................................................................................... 31
5.2 limitations of the study......................................................................................................... 32
5.3 Future research direction...................................................................................................... 33
Survey Questionnaire ..................................................................................................................... 38

vi
 CHAPTER 1

INTRODUCTION

1.1 Background of the study

Every organization either it is profit oriented or nonprofit oriented want to

become top in their quality of products and services therefore organizations work

effectively and efficiently , they try to get competitive advantage through well

motivated and satisfied employees.

For any organization to achieve its target effectively it must have money,

equipment and ideas about products and services to achieve its output but without loyal

and committed employees, organization cannot utilize these resources effectively and

efficiently.

Various studies have been conducted on this topic in different countries or

different nature of business. The underpinning aim of this research is to find out how

performance management (PM) practices influence employee engagement in non-

governmental organizations (NGOs) in Gilgit. The nature of NGOs is different from

other profit oriented companies. These organizations have played a pivotal role in socio-

economic development and progress of Gilgit Baltistan. Therefore the researcher has

selected non-governmental organization to conduct this research study.

Performance management (PM) is proactive system of motivating employees

towards achieving organization goals. The performance management practices help

organization to enhance their employees’ engagement. An engaged employee is aware of

business situation, and works with colleagues to improve performance within the job for

1
the benefit of the organization. The organization must work to develop and raise

engagement, which requires a two-way relationship between employer and employee

(Ramsay, Finney, 2006).

Jayawarna et al., (2007) says that today every organization faces competition and

tries to achieve competitive advantage or their goals organizations implement

performance management (PM) practices. The general assumption is that those

organizations that pay more attention to mutual goal setting, proper feedback, coaching,

communication, training and development and rewards will be more successful in

employee’s engagement.

The effective utilization of human resource is a major goal of most organizations

whether organization is small or large. PM practices are necessary for organization

success and achieve organizational objectives. Employees are the key resource of

organization and organizational performance largely depends on them. If, there is an

appropriate range of PM practices are developed and implemented effectively, the

employees will make a substantial contribution in firm performance.

1.2 Significance of the study

This study is significant to the researchers in a sense that it will develop an

extensive knowledge about the effect of performance management practices (developing

and planning performance, managing and reviewing performance, assessing and

rewarding performance) these practices on employee’s engagement. Besides it is helpful

to utilize the potentials needed to go for a particular research, it is also of much

importance to the learning organizations as how best they can adapt the practices to

enhance employees engagement in the organizations i.e. goal setting , feedback, coaching

2
,training and rewarding in this research. The recommendations presented in this research

will be fruitful to cope up with the challenges such organizations will face.

Everyone who goes through this research for pursuing knowledge or seeking help

to fill the gaps in their strategies in order to improve their skills, knowledge,

commitment, motivation and satisfaction, this research will pave the way. This study will

prove to be significant for all types of organizations, like governmental and non-

governmental. Apart from the benefits gained by the organizations from this research, it

would also prove to be helpful in the way that by practicing it in real situations will result

in improved employee’s engagement in long run. Mutual goal setting increases

employee’s morale, proper feedback practice increases performance and training in

organizations results in polishing the personality, skills, behaviors and attitudes of

employees, so this will also be helpful in overall organization’s performance.

1.3 Broad and specific problem area

Now a day every organization face great competition either organization is large

or small. Every organization tries to compete with their competitors. In this competition,

even the little efforts made by such organizations matter a lot as the success of any

organization is dependent upon the talented, skillful, committed, loyal employees.

Employee’s performance as well as employees commitment and loyalty enhance

through implementation of PM practices such as mutual goal setting which has great

impact on employees loyalty, proper feedback and identify employees weaknesses and

strength, different types of trainings which are helpful for skill development, and give

rewards which is helpful for enhance employees commitment towards organization. The

3
purpose of the present study is to investigate a link between PM practices and its

influence on employee’s engagement.

1.4 Research objectives

I. To measure the influence of PM practices on employee’s engagement.

II. To investigate the effect of mutual goal setting on employee engagement.

III. To ascertain the role of feedback on employees engagement.

1.5 Research questions

Is there any influence of performance management practices (developing and

planning, managing and reviewing, assessing and rewarding) on the work engagement of

employees working in Non-Governmental Organizations (NGOs) situated in Gilgit-

Baltistan?

1.6 Delimitations of the study

This research has several delimitations.

1. The effectiveness of the PM practices on employees engagement also examine in

other organizations such as small businesses, government organizations and

private firms.

2. The study could include the overall NGOs of Gilgit but this study includes few

NGOs of Gilgit so the sample size of the study is small which can be increase.

3. This research has highlighted few practices of PM which can b increase for

further research.

4
 CHAPTER 2

LITERATURE REVIEW

2.1 CONCEPTS AND DEFINITIONS

2.1.1 Performance management

According to Armstrong (2006) Performance management is a process of

developing the performance of individuals and teams to improving organizational

performance continuously therefore organization can get better results from the teams

and individuals by understanding and managing performance within planned goals,

standards and competence requirements.

Performance management is developing process of organization strategies, vision,

mission, objectives and develop action plan to implement these strategies (Bititci, Cocca,

& Ates, 2016).

Performance Management is ongoing process of helping employees in learning

and development and contributes to the effective management of individuals and teams in

order to achieve improved levels of individual and organizational performance and

development (Walters, 2013).

2.1.2 Performance management practices

According to Armstrong (2009) Performance management practices are

establishing goals and objectives, employee development programs, assessing

performance, and providing feedback to improve performance.

5
PM practices generally consist of step by step activities such as performance agreement

(goal setting), performance monitoring or facilitation, and performance appraisal and

feedback, employees development program and rewards system (Gruman & Saks, 2011).

2.1. 3 Developing and planning performance

According to Armstrong and Baron (2004) performance planning is the first step

of performance management its mutual discussion between supervisor and employee

about what are the targets of employees they have to achieve, how to perform their task

and develop their skills which helpful employees to fulfill the requirement duties. The

plan also describes how manager lead and support employees during performance so

performance planning is forward looking. In performance development plan manager

motivate employees to develop personal development plan and performance

improvement plan and at last plan is final after manager and employee mutual agreement.

2.1.4 Managing and reviewing performance

Performance review is best practice of performance management therefore review

performance of employees which is helpful to identify the strength and weakness of

employees, also helpful for managers and employees to forward looking and wok for

better future and guide manager to tackle problems, employees are encourage identifying

their own performance and improving their performance (Armstrong, 2006).

6
2.1.4.1 Seeking feedback

Feedback is part of reviewing performance and it is the process of providing

information and guidance to employees therefore feedback consists of two way

communication between employees and supervisor. In every step of employees

performing task they need proper feedback to perform their task effectively so continuous

feedback is vital practice of reviewing performance. Feedback helpful for organization to

motivates their employees to work efficiently and effectively. It’s important to address

strengths and weakness of employees and continuous guidance to employees may

positive impact on their performance. Regular feedback and coaching helpful for

employees to increase productivity, quality of work, creativity and innovation and also

helpful to prevent problems of employees on the time when problems accurse

(Armstrong, 2006).

2.1.4.2 Communication

According to Armstrong (2009) performance management is ongoing process so

PM provides an opportunity for communication between employees and employer its two

way interaction between employer and employees. Employees have opportunity to

provide their feedback to supervisor about their performance.

2.1.4.3 Coaching

Coaching means give instruction and it is continuous process of maintain

effective relationship between employees and supervisor. It’s helpful in employee’s

7
growth and develops new skills. Manager with the help of coaching evaluate the

employees performance identify needs of employee.

2.1.5 ASSESSING AND REWARDING PERFORMANCE

2.1.5.1 Assessing

Assessment is ongoing process of employees learning. Its collaborative process of

obtain knowledge; get skills, review, and use of information about employees

performance, its focus on learning of employees and its implementation in organization

(Ark, 2013).

2.1.5.2 Reward

On the basis of employee performance give rewards it may be tangible (cash

bonuses, salary increase) or intangible which helpful for employee’s encouragement and

helpful for enhance employee’s motivation. Rewards are vital to increase employee’s

morale as well as organizational performance (Furtado, Aquino, & Meira, 2007).

2.1.6 Employee Engagement

Employee’s engagement means employees who feel committed, energetic, loving,

enthusiasm and fully involve with their job and employees show their attachment towards

their job (Falasi, 2014).

Different organizations define engagement differently, some organization define

engagement as employees’ satisfaction with their work and delight towards their

8
organization, the extent to which employees enjoy and believe in what they do for work

and the perception that their manager therefore engaged employees may be more likely to

commit to staying with their current organization, and high engage employee obtain the

benefits for organization (Macey & Schneider, 2008).

Engaged employees are emotionally attached to their organization and highly

involved in their job with a great enthusiasm for the success of their organization

(Solomon & Markos, 2010).

Perrin’s (2003) define employee engagement according to him employees’

willingness and ability to help their company succeed, largely by providing flexible effort

on a sustainable basis.”

According to Macey et al., (2009) when organization promote high levels of trust

and fairness in the culture is the key to creating and sustaining an engaged workforce, and

interventions for driving engagement can fall into the areas of building confidence, and

social support networks, renewing or restoring employee energy and enhancing the

motivation and freedom to engage.

According to Gubman(2004) employee who works for his organization loyally

and enthusiastically is called employee engagement therefore engagement also gives the

meaning that, employee who himself deliberately work more than his or her job

requirements so that employee willingness to attach with organizational happily is also

another name of engagement.

Robinson et al., (2004) define employee engagement as “a positive attitude held

by the employee towards the organization and its value so an engaged employee is aware

of business context, and works with colleagues to improve performance within the job for

9
the benefit of the organization. The organization must work to develop and nurture

engagement, which requires a two-way relationship between employer and employee.”

2.1.6.1 Job Satisfaction

Javed, Balouch, and Hassan (2014) define that employee satisfaction means how

employees think, feel towards organization and perceive therefore Success of the

organization depends on employees when they enjoy their work and properly rewarded

for their efforts employees feel them self as valuable asset.

2.1.6.2 Loyalty

Performance of employees in organization depends on the loyalty of its

employees, the better performance means high loyalty which indirectly impact

organization performance for this purpose organization have invest huge resources as

well as efforts for attracting and retaining talented employees(Falasi, 2014).

Employee loyalty means employees committed to the organization success and

they think working for organization is good and loyalty is the kind of faithfulness and

trueness. Organization implement performance management practices such as mutual

goal setting, training and development programs, proper feedback system, coaching and

reward all these practices aim to develop loyal employees.(Iqbal, Tufail, & Lodhi, 2015).

10
2.1.6.3 Organizational Commitment

According to Rhoades et al., (2001) Employees conceptualized as the emotional

and psychological feeling about an organization is called Organizational commitment.

Organizational commitment means an employee desire to stay with the organization

(Camp 1994). This includes effectively sharing and supporting corporate goals and

values, as well as willingness to work on behalf of the organization Taormina (1999).

When an employee is committed to an organization, they want to see the organization

succeed Wright, Gardner and Moynihan, (2003) additionally, organizational

commitment’s influence on an employee’s likelihood of staying with the organization

reduces turnover.

2.2 THEORETICAL REFLECTIONS

2.2.1 Developing and planning performance impact on employee engagement

Performance planning is helpful to encourage employees towards organization

commitment and linked between employees work with organizational objectives and

goals (Schneier et al., 1987).

Goal setting is the vital component of performance management practices.

Employees and supervisor sets performance planning by discussing and agreeing the

objectives and task of employees which directly linked with organization goals and

targets (Pulakos 2009) therefore researchers suggests that when employer and employees

set goals with mutually employees become engaged with their organization and with

11
their duty, mutual goal setting can develop personal and professional, as well as

organizational efficiency (Mone, Eisinger, Guggenheim, Price, & Stine, 2011).

Goal setting is the primary factor which is most important to enhance

organizational commitment because it has got positive relation with employee

engagement which made a positive impact on engagement of employee at organization

(Sujan et al., 1994).

Previous research found that employee’s participation in goal setting has positive

impact on employee’s commitment towards the organization such as employees feel them

self like a part of organization (Brown, Landau, & Mitchell, 2008).

Mone and London (2009) suggests that when managers and employees set goals

collectively employees become more engaged and committed toward their duties.

Collectively setting goals can enhance personal growth and professional development, as

well as improve organizational effectiveness (Kerr & Landouer, 2004).

Schiemann (2009) a number of studies shows the positive impact of alignment of

employees goals to the organization goals which enhance employee satisfaction.

According to Locke, et al., had discussed effective goal setting’s positive impact

on employee performance within organizations and they define an engaged employee as a

worker who is fully involved in and enthusiastic about his or her work (Tritch, 2003).

According to the Medlin and Green (2009) there is positive relationship between

goal setting and employee engagement as positive impacting employees performance.The

objectives need to be defined and established with employees. The objectives are relevant

with employee’s job and proper define.

12
 Rogers and Hunter (1991) stated that setting objectives is the fundamental aspect

for an organization and top management support for employees' participation in setting

objectives therefore It is a motivational process which also gives the individual the

feeling of being involved and creates a sense of ownership for employees.

2.2.2 Managing and reviewing performance impact on employees engagement

Performance reviewing is important practice of performance management which

is helpful for employer to identify the actual performance of employees. In organization

reviewing of employees performance is on daily base and on the base of the reviewing

employer identifies strengths and weaknesses of employees.

Managing performance throughout the year with proper coaching, guiding,

motivating and rewarding employees which h great impact on employee’s royalty

towards organization. These helpful to improve employee’s performance which indirectly

improves organization performance and employees are loyal towards organization and

work enthusiastically (Armstrong, 2006).

Researchers suggest that performance management is ongoing process so giving

proper feedback is helpful for improve employees performance which indirectly impact

employees engagement so proper feedback helpful for employees to understand their

performance strengths and weakness so receiving feedback on their performance

influence positive and motivate towards their job(Mone, Eisinger, Guggenheim, Price&

Stine, 2011).

According to Elaine and Pulakos (2008) continuous feedback motivate employees

when employer observed impressive or unproductive performance on the time supervisor

13
or employer give feedback about daily achievements is also very valuable. Manager

responsibility is to provide feedback in a helpful and timely manner. Employees’

responsibility is to seeking feedback to ensure they understand how they are performing

and reacting well to the feedback they receive.

Coaching is an effective leadership style of helping employees to improve their

performance therefore coaching helpful employees to developing and learning which has

positive impact on employee’s commitment towards organization (Huang & Hsieh,

2015).

Coaching is performance management practices which is supportive to

developing a person's skills and knowledge so that employees' job performance improves,

and helps them to achieve of organizational objectives therefore managers identify and

implement training and other actions necessary to improve individual performance

(Bevan & Thompson, 1991).

Black and Lynch (1996) recommend that the training courses must be designed

with the present and future needs of the employees and facilitate the learning of these

skills. A good training or coaching course improves the quantity and quality of

organizations output, increases the chance of organizational success, decrease the

organizational costs, and increase employees performance which indirectly enhance

employees commitment.

2.2.3 Assessing and rewarding impact on employee’s engagement

According to Smith (2009) performance assessment practice helpful to identify

the need of training and development of employees which is fruitful for career

14
development of employee’s. When organization facilitates such practices than employees

are committed towards their organization and they work effectively and efficiently.

Performance assessment is important practice of performance management which

is helpful for employer to identify the actual performance of employees therefore in

organization assessment of performance is on daily base and on the base of the

assessment employer identifies strengths and weaknesses of employees (Bititci, Cocca, &

Ates, 2016).

According to Smith (2009) performance evaluation practice helpful to identify the

need of employees training and development which is fruitful for career development of

employee’s. When organization facilitates such practices than employees are committed

towards their organization and they work effectively and efficiently.

Training and development program improve employees work efficiency which

indirectly impact on employees engagement and people who are enthusiastic about their

work they perform effectively and efficiently (Redman, 2011).

Regarding to Lardner (2015) rewards and other benefits was help to attract, retain

and engage top talented key staff of organization. Through employees evaluation

practices identify key employees and give rewards. Rewards and Incentivize can helpful

for individual and team performance to make a long term growth aspirations.

Gebauer and Lowman (2009) describe employee engagement as having a deep

and broad connection with the company that results in the willingness to go above and

beyond what is expected to help the company succeed, they also offer a framework for

building engagement based on ‘knowing, growing, inspiring, involving, and rewarding

15
‘employees and within that framework recommend actions for senior leaders, managers,

human resource professionals, and employees themselves.

According to Waheed (2011) Employees are a vital asset of the organization. The

success or failure of the organization depends on employee performance. So that

organizations are investing huge amount of money on employee development.

Costen and Salazar (2011) explore the relationship between training and

development and employees engagement and employees who receive trainings their skills

are develop and they become more loyal and like to stay with organization.

The effect of training and development practice has positive impact on employee

engagement (Kamau, Goren, Okemwa& Biwott, 2015).

Organizations offer different learning opportunities to their employees who

enable employees to perform better on their jobs which, in turn, employees are more

loyal and committed to their organization and organization as a whole to perform better

as well (Torraco & Swanson, 1995).

Employee development means more than helping employees become continuous

learners, regardless of the requirements of the organization. To be beneficial for both

individual employees and organizations, research on employee development should seek

greater understanding about the wide range of conditions within which employee

development programs exist in organizations (Washington, 2010).

According to Robert and Vance ( 2006) training and development helpful for

enhance engagement and commitment. It gives employees a chance to motivate them to

how they helpful to achieve organization mission. Training helps new and current

employees get knowledge and skills they need to perform in their work.

16
 Employee Development is one of the most important practices of performance

Management. Employee development means to develop employee’s technical skills,

human skills, and conceptual skills. These skills helpful employee growth and more

flourished and the employee performance would increase (Elena, 2000).

Champathes (2006) suggest that employee’s engagement high due to their

performance improvement so therefore, there is a positive relationship between employee

development and employee engagement. As when employees would be more developed,

they would be more satisfied with the job, more committed with the job and the

performance would be increased. When employee performance would increase, this will

lead to the organization effectiveness.

Employee development programs must not only achieve its objectives, but it

must have positive outcomes for the organization and individuals within the organization.

Due to employee development employee are royal and committed to the organization.

Training and development can serve as additional levers for enhancing engagement and

commitment. These type of facilities enhance employees performance which helpful to

encourage employee engagement (Vance, 2006).

According to Rust et al., (1996) Employees are important to the success of every

type of organization either its service base organization or production base. These

employees are responsible for service delivery, and finally determine the quality of

service the customer receives.

The performance management practices helpful to enhancing engagement. An

engaged employee is aware of business context, and works with colleagues to improve

performance within the job for the benefit of the organization. The organization must

17
work to develop and raise engagement, which requires a two-way relationship between

employer and employee (Ramsay & Finney, 2006).

2.4 Theoretical Framework

Performance Management Practices

Developing and planning

 Setting goals
+ve
 Setting objectives

Managing and reviewing

+ve
 Seeking feedback Employee
 Communication Engagement
 Coaching

+ve
Assessing and rewarding

 Personnel development
 Evaluation

Figure # 2.1: Theoretical Framework

Source: Adapted from Rana (2015)

2.5 Hypotheses

On the base of literature review following hypothesis are developed in order to

find out the influence of performance management practices on employees engagement

in organization.

18
H1: Developing and planning performance has positive impact on enhancing employee

engagement.

H2: Managing and reviewing performance has positive impact on employee engagement.

H3: Assessing and rewarding performance has positive impact on employee’s

engagement.

2.6 literatures Gap

The study Rana (2015) on High-involvement work practices and employee

engagement suggest that future research should examine the effectiveness of the

performance management practices on engagement in different organization like private

organizations, government organization, and NGOs.

Swarnalatha and Prasanna (2012) investigate in their research article “Increasing

Organizational Commitment of Employees: By Correlation of Goal Setting, Employee

Engagement and Optimism in the Organization”. Employee’s engagement increase

though mutual goal setting so further research will be conduct by prominent more details

on these variables.

The researcher in his article “Performance management effectiveness: practices or

context?”(Victor, Haines & St-Onge, 2012) mentioned some limitation of his study like

data were collected at one point in and respondent of sample of organization located in

Canada which may not be representative of another organization which may be located in

another nation.

19
 CHAPTER 3

RESEARCH METHODOLOGY

3.1 Population frame

The population of this research is employees working in of NGOs situated in

Gilgit Baltistan.

3.2 Sample selection

As the general rule of thumb for selection of using this methodology are

minimum 3 respondents per item of the instrument. This study considers collect data

from more than 54 respondents referring to the items of the instrument of the study i.e.18.

In this study researcher used convenient sampling method for select 100 employees of

NGOs so researcher meet rule of thumb. Questionnaire collected from Aga Khan Rural

Support Programme (AKRSP), Aga Khan Cultural Services Pakistan (AKCSP), Aga

Khan Education Services Pakistan (AKESP), Aga Khan Health Services Pakistan

(AKHSP) and Professional development Center, North (PDCN).

3.3 Unit of analysis

Individual employees of non -governmental organizations are unit of analysis.

3.4 Type of study

This is causal study in nature that tried to find out influence of performance

management practices (independent variable) on employees’ engagement (dependent

variable).

20
3.5 Instrument development/selection

The influence of performance management practices on employees engagement

questionnaire consist of 100 questionnaires and from each NGOs researcher collect

twenty five questionnaires from employees of NGOs. On the research questionnaires

researcher use five point likert scales ranging from 1) strongly disagree (SD), 2) disagree

(D), 3) neither agree nor disagree(N), 4) agree(A), 5) strongly agree(SA).

3.7 Data collection procedures

In this research, the researcher main purpose is to find out “The influence of PM

Practices on employees engagement NGOs of Gilgit”. This research is quantitative based

and the data has been collected through questionnaires. These questionnaires consist of

eighteen close ended questions. Through convenience sampling, method was used to

collect the data from the NGOs. To generate the views from the employees of these stated

organizations, using five point a likert scale which ranges from strongly disagree to

strongly agree. There were hundred and twenty five questionnaires distributed in various

NGOs in Gilgit out of which hundred were returned. Twenty five questionnaires were

taken from Aga Khan University Professional Development Center North (AKUPDCN),

twenty five questionnaires were taken from Aga Khan Cultural Service Pakistan

(AKCSP), twenty five questionnaires were taken from Aga Khan Health Service,

Pakistan (AKHSP), twenty five questionnaires were taken from Aga Khan Education

Service, Pakistan (AKESP) and twenty five questionnaires were taken from Aga Khan

Rural Support Program (AKRSP).

21
3.8 Data analysis techniques

Data analysis through statistical software SPSS and find out correlation between

independent variables and dependent variable. The regression technique is applied for

accurate results.

22
 CHAPTER 4

RESULTS AND DISCUSSION

4.1 Reliability test of the data

Table 4.1 Reliability Statistics

N of Items Cronbach's Alpha
Developing and Planning (DP) 4 .800
Managing and review (MR) 4 .771
Assessing and rewarding (AR) 4 .727
Employee engagement (EE) 4 .767

Table 4.1 shows the internal consistency among the variables and the internal

consistency of variables are tested with the use of cronbach’s alpha. Results show that

developing and planning performance has an alpha of .800 which means that the items of

this variable are 80% consistent with each other similarly managing and reviewing

performance has an alpha of .771 which means that the items of variable are 77%

consistent with each other , assessing and rewarding performance has .727 and employees

engagement has .767 therefore all these variables have relatively internal consistency and

a reliability coefficient of .70 or higher is considered” acceptable.

23
 Table 4.2 Demographic Details of Respondents

Frequency Percent

Gender

Male 71 71.0

Female 29 29.0

Total 100 100.0

Age

Below 30 years
26 26.0

31-40 years
41 41.0

41-50years
24 24.0

51 and above
9 9.0

Total 100 100

Level of education
Bachelors 27 27.0

Masters
49 49.0

M.Phil 23 23.0

PHD
1 1.0

Total 100 100.0

Job Experience

Less than 5 Years 39 39.0

6-10 Years 34 34.0

11-15 Years 8 8.0

16-20 Years 19 19.0

Total 100 100.0

24
 Table no 4.2 shows the personal information of respondent i.e. Age, Gender,

Education and job experience. The table shows that the majority of respondents in

this study are male (71%) and minorities females respondents are (29%) also

represented. Most of the respondent (40%) are between the ages of 31-40 years and

only (9%) of respondents have above 51 years of age.

The table further shows the education information of respondents majority of

respondents in this study are Masters (49%) degree holders. M.Phil respondents are

(23%) and only one respondent is PHD holder so that in this study researcher target

employees are educated.

Above table presence the respondent job experience the majority of the study

respondent experience is less than five years (39%) and minority respondent job

experience is (8%) so that the employees in nongovernmental organizations has not

enough work experience.

4.3 Correlation results for dependent and independent variables

Table 4.3 Correlation coefficient

DP MR AR EE
Developing
1
and Planning(DP)
Managing and
.672** 1
review(MR)
Assessing and
.567** .656** 1
rewarding(AR)
Employee
.555** .601** .554** 1
engagement(EE)
**. Correlation is significant at the 0.01 level (2-tailed).

25
 Table 4.3 shows the correlation coefficient, it reveals that the inter-

relationship between Managing and reviewing and developing and planning

performance is 0.672 which is significant and indicates that there exists strong

positive correlation between Managing and reviewing and developing and

planning performance. The coefficient of correlation between assessing and

rewarding and developing and planning is 0.567 which is significant and indicates

that there exists strong positive correlation between AR and DP. The coefficient

correlation between assessing and rewarding performance, and managing

reviewing is.656 which is significant and indicates positive relationship.

Employees engagement and developing and planning performance is .555 which

significant and indicates positive relationship. Employees engagement and

Managing and reviewing is .601 which shows positive relationship

Table 4.4 Model Summary

R R Square Adjusted R Square Std. Error of the Estimate

.657a .432 .414 .53982

Predictors: (Constant), AR, DP, MR

The Model Summary table shows that the multiple correlation coefficient (R),

using all the predictors simultaneously, is .65 (R2 = .43) and the adjusted R2 is .41,

meaning that 41% of the variation in employees engagement can be predicted from AR,

DP, MR. combined.

26
 Table 4.5 ANOVAb
Sum of Squares DP Mean Square F Sig.

Regression 21.255 3 7.085 24.312 .000a

Residual 27.975 96 .291

Total 49.230 99

a. Predictors: (Constant), AR, DP, MR

b. Dependent Variable: EE

Table 4.5 shows that ANOVA produces a p-value of .000, which obviously lies

below all α values (meaning that the researcher is 95% confident that the relationship

between these two variables is not due to chance). We can say that this is a significant so

this model fit for analysis.

Table 4.6 Results of Regression Analysis

Unstandardized Standardized
Coefficients Coefficients
B Std. Error Beta t Sig. Hypotheses
(Constant)
.835 .370 2.259 .026
Developing
and Planning(DP) .262 .126 .222 2.083 .040 H H1:Accepted

Managing and
.328 .127 .300 2.573 .012 H2:Accepted
review(MR)
Assessing and
.205 .093 .231 2.210 .029 H3:Accepted
rewarding(AR)
Dependent Variable: Employee Engagement

Table 4.6 shows the regression coefficient on the basis of which hypotheses is

accepted that one unit change in developing and planning performance leads to change

.222 units in employee’s engagement so that developing and planning performance has

positive influence on employees’ engagement and this hypothesis was accepted.

Similarly one unit change in managing and reviewing performance leads to change in

.300 units in employees’ engagement therefore managing and reviewing has positive

27
influence on employees engagement and this hypothesis is also accepted and one unit

change in assessing and rewarding performance leads to change in .231 in employee’s

engagement.

4.7 Discussion

The purpose of this research is to examine the influence of performance

management practices on employee’s engagement. For this purpose different statistical

tests are run like reliability test, regression, correlation and analysis of variance

(ANOVA). On the basis of these tests, hypotheses are accepted or rejected. In this

research there are three independent variables: developing and planning performance

(mutual goal setting, objective setting), managing and reviewing performance (feedback,

coaching, communication), and assessing and rewarding (personal development,

evaluation of employees performance). Dependent variable is employee’s engagement

(loyalty, satisfaction, commitment).

The current study underpinning aim to identify the influence of performance

management practices on employee’s engagement in NGOs situated in Gilgit. In this

study there is positive influence of mutual goal setting on employee’s engagement. When

goal setting is effectively planned according to employees capabilities and skill it will

lead to enhance employee’s commitment towards organization. Employees’ participation

in decision making leads to enhance satisfaction level of employees and loyalty increases

towards their job and employees love to perform efficiently and they feel them self a

valuable asset of organization. Similarly involvement in objective setting employees

wants to continue their services in the same organization and they defend it when

someone speaks against the organization. This result is in line with (Swarnalatha, 2012)
28
who ascertains that mutual goal setting in the organization has positive influence with

employee’s engagement.

The findings from data analysis are managing performance through proper

feedback has significantly and positive relationship with employees engagement.

Therefore continues feedback of supervisor or manager helpful for employees during

their performing task so that mangers give more attention to their sub ordinates. Similarly

proper communication with staff helpful to identify their problems they face and give on

time suggestions so that continuous communication is effective way to solve their

problems which helpful to increase loyalty of employees they become more attach with

organization. On the other side coaching also effect positively on employees engagement.

Previous research also indicated that all these practices helpful for increasing employee’s

loyalty.

After data analysis assessing and rewarding performance has significant positives

influence on employees engagement. Assessment of employees performance helpful to

identify employees weakness and strength and also provides feedback about their actual

performance which is vital practice of motivating employees to utilize their capabilities.

On the basis on performance assessment organization provides different training and

development opportunities and rewards which leads to enhance employee’s loyalty and

commitment towards their organization. According to respondent responses employees

feel that such practices increase their motivational level to perform their task effectively

and they advice their friends to do work for same organization. Previous research on

training and development has a positive and significant effect on employee job satisfaction and

enhance loyalty of employees towards organization (Costen & Salazar, 2011). According

29
Scott & McMullen (2010) rewards system has positive coorelated with employees

engagement therefor employees are motivated towards organization. This research was

also a line with previous research. So that employees are satisfied with promotions and

career development opportunities and they want to continue their work in same

organization.

30
 CHAPTER 5

CONCLUSION, LIMITATION AND FUTURE RESEARCH

DIRECTIONS

5.1 Conclusion

Employees are the vital assets of organization, who help organizations to achieve

competitive advantage. Therefore organizations need to evaluate, develop and reward

employees’ performance and give them a friendly work environment that enhances

employees’ commitment and loyalty towards organization. Therefore the underpinning

aimed of this study was to know how performance management practices influence the

employee’s engagement. For this purpose the researcher has taken primary data in the

study was comprised of one hundred employees working in which were non-government

organizations selected through convenience sampling methodology.

From the literature review , there are three practices of performance management

like the first practice is the development and planning which includes mutual goal setting

and objective setting for employees these practice helps organization to enhance

commitment and loyalty towards organization. Employee’s involvement in decision

making they feel valuable asset for them self and the linking employee’s goals with

organization mission helpful for employees to understand their responsibility and also

motivate employees to work with loyalty. The statistical tests indicated that there is

positive and significant influence of developing and planning performance on employees’

commitment. The second practice is managing and reviewing employee’s performance

through proper feedback, coaching and communication. Feedback aims to identify

31
employee’s strength and weakness gives positive response to employees. Coaching

underpinning object is to development and qualifying employees through skills and

knowledge and communication helpful to identify employee’s problems so that

employees are more involve in their work and increase their work efficiency so that they

are more loyal towards organization.

The last practice is assessing and rewarding performance which consist training

and development activities, evaluation employee’s performance and rewards system like

promotions helpful to increase employee’s loyalty.

5.2 Limitations of the study

This research has several limitations:

1. Employee data in an organization is confidential. Organizations do not

comfortably share accurate data, specifically data regarding the goal setting,

feedback and coaching, performance assessment, rewards training and

development etc. Therefore, I faced difficulty in getting the actual data.

2. Any research activity is highly dependent upon the time which is the basic

element in any research. Having limited time, there might be a certain deviation

from the purpose we are going to find out. In our case, time is one of the main

constraints that impacts over all research activity.

3. The required resources are limited in number. Further, organizations have a busy

schedule regarding their daily work related activities, so these organizations

sometimes fail to respond accurately. Therefore, it would also affect the way of

finding out the true outcomes of a research.

32
5.3 Future research direction

In this study researcher selected three dimensions of performance

management practices i.e. planning and developing, managing and reviewing

and assessing and rewarding therefore future research should also add more

dimensions of PM such as compensation, performance appraisal and identify the

influence on profit oriented organizations and government organizations.

In this study researcher used convenient sampling technique which can be

generalized therefore future research should use other sampling technique.

33
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 Survey Questionnaire

Dear Respondent,

Thank you for agreeing to participate in this survey. I am a student of MBA (Professional) at KIU and
conducting a survey on “The influence of Performance Management Practices on Employee’s
Engagement”. Please feel free to contact me regarding any queries you may have.

(The information provided in this questionnaire will be kept confidential and shall only be used for
academic purposes).

Regards,
Sumera

Personal Information

a. Name (Optional):__________________________________________
b. Age: Less than 30 31-40 41 -50 51 and above
c. Gender: Male Female
d. Education: Bachelors Masters M.Phil / MS. Ph.D.
Any Other (Please specify)___________________________
e. Name of Organization
(Optional):______________________________________________________
f. District/ Location of organization:
_____________________________________________________
g. Experience (years): _________________
h. Designation: _________________

38
Key: SD = Strongly Disagree = 1; D = Disagree = 2; N= neither Agree nor Disagree = 3; A= Agree = 4;
SA= Strongly Agree = 5

(Mone, Eisinger, Guggenheim,2011) SD D N A SA

DP 1 I know how my work contributes to the achievement of my 1 2 3 4 5

department’s goals.

DP 2 I have opportunities to provide input into decisions that 1 2 3 4 5

affect my work efficiency.

DP 3 My organization is providing me the resources and 1 2 3 4 5

decision-making authority to perform effectively.

DP 4 I am involved in the decisions that impact my work. 1 2 3 4 5

MR 5 I am satisfied with the quality of supervision I receive. 1 2 3 4 5

MR 6 My supervisors give me feedback when I perform poorly. 1 2 3 4 5

MR 7 My manager provides me ongoing feedback that helps me 1 2 3 4 5

improve my performance.

MR 8 The company communicates me to understand strategy, 1 2 3 4 5

vision and direction.

MR9 I am satisfied with opportunities for career progression and 1 2 3 4 5

promotion.

AR10 I think employee development practices increase my 1 2 3 4 5

motivational level to perform my task efficiently.

AR11 The organization provides me job related training. 1 2 3 4 5

AR12 I am encouraged to look for ways to improve my work 1 2 3 4 5

processes and productivity.

AR13 Organization providing sufficient opportunities for training. 1 2 3 4 5

EE14 I want to continue my work in the same organization. 1 2 3 4 5

EE15 When somebody speak ill of my organization, I defend it 1 2 3 4 5

immediately

EE16 I would like to advise my friends to do work in this 1 2 3 4 5

organization.

EE17 The work I do is appreciated. 1 2 3 4 5

EE18 I am satisfied with my chances for salary increases. 1 2 3 4 5

39
40