Reframing performance appraisal through employee perceptions: Insights from the Albanian banking sector

The Albanian banking sector is facing growing challenges in attracting and retaining skilled employees, making the effectiveness of performance evaluation systems increasingly important. This study investigates how banking employees perceive the current appraisal practices and identifies the main factors that influence their views. To achieve this, a quantitative research design was employed, using primary data collected through a structured questionnaire distributed to 182 banking professionals across various institutions and roles. To assess the strength and significance of the predictors influencing employees' views on appraisal relevance data were analyzed using descriptive statistics and multiple regression analysis. The analysis revealed that clarity of evaluation criteria (b = 0.443), objectivity of indicators (b = 0.342), and linkage to rewards (b = 0.268) emerged as the key drivers explaining 56.6% of the variance in employees' perceptions of performance appraisal system effectiveness. In contrast, the frequency of evaluations and the quality of the feedback process demonstrated a comparatively weaker influence on employees' perceptions of appraisal system effectiveness. These results suggest that improving the transparency, consistency, and developmental value of performance evaluations could play a crucial role in enhancing employee satisfaction and retention. Strengthening appraisal practices may, therefore, represent an important step for Albanian banks aiming to build a more satisfied, engaged, and resilient workforce.