Performance Appraisal and Employee Performance: A Meta-Analysis from the Perspective of Goal Theory

Abstract: This paper sought to investigate the assumption of the Goal theory in the context of performance appraisal and employee performance. The Goal theory assumes that setting of goals and appraisal of the goals are associated with higher motivation, commitment and goal-achievement. The paper used meta-analytic approach to examine the existing literature on the assumption of the Goal theory, specifically in the relationship between performance appraisal and employee performance. The meta-analytic results from 27 studies indicated that the assumption of the Goal theory holds in the relationship between performance appraisal and employee performance. That is, performance appraisal is positively correlated with employee performance. However, the study found that the relationship between performance appraisal and employee performance is influenced by the moderating effects of the sector (public vs private) where the study is conducted, organizational size (large vs small), sampling technique (probability vs non-probability) and the sample type (cross-sectional vs longitudinal). The study found that these moderators cause inconsistencies in the existing findings on the assumption of the Goal theory in the appraisal-performance nexus. The study therefore proposed a revised Goal theory framework in the relationship between performance appraisal and employee performance. Moreover, the study established that organizations need to be cautious when using the Goal theory, by first identifying the factors that could influence, moderate or limit its application. Equally, researchers need to be careful about the moderating factors when employing the theoretical framework of the Goal theory in their studies, to avoid presenting inaccurate findings on the relationship between performance appraisal and employee performance.