Empirical investigation in analysing the critical factors of performance appraisal system in enhancing employee capability in select ITES companies in India using structural equation model (SEM) analysis

Abstract

This study is mainly related in analysing the main determinants of performance appraisal system in enhancing the capabilities of the employees. In India, the ITES industries employ nearly 4.4 million and it accounts for 8% of India’s GDP. Hence, it is highly critical for the management to apprehend the overall performance of the employees so that they can contribute effectively of organisational growth and nation development. The performance appraisal system is stated as the systematic analysis of the progress of the employees based on the agreed objectives. Companies uses many appraisal methods like Management by objectives, 360-degree feedback etc. so as to understand the progress of the employees on different parameters. Through the effective performance appraisal system, the employees can focus on their key skills, harness their fullest potential and thereby enhance their capabilities.
 The study uses both primary and secondary data sources, the researchers has used questionnaire method in order to collect the data from the respondents, the major analysis used are demographic analysis, correlation analysis, T test and Structural equation model. The analysis reveals that the critical determinants considered in the study possess stronger influence in enhancing employee capabilities in the ITES industry.