IMPACT OF PERFORMANCE APPRAISAL SYSTEMS ON ORGANIZATIONAL PERFORMANCE: EVIDENCE FROM PUBLIC SECTOR ORGANIZATIONS IN PAKISTAN

Abstract

Objective; The purpose of this study was to examine the impact of Performance Appraisal Systems (PAS) on Organizational Performance (OP) in public sector organizations of Pakistan and to evaluate the moderating role of Organizational Commitment (OC) in this relationship.

Method; A quantitative, descriptive, and correlational research design was employed. Data were collected through structured questionnaires from 53 employees of various public sector organizations in Pakistan. Measures included PAS, OC, and OP, assessed on a five-point Likert scale. Data were analyzed using descriptive statistics, correlation analysis, regression analysis, and moderation analysis.

Results; Results revealed that PAS significantly predicts OP (β = 0.90, p < .001). Correlation analysis indicated strong positive relationships between PAS and OP (r = .90, p < .01) and between PAS and OC (r = .78, p < .01). Moderation analysis showed that OC significantly strengthens the relationship between PAS and OP (β = 0.12, p = .016), highlighting its role as a crucial moderator.

Conclusion; The findings suggest that implementing fair, transparent, and structured PAS can enhance organizational performance in public sector organizations. Furthermore, fostering employee commitment amplifies the effectiveness of appraisal systems, emphasizing the need for integrated HR strategies. This study addresses a gap in the literature by examining the PAS–OP relationship in Pakistan’s public sector while highlighting the moderating role of OC.