Impact of performance appraisal system on employee motivation in life insurance companies in Nepal

Abstract

This study examines the impact of performance appraisal system on employee motivation of Nepalese insurance companies. Employee motivation is the dependent variable. The independent variables are training and development, reward and recognition, communication, commitment and feedback system. This study is based on primary data of 24 insurance companies with 219 observations. To achieve the purpose of the study, structured questionnaire is prepared. The regression models are estimated to test the relationship, significance and impact of performance appraisal system on employee motivation in context of Nepalese insurance companies. The result shows that training and development is positively correlated to employee motivation. It indicates that increase in training and development activities, higher would be the employee motivation in organization. Likewise, reward and recognition are positively correlated with employee motivation. It indicates better reward and recognition system in an organization, higher would be the employee motivation. Similarly, there is positive relationship between communication and employee motivation. It indicates that better the communication system in the organization, higher would be the employee motivation. Furthermore, commitment is positively correlated with employee motivation. It indicates that better commitment in the organization higher would be the employee motivation. In addition, feedback system is also positively correlated with employee motivation. It indicates that higher the feedback to the employee, higher would be the employee motivation. Likewise, the regression results show that beta coefficients for training and development, rewards and recognition, communication, commitment and feedback system are positive with employee motivation.