Performance appraisal in China : an analysis of stakeholder perceptions in the Chinese state-owned banking industry

• Main Author: Zhang, Yongmei
• Published: Liverpool John Moores University 2010
• Subjects: 331.2; HG Finance
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.521108

Performance appraisal is an important element of Human Resource Management and one which can directly contribute to the achieving of organizational goals. The process of performance appraisal can also result in employee development, enhanced communication and a strengthening of a feeling of belonging. The central conceptual framework for the study embraced performance appraisal within the wider framework of performance management, stakeholder theory and the diversity of national culture. Much of the previous research into performance appraisal has predominantly focused on Western organizations, with limited attention being paid to its practice in developing economies. The entry, in 2001, of the People's Republic of China to the World Trade Organisation (WTO), provided an opportunity for foreign banks to operate in China which, in turn, increased competition for Chinese banks. As the banking sector, particularly the state-owned banks, is an extremely sensitive area for the nation's economy, the contribution that performance appraisal can make to a bank's success is important and thus provided a natural setting for the research. Adopting an exploratory approach, a specifically-designed questionnaire was used to gather data from salient stakeholders in Chinese state-owned banks between 2006 and 2007. Over 700 questionnaires were returned and analysed using parametric statistics to determine how stakeholders perceived performance appraisal within their bank. Biographic data provided independent variables which were evaluated against the areas of satisfaction, loyalty and the perception of an 'ideal' performance appraisal system. Levels of employee satisfaction provided a strong cultural perspective on the appraisal process, with this being contrasted at different levels within the banks and between each bank. The findings suggest a relationship between salient stakeholders' positive perceptions of procedural and distributive justice and levels of satisfaction. Findings from stakeholder perceptions of an 'ideal' appraisal process were used to provide recommendations as to how performance appraisal can be intertwined within a national culture. The unique setting provided direct contributions of knowledge with respect to developing the conceptual framework of performance appraisal from a stakeholder perspective. The associated areas of performance management and evaluation of performance appraisal in a developing economy extended the literature with respect to international HRM. From an organizational perspective, the empirical study provided recommendations that contributed to the development of employees in Chinese state-owned banks, which would enhance their strategic aims, in the new post-WTO competitive environment.