Moderating role of performance appraisal on organizational commitment and employee performance in supermarket chains, Kericho County

Abstract

In Kenya, wholesale and retail sector comprises a sizeable part of the economy in view of its contribution to GDP which stands at thirty percent. However stiff competition, from both local and international players, continues to cause unrest in the retail sector resulting to poor performance. This study therefore sought to determine the moderating role of Performance Appraisal on Organizational Commitment and Employee Performance in Supermarkets, Kericho County. The specific Objectives of the study were; to examine the effect of Affective Commitment on employee performance, to determine the effect of Continuance Commitment on employee performance, to establish the effect of Normative Commitment on employee performance, and to assess the moderating role of Performance Appraisal on Organizational Commitment and employees’ performance. The Study was guided by Becker’s side bet theory and Goal theory. Explanatory research design was adopted. The study targeted 357 employees of all the Supermarkets in Kericho County. A sample size of 189 was determined using Yamane’s sample size formula, stratified random sampling was utilized to select the actual respondents. Structured questionnaires were used to collect requisite data which were subjected to Hierarchical multiple regression for test of both direct and indirect effects of respective study variables. Study findings indicated that affective commitment (β = 0.975, p<0.0001), continuance commitment (β= 0.133, p=0.007) and normative commitment (β = 0.298, p<0.0001) had a significant and positive effect on employee performance as evidenced by R 2 of 0.63. The study found that performance appraisal significantly moderated the relationship between organizational commitment and employee performance by improving the predictive power of the regression model from 62.7% to 95.4%. Conclusively, Organizational commitment seems to cause the greatest increase in employee performance when performance appraisals are efficient. Organizations should put in place a fair, sensible and reasonable performance appraisal system to enable high performance in view of the positive moderating effect on the relationship between organizational commitment and employee performance.