The Impact of Performance Assessment System on Employee Commitment: A Study among Executive Officers of State-Owned Commercial Banks in Sri Lanka

Performance management is a much broader and a complicated function of HR, as it encompasses activities such as joint goal setting, continuous progress review and frequent communication, feedback and coaching for improved performance, implementation of employee development programs and rewarding achievements. Performance management can be regarded as a systematic process by which the overall performance of an organization can be improved by improving the performance of individuals within a team framework. It is a means for promoting superior performance by communicating expectations, defining roles within a required competence framework, and establishing achievable benchmarks. As end results, the performance appraisal positively affects to the employee commitment and it will lead to achieving corporate objectives. However, there is a public opinion about a poor performance management system in public sector organizations. Accordingly, some researchers argue that performance management of public sector commercial banks is poorer than private sector commercial banks in the Sri Lankan context. Hence, this paper focuses on the assessment of the influence of the current performance management system adopted by major state-owned commercial banks on job commitment of their executive employees. The sample for this study was drawn from executive grade employees who are working at Peoples Bank and Bank of Ceylon and data were collected by using self-administrated questionnaire. Altogether 350 questionnaires were distributed by email and 208 completed questionnaires were taken in for final analysis. The PLS based SEM was employed to measure the impact of the exogenous variable on the endogenous variable based on the Smart PLS-3. The results revealed that among the set of determinants, career development, is the most significant determinant of employee commitments among executive officers of state-owned commercial banks in Sri Lanka. Further, it was revealed that, alignment with organizational goals, is the least significant determinant of employee commitments among executive officers of state-owned commercial banks in Sri Lanka.